Fedex trust as a value and a bridge connecting people


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Reputation management in Federal Express (FedEx) is based on the objective to transmit the corporate culture from within the company to the world.

For Federal Express, its most valued asset is its brand, recognized on the global level thanks to the performance of the employees. This focus enabled FedEx to become USA’s major company in this sector. The multination is aware that reputation is built from within, it starts with the employees and is then broadcast to other stakeholders.

The company understands that managing expectations of the stakeholders is a prerequisite of success, for in the 21st century stakeholders have much more power. For FedEx, the reputation is like a bridge that connect all stakeholders.

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Fedex trust as a value and a bridge connecting people

  1. 1. CasesStrategy DocumentsC07 / 2011ReputationFedEx: Trust as a Valueand a Bridge ConnectingPeople Projecting corporate culture from within outwards lies at the heart of reputation management at Federal Express (FedEx) Federal Express or FedEx is the largest U.S. As it has already been mentioned, for FedEx company working in the area of package and reputation is a long-term investment. William freight transportation. It has a global reach, G. Margaritis, Senior Vice President for Global ensured by almost 300 airplanes and 300,000 Communications & Investor Relations, explains employees, who represent the brand’s spirit in the that reputation is like “a child, who has to USA and more than 200 other countries, generat- be looked after day after day”. The CEO of ing an annual revenue of USD 36 bn. the company understands this and to this end implemented in his company the policy of In terms of corporate governance, FedEx defines bonus distribution linked to the results of the itself as a company aiming to deliver a full range company according to the reports on corporate of transportation, e-commerce and management reputation such as RepTrak and Best Places to solutions to individual clients and businesses all Work, renowned tools for measuring corporate around the world. The company, led by CEO Frederick reputation and employees’ satisfaction. W. Smith and his executive team, acknowledges the importance of reputation management for generating As Margaritis explains, “competition on the ground value in the long run. However, this idea was not of culture is one of the few ways to differentiate present in the beginning of the Company’s operations. oneself. Corporate culture is a connecting point Instead, it developed as the result of the Company’s between the brand image and values, projected to ongoing efforts to demonstrate its economic return the market and the heritage that will be handed to the Board of Directors, thus making them realize down to future generations. Reputation and the need to support reputation management. In the corporate culture cannot be sold or purchased. last years FedEx pioneered changes in the executive Therefore, they need to be built and grown through team aimed at management of intangibles. every activity of the Company”.Document created by Corporate Excellence - Centre for Reputation Leadership quoting from, among other sources, the interventions onthe Fedex case in the 15th International Conference in New Orleans on Corporate Reputation, Brand, Identity and Competitiveness,on May 2011.
  2. 2. FedEx: Trust as a Trust as a Corporate Culture reputational risks related to employment ofValue and a Bridge Movies, TV series and other media products often 300,000 people, a fleet of airplanes and trucks andConnecting People contain references to the culture of Fedex. However, its commitment to the global reach, which means all references to the brand and broadcasting of the obtaining operation licenses in new markets. company spirit are primarily directed towards the The executive team realized that reputation Company´s employees, who develop a motivation management was of paramount importance for to remain in the Company. FedEx employs around obtaining licenses and mitigating reputational 300,000 people throughout the world and the risks. In the case of FedEx, understanding of the success of its business depends on their level of fact that reputation drives performance excellence satisfaction. FedEx understands that the employees came from the top management, which facilitated of the Company are the ones who are in direct the Company´s commitment to management of contact with customers on a daily basis. That´s why intangibles. Reliance on the help and support of generating a sense of pride and closely aligning the the top management allowed the Company to employees with the company, plays a key role in the overcome the barriers which typically hamper sector characterized by high turnover rates. firm-wide management issues, such as reputation. “For Federal Express All this enabled a U-turn in the Company management. This meant a shift from the reputation builds traditional brand focus on the customers to a focus long-term value, it is on the employees. The brand was reinforced by attributes which helped to create a connection compared to a child who between the Company and its employees. Even if in needs to be looked after the beginning FedEx did not pay enough attention to the key group of its stakeholders, they were able day after day’ to react timely to focus their efforts on human resource management. The Company defines trust as an emotional connection which allows FedEx to become part For FedEx, reputation is directed outwards by means of its customers’ daily life. It is interesting how of a strong corporate culture and an understanding the employees believe in the company and see that the employees are the key ambassadors of the its brand as a guarantee of superior quality. The brand. In this sense, the Company implies that stories of delivery staff, who after overcoming the corporate culture is the starting point for any thousands of obstacles, manage to accomplish their of its activities. A solid corporate culture is based tasks, contribute to creation of trust both among on the emotional link which translates into a good employees and among ultimate users. FedEx uses service and eventually positive experience for the this competitive advantage to develop the content ultimate user. The feeling of pride, belonging and of the corporate brand. loyalty generate brand value, which translates into the capacity to attract talent and capital. Priority Stakeholders The U.S. multinational first took interest in Change of Paradigm the matters of reputation when it realized the But reputation management is important not only from the viewpoint of the employees, but also from The corporate culture the viewpoint of consumers, public authorities, trade unions, etc. We are observing a change of paradigm: of trust through today power is held by the stakeholders, and organizations have to consider their expectations - Reputation Management. - Support the entire and provide adequate responses. Target groups Company: steering committee. become more and more discerning, they try to find - Investment in intangible and tangible resources. out what stands behind the brand, who directs it - Brand Management and what is done by the company as a corporate Confidence entity. This means that it’s no longer sufficient to Employees: offer a good product or a good service. - Generation of brand ambassadors. According to the philosophy of FedEx, the brand Clients: - Pride of ownership. - Change in customer - Contribution to the creation is determined by the Company, while reputation is service. of brand value. the perception of the Company by others. In order - Listen to the network - Videos and Story telling as a to have a good reputation it is important to do what 24 hours a day. motivational tool - Recovery of one promised to do, and to do it well over a long customers after period of time. That’s why holding to one’s promise the error and doing it consistently and coherently over time is indispensable for generating trust. Margaritis says Source: FedEx, 2011. that “reputation consists of many dimensions and Cases 2
  3. 3. FedEx: Trust as a is more profound – it is the inner substance rather understanding that the employees’ peers trust moreValue and a Bridge than the way we dress or speak. Reputation is what in what is said by people rather than by the companyConnecting People drives our behaviour”. as an institution. Creation of Content This focus is risky from the viewpoint of controlling FedEx sees content as a way to reach its stakeholders. the messages. But Federal Express believes that even More specifically, by using communication the if there is 1% of employees who do not associate Company established a relational policy, which themselves with the ideals and principles of the enables the Company to receive interesting company, 99% of the employees do. Therefore, it contributions for free without resorting to is impossible to change the HR policies to suit this traditional press releases and paid advertising. 1%. In this sense the benefits are greater than the Directors of the Company believe that in future risk. Again, the strategy used for the transmission of videos will account for 80% of the information flow messages by the employees are the contents which and therefore base communications on multimedia tell a story, mainly in multimedia formats, areas that content and related technologies. This is a kind of also are useful for training the employees. “storytelling” aimed to add content to the brand and reach different stakeholders in the most Conclusions effective, easy and quick manner. FedEx believes that its brand is its most valuable asset, recognized at the international level thanks ‘Reputation is projected to excellent performance of its employees. This understanding enabled the Company to become from within and works the leading U.S. enterprise in its sector. The through the circles multinational realizes that the reputation is projected from within: it starts with the employees of trust” and is transmitted onto other stakeholders. Thus managing expectations of the stakeholders is key to On the other hand, the new social media opened success in the 21st century. FedEx views reputation new communication channels and enabled dialogue as a bridge that connects all stakeholders. between clients and companies. This revolutionized the traditional customer service, normally offered by companies to their clients. Capturing this trend, FedEx created a team of professionals who offer 24-hour customer service through the social media. The team’s responsibility is to browse the web in search for all relevant comments or messages in order to respond to the needs, anticipate possible problems and mitigate risks. However, the Company went even further and is trying to turn all its employees into communication agents, involved in positioning the brand through the Internet. As was already mentioned, FedEx believes that its employees are the main ambassadors of the brand. The Company bases its policy on the Brand philosophy: old versus current Ancient philosophy: Current philosophy: Focused on the client Focus on the employee and customer Company Company Staff Staff Customers Customers Unique approach Approach the employee to client and with to reach the customer little ability to react and ability to react very Source: FedEx, 2011. Cases 3
  4. 4. ©2011, Corporate Excellence - Centre for Reputation LeadershipBusiness foundation created by large companies to professionalize the management of intangible assets and contribute to the developmentof strong brands, with good reputation and able to compete in the global market. Its mission is to be the driver which leads and consolidatesthe professional management of reputation as a strategic resource that guides and creates value for companies throughout the world.Legal NoticeThis document is property of the Corporate Excellence - Centre for Reputation Leadership and has as its objective to share businessknowledge about Brand, Reputation, Communication and Public Affairs Management.This document is directed exclusively towards its addressee and contains confidential information, subject to professional secrecy, whosedisclosure, copy or non-authorized use is against the Law. If you receive this document by mistake, let us know immediately and erase itwithout keeping a copy.Corporate Excellence - Centre for Reputation Leadership is the owner of all the intellectual property rights of the images, texts, designsand any other content or elements of this product and has the necessary permission for its use, and therefore, its copy, distribution, publicrelease or transformation is prohibited, without express authorization from the owner.