The FedEx Delivers: How the World's Leading Shipping Company Keeps Innovating and Outperforming the Competition [Hardcover]

Fred Smith and FedEx overcame incredible obstacles in the company's start-up, and cannot be congratulated enough for doing so. In addition, it went on to become the first service company to win the prestigious Baldrige Quality Award in 1990. However, Birla's "FedEx Delivers" does neither readers nor FedEx any service by its incomplete and simplistic coverage.

Birla's book emphasizes a quasi-Baldrige/human-relations perspective. However, my research showed that maintaining an important competitive advantage and low costs are far more important to organizational success. Birla does not address these aspects. (This conclusion is reinforced by several Baldrige Award winners subsequently encountering severe financial downturns after winning the award - even bankruptcy.)

The second major problem with the book is that it does not cover FedEx's series of acquisitions since successful startup. These include Viking Freight, Watkins LTL Express, Roadway Package Express, Flying Tigers, and Kinkos. Again, FedEx has done a great job of building these existing businesses, but Birla tells us none of it - important since so many acquisitions fail. Neither does he address the resulting incursion of substantive competitive disadvantages. (One obvious issue is substantial route and facility overlap between various divisions - this becomes increasingly untenable as fuel prices increase.)

Finally, my experience (FedEx Ground) is that FedEx has NOT tried to substantially change the human-relations environment in these companies - even though they may seriously contradict Birla's summary of the original Baldrige-winning FedEx.

For example, FedEx Ground drivers are not company employees - rather hired by thousands of truck-owners contracting with FedEx, and labeled "independent contractors." If you're an independent contractor, neither the company nor the truck owner pays state workers compensation or federal unemployment and disability taxes. They are also released from matching workers 7.65% Social Security and Medicare taxes; an independent contractor pays the full 15.3% load. This creates great inconsistencies in work environment and pay. Almost all the FedEx Ground drivers and all the owner-operators receive no benefits and are paid far less than their UPS counterparts. (My sense is that FedEx is turning Watkins LTL into a similar situation, while reducing pay, increasing non-productive wait-times, and eliminating benefits at the same time - despite having been ruled in violation of IRS regulations and subjected to assessments estimated to eventually total $1 billion!)

Another issue is that because the over-the-road truck owners have invested considerable time and equity in their trucks and routes, FedEx has been unable to take advantage of much-more fuel-efficient piggy-back rail service - without buying out truck owners at considerable expense, which it has chosen not to do. (UPS uses considerable piggy-back rail service.)

Still another problem arising out of its acquisitions and new start-ups is that FedEx has duplicating routes - FedEx Express (its air arm), FedEx Ground, and FedEx Home Delivery vehicles all overlap in their service areas. (Conversely, UPS' use of a single vehicle for package delivery also allows it to charge by service speed, NOT transport type - often allowing use of low-cost ground transport instead of aircraft to provide higher-revenue next-day service.) Again, FedEx helps overcome these strategic disadvantages by paying employees less, and sometimes hiring unqualified drivers (eg. FedEx Ground OTR) - contrary to Birla's book.

FedEx has greatly benefitted from periodic UPS labor union strikes - a sustained competitive advantage also ignored by Birla. (On the other hand, Birla also ignores FedEx's labor strife among its pilots, especially after acquiring Flying Tigers.)

Bottom Line: "FedEx Delivers" is not worth reading.

In a very easy-to-read book, Birla uses his vast experience in FedEx to outline how the philosophy of FedEx evolved and thrives on innovation. The vantage point enjoyed by the author certainly reflects in this "big picture" viewpoint of one of the better known company's growth. Of particular interest is the notion of innovation ( spelt with an "i") dealing with process improvements and Innovation (spelt with an "I") dealing with business model changes. The author provides an interesting discussion on what constitutes innovation and how FedEx defined (or didnt define) it. The rest of the book explains how a 5-dimensional employee base can be created. This discussion is certainly novel and adds some interesting perspective for anyone involved in managing people and/or processes.

Though the book will certainly please any "managerial-type" reader, I was a bit disappointed to see that the author's vast engineering experience was essentially untapped in this book. There is no meaningful discussion on the operational side of "how " FedEx actually implemented innovation....In that sense, the title is a little misleading for an engineering-minded reader. Regardless, this is an excellent read, provides a different perspective on how innovation should be seen, and a broad paradigm that enables developing an employee-base committed to and thriving on innovation. A good read. (It may be interesting to read this book along with the autobiography of Kinko's founder - "Copy This!". FedEx's buying of Kinkos is discussed in this book and for even a casual observer the synergy between these two companies seems real.)

I was very disappointed in this book on Fed Ex. This is a great management theory book but really told me nothing about how Fed Ex is innovating again and again. I am hoping that someone will come out and tell us how Fed Ex as a company is succeeding but it is not this book. For those interested in academic management you will find this interesting otherwise don't waste your time and money.