On Jan. 26, the MIT Center for Transportation and Logistics (CTL) hosted FedEx founder and executive chair Frederick W. Smith for an intimate, one-on-one conversation with Yossi Sheffi, director of CTL and professor of civil and environmental engineering. Their talk, titled “50 Years of Delivering Innovation,” centered on the evolution of the supply chain and logistics fields over the last half-century — in which FedEx played a large part.
Smith’s visit kicked off CTL’s yearlong celebration of its 50th anniversary. The year of its founding, 1973, coincides with the year that Federal Express first began operations — with 14 Dassault Falcon 20 aircraft delivering 189 packages, a far cry from the 16.5 million packages it now delivers daily.
In his introduction, Sheffi called Smith “a legend in our field.” A true visionary, Sheffi continued, “he started an industry more than a company.” From overnight shipping — which was unheard of in 1973 — to package tracking, FedEx has been a consistent leader on innovation in the shipping industry.
Smith described his philosophy on innovation as quite simple: “If you’re in business,” he said, “and you don’t innovate, you’re in the process of commoditization or extinction.”
During a Q&A session with students, researchers, and MIT community members, Smith articulated two things business leaders must tolerate to innovate successfully. First, he said, “you’ve got to be able to tolerate characters. A lot of the people who come up with really good ideas are a little strange in certain ways.” He grinned and added, “That’s what people thought about me.”
The second requirement is to “be able to tolerate failure.”
Smith credits the continuous drive to innovate — and willingness go out on a limb for bold new ideas — for FedEx’s longevity. “Not every year is great,” he said. “We make some mistakes on one thing or another, but somehow we got from that 189 packages to $100 billion, because we’re very analytical and we do understand you have to change.” As cautionary examples, he cited companies that “changed the world” like Sun Microsystems and Wang Laboratories, but that have since come and gone. “But here we are,” Smith continued. “We’re still standing.”
Innovation is a crucial value for companies to hold, imperative to survival, according to Smith. “The way you have to do it is to do it,” he said, encouraging business leaders to “pound their fists constantly” about the need to adapt and change.
CTL@50 Presents: 50 Years of Delivering Innovation – A Conversation with FedEx Founder Fred Smith