FedEx Corporation’s Philosophy Employees First, Customers Second, and Shareholders Third

By M.S. Rao

“Much of our success reflects what I learned as a Marine. The basic principles of leading people are the bedrock of the Corps. I can still recite them from memory, and they are firmly embedded in the FedEx culture. We teach them daily in our own Leadership Institute, which turns out the thousands of managers needed to run our operating companies.”– Frederick W. Smith, CEO, FedEx

There are several generational cohorts globally based on the duration of their birth. Currently, there are four generations in the workplace. They are The Silent Generation (born the mid-1920s to early 1940s); Baby Boomers (born early 1940s to early 1960s); Generation X (born early 1960s to early 1980s); Millennials who are also referred with different names including Generation Y (born early 1980s to early 2000s).

The Silent Generation, also known as the Greatest Generation, Veterans, Traditionalists, the Mature Generation or “The Lucky Few” are logical, conservative, conformist, and historical. They are loyal to their organizations and respect rules, follow the hierarchy and crave for job security. Baby Boomers are hard workers and willing to work long hours. They are driven for upward mobility, and are less comfortable with rapid growth in technology. They care for their parents and children. Generation X, also known as Baby Busters value freedom, and are flexible and adaptable. They are latchkey kids, skeptical and ironic. They are task-oriented and comfortable in job-hopping. Millennials are impatient to achieve their goals and objectives. They crave for recognition and look for challenging roles and responsibilities. Their self-esteem is high, and their personal, professional and social lives are merged with smartphones.

Frederick W. Smith – A Traditionalist

When you look at famous people including Martin Luther King, Jr., Queen Elizabeth II, Sandra Day O’Connor, Miles Davis, Mikhail Gorbachev, Bob Dylan, John McCain and Fred Smith, they all belong to The Traditionalists. The Traditionalists are known as The Silent Generation because the children born between 1922 and 1946 worked hard and kept quiet.

Frederick W. Smith is the Chairman, President and CEO of FedEx Corporation that is headquartered in Memphis, Tennessee. He was born on August 11, 1944 in the United States. Hence, he falls in the generational cohort of Traditionalists. He is a successful CEO with a military background. He is a decorated U.S. Marine Corps combat veteran who served as an officer from 1966 to 1970. He founded FedEx in 1971 and has grown it into a $43 billion company. He is a risk taker who goes by his gut and intuition. His military training has taught him several leadership skills and abilities. He said, “The Marine Corps is the best when it comes to teaching people how to lead other folks.” There are other iconic CEOs with military background such as Daniel Akerson of General Motors; Alex Gorsky of Johnson & Johnson; Robert A. McDonald of Proctor and Gamble; Robert Myers of Casey’s General Store; James A. Skinner of Walgreens; Herb Vest of H.D. Vest; Richard Kinder of Kinder Morgan; Ken Hicks of FootLocker; Sumner Redstone of Viacom; Clayton M. Jones of Rockwell Collins; Tom Dent of Lumetra; Lowell McAdam of Verizon; James Mulva of ConocoPhillips; and Robert J. Stevens of Lockheed Martin.


Employees First, Customers Second, and Shareholders Third

“Our ‘People, Service, Profit’ philosophy insists that our people be treated fairly. If we give good service and we come up with a reasonable profit, we make that a good deal for our employees, with profit sharing, promotions, complaint procedures. If you spend any time looking at the culture of FedEx you’ll find that PSP philosophy is the foundation of everything else.” – Frederick W. Smith, CEO, FedEx

Fred Smith keeps people before profit. His leadership philosophy is people-service-profit. For instance, during the 1990s, when UPS workers went on strike, thousands of FedEx employees worked numerous hours to process the additional 800,000 packages that flooded into FedEx centers. Fred Smith1 rewarded his employees with special bonuses while taking out full-page newspaper ads to thank them for their hard work. He followed the philosophy of ‘employees first, customers second, and shareholders third’ much before the philosophy came into vogue. It clearly indicates that he is a visionary leader who could see the invisible well ahead of times and technologies. Here are some leadership lessons you must learn from Fred Smith.


Fred Smith–Leadership Lessons

“I do not believe I could have built FedEx without the skills I learned from the Marine Corps.” –Frederick W. Smith, CEO, FedEx

Follow Your Passions: He followed his passion to be a US Marine and subsequently followed his passion to found his own company. He rightly remarked, “You’ve got to enjoy what you’re doing, and have some fun, and be able to laugh at yourself a bit.”

Walk Your Talk: He set an example for others to follow. He practiced whatever he preached. There is no chasm between his words and deeds.

Build Trust: He built trust and encouraged transparency to carry all the stakeholders.

Be a Good Listener: A good leader is a good listener. He is a good listener and speaker.

Emphasize Organizational Culture: He strove for excellence and emphasized organizational culture. He remarked, “We have a culture that allows us to change without threatening the people that work at the company.” His employees have the Purple Promise in which they declare, “I will make every FedEx experience outstanding.”

Build a Strong Team: He built a strong and successful team.

Emphasize Excellence: He continuously innovated and improved his services. He acquired it from his military experience.

Empower Others: He built a strong team and empowered them to make their decisions.

Be a Risk Taker: He took risks in his business life. He gambled to raise finances to fund his ailing company which is an incredible turnaround story to many people globally.

Be Part of the Solutions, not Problems: He explores solutions rather than to brood over the problems. He inculcated this great trait from his military training.

Be Simple and Humble: Fred’s leadership principles and practices are simple, and his attitude toward people is humble. He once remarked, “People say leadership is complicated. But there’s no mystery about leadership.”

Believe in Shared Leadership: He involved others to be an integral part of decision-making and encouraged the participative leadership style.

Be a Voracious Leader. He is a voracious reader who invests his time in reading books. He read lots of books on history, generals, presidents and famous people. The book that inspired him was Death Be Not Proud. It was about a young boy who had a brain tumor and how he handled it. And the book that influenced him was the biography of General Lee. He recommends the book, Modern Times by Paul Johnson for millennials, and the books authored by David Halberstam for all generations.


Fred Smith’s Entrepreneurial Highs and Lows

“Fear of failure must never be a reason not to try something.” – Frederick W. Smith, CEO, FedEx

Fred Smith’s entrepreneurial journey has not been a cakewalk. He encountered several highs and lows while running his company. Initially he incurred losses in his business. He went to the blackjack tables in Vegas, won $27,000, and wired back to FedEx to keep his business afloat. Currently, the company2 sends more than 12 million packages on a typical business day, employing 640 airplanes, 100,000 vehicles and 400,000 people. Hence, entrepreneurship is for brave hearted, not for fainthearted.


Does Military Training Make Better Leaders?

“My four years in the Marine Corps left me with an indelible understanding of the value of leadership skills.” – Frederick W. Smith, CEO, FedEx

The military training equips soldiers with several qualities such as leadership, emotional intelligence, team building, communication skills, tenacity, resilience, confidence, adaptability, fraternity and honesty. Soldiers excel as strong leaders since they work under grueling conditions. In fact, testing times make them tough leaders. They are filled with energy and enthusiasm with a heart to serve others. They are strategic thinkers, trustworthy, risk takers, learn lessons from failures, and motivate others when there is no light at the end of the tunnel. They are highly focused on hitting the bull’s eye. However, military leaders must develop the flexibility to adjust to civilians. They are honest and straightforward but often lack tact and diplomacy.

Soldiers can work under pressure. They are resourceful and work with what they have and from where they are. They lead by example and take care of their people. They are highly disciplined, dedicated, prompt and punctual. They maintain an elegant dress code. Fred Smith once remarked, “Even in a blue pin-striped suit, I still make sure that the right-hand edge of my belt buckle lines up with my shirt front and trouser fly. I shine my own shoes, and I feel uncomfortable if they aren’t polished.”

Research shows that companies with military trained CEOs commit corporate frauds much lesser than their counterparts with civilian backgrounds. The Korn/Ferry research shows that CEOs with military experience deliver better performance and have longer tenures.

The soldiers look for similarities, not differences. They believe in fraternity and equality. They are fair and just. They are good time managers and smart in making decisions quickly in spite of inadequate information. They are competent to handle volatility, uncertainty, complexity and ambiguity (VUCA) successfully. They are bold to encounter organizational challenges and elegant in overcoming them effectively. Those who made use of their military background succeeded as leaders and CEOs.

Research shows that companies with military trained CEOs commit corporate frauds much lesser than their counterparts with civilian backgrounds. The Korn/Ferry research shows that CEOs with military experience deliver better performance and have longer tenures. Here are some observations:

Clayton Jones, CEO of Rockwell Collins notes, “At a very young age, you get a chance to be in leadership positions of significant magnitude. You become comfortable in a leadership role.”

The late Michael H. Jordan3, who served as Navy lieutenant and was a former CEO of Electronic Data Systems, commented in the report: “What the military is really good at doing is teaching you to plan and program. The essence of being an officer is to figure out how to deploy forces and resources to get something done. From a management standpoint, that is one of the really great lessons.”

Military Training Emphasizes Transferable Skills

Military training teaches beyond domain skills such as conceptual skills and human skills. Soldiers turn out to be the jack of all trades and master of their domains. They are equipped with transferable skills which are crucial to succeed irrespective of the industry and in civilian life. However, most of them don’t get adjusted quickly with civilian life. Hence, they must develop the flexibility to jell with civilian society to succeed as professionals and leaders.


Military training teaches beyond domain skills such as conceptual skills and human skills. Soldiers turn out to be the jack of all trades and master of their domains. They are equipped with transferable skills which are crucial to succeed irrespective of the industry and in civilian life.

From Battlefield to Boardroom

It is often observed that CEOs with civilian background emphasize on “ends” whereas the CEOs with military background emphasize “means.” Although we cannot conclude that the CEOs with military background alone will succeed, the fact is that the military background is definitely an asset. Hence, the success rate of leaders and CEOs with a military background is certainly higher because they build trust in others and stick to their commitments. Additionally, their confidence and communication help them stand out from others. Dr. Irwin Mark Jacobs, founding chairman and CEO emeritus for Qualcomm once remarked, “A great leader must lead by example, not by fiat. He or she must set an example of integrity, of openness to new ideas, of understanding details as well as the larger picture, of communicating well, and of not shooting the messenger when a problem arises but helping find a solution.” Most military leaders possess these qualities to excel as successful leaders and CEOs.



“Leadership is simply the ability of an individual to coalesce the efforts of other individuals toward achieving common goals. It boils down to looking after your people and ensuring that, from top to bottom, everyone feels part of the team.” – Frederick W. Smith, CEO, FedEx

Fred Smith is a charismatic and visionary leader with tenacity and resilience. He is a philanthropist who added immense value through corporate giving. He is an inspiring example for leaders from civilian and military background cutting across generational cohorts. He is an ideal leader to be emulated by others globally.

Note: This article is an adapted excerpt from my book titled, “Soft Leadership for Millennials: Leading Generational Differences in the Workplace Successfully.”

About the Author

Professor M.S. Rao, Ph.D. is the father of “Soft Leadership” and founder of MSR Leadership Consultants, India. He is an International Leadership Guru with 38 years of experience and the author of over 45 books including the award-winning ‘21 Success Sutras for CEOs’.4 Most of his work is available free of charge on his four blogs including He is also a dynamic, energetic, and inspirational leadership speaker.

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The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.