This past weekend Fedex founder Fred Smith had a reason to celebrate. The reason wasn't, though, the sentencing of the Philadelphia Fedex driver who was found guilty of stealing more than $40,000 worth of iPhones out of shippers' packages. Smith was also probably not celebrating the recently gone-viral video starring the package-chucking Fedex driver which circled the globe faster than a speeding Express package.
It's also unlikely that Smith's weekend celebration had anything to do with the $21.5 million settlement that Fedex has agreed to pay for overcharging as much as $3 per package for millions of packages over a three-year period. And hopefully Fred Smith wasn't toasting the shipping price hikes and staff reductions that were announced in June as part of his weekend celebration either.
Fedex's once enviably sparkling reputation for customer relationships and service has become quite tarnished lately, to say the least. Is the sum total of the Fedex employee and customer challenges a sign that Fedex has lost its managerial mojo? Or is it just another case of media fixation and negative news spin run amok?
Most likely it's a little bit of both, but the only way to really know is at the individual customer experience level. Having had a customer experience with Fedex myself in the past two weeks, I am inclined to believe that Fedex is not just the victim of bad press.
Before I share this real and recent Fedex case study, I'm going to give the executive summary and then those that are intrigued about how one customer interaction could possibly serve to illustrate all ten of these managerial principles can continue reading.
The executive summary is:
- Employees need to know the "why" behind every part of their job so that they know the consequences of skipping steps.
- Employees who are slaves to "the system" will end up spending an inordinate amount of time trying to fix the transactions and interactions that are exceptions to the system.
- Employees without empowerment are employees without ownership.
- Exceptions happen. Good companies know that and have designed an effective way to handle them.
- You don't win any points from customers by just meeting their expectations with ordinary transactions in ordinary ways. You win points by adding the "extra" to the ordinary and by handling out of the ordinary transactions in an unexpected way.
- There's a difference between efficiencies that are created to enhance the customer experience and efficiencies that are created to cut costs.
- When economic efficiencies don't take the customer experience into account, they eventually create their own customer service related costs.
- Unless you put customers on your payroll, they should not be made responsible for making sure your employees have done their jobs.
- Apologies and service recovery are not the same thing.
- When you lose trust, you lose everything.
In my mind, these are not particularly controversial management principles and practices. They're pretty logical, fundamental, and applicable to any company in any industry. Each one of these management principles could be the root cause of customer service excellence or customer service disaster. When the combination of all of them comes into play with one single transaction, then the potential for excellence or disaster multiplies exponentially.
So, here is the abbreviated (very, very, very abbrseviated) story of the one Fedex customer interaction that illustrates the importance of ten different managerial principles and practices.
A package in Orlando, Florida needed to be shipped to Houston, Texas. A happy and loyal Fedex customer, without even checking any other rates from any shipping competitors, went online to Fedex.com and filled out the shipping form.
The comedy of errors that then caused a two-day delivery to take two weeks to get to its destination required the involvement of two different customers on the shipping side and one customer on the receiving side to follow up daily with countless Fedex employees to make sure promised actions were taken. In contrast to the relentless customer follow-throughs, there was none from Fedex.
And when each of the Fedex employees did not do what they promised to do, it took the involvement of two customers on the shipping side and one customer on the receiving side to problem solve with the newest Fedex employees in the Customer Service chain of pain and to coach the newest Fedex customer service rep through their next steps. Quite literally the Fedex customers were forced to become Fedex managers.
It took two weeks of daily interventions (with no time off on weekends) to get one package from point A in Orlando, Florida to point B in Houston, Texas. You would think the delivery service had been provided by the pony express instead of Federal Express.
Just reading that summary must leave you wondering what sort of extenuating circumstances were involved that could cause a fairly standard shipping transaction to turn into a two-week drama. And there was one - just one. In the initial order there was a mistake on the street address where the package was to be picked up. That was a "circumstance," and everything that happened after that in the Fedex "system" caused the circumstance to become "extenuating." And exasperating. And infuriating. And absurd.
With the millions of packages that are placed into the Fedex system every day, surely there must be more than one per day which has a piece of incorrect address information. And surely each one of those misaddressed forms couldn't cost two-week delays and umpteen Fedex employee hours or else Fedex would extenuate themselves into bankruptcy.
Actually there is a safeguard that Fedex has in "the system" to handle address errors. The technical term for it is "Call the Shipper Using the Phone Number They Are Required to Provide." The first driver on the first day didn't do that and everything that went haywire after that was a result of a driver who thought it was easier to give up when he couldn't find an address than it was to make a one-minute phone call to confirm an address.
So the original Fedex service failure can be traced back to one action of one Fedex employee. But the Fedex service recovery disaster that followed was not the responsibility of individual employees, but rather the responsibility of the leadership team that has created (or allowed) a system that doesn't support the people who are responsible for delivering the service. This Fedex transaction is both a result of mismanagement and missed management.
It's probably easy to tell that in this case study I am the victim... er, um "subject." And my retelling of the story is my gift to Fred Smith as part of his 69th birthday celebration this past weekend. While some might think it's not a very "happy" offering for a birthday, I do believe that there's no greater gift to business leaders than to see the reality of today that's creating the path towards tomorrow. As the saying goes, Mr. Smith...Today is a gift. That's why they call it the present.
If you have a birthday gift or wishes that you'd like to give as well, here's Fred Smith's direct contact information >>
By the way... Fred Smith shares a birthday with Steve Wozniak, the co-founder of Apple (AAPL). August 11th seems to be a good day for giving birth to innovation.