Face Time With Fred Smith

Age: 56
Family: Second marriage, 10 children
Family history in transportation: Grandfather was a paddleboat captain on the Mississippi River; father helped found Greyhound bus line
Early job: Crop-dusting pilot
Path not taken: After graduating from Yale, planned to attend Harvard Law School but went to Vietnam as a marine instead
Unexpected endeavor: Personally funds a film-production company called Alcon Entertainment
Number of planes in the American Airlines fleet: 720
Number of planes in the FedEx fleet: 662

The career of Fred Smith -- founder of Federal Express, creator of overnight delivery -- is built on an obsession with time and the pursuit of speed. Which makes his office more than a bit surprising. It is a peaceful place, spacious and flooded with natural light. And it has a few features that you don't often associate with the CEO of a company with nearly $20 billion in sales and a quarter-million employees. On the coffee table is a bowl filled with tiny, perfectly rendered FedEx boxes, each containing two pieces of gum. And several walls in the office have built-in floor-to-ceiling shelves loaded with books that appear unmistakably to have been read.

In an interview, Smith is both true-to-form and surprising. He is forceful; he insists on finishing his point and won't be interrupted by a follow-up question. But he is also relaxed and funny, at one point insisting that My Dog Skip, a movie that he financed about the writer Willie Morris and his dog, made every viewer cry. Including him? "I sort of got a lump in my throat, yeah," he says.

FedEx's customer service is legendary. When you started the company in 1971, why did you think that customer service was so important?

The original concept for FedEx was built around moving very high-priority parts for the electronic and medical industries. When you have one of those parts, and a computer is down, or a hospital is in need of something, you really have to do what you say you're going to do. That idea became such a part of the cultural fabric of the company that now it's essentially self-perpetuating.

How would you react to Fred Smith, age 27, coming to you today with a proposal to invest?

[Laughing] I would react much differently from how most people reacted to me. I'm open to listening to people who are 27 and have an idea.

Have you ever invested?

Well, I back two young men in Hollywood -- the Alcon Entertainment deal. Two guys from Princeton came to me and pitched something they thought they could do in the movie business in a way that nobody had ever done before. And it made a lot of sense to me. So I decided to back them -- because they reminded me of me.

How has it worked out?

So far we've had one not-so-good movie and one super success, My Dog Skip. And we've got a movie coming out in August: The Affair of the Necklace.

A scene in the movie Cast Away depicts time management as an obsession at FedEx. Has thinking about time as an asset -- which many businesses don't do -- changed the way that you personally operate?

I am really tough on time, on prioritizing those things that are truly important -- "high-leverage" activities. I didn't coin that phrase, but I generously borrowed it. That's what I constantly talk about to our executives: Spend time on the high-leverage activities, and delegate those activities that aren't high-leverage.

I read that each night before you go to bed, you jot down the things that you want to tackle the next day. Do you still do that?

Oh, absolutely. I've already finished three-quarters of my list today.

What's on the list?

[Picking up a small, folded piece of paper from his desk] Okay, these are my high-leverage activities for today: I attended a meeting with our CFO on our seven-year outlook. I wanted to write an email about some activities in our international area. And then I had about five things that I needed to do for my kids and one philanthropic thing that I needed to do.

Are you still a licensed pilot?

I haven't flown in about four years. That's a good example of being brutal on time management. I really had to work hard to keep the flying up. I used to go out on the weekends and do acrobatics and that kind of stuff. But basically, everything comes down to priorities. Our son, who just got into UNC-Chapel Hill ... I didn't miss a single high-school football game that he played this year.