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Digital Competition – Laurie A. Tucker

“Our customers are moving at Internet speed, so they need us to respond at Internet speed.”

Laurie A. Tucker hates to do anything that runs the risk of demotivating the people she works with, but one day last year, she did just that. She decided to kill a product that they had poured hundreds of thousands of hours — and hundreds of thousands of dollars — into developing and marketing. She had hesitated on making the call for nearly six months. “Every time we had the gun out, someone would come up with a new idea to improve the product or market it better,” says Tucker, senior vice president of electronic commerce and customer services at Federal Express. For a time, Tucker’s innate optimism won out, and she encouraged her employees to do what they could to save the product.

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But by fall 1998, it was time to pull the trigger on FedEx’s groundbreaking VirtualOrder software, which had helped hundreds of companies wade into the waters of e-commerce. Although Tucker’s group had a big first-mover advantage, FedEx’s sales force wasn’t suited to selling e-commerce software. It was better at convincing logistics managers to funnel more packages to FedEx. New entrants like Broadvision and Intershop were more determined about developing e-commerce software than FedEx could ever be. Tucker decided that it would be preferable for FedEx to partner with these players rather than to compete with them, and she told the VirtualOrder team to move their customers to other e-commerce platforms.

It was a short-term shock to FedEx’s systems people. But the real shocker is that Tucker, in recounting the demise of VirtualOrder, doesn’t so much as wince. Her speech, tinged with a slight Southern accent, is as quick and upbeat as always. “I suppose we could have focused on how many dollars we wasted, but instead I asked, ‘What did we gain?’ If we had put those dollars into advertising and PR, would we have gained the same credibility and developed the same skills in our IT group? I encourage my people to look at it as a project that cost us money but that generated huge benefits.”

Making sense of radical change, false starts, and strategic missteps is an unavoidable part of Laurie Tucker’s job — although the word “failure” is absent from her vocabulary. “What Laurie demands of us is that we make an educated guess,” says Dottie Berry, a FedEx vice president who has worked with Tucker for 20 of Tucker’ 21 years at the company. “Nine times out of 10, you’re wrong — but how are you supposed to find the one approach that’s exactly right? The worst thing you can do, in her world, is not do anything.”

That’s because Tucker’s world is one of relentless, high-stakes change at one of the world’s most visible companies. Inside FedEx, Tucker wrestles with two of the defining agenda items for 21st-century competition at every company: how to design a compelling customer experience, and how to embrace the transforming power of the Web. She (along with the seven vice presidents and 6,000 employees in the units that she runs) is responsible for the FedEx customer experience on the Web, on the phone, and at the company’s 1,400 World Service Centers. That means that Tucker is responsible for challenging the status quo at FedEx. “It’s my role to offer challenges to the existing way of doing business,” she says. “This group is the future of the company.”

Focus on Customers — for a Change

You don’t have to be an outsider to be a change agent. Navigating her black BMW sedan from FedEx’s headquarters at the Memphis airport toward one of the company’s newest call centers, Tucker recalls joining FedEx at age 21, the week after she graduated from the University of Memphis with an accounting degree. It was 1978, the same year that FedEx went public. The company paid for her MBA in finance, and by the time Tucker was 26, she was the company’s manager of pricing, on her way up to the ranks of director, vice president, and senior vice president.

“Our paths first crossed about 20 years ago, in the finance department,” says Dennis Jones, 47, executive vice president and chief information officer at FDX Corp., FedEx’s parent. “Laurie has such charisma and enthusiasm — and incredible adaptability. She leads people to a conclusion that wouldn’t be a natural path for them. She’s able to get people to march in the same direction.”

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At the call center, Tucker displays her trademark mixture of company pride and a powerful desire to shake things up. Last November, when she was handed responsibility for the company’s 16 domestic call centers, she was appalled to learn that the employees there didn’t have access either to the FedEx’s public Web site or to the company’s intranet. So while any FedEx customer with Web access could search a comprehensive database of FedEx’s service centers and drop-off locations, the call-center reps couldn’t.

Tucker and her team immediately swung into action, producing a five-minute video for the board of directors. On one side of the screen, a customer was on the phone with a call-center rep, asking a question about a certain page on FedEx’s Web site. On the other side, the rep was apologizing profusely and explaining that she couldn’t see the page. When the video was presented to the board, “there was an audible gasp in the room,” Tucker recalls. She got a green light within a day, and directed her team of technologists to start deploying Web access at the call centers. Even though it was working during the company’s peak shipment period, the team managed to get all of the centers online by January 1999. “Internally, the campaign was called Absolutely Online,” Tucker says. “We generated a lot of excitement about it. And that’s how we were able to get it done so quickly.”

Today, she’s getting an update on a call-center initiative dubbed FedEx OneCall. Now that customers can answer many basic questions themselves by using FedEx’s Web site, the calls that do come in are more complex. But reps in FedEx’s old call centers worked under strict orders to limit call time. The reps also were specialized, and to answer tough questions, they usually had to hand a call to someone else. The result, occasionally, was a frustrating runaround and delayed resolution.

At OneCall, reps are cross-trained in various tasks, and they don’t work under looming call-time objectives. Instead, reps are praised for helping to solve thorny problems. Tucker listens to the OneCall group’s report, and she seems pleased. A pilot program in Fort Lauderdale, Florida, begun earlier in the year, has already generated nearly $10 million in additional revenue from customers thrilled with the higher level of service. She encourages the OneCall executives to pick up the pace, moving more reps and call volume to this new system. She reiterates her vision to them: Within 18 months, all FedEx customer service will be converted to the OneCall system. When the executives explain that one possible barrier is building out the database of customer information fast enough, she lets them know — no bones about it — that they should do whatever it takes. “Don’t hesitate to get a contractor in here,” she says.

On the call-center floor, Tucker gabs with the reps as if she’s got all day. It’s clear that she’s at ease among the rank-and-file, noshing on a few graham crackers that are left over from a buffet lunch and chuckling at one rep’s story about tracking down a golfer’s pair of lucky shoes in time for an important tournament. “The thing about Laurie is that she is very genuine, very sincere, and very approachable,” says Dottie Berry, her longtime friend. “No one hesitates to talk to her — to tell her both good news and bad.”

Tucker also enjoys going out on sales calls — especially to e-commerce up-and-comers. (She was recently in Santa Monica, California with eToys, talking about how the two will promote each other this holiday season.) Though some of FedEx’s e-commerce clients start off with shipping volumes that are so small that they might not even register on a transportation company’s seismograph, Tucker knows that the winners get big quickly. “They’re the ones that most need our help getting up and running right now,” she says. “That’s exciting. Their decision cycle is 15 minutes long. They’re not buried in minutiae, and their survival is dependent on executing three or four key strategies. We focus on the e-tailers, the early adopters. These companies are just exploding.”

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That’s why, when call-center reps talk about tracking work that they’ve done for an online florist, Tucker knows that company’s COO by name. She has shepherded the florist from a 20-box-a-day customer to one of FedEx’s top 10 shippers during peak times. The COO has Tucker’s home phone number and cell-phone number, because his business depends on a positive customer experience. Tucker explains: “Our customers are moving at Internet speed, so they need us to respond at Internet speed.”

Reminiscing about the Future

The next day, Tucker is in her office at FedEx’s World Tech Center in Collierville, Tennessee. She has three offices — one at headquarters, one at her home, and this one. The bookshelves at all three are lined with business books and techno-tomes: “The Innovator’s Dilemma,” “Unleashing the Killer App,” “The 500-Year Delta.” “She has a ferocious appetite for learning,” says Berry.

Throughout FedEx’s history, much of the company’s strategy and vision has emanated from one person: Founder Fred Smith, 55, who now serves as chairman, president, and CEO of FDX Corp. Indeed, Smith’s signature accomplishment in the nearly 30 years since FedEx’s founding has been to create an operationally excellent army of workers who are responsive to his direction. “Fred is clear on what he wants, and very impatient about getting it,” Tucker says.

But Tucker knew that the technology landscape was being shaped so rapidly, and was proving to be so expansive, that no one person could follow all the players, all the developments, all the competitive dynamics, and shape strategies fast enough. In 1994, she stumbled on the book “The Art of the Long View: Planning for the Future in an Uncertain World” (Doubleday/Currency, 1991) by futurist Peter Schwartz. The book’s guide to thinking about various scenarios for the future was a revelation, and Tucker gave copies to all of her direct reports. Once they’d read it, she organized a weekend meeting at her home. Her intention was to foster free-form thinking about new ways that FedEx might interact digitally with its customers. That first off-site, says Berry, who was in attendance, “was the first time that we challenged ourselves to think strategically — to think beyond the next 90 days. It really broke through some cobwebs.”

One outcome of that first “learning journey,” as Tucker refers to it, was that her team decided “that we had to shift to solutions that our customers could run on their own hardware or within their own systems.” Tucker saw that as companies worked to make their supply chains more efficient, if FedEx’s proprietary shipping and tracking system stood alone, then customers would gravitate toward transportation providers that could be more easily integrated into their supply chains. Tucker and Berry assembled a team of 100 employees to create a new version of the system that would run on any Windows or Macintosh computer. “She headed it, and listened every week,” Berry remembers. Eleven months after that first off-site, the company launched FedEx Ship for Windows and Macintosh — with a splashy Super Bowl ad.

Tucker and her team of vice presidents still hold regular learning journeys, and the practice has begun to spread through the rest of the company. “This company has always listened to the customer,” Tucker says. “Now it’s about anticipating the customer. There’s no time for incremental improvement.”

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Tucker walks briskly through the halls of the Tech Center. This campus opened in October 1998, and Tucker was instrumental in getting it built. It looks much more Silicon Valley than Tennessee. Break rooms feature cushy chairs, popcorn machines, and Ping-Pong tables. Outdoor sitting areas all have LAN connections, so that employees can work alfresco. Other amenities abound: a jogging trail, a fitness center, a Starbucks, and a Kinko’s.

The fact that the Tech Center occupies the newest building in the FedEx empire is the perfect tribute to Tucker’s mission to create a “new” FedEx — to reimagine the company as an e-business enabler, rather than just a collection of planes and trucks that haul packages. “A lot of my peers are operators,” Tucker says. “They want the planes to take off on time. The challenge that Fred [Smith] and Dennis [Jones] and I share has been to get people to think in a bigger way. This new world isn’t just about keeping the core business strong. We have to find new businesses and be more in tune with the future.”

Among those new businesses are a supply chain and a logistics-consulting practice that Tucker is building. “I love to play out future scenarios in my head,” Tucker says. “I’ve actually been accused of reminiscing about the future. People have to tell me, ‘Wait, we haven’t done that yet.’ But I try to get them to understand that these aren’t opportunities that can sit on the shelf. Nothing else in our industry is quite as exciting and disruptive as e-business. When people ask, ‘What do you do at FedEx?’ I say, ‘All the fun stuff.’ I can’t imagine having a more fun job.”

Scott Kirsner (kirsner@worldnet.att.net), a Fast Company contributing editor, is based in Boston. Contact Laurie A. Tucker by email (latucker@fedex.com).

Sidebar: What’s Fast

Laurie A. Tucker is an impatient change agent inside FedEx — a company that moves fast for a living. Here’s her advice on how big companies can get with the Web.

One is the loneliest number.

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The digital world moves too fast for even the biggest companies to do it on their own: “If the word ‘threat’ comes out of your mouth, the next word ought to be ‘alliance.’ “

The front line drives the bottom line.

A major factor that contributes to winning on the Web is being able to deliver results on time. That’s why, says Tucker, “I’d much rather meet with project managers when I want to get an update on a project than meet with their bosses.” Why? Tucker believes that she gets a straighter, more nuanced story when she talks to the people who are actually doing the work.

It’s always useful to reuse.

One way to work fast, Tucker argues, is by not repeating good work that you’ve already done. FedEx’s call centers use the same application to locate drop-off locations as the one that customers see on the public Web site; FedEx’s service centers will soon use the same credit-card clearing process as the Web site.

The only choice is … choice.

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“Customers have to be able to have it their way,” Tucker says. “We can provide them with turnkey systems — APIs for those who want to integrate [FedEx software] with their own systems; FedEx Ship; and FedEx interNetShip, which facilitates shipping over the Web.” The result: 70% of the 3 million packages that move through FedEx’s network every day have been processed online, without paper forms.

You can’t move fast if you plan slow.

One enemy of innovating on Internet time is budgeting. Tucker’s unit can seek “contingency funding” if it wants to chase hot opportunities: “We’re not forced to get everything into the business plan at one point in time.”

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