Latest / The David Rubenstein Show / Raj Subramaniam

Transcript

Raj Subramaniam · The David Rubenstein Show

• 0:02
  Speaker 1: One of the most legendary corporate founders of a company
• 0:05
  Speaker 1: in the United States the last fifty years was Fred Smith.
• 0:08
  Speaker 1: He started FedEx. When he got ready to retire, he
• 0:11
  Speaker 1: picked one of his four hundred thousand employees to succeed him.
• 0:15
  Speaker 1: The employee is Raj Subermnium, who is an Indian immigrant,
• 0:19
  Speaker 1: a graduate of Syracuse and somebody had a chance to
• 0:21
  Speaker 1: sit down with recently to talk about what it's like
• 0:24
  Speaker 1: to run FedEx and to succeed the legendary Fred Smith.
• 0:27
  Speaker 1: So in the old days twenty five years ago or so,
• 0:30
  Speaker 1: if I wanted to send a letter overnight make sure
• 0:33
  Speaker 1: it got there, I would do a FedEx and you
• 0:36
  Speaker 1: you know, you package it up and you send it
• 0:37
  Speaker 1: and we get there the next day. But today, with
• 0:40
  Speaker 1: the Internet, do you really have many letters going overnight
• 0:43
  Speaker 1: to people?
• 0:44
  Speaker 2: No? Letters A very very small piece of the business.
• 0:47
  Speaker 2: And I think you sent some letters, so thank you
• 0:50
  Speaker 2: about that. But it's if you open up our airplanes
• 0:54
  Speaker 2: and look at them, if you imagine you can fill
• 0:55
  Speaker 2: it up with letters, that's a lot of letters. So
• 0:58
  Speaker 2: it's actually, you know, we move the high value economy
• 1:02
  Speaker 2: of the world. In fact, last year we moved roughly
• 1:05
  Speaker 2: two trillion dollars worth of goods across the world, and
• 1:08
  Speaker 2: there are pharmaceuticals, aerospace, defense, in textiles. You just think
• 1:13
  Speaker 2: about the ones. The value per pound of something is
• 1:16
  Speaker 2: very high. They usually go in our system.
• 1:19
  Speaker 1: How do you envision your business growing in terms of
• 1:22
  Speaker 1: more customers. You've got a pretty good business already. Where
• 1:26
  Speaker 1: are you going to take a market share from ups
• 1:28
  Speaker 1: or from new entrance to the field.
• 1:31
  Speaker 2: Well, I think the market itself is growing, and I think,
• 1:34
  Speaker 2: you know, I feel like our industry, what we do
• 1:38
  Speaker 2: as an industry is pretty significant and somewhat you know,
• 1:42
  Speaker 2: underappreciated actually because it's been taken for granted, especially now
• 1:47
  Speaker 2: in this day and age. What we do as an industry,
• 1:50
  Speaker 2: whether it is like I said, two or three players
• 1:52
  Speaker 2: that we have is I think there's a lot of
• 1:54
  Speaker 2: value and within that, I think the market itself is
• 1:57
  Speaker 2: going to grow. The opportunity for players who really have
• 2:01
  Speaker 2: standout capabilities to know this is now significant. And I
• 2:06
  Speaker 2: think I'm confident in our value proposition that we can
• 2:08
  Speaker 2: compete very effectively and win share as well.
• 2:11
  Speaker 1: And how many trucks do you have delivering all these things?
• 2:14
  Speaker 2: We have two hundred thousand motorized vehicles around the world.
• 2:17
  Speaker 1: And are you going to have many trucks that are
• 2:19
  Speaker 1: driverless at something.
• 2:20
  Speaker 2: We already have and we are you know, working with
• 2:23
  Speaker 2: a partner in Texas where we have autonomous driving being
• 2:27
  Speaker 2: tested and we'll see how that goes.
• 2:29
  Speaker 1: Yeah, well there's the packages get there quicker.
• 2:31
  Speaker 2: Well, no, it's the same speed. The important thing is
• 2:35
  Speaker 2: the infrastructure we already have. We have six hundred and
• 2:38
  Speaker 2: thirty eight facilities right on the highway, so we can
• 2:40
  Speaker 2: go facility to the facility on the highway and then can
• 2:44
  Speaker 2: be human driver. So that is important component of this
• 2:47
  Speaker 2: because you know, you don't I don't think we are
• 2:49
  Speaker 2: yet able to see an autonomous truck driving down the
• 2:52
  Speaker 2: street outside here.
• 2:53
  Speaker 1: How is your business going to change with AI? Is
• 2:56
  Speaker 1: AI going to make it easier harder for your business?
• 2:58
  Speaker 2: Yeah, it's going to be great because the fact that
• 3:00
  Speaker 2: I told you we have two petabytes of data every
• 3:03
  Speaker 2: single day. We'll realize back in twenty twenty that the
• 3:05
  Speaker 2: data as we generate is a valuable asset on its own.
• 3:08
  Speaker 2: So we had gone about, you know, really engineering and
• 3:13
  Speaker 2: creating a platform using our data and creating a digital
• 3:16
  Speaker 2: twin of fed X and then comes the revolution in
• 3:19
  Speaker 2: AI and then suddenly that now we're able to use
• 3:22
  Speaker 2: that AI to now supercharge our data. So of course
• 3:25
  Speaker 2: we're going to use to improve our efficiency, our network
• 3:29
  Speaker 2: efficiency and so on. That's that's great, we'll do that's
• 3:32
  Speaker 2: that's the base layer, but we're also using it to
• 3:34
  Speaker 2: differentiate and create new value for our customers so they
• 3:38
  Speaker 2: ship more packages. And when they ship more packages, they're
• 3:42
  Speaker 2: no AI delivering packages. That's the more jobs. In fact,
• 3:45
  Speaker 2: last year we've added about twenty nine thousand jobs in America.
• 3:49
  Speaker 2: You know, we're also looking at how do we use
• 3:51
  Speaker 2: the insights that we have to orchestrate global supply chain,
• 3:55
  Speaker 2: So we're you know, there's opportunity for us to leverage
• 3:59
  Speaker 2: the inst that we have from our data and do
• 4:02
  Speaker 2: different things with it.
• 4:03
  Speaker 1: Now with all the data that you have, you've got
• 4:05
  Speaker 1: as much data as much to any company. And where
• 4:07
  Speaker 1: the US economy is, do you see a recession anywhere
• 4:10
  Speaker 1: in the near future.
• 4:11
  Speaker 2: I'm more optimistic. There's a stealth industrial growth in this
• 4:19
  Speaker 2: economy that's coming up, and we're seeing growth in the
• 4:22
  Speaker 2: B to B sector. We'll see how it goes, but
• 4:25
  Speaker 2: you know, we if you go back from September twenty
• 4:28
  Speaker 2: twenty two to the next three and a half years,
• 4:31
  Speaker 2: the industrial the Ism index was down pretty much thirty
• 4:37
  Speaker 2: five or thirty six months. It was a very tough time.
• 4:40
  Speaker 2: But I think we're starting. You know, there's probably some issues.
• 4:43
  Speaker 1: I say, I have a package I want to deliver
• 4:45
  Speaker 1: it to the Middle East right now? Can you deliver
• 4:49
  Speaker 1: packages in the Middle East because of the war going
• 4:51
  Speaker 1: on there or do you is that a problem for you?
• 4:53
  Speaker 2: Yeah, short answer as we can. We have a large
• 4:57
  Speaker 2: hub in Dubai and obviously we can fly FedEx airplanes
• 5:03
  Speaker 2: into Dubai or we have an operation into Riad, so
• 5:07
  Speaker 2: those things, no, we can't fly. But we have now
• 5:10
  Speaker 2: using other carriers to move traffic in and out of
• 5:13
  Speaker 2: Middle East as operational, but not the same way that
• 5:16
  Speaker 2: it was before.
• 5:17
  Speaker 1: So today, what do you want to accomplish the most?
• 5:20
  Speaker 2: We have changed our focus very clearly, and when we
• 5:25
  Speaker 2: had to invested ate back in February, you know, we
• 5:29
  Speaker 2: laid out goals of four percent revenue growth, which is
• 5:33
  Speaker 2: you know, modest by historical standards, but something again focused
• 5:38
  Speaker 2: on those high value verticals, but generate you know, fourteen
• 5:41
  Speaker 2: percent bottom line growth because of o Kager because of
• 5:45
  Speaker 2: the transformations that we're doing and generate you know, six
• 5:48
  Speaker 2: billion dollars of free cash flow. So that's our financial
• 5:51
  Speaker 2: those are our financial anchors that we are for.
• 5:53
  Speaker 1: So I noticed that when you are sometimes you have
• 5:56
  Speaker 1: brought the pandas to the National Zoo and you've shipped
• 5:59
  Speaker 1: some act Is that a for profitable business shipping? Those?
• 6:06
  Speaker 2: They are the VIPs very important bandits. So you know,
• 6:11
  Speaker 2: this is something that we have done for some time
• 6:13
  Speaker 2: now and because we can do it. You know, we
• 6:16
  Speaker 2: have done I think fifteen or so pandas and we're
• 6:18
  Speaker 2: looking at another one from Atlanta as well. So that's
• 6:21
  Speaker 2: something that we do and we have you know, we
• 6:24
  Speaker 2: have actually the delivery of the plane. It's called the
• 6:26
  Speaker 2: pandex for us.
• 6:28
  Speaker 1: And you do other animals likes or things like.
• 6:30
  Speaker 2: That, well, you know, we used to do animal charters
• 6:33
  Speaker 2: the way before, but right now this is this is
• 6:35
  Speaker 2: a more let's call it diplomatic move.
• 6:37
  Speaker 1: What is the biggest challenge that Wall Street sees you
• 6:41
  Speaker 1: as having as the company. What Wall Street analysts are
• 6:44
  Speaker 1: always wanting more revenue, more profits? What does Wall Street
• 6:46
  Speaker 1: mostly say that you should be doing that You're not
• 6:49
  Speaker 1: yet doing.
• 6:50
  Speaker 2: You know, some of the investors are frustrated about you know,
• 6:55
  Speaker 2: lack of generation of free cash flow for example. But
• 6:58
  Speaker 2: you have to have investments capital to get the network
• 7:02
  Speaker 2: that we've built so far. So the fact that we're
• 7:05
  Speaker 2: here and we're turning a corner and then, you know,
• 7:08
  Speaker 2: I'm not anticipating at this point and going to Moon
• 7:10
  Speaker 2: or Mars. You know, we have this planet pretty much
• 7:13
  Speaker 2: covered and the investments that we need are more incremental.
• 7:17
  Speaker 2: At this point, I think that realization is starting to
• 7:21
  Speaker 2: sink in, and so maybe the frustration is starting to
• 7:23
  Speaker 2: ebb some somewhat, and I think we also have the
• 7:25
  Speaker 2: job to do then to put points on the board
• 7:27
  Speaker 2: and demonstrate success on a consistent basis on this foundation,
• 7:31
  Speaker 2: I think we'll be all right.
• 7:32
  Speaker 1: Let's go through how you became the CEO. So where
• 7:36
  Speaker 1: were you born.
• 7:37
  Speaker 2: I was born in India, in a small state of
• 7:40
  Speaker 2: Kerala right on the southern so the Florida.
• 7:43
  Speaker 1: And were you you always interested in distribution as a boy.
• 7:48
  Speaker 2: Or something or I didn't. I wouldn't know what that was. No,
• 7:53
  Speaker 2: I was very straightforward, you know, middle class childhood focused
• 7:58
  Speaker 2: heavily in luckily for me, education plus sport, sport is
• 8:02
  Speaker 2: very important in my life.
• 8:03
  Speaker 1: So were you in a big athlete or something?
• 8:06
  Speaker 2: I was pretty good. You were in cricket, cricket and
• 8:08
  Speaker 2: badminton and athletics. Everyone knew good education was a ticket
• 8:13
  Speaker 2: to success.
• 8:13
  Speaker 1: So you're in India, in the Florida of India, and
• 8:16
  Speaker 1: you decide you want to go to a cold weather college, Syracuse.
• 8:20
  Speaker 1: How did you wind up at Syracuse? A very good school?
• 8:22
  Speaker 1: But how did you wind up there?
• 8:23
  Speaker 2: Well, first of all, you know, you have to you
• 8:26
  Speaker 2: have to imagine a world where there was no Google
• 8:29
  Speaker 2: or information was let's say, much scarcer. So there was
• 8:33
  Speaker 2: a well worn path you go. You know, in India,
• 8:36
  Speaker 2: you know there's some you get into the indianstry of technology,
• 8:39
  Speaker 2: very competitive school and once you're through that, there is
• 8:42
  Speaker 2: usually a path to get a scholarship to come to
• 8:44
  Speaker 2: America and you just get all you get, really information
• 8:48
  Speaker 2: is about rankings of top twenty schools in America, and
• 8:52
  Speaker 2: Syracuse wasn't in the top twenty four chemical engineering at
• 8:55
  Speaker 2: that time. I got a scholarship. Well, two ranks below
• 9:00
  Speaker 2: which also got a scholarship was Florida. So and I
• 9:04
  Speaker 2: learned because this was two ranks about I took Syracuse
• 9:07
  Speaker 2: and Garomberg going to the councilate in Mumbai or Bombay
• 9:11
  Speaker 2: at that time, and the lady says, you know it's
• 9:13
  Speaker 2: going to be cold over there, and I said, yeah,
• 9:16
  Speaker 2: cold whatever, And now you're at Romberg. I had not
• 9:19
  Speaker 2: seen temperatures below seventy five degrees in my life.
• 9:23
  Speaker 1: Had you ever seen?
• 9:24
  Speaker 2: So when I got this, no, no, no chance. So
• 9:27
  Speaker 2: I got to Syracuse. The first day, I'm walking to school,
• 9:29
  Speaker 2: it was seventy degrees in sunny and everyone's telling me
• 9:32
  Speaker 2: a nice day, and I'm freezing. So it went downhill
• 9:35
  Speaker 2: from there.
• 9:36
  Speaker 1: Did you ever consider transferring when you saw?
• 9:38
  Speaker 2: It's kind of kind of crazy because by the time
• 9:40
  Speaker 2: the next six months came around, my blood was thick
• 9:43
  Speaker 2: and I was like, in the forty five degrees, I
• 9:44
  Speaker 2: was in my T shirt today. Actually I can deal
• 9:47
  Speaker 2: with cold pretty good.
• 9:48
  Speaker 1: So when you graduated, did you say I want to
• 9:51
  Speaker 1: be the CEO of FedEx or what did you want
• 9:53
  Speaker 1: to do?
• 9:54
  Speaker 2: When I joined FedEx in ninety one and I barely
• 10:00
  Speaker 2: knew Memphis, I didn't know anybody in Memphis. If someone
• 10:03
  Speaker 2: had told me that this is the job I would
• 10:05
  Speaker 2: be doing, then I would have set out a much
• 10:07
  Speaker 2: better chance to play for the Indian cricket team.
• 10:10
  Speaker 1: So how did you get the job? You just interviewed
• 10:12
  Speaker 1: for a job after college?
• 10:13
  Speaker 2: Again, my MBA I was in. I was in campus
• 10:15
  Speaker 2: in Austin, Texas. It's kind of a story around it too.
• 10:18
  Speaker 2: I was. So I came home one afternoon and my
• 10:22
  Speaker 2: apartment made was on the phone and he's basically in
• 10:24
  Speaker 2: the ones. Now, I can't do that, you know, he
• 10:25
  Speaker 2: was leave us, leaving the country. So I said, who's
• 10:28
  Speaker 2: on the phone? He said, that's fed X. He said,
• 10:30
  Speaker 2: they're you know, coming to campus. Won't to interview him
• 10:33
  Speaker 2: and so, but he's not going to be there, So
• 10:35
  Speaker 2: I said, give me the damn phone, you know. So
• 10:39
  Speaker 2: I call over and I say, uh, you know, you
• 10:43
  Speaker 2: just talked to my roommate. But he's not done to
• 10:46
  Speaker 2: me there. But I'm going to be here. Can I
• 10:47
  Speaker 2: faction him my resume? I said him already said okay,
• 10:49
  Speaker 2: come on over for the interview. So, now this was
• 10:53
  Speaker 2: a time when recession was pretty you know, pretty deep
• 10:56
  Speaker 2: in ninety one. And also I didn't have a green
• 10:58
  Speaker 2: card and that's all that's big that had become an
• 11:00
  Speaker 2: issue from other interviews. So when I got to the interview,
• 11:04
  Speaker 2: my euphoria had already come back down again. So I
• 11:07
  Speaker 2: see these two gentlemen, very nice people, across the table,
• 11:10
  Speaker 2: and I say, I didn't say good morning, I didn't
• 11:13
  Speaker 2: say hello. I said I don't have a green card.
• 11:18
  Speaker 2: I said, if that's a problem, then you know, I
• 11:20
  Speaker 2: don't want to waste your time or mine. And they
• 11:22
  Speaker 2: look at me like, what is this is a strange kid,
• 11:25
  Speaker 2: and say, son, let's first figure out whether you have
• 11:29
  Speaker 2: what it takes to do a job at FedEx, and
• 11:30
  Speaker 2: let's worry about the paperwork.
• 11:32
  Speaker 1: And then so I got hired, and that's his history.
• 11:34
  Speaker 1: What was your job?
• 11:36
  Speaker 2: I was the associate marketing analyst for international marketing at FedEx.
• 11:40
  Speaker 2: So it can go lower for the staff.
• 11:45
  Speaker 1: Position now, all right, so you what year was that?
• 11:47
  Speaker 2: That was ninety one, all right?
• 11:48
  Speaker 1: So you work your way up over a series of
• 11:50
  Speaker 1: jobs and eventually you became the president or chief operating officer.
• 11:56
  Speaker 2: Well, yeah, in twenty nineteen, I was the presidency of.
• 12:00
  Speaker 1: Okay, so your president COO and Fred Smith, the legendary founder,
• 12:06
  Speaker 1: is going to be there forever. People thought, did he
• 12:09
  Speaker 1: call you one day and say, guess what I want
• 12:11
  Speaker 1: you to be my successor.
• 12:13
  Speaker 2: One day he calls over and says, I'm going to
• 12:18
  Speaker 2: Los Angeles tomorrow. I've looked at your calendar. You're doing nothing.
• 12:25
  Speaker 2: I want you on the plane with me. And so
• 12:29
  Speaker 2: it was I think the day before Valentine's Day or
• 12:32
  Speaker 2: whatever it was. So I'm there, you know, and then
• 12:36
  Speaker 2: he so he walks into the plane and we're going.
• 12:39
  Speaker 2: Even before he sits down, in turns on and says,
• 12:41
  Speaker 2: so would you like to be the president and CEO
• 12:43
  Speaker 2: of FedEx? And I'm looking at him. I'll be honored, sir,
• 12:47
  Speaker 2: And he sat down for the next because we can't
• 12:49
  Speaker 2: get out anymore because no, we've got a four and
• 12:50
  Speaker 2: a half our flight.
• 12:52
  Speaker 1: So you became the president and COO. And then how
• 12:56
  Speaker 1: many years later before hecame the CEO.
• 12:59
  Speaker 2: It's three years.
• 13:00
  Speaker 1: I mean, you become the CEO. You say that. Fred, Look,
• 13:04
  Speaker 1: it's a nice company you built, but I want to
• 13:05
  Speaker 1: make some changes, dramatic changes. Was that hard to do
• 13:08
  Speaker 1: because you made a lot of dramatic changes.
• 13:10
  Speaker 2: Well, Fred was very very clear about this. This is
• 13:12
  Speaker 2: the greatest thing about Fred. And I mean, I mean,
• 13:15
  Speaker 2: I'm just going to count myself one of the very
• 13:17
  Speaker 2: very fortunate persons in the planet that I have spent
• 13:20
  Speaker 2: so much time with him. It was very very clear
• 13:23
  Speaker 2: that once the mantle shift is over that okay, you know,
• 13:27
  Speaker 2: you'll give me all the input you want, but the
• 13:29
  Speaker 2: decision making was mine. That meeting with him lasted about
• 13:32
  Speaker 2: two minutes, all right.
• 13:33
  Speaker 1: So when you became the CEO, one of the things
• 13:36
  Speaker 1: you did was to focus on profitability. And one of
• 13:40
  Speaker 1: the ways you did that is you began to, I guess,
• 13:43
  Speaker 1: consolidate some of the divisions. Can you explain there were
• 13:45
  Speaker 1: four divisions at FedEx.
• 13:47
  Speaker 2: Yeah, so we were set up in a way to
• 13:51
  Speaker 2: operate independently with multiple operating companies and also multiple networks.
• 13:55
  Speaker 2: So four parts, right, FedEx Express, FedEx Ground, FedEx Freight,
• 13:58
  Speaker 2: and we had FedEx Office things like that, but three
• 14:01
  Speaker 2: main companies. The main thing was in the United States.
• 14:05
  Speaker 2: There was the reason why it was set up this way.
• 14:07
  Speaker 2: And again we talked about, you know, we were started
• 14:11
  Speaker 2: off in the air express business. When the ground parcel
• 14:13
  Speaker 2: business we were tiny at the turn of the century.
• 14:16
  Speaker 2: We were only ten percent market share, so we had
• 14:19
  Speaker 2: to make inroads and we need to be a differentiated play.
• 14:22
  Speaker 2: So that's what you know. You know, it took we basically,
• 14:25
  Speaker 2: you know, grew our market share for many, many, many
• 14:29
  Speaker 2: years in a row. But the profile of the traffic
• 14:32
  Speaker 2: was changing and we needed to consulate our networks. So
• 14:35
  Speaker 2: that was the impetus. It was. It was an evolution, really,
• 14:39
  Speaker 2: and so the time had come to do that, and
• 14:41
  Speaker 2: I don't think there was any debate whether we should
• 14:43
  Speaker 2: do it down, you know, so we started moving in
• 14:46
  Speaker 2: this direction. So we consolidated networks, consolidated the operating companies
• 14:49
  Speaker 2: into one FedEx, and we were you know, this is
• 14:52
  Speaker 2: a lot a long cross.
• 14:53
  Speaker 1: So the consolidations occurred, and I think the market capitalizations
• 14:57
  Speaker 1: up about sixty three percent. The stock is upset seventy
• 15:00
  Speaker 1: three percent, but the revenues are roughly flat.
• 15:02
  Speaker 2: Well it's that's not the way it works. Because at
• 15:05
  Speaker 2: the turn of the twenty nineteen, before the pandemic, we
• 15:07
  Speaker 2: were about sixty nine billion dollars in revenue. The next
• 15:10
  Speaker 2: two years we grew twenty five billion. So he got
• 15:12
  Speaker 2: ninety four billion, Okay, then it went down to eighty
• 15:16
  Speaker 2: eight the shadow of the pandemic, and now we're back.
• 15:20
  Speaker 2: So when you say you're back, yes, but if you
• 15:21
  Speaker 2: should look at the longer picture. We've grown about five
• 15:24
  Speaker 2: percent cagre since about twenty nineteen, or six percent cares
• 15:27
  Speaker 2: for us. Part of the culture that Fred drilled into
• 15:30
  Speaker 2: a brain is that change is the only constant and
• 15:33
  Speaker 2: if you don't like change, you will absolutely hate extinction.
• 15:38
  Speaker 1: Fred Smith always said that they fed Ox employees were
• 15:41
  Speaker 1: like part of his family, and it was a Berlick
• 15:43
  Speaker 1: family atmosphere. What do you do to make sure that
• 15:45
  Speaker 1: people feel like they're part of a family organization and
• 15:48
  Speaker 1: part of a company that's really doing something useful for society.
• 15:52
  Speaker 2: High performance team, that's what he would say. And we
• 15:56
  Speaker 2: are always a people first company. In our philosop is
• 16:00
  Speaker 2: crystallize in people's service. Profit you take care ever your
• 16:02
  Speaker 2: people that provide outstanding service for our customers would generates
• 16:06
  Speaker 2: profit for a company. We invest back in our people.
• 16:08
  Speaker 2: This unending circle is what has been guiding FedEx from
• 16:11
  Speaker 2: the very very good go and it's not a ethereal theory.
• 16:15
  Speaker 2: In a service business. We have five hundred thousand team
• 16:18
  Speaker 2: members around the world. The difference between those five hundred
• 16:21
  Speaker 2: thousand team members doing just enough not to get fired
• 16:26
  Speaker 2: versus doing an outstanding job for our customers and in
• 16:31
  Speaker 2: delivering what we call our prople promise. That's the difference
• 16:34
  Speaker 2: between failure and success. And so this philosophy is embedded
• 16:38
  Speaker 2: into all of us. And a great thing about FedEx
• 16:42
  Speaker 2: also is that this culture prevails globally. Anywhere in the world.
• 16:45
  Speaker 2: Do you go, The language of the country may be different,
• 16:47
  Speaker 2: but the language of FedEx is the same that I've
• 16:50
  Speaker 2: told and I promise for for sure. We may hire
• 16:52
  Speaker 2: a new get new people, buying new companies, new technology,
• 16:56
  Speaker 2: but the culture ain't going to change. That's that's what's
• 16:58
  Speaker 2: guiding us going forward.
• 17:00
  Speaker 1: Parents are in their early nineties and did they call
• 17:03
  Speaker 1: you and say they're proud of you?
• 17:05
  Speaker 2: They're very, very proud and they could not have imagined
• 17:08
  Speaker 2: anything close close to this. Uh. And so my dad's
• 17:13
  Speaker 2: advice always to me is keep working out, keep working out,
• 17:16
  Speaker 2: don't let them down, So keep moving.
• 17:18
  Speaker 1: Yeah, and what about your children? Are they proud of
• 17:20
  Speaker 1: what your much?
• 17:21
  Speaker 2: They are? Yes?
• 17:22
  Speaker 1: So when you are introduced to people, you're people say
• 17:26
  Speaker 1: you're the CEO and you're the are the CEO of
• 17:28
  Speaker 1: Are they surprised that somebody that came from India is
• 17:30
  Speaker 1: running this company that is legendarily built by Fred Smith.
• 17:35
  Speaker 2: I was introduced as this minister from an African country.
• 17:41
  Speaker 2: He just could not digest this fact. It was like
• 17:45
  Speaker 2: it was like double tack and triple tech. You are
• 17:48
  Speaker 2: the CEO, you are the global CEO. So there is
• 17:54
  Speaker 2: a little bit of that sometimes. But I think you know,
• 17:58
  Speaker 2: it's it's not it's that's meant me rare, rare at
• 18:02
  Speaker 2: this point.
• 18:02
  Speaker 1: So what do you do when you're relaxing if you're
• 18:05
  Speaker 1: not you know, looking for you know, where your package
• 18:08
  Speaker 1: was or something like that. What are you doing from
• 18:11
  Speaker 1: a package you never have to look for you? No?
• 18:14
  Speaker 2: Yeah, I think for me, I mean at this point,
• 18:16
  Speaker 2: either family time or tennis. That's kind of you're a
• 18:19
  Speaker 2: tennis you're a tennis player, so that's my meditation as
• 18:24
  Speaker 2: well as a relaxation.
• 18:25
  Speaker 1: And do you ever play with like, have your employees
• 18:28
  Speaker 1: you beat them? I assume you can beat them pretty readily.
• 18:31
  Speaker 2: No, it's I do we actually have Memphis of course,
• 18:35
  Speaker 2: you know there's a lot of FedEx folks and so
• 18:36
  Speaker 2: we play, but nobody gives me a quarter. Listen, I
• 18:39
  Speaker 2: can assure you that they're not giving up. In fact
• 18:41
  Speaker 2: that I would be upset if they did.
• 18:43
  Speaker 1: Fred Smith came up with this idea years ago, and
• 18:45
  Speaker 1: obviously it's built a big business and so forth. But
• 18:48
  Speaker 1: are you worried that some young Fred Smith somewhere else
• 18:51
  Speaker 1: is going to come up with something that replaces your business.
• 18:54
  Speaker 2: For us, part of the culture that Fred drilled into
• 18:56
  Speaker 2: a brain is that change is the only constant and
• 19:00
  Speaker 2: if you don't like change, you will absolutely hate extinction.
• 19:05
  Speaker 2: And so we are constantly with that mantra in place. Now.
• 19:12
  Speaker 2: Having said that, the physical network that we have in place,
• 19:16
  Speaker 2: and I keep repeating to this, is you can pick
• 19:18
  Speaker 2: it up a package or shipment from any one part
• 19:21
  Speaker 2: of the world and get it to any other part
• 19:23
  Speaker 2: of the world. It's taken us fifty three years to
• 19:26
  Speaker 2: build this incredible network that is going to be very
• 19:31
  Speaker 2: very difficult to replicate. So unless someone is inventing it
• 19:34
  Speaker 2: being me up Scotty machine and you know, moving through ether,
• 19:39
  Speaker 2: this is going to get very very difficult replicated. So
• 19:41
  Speaker 2: I think there are certain things that are clear modes
• 19:44
  Speaker 2: for us. But then the question for us is how
• 19:47
  Speaker 2: do we innovate and change, continue to keep that energy
• 19:50
  Speaker 2: up and move forward.
• 19:51
  Speaker 1: All right, So, today, if somebody wants to get a
• 19:54
  Speaker 1: job at FedEx and rise up. What's the best way
• 19:56
  Speaker 1: to get a job at fed X these days?
• 19:58
  Speaker 2: Well, it is, it depends on what job you want
• 20:02
  Speaker 2: and your gradational you know, that's not open right now.
• 20:06
  Speaker 2: So but I think starting off at FedEx if it's
• 20:12
  Speaker 2: at an operational side of the house. You know, obviously
• 20:15
  Speaker 2: we hire a lot of people every single day. Like
• 20:17
  Speaker 2: we said, we had twenty five thousand on the last year.
• 20:20
  Speaker 2: And the great thing is a lot of people who
• 20:22
  Speaker 2: start around as frontline careers, we had a fantastic career
• 20:24
  Speaker 2: and in fact, you know, several of them rise to
• 20:28
  Speaker 2: executive level positions in this company and there's a long
• 20:30
  Speaker 2: history of that. And then of course the staff jobs
• 20:33
  Speaker 2: as well, because I feel we're in a very exciting
• 20:36
  Speaker 2: time period here and the and that's and the words
• 20:41
  Speaker 2: getting around. So the interest level is actually as increasing,
• 20:44
  Speaker 2: and whether it is you know, you know, whether it's
• 20:47
  Speaker 2: different functional jobs or especially in technology and the ability
• 20:51
  Speaker 2: for FedEx to leverage what we have today and have
• 20:55
  Speaker 2: a different view on how we can leverage technology to
• 20:58
  Speaker 2: drive a eye. So we are getting a lot of
• 21:00
  Speaker 2: interest in FedEx for that.
• 21:02
  Speaker 1: As I mentioned earlier, stock is up about seventy three
• 21:05
  Speaker 1: percent since you took over, So you know, probably you
• 21:09
  Speaker 1: can't do much better. So would I be better not
• 21:11
  Speaker 1: to buy the stock now, would you say?
• 21:12
  Speaker 2: Or No? I think that's not the way to look
• 21:16
  Speaker 2: at it. It's yeah, you've got to look at it
• 21:19
  Speaker 2: from what's coming next?
• 21:21
  Speaker 1: And so what are you going to do to make
• 21:23
  Speaker 1: it even more proper?
• 21:24
  Speaker 2: I think so. I think there are financial goals I
• 21:27
  Speaker 2: told you are pretty very exciting, but also most importantly achievable.
• 21:30
  Speaker 2: The transformation that's underway at FedEx today, whether it is
• 21:33
  Speaker 2: our network transformation that's the organizational transformation, or digital transformation,
• 21:38
  Speaker 2: those are really livers for us and we can create
• 21:41
  Speaker 2: a new businesses on which layers on on top of
• 21:45
  Speaker 2: our existing physical business in a way. And so it's
• 21:48
  Speaker 2: very exciting. We're all excited at FedEx and we think
• 21:50
  Speaker 2: there's a lot more to go.
• 21:52
  Speaker 1: How do you spend your time as CEO?
• 21:53
  Speaker 2: I've thought about it carefully because I know the first
• 21:56
  Speaker 2: year was like I mean, I realized that the most
• 21:59
  Speaker 2: important as that I have is time. So I actually
• 22:02
  Speaker 2: sat down and thought about and said, what's my job?
• 22:04
  Speaker 2: And so one, of course is the guide the strategic
• 22:06
  Speaker 2: direction of where the company is headed, make sure I
• 22:09
  Speaker 2: have the right set of people around me to execute,
• 22:12
  Speaker 2: have an execution framework, but not get involved in every
• 22:14
  Speaker 2: aspect of execution, and represent the company well internally and externally.
• 22:19
  Speaker 2: And once I kind of got clarified in my own
• 22:21
  Speaker 2: mind that this is what my job is, then I
• 22:24
  Speaker 2: actually went through my calendar and I just very disciplined,
• 22:27
  Speaker 2: you know, put back and God's you know, some stef segment.
• 22:30
  Speaker 2: I would say, about three or of the five days
• 22:33
  Speaker 2: I'm traveling.
• 22:34
  Speaker 1: Now, what's the most enjoyable part of your job?
• 22:36
  Speaker 2: Oh, by a wide margin, is actually interacting with the FedEx.
• 22:41
  Speaker 1: Team members, not interviewing like this.
• 22:43
  Speaker 2: That's quite a second. Maybe, No, I think it's a
• 22:47
  Speaker 2: it's a it's a team members. It just you know,
• 22:49
  Speaker 2: really it's an incredible set of uh tam. It doesn't
• 22:52
  Speaker 2: matter where you're in the world.
• 22:53
  Speaker 3: And what's the least enjoyable part because we are in
• 22:58
  Speaker 3: every part of the world and very kind of you
• 23:01
  Speaker 3: know these days, I got to get up in the
• 23:02
  Speaker 3: morning and say a little prayer before you look on
• 23:04
  Speaker 3: my phone, so you know, because I.
• 23:06
  Speaker 2: Don't know what's happening, and so that you know, just
• 23:09
  Speaker 2: the unpredictability.
• 23:10
  Speaker 1: Of it now, you met your wife at FedEx.
• 23:14
  Speaker 2: Yeah, just in the same timeframe and she joined FedEx
• 23:17
  Speaker 2: what's six months before we got married.
• 23:20
  Speaker 1: Yeah, you had to be in FedEx employee to be
• 23:22
  Speaker 1: married or yeah.
• 23:23
  Speaker 2: Other way around. I need to have a job before
• 23:25
  Speaker 2: she married me.
• 23:28
  Speaker 1: You are now sixty years old, yes, sixty, You have
• 23:31
  Speaker 1: virtually no gray hair. Why is that?
• 23:35
  Speaker 2: That's a good That's a secret that's going to remain
• 23:37
  Speaker 2: with me.
• 23:40
  Speaker 1: Well, maybe you could whisper to me later. I've done
• 23:44
  Speaker 1: a great job for your shareholders and your employees. Well,
• 23:47
  Speaker 1: and I'm sure Fred would be very proud of what
• 23:49
  Speaker 1: you've done.
• 23:49
  Speaker 2: Thank you.
• 23:51
  Speaker 1: Thanks for listening to hear more of my interviews. You
• 23:54
  Speaker 1: can subscribe and download my podcast on Spotify, Apple, or
• 23:58
  Speaker 1: wherever you listen.