Successful Transformation Requires People, Says FedEx CIO

Companies undergoing a big transformation risk overlooking the role of people. That was FedEx CIO Rob Carter's message in his keynote this morning at InformationWeek's Spring Conference in Amelia Island, Fla.

FedEx's attention to people led to the success of its 6x6 Transformation program launched two years ago, said Carter, named InformationWeek's Chief of the Year in December.

The 6x6 Transformation initially focused on improvements in such areas as cost effectiveness, speed, innovation, service levels, and business alignment. The end goal was to create a consistent environment linking FedEx Express, FedEx Ground, and FedEx Kinko divisions.

But a little ways into the program, FedEx realized it hadn't put enough focus on people and the part they play in a successful transformation. FedEx's first step was to develop ways for motivating employees and providing them with meaningful work. "Everything within IT and our business recognizes the contributions that people make," Carter said.

Additionally, FedEx worked on developing better communications with its business partners. "To most of our business partners, it's mystical what we do and why we are spending money on certain projects," Carter said, referring to FedEx's $1 billion IT budget. FedEx began talking partners through the transformation process, creating a refined set of terminologies that would help the partners understand the business. "The world is becoming a lot more technology-intensive, and [partners need] to understand what we do," said Carter.

FedEx also worked with partners in India and other countries to develop new systems and applications to help the transformation. That included technologies for improving customer satisfaction, such as software tools that use rich data to inform customers of all incoming shipments.

Carter assured the audience that its development work overseas doesn't threaten domestic employees and business partners. Carter called it "variable capacity" rather than outsourcing. "We're not pushing our systems out, but working with partners to develop them. We're just not a big outsourcing company," he said.

But despite what Carter calls FedEx's "culture of change," the company still finds itself in stiff competition with UPS and DHL, which are also trying to stay relevant through innovation and growth.

DHL, for example, announced today enhancements to its suite of domestic Next Day Air products: It will expand service coverage across the United States for next-day product delivery services and also enhance its money-back guarantee to include transportation charges and service fees.