Monday, May 21, 2012

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Driving Change

The year 2007 is the centennial marker for United Parcel Service. UPS makes an exceptional case study on a business passing the test of time while surrounded by all types of companies in decline. Mike Brewster and Frederick Dalzell, author affiliates to the Winthrop Group, were given unprecedented access to UPS. Driving Change gives a historical account of UPS and details their steady approach to business.

UPS came from simple roots and a simple message. Jim Casey, UPS founder, was located in Seattle during the early 1900s, a time when mass movement to the West had people looking to find their fortune and create a life. Jim Casey recognized that information was a premium and $100, two telephones and a bicycle became the tangible assets of the start-up messenger service. His vow of the best service at the lowest possible rates became the “big idea,” and in 1919 the promising company was named United Parcel Service.

Brewster and Dalzell found several key ingredients that drive UPS dealings, and the first is the competitive advantage of culture. Human resource departments acknowledge the constant challenge to create a shared corporate mission of embraceable values. The sense of mission and opportunity came intuitively for Jim Casey and is easily demonstrated during his expansion of support to retail delivery in the 1920s. He felt that it was imperative that his employees reflect well on the customer, and with this thinking launched the trademark Pullman brown color, fashioning a professional look from the drivers to the delivery vehicles. This standard is still maintained today. UPS was a frontrunner in developing employee ownership concepts by offering promotions from within, stock buy-in options, and stock bonuses to the staff. UPS is a meritocracy.

The second critical element for UPS is its ability to execute. Imagine placing a sense of urgency on the delivery of 15 million parcels each day. This goes beyond guaranteeing the timing of a delivery, and also includes tracking. Former UPS CEO Oz Nelson said, ”The information about the package is becoming as important as the package itself.”  Gourmet food retailer Harry and David counts on UPS for deliveries during their intense holiday season— 90 percent of their perishable orders reach the customer within 24 hours. The UPS hub/spoke model and Golden Link allows for exact delivery. Customers expect results, and for UPS this may be shipping anything from an iceberg to sea aquarium inhabitants. No kidding!

Driving Change names the final main component to UPS as transformation. Information technology and globalization demonstrate this constituent element the best. During the mass power outage of 2003, UPS barely missed a business beat due to their backup planning and redundant designs of the mainframes in Mahwah, New Jersey. They ran at 100 percent capacity while much of the eastern part of the Unites States and Canada were in darkness. When it comes to global vision and expansion, UPS believes it should happen quickly; but initially culture clashes and the need to “act local” thwarted their efforts. UPS may have trailed their competition in global expansion momentarily, but when it came to playing catchup UPS found their bias for action. Their airline of “browntails” was the fastest start-up in FAA history and is ranked eighth largest in the world.

Whenever one examines anything withstanding the test of time, it begs the question as to how it moved from point A to point B. There are always a story and a few lessons behind, say, a golden anniversary couple or the fine antique that has been passed down through generations of a family. The tale of UPS is about unapologetic culture, like-mindedness in mission, punctuality, precision, improvement through constructive dissatisfaction and large-scale replication. The road along the way has its twists, turns and few bumps. Driving Change explains how UPS stays its course.

A veteran of the publishing industry, Sandra Guinness Lupini is a freelance writer.

 

 

 

 

 

 

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