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About the Author
Mike Brewster is the author of two business books, Unaccountable: How the Accounting Profession Forfeited a Public Trust and King Capital (with Amey Stone). In 2003, Mike wrote the "Flashback" column for BusinessWeek Online, a monthly feature that provided historical context for business and public policy issues in the news. In 2004, Mike's byline appeared in BusinessWeek, Fast Company, Inc., Chief Executive, Brand Week, and Sales and Marketing. Frederick Dalzell is an historian and consultant whose recent business books include Changing Fortunes and Rising Tide. In addition to teaching history at Harvard and Williams College, he spent several years as a research associate at Harvard Business School. He is currently a partner in The Winthrop Group, a firm specializing in historical research and archival services for businesses and nonprofit organizations.
Read an Excerpt
Driving ChangeThe UPS Approach to Business
By Mike Brewster Frederick Dalzell
HyperionCopyright © 2007 UPS
All right reserved.
PrologueOn the Road with UPS
Ride with the drivers, you're told. If you really want to find out what makes the world's leading package delivery and logistics company tick, if there is anything valuable for today's managers to learn from UPS, it all starts with the drivers. Mention UPS to anyone, anywhere, and you'll hear immediately about their driver: Rudy or Murph or Patrick or Chen or Sue.
So on a sweltering July morning, you find yourself admiring a Snoopy made entirely of lilies at Preston Bailey, a celebrity flower arranger on West 25th Street in New York City. A COD package from UPS for $68.15 has set off a mild tempest at the business, with employees scurrying to deal with long-time UPS driver Rudy Taylor.
Rudy politely but firmly withholds the package from a young woman increasingly anxious to tear it out of his hands. Finally, the business manager lopes in. "When Rudy says you need to write a check, you write a check," he announces to the small staff, signs for the package, grabs a Krispy Kreme donut, and disappears.
Not fully out of Preston Bailey's, Rudy is explaining that the business manager's signature has by now been uploaded into the UPS worldwide tracking system, and that the sender can already see on UPS.com that the package has arrived at Preston Bailey. You start to think that maybe today's UPS has as much to do with technology as it does with drivers.
So you go to Mahwah, New Jersey, to UPS's World Technology Headquarters. Each day, data on some fifteen million packages wends its way through the UPS global network. At 8:15 A.M. sharp each weekday morning, about fifty managers responsible for maintaining the system gather in a large conference room to diagnose, detect, and fix any problems. Think of those Apple Store Genius Bars, where Apple aficionados bring their iPods and iMacs to be cured, but on a much grander scale.
Jim Medeiros, the UPS manager in charge, and his team discuss any potentially serious technology issue at any of UPS's 8,000 hubs, distribution centers, or package-sorting facilities around the world that might have developed during the previous twenty-four hours. It doesn't matter where in the world a UPS package is, Medeiros says, all package information is maintained on the global UPS system, enabling the company to act as one worldwide company. This is a claim worth checking.
So you go to Futian, a twenty-five-block free trade zone in the southern Chinese city of Shenzhen. Inside a 300,000-square-foot UPS distribution center, tens of thousands of McDonald's Happy Meal toys heading for South America are stacked more than twenty-six feet high. They sit next to W.W.W. Gore coats, Lexmark inkjet printers and Molex fiber optic cables. For these and other customers in Futian, UPS arranges ocean freight, air freight, and ground transportation, from the manufacturer to the warehouse to retail stores.
But it soon becomes apparent that technology, too, has its limits, and that UPS must get creative to serve its customers in every corner of the planet. In the southern African nation of Zambia, for example, UPS uses canoes to make deliveries across the Zambezi River. On the other end of Africa, mules deliver UPS packages into villages in the Abu Simbel region of Egypt. Near the famous cathedral in the narrow streets of Cologne, Germany, UPS cyclists deliver documents and packages to downtown offices. But what do all of these local services have to do with big-picture global trade routes, with those supply chains that we all hear so much about?
So you go to Chicago, to a UPS-sponsored conference on the global economy called Longitudes. Globally savvy CEOs debate the economic integration of Asia and the removal of trade barriers through organizations like the World Trade Organization (WTO). Former U.S. trade representative Charlene Barshefsky asserts that the United States needs to eliminate its budget deficit. Pulitzer Prize-winning author Daniel Yergin advises U.S. policy makers to concentrate on managing oil interdependence, as becoming energy independent is unrealistic. All important issues, certainly, but how is UPS itself connected to all of them?
So you go to UPS corporate headquarters in Atlanta. Mike Eskew, UPS's chairman and chief executive officer, sits in the company cafeteria and sips from his mug as he talks about postal codes in Germany, time studies in Bloomington, and overflow volumes in Pittsburgh.
He casts his industrial engineer's gaze around the room at colleagues striding by. Despite the Fortune 500 trappings of manicured grounds, a state-of-the-art employee gym, and gadget-laden conference rooms, there's something a little different about the culture at UPS's corporate headquarters.
UPS employees are not permitted to eat or drink at their desks, a nod of solidarity to those working in the field in hubs and package cars, which even the top brass observes. Company meetings start exactly on time, campus buses pull up at their assorted stops right on schedule, and clean-cut tour guides deliver rehearsed presentations flawlessly.
"You know, going all the way back to our founder, Jim Casey, we have had this extraordinary culture, this culture of constructive dissatisfaction," Eskew says. "Jim Casey is still a strong presence here, because the things he said are true even today." Now Eskew is talking about - ghosts?
No. You realize that he is saying that maybe UPS's century-long success is about something more than driving trucks and sorting packages and wiring mainframes and flying airplanes. Maybe it's also about the simple values that Casey embraced, about a singular culture of never being satisfied, about the discipline to execute, about the willingness of tens of thousands of like-minded people to pull together and transform an organization. Maybe it's about - surprise! - managing large-scale change.
So you don't go anywhere else. You go back.
Back through four watershed UPS transitions: synchronizing global commerce, achieving the biggest and fastest airline start-up in history, popularizing common carrier service, and delivering retail products for urban department stores. Backing through time, you catch glimpses of a company paralyzed by a strike in the 1990s, blindsided by more energetic competition in the 1970s, battling with the U.S. government in the 1960s, reeling on the ropes with a dead business model in the early 1950s, and mired in the Depression's woeful economics in the 1930s.
Soon you find yourself all the way back - 100 years to be exact - to 1907 Seattle, when a tiny company called the American Messenger Company was started by a teenager named Jim Casey. And this is what you find out about UPS and the nature of change.
Excerpted from Driving Change by Mike Brewster Frederick Dalzell Copyright © 2007 by UPS. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Prologue: On the Road with UPS 1
The "Big Idea": Culture as Competitive Advantage 7
Constructive Dissatisfaction and the Quest for Continuous Improvement 35
A Common and Uncommon Carrier: Accomplishing Transformation 51
Rising to the FedEx Challenge: Building an Airline 71
Beyond the Golden Link: Going International 87
Creating a Truly Global Business 119
The Technology Company That Delivers Packages 145
The Ownership Company 179
Synchronizing Global Commerce, One Supply Chain at a Time 221
One Company, One-to-One 259
Epilogue: Revealing the "Secret Sauce" at UPS 283