Innovation and Change at FedEx - Case Study Example

? Innovation and Change Executive summary The paper seeks to explore the fundamental concept of innovationwhich has certainly become part and parcel of the present business environment. In the context of change and innovation, it becomes imperative that each and every organization strives to stay ahead of the park in order to survive in the market. The competitive logistics market demands a lot of innovation from the market players in order to address the growing needs of the consumers. FedEx is always at the forefront in creating efficient ways that can effectively enable the organization to sail through this environment. However, amid the incessant process of innovation, several challenges abound. FedEx is always at the forefront in addressing these challenges in order to make the organization better in the modern age. Innovation and Change FedEx Corporation is currently a global multinational company specializing in the highly intricate logistics industry across the world. The company is indeed a global brand that has diversified its operations across the several sectors bordering the logistics industry. Indeed, through its bunch of operations, FedEx is currently one of the leading corporations in its industry. Headquartered in the United States, the operations of the corporation are presently divided into several divisions. The corporation was formed in 1996 following the acquisition of Caliber Systems Inc. by the original FedEx Express. Since its formation, the major objective of the corporation has always remained the need to build a strong share and foundation in the highly competitive logistics industry across the world (2012). Indeed, over the years, the organization has sufficiently managed to realize most of its objectives. Most of these realizations have always been a result of the efficient operational processes in the organization and the focused sense of management often realized in the organization. Presently, the organization operates in several segments across the industry. These include, Express, Freight and Ground. Nevertheless, the original company FedEx express was incorporated in 1971 when Fredrick Smith sought to put into action an idea he had nurtured since his days as an undergraduate student at Yale (Burns & Stalker, 1999). Throughout the years, the company has grown and managed to take a lead in the highly competitive industry. The challenge has always been great amid the many dynamics that characterize the present business environment. Nevertheless, these drawbacks have always been addressed effectively by the management of the organization. As an external innovation management consultant, I would institute a number of changes in the organization with regard to innovation in the organization. This is about the production of new ideas in the organization, which normally takes a lot of time before approval is done. In this regard, it has been realized that the organization looses many new resources in terms of ideas given by the employees. It would therefore be imperative that the time for approval of new ideas be shortened so that the organization can effectively benefit from its large pool of resources. Similarly, much of the bureaucracy realized in the adoption of ideas in the organization has always been wanting. As an innovation consultant, I would effectively address this concern by instituting measures and policies that would mitigate the red tape presently realized. This would go a long way in making the innovation strategy of the organization one of the best in the industry. Innovation only thrives if such an environment is present in the organization. In terms of its value benefit, the company aspires to maximize the returns of its stakeholders through the provision of quality services using the latest trends in the market. Indeed, the operations of FedEx are almost indispensable in the present world. The organization is a very active participant in the global supply chain industry through its efficient logistics services that enable goods to be ferried to their destinations at the minimum time possible. Similarly, the organization facilitates the achievement of the product lifecycle of most organizations that rely on its services for their operations (Ng & Farhoomand, 2000). To facilitate its success in the market, FedEx appreciates the imperative role of creating a series of networks across the world in order to enhance its fast deliveries. In this regard, the corporation has acquired other smaller organizations in order to enhance its global reach and ensure that every corner of the world is reached at the minimum possible time. One of its notable successes in this regard was the creation of FedEx Asia One, a network that is certainly unparallel in the world. This network effectively covers the Asian and the whole of the Orient through daily flights and a network of other channels that ensure very quick deliveries. As an inspiration to the employees, the core values of the corporation are Innovation, Service people, Integrity, Responsibility and Loyalty (APQC, 2008). These fundamental ideals have always guided the operations of FedEx and ensured maximum output from its nearly 200,000 employees across the world. With the series of acquisitions that characterized the operations of FedEx, it actually became imperative for the organization to adopt a new organizational structure that could effectively serve the growing and intricate organization that was thereby emerging. The lean organizational structure previously in use certainly proved inappropriate for the highly diversified operations of the organization. As a result, the organization adopted a multi-divisional organizational structure, which basically meant that the top management provides strategic guidance of the whole organization and consolidates financial aspects of the organization. However, substantial authority rests with the particular divisions of the organization. Each division is mandated to manage its own affairs and is responsible for the intricate network of activities in the particular division. Certainly, the structure has enabled the individual growth of the particular divisions of the organization without much influence from the operations of the other sectors of the organization. This has seen the growth of such divisions as Express, Freight, Supply Chain, Ground and Trade network. Such a division, complemented by an effective organizational culture that focuses on performance of the employees, has enabled the corporation to realize much of its present success in the market. It is imperative to realize that presently, FedEx covers entirely all the globe though its logistics services. The organization however, has a very strong presence in North America and Asia where it has recently focused much of its operations as a result of the booming business in the region. FedEx organizational chart Indeed, as participant in the highly dynamic logistics industry, FedEx is faced with a lot of opportunities, threats and challenges that require much analysis and action. Innovation is a very important ingredient that ensures success of operations in the present business world (Hill, 2010). In this regard, FedEx has always been at the forefront in seeking means and ways of creating value and differentiating its services from those of the competitors in the market. Some of the opportunities realized in the market in which FedEx can actually capitalize on include: The cost of entry into the logistics industry is much expensive due to the high infrastructure needs. This limits the number of new entrants. FedEx is already a leader in the global express industry through its efficient services in the sector The need for express delivery will always exist as long as the socioeconomic environment persists. Market is therefore much assured. The growth of e-commerce across the world is creating much need for express delivery of goods to the clients. Globalization is a sure opportunity in terms of expansion. In the face of addressing these opportunities to enhance the growth of the organization, innovation becomes a very critical item in the context of FedEx operations. It is much imperative to realize that the success of FedEx over the years has always been hinged on the various aspects of innovation instituted by the organization. Indeed, innovation is at the core of the organization and the future success of the organization still largely depends on its strategies with regards to innovation. Through its effective human resource management program, the organization has always ensured that employees are the most critical asset of the organization. This is actually important considering that FedEx is a service provision corporation where the employees play a great role in the operations. Through the effective employee management policy in place, there has always been the development of new products and services through brilliant ideas from the employees (Birla 2005). The culture of innovation at FedEx was created by its very founder Fredrick Smith. Currently, all employees at FedEx are tasked with finding new ways through which customer satisfaction can be enhanced by the organization. There is indeed much opportunity to be realized in this regard. Considering the thousands of employees the organization has across the world and the diversity of these employees, it certainly implies that there is much opportunity for innovation with respect to the employees of the organization. The FedEx institute of technology is one of the most effective ways through which innovative ideas can be developed in the corporation. The institute focuses on science, business and industry-sectors which FedEx effectively seeks to maximize. In this regard, the institute is a very good center through which innovative ideas can be developed in order to enhance the growth of the organization. Through research and development, the center is able to dissect into the specific areas of the industry where FedEx cab develop and take a lead in the market. The development of Information Technology across the world has presented a new ground for the innovation in the logistics industry. Innovation can be realized through web services and in efficient supply of goods ordered through e-commerce. Innovation at FedEx cuts across several sectors of the industry. This is basically realized in research, business, technology and engineering where the researcher are tasked with developing ideas that match the changing customer needs and expectations in the market. Innovation at FedEx is focused on the identification of the opportunity spaces in the industry. After that, concepts are developed through incubation, prototyping, and commercialization processes. These strategies are much effective in fostering an innovative culture within the organization. Sure enough, innovation has become a culture at FedEx as can be realized from the nature of the performance of the employees of the organization. Indeed, this is a good opportunity for the organization to develop itself ahead of its competitors. Indeed, FedEx in much ahead of its competitors with respect to express deliveries. In this regard, the corporation has a very good chance of developing its processes through innovative ideas from its employees and other sources in order to be effectively assured of a lead in this sector. Innovation has created the need for differentiation of services. Such differentiation has always focused on the quality of the services offered. Currently, FedEx commands the largest fleet of airplanes used in the express operations across the world. Despite the importance of innovative processes in the realization of success at FedEx, most of the innovative suggestions have always been much difficult to implement. In some instances, innovations demand a total overhaul of the existing structures order to replace them with more efficient processes. Well, such overhauls might always translate into the disruption of services in the organization hence most are never adopted. In the same way the implementation of some of the suggested ideas might always face a challenge with respect to the financial implications. Innovation is much expensive at the implementation stage and this can always create a challenge for the organization. The extent of FedEx operation’s across the world implies that any new innovative idea has to be implemented across all the facets of the organization. This might prove quite a challenge for the organization. Often, it is realized that innovation is normally affected by the nature of the operations in the industry. The logistics industry across the world is dominated by several large market players who are very keen on the operations so each other. In this regard, any innovative idea developed by FedEx or any other competitor is quickly adopted through prototyping or coping. In this way, much of the research geared toward innovation seems to be wasted in a way. The competitive nature of the market has created a lot of unethical practices that seem to affect the smooth operation in the market. The nature of innovation creates the need for questioning the status quo and challenging the present way of doing things. This however is often faced with a lot of cultural barriers. FedEx operates in several cultural backgrounds in the world. Some of these cultures are very resistant to any changes that might be instituted to improve the quality of the services. For instance across Africa, FedEx faces the challenge of modernizing its services through information technology due to the mild adoption of such strategies in some of the countries. Culture therefore plays a great hindrance to the development of innovative ideas and in the implementation of some of these ideas on the ground (Wetherbe, 1996). However, despite the challenge of culture, FedEx has always been at the forefront in creating the awareness on the importance of adopting some of these changes in the environment. Most of the innovative problems realize by FedEx can effectively be addressed through methodical strategies in place. For instance, instead of instituting innovative methods across all the market, it would be imperative to fist begin with the most productive markets in order to cut the costs of implementation and enable the gradual adoption of the new ways of operations. This can help in creating the change without much of the challenges realized. Similarly, the challenges can effectively be addressed through the proper identification of the opportunities that could be exploited through innovation. In conclusion, it is realized that FedEx is indeed a market leader in the logistics industry courtesy of the proper organizational culture that emphasizes on the importance of the employees and the proper innovative strategies that ensure that operations meet the demands of the consumers. However, challenges still abound in the innovation process considering the sheer size of the organization and the financial implication of implementing some of the strategies for change. References Birla, M. (2005). FedEx delivers: how the world's leading shipping company keeps innovating and outperforming the competition. Hoboken, N.J.: John Wiley & Sons. Burns, T., & Stalker, G. M. (1999). The management of innovation. London: Tavistock Publications. Hill, C. (2010). Strategic management theory: an integrated approach (9th ed.). Mason, OH: South-Western/Cengage Learning. Ng, P., & Farhoomand, A. F. (2000). FedEx Corp.: structural transformation through e-Business. Hong Kong: Centre for Asian Business Cases, School of Business, University of Hong Kong. Realizing Change: Knowing When & How to Successfully Change - FedEx Ground. (2008). Houston: American Productivity & Quality Center (APQC). Service., c. F. (n.d.). New Customer Center: Get Started with FedExA‚A®. FedEx: Shipping, Logistics Management and Supply Chain Management. Retrieved May 2, 2012, from http://www.fedex.com/us/service-guide/new-customer/index.html?lid=learn_starting_newcustomercenter Wetherbe, J. C. (1996). The world on time: the 11 management principles that made FedEx an overnight sensation. Santa Monica, Calif.: Knowledge Exchange. Read More