How FedEx's 'purple promise' shrinks emissions and grows revenue
When it comes to the environmental impact of an indispensable service, we often accept "less bad" as good enough. Aircraft, for example, create 2 percent of anthropogenic emissions — but unless we're willing to forgo the cargo and the commerce they facilitate, it seems we're stuck with the consequences. But FedEx is defying such conventional wisdom.
Blending technological and social innovation, FedEx is proving that companies can maintain growth and lower aviation emissions at the same time.
With services spanning more than 220 countries and territories, FedEx moves 90 percent of the world's GDP. By optimizing its facilities, planes and trucks, FedEx is mitigating the impacts of a gargantuan ecological footprint. The world's most recognized delivery company also recognizes that its ability to reach the most remote spots on earth is a sweet spot for corporate citizenship. That's how the company zeroed in on disaster relief as a giving opportunity.
Promising purple, going green
"It begins with 'the purple promise,'" said Nathan Loftice, sustainability leader at FedEx, at a recent conference at the University of Dallas. For FedEx employees, that's a promise "to make every experience outstanding" (PDF).
Loftice is big on mission statements, not just for personal branding or corporate messaging, but also for their strategic value. Giving attendees an aerial perspective of the company's global citizenship efforts, specifically the EarthSmart program, he explained, "You can't be all things to all people. So at FedEx we ask, 'Where do our strengths align with the world's needs?'"
With a background in finance, Loftice knows the simple definition for profit is revenue minus costs. But taking a more expansive view, he suggested, "Could 'profit' also mean helping society create revenue and infrastructure to support their communities? Or helping people lift themselves out of poverty through global trade networks?"
Loftice typifies the multi-dimensional thinking of FedExers who mix the purple promise with green values — and it extends beyond the borders of the CSR department.
Aviation emissions slow down, growth takes off
For Bobbi Wells, managing director of air ops, fuel efficiency is not just a profit center. It's an act of corporate citizenship.
"We had such a tremendous focus on service that our thinking about fuel use was a secondary consideration," said Wells. "But in 2007, it became clear that we had to change our approach to fuel use for two reasons: one, it didn't fit with our position relative to being a good global citizen; and two, it did not fit our business model to displace planes so frequently for refueling."
Wells and colleagues set about developing a systematic approach to "tackling areas where we could create the biggest results and wins for the future." Among the measures her team has taken to increase efficiency and lower aircraft emissions is a fuel-management program called Fuel Sense.
"We knew we could not go after every opportunity at once," said Wells. "So Fuel Sense is a measured approach to implementing change." The program comprises 40 program teams that work together to optimize equipment, efficiencies and other practices in the transportation chain: "From safety to engineering to aircraft maintenance, everybody is involved."
Since launching, Fuel Sense has saved FedEx about 60 million gallons of fuel as of the end of fiscal year 2013, with a goal of overall improvement of 20 percent by 2020. FedEx also aims to get 30 percent of its jet fuel from alternative fuels by 2030. Through fuel conservation and best practices in aviation and ground transportation, the company substantially has reduced greenhouse gas emissions while increasing revenue.
Getting pilots on board with sustainable practices
The airline industry has a culture that said "gas equals safety," explained Wells. "We don't save fuel at the expense of providing service to our customers or ensuring the safety of our employees and assets. But we did need an honest, ongoing conversation about why and how they needed to reconsider their fuel practices." To change the culture, Wells convened a cross-functional group including front-line staff, analysts, pilots, engineers and management.
"Representatives from 10 different departments that touched airplanes relative to fuel met each month for over a year to focus on biggest buckets of opportunity," said Wells. "This was literally one of the best things I have ever done."
With a dispatch background, Wells understands that communication and connection between the lead pilots and dispatchers is paramount. "The captain has ultimate authority over the flight. They needed to learn that more fuel is not necessarily better," explained Wells. "But they also needed to know that dispatchers would not question it if a pilot made the decision to put more fuel on the plane."
Now operating as a domestic flight carrier under flag status, FedEx planes do not need to carry extra gas under certain circumstances. "It is rare to divert to an alternate airport, so carrying gas for this purpose is unnecessary and wasteful," said Wells.
To teach the new best practice in fuel use, Wells stressed consistent messaging and reinforcement through training and via iPads. Talking to other airlines that transitioned their status, Wells reported that it took them anywhere from 11 months to three years to get buy-in. However, when FedEx implemented its new fuel management standard, it got its pilots "on board and tracking within two months."
"For a mature program, the results we continue to see impress us."
Dispatching relief where it's needed most
When Typhoon Haiyan hit the Philippines, every radio, Internet and TV station showed issues getting relief supplies into the place where it was hit hardest. Red Cross was there immediately assessing logistical needs. But the airport was compromised.
"For FedEx, the first order of business was to save lives," said Tabatha Stephens, manager of corporate contributions at FedEx. "We knew we could get to a nearby airport. We also donated a plane that delivered over 2,000 pounds of pharmaceutical and medical supplies in a relief effort worth $10 million."
"We focus on partners with a global reach, just as we do," said Stephens. To assist FedEx in disaster relief, the company has partnered with Direct Relief, American Red Cross, the Salvation Army and Heart to Heart International. "Our operations staff members work with these non-profit partners to help get access and connectivity. Invariably, they find a way to make it happen."
So do the pilots. According to Wells, "We have pilots who volunteer to take flights in cases where runways are compromised, like in Haiti. Volunteer participation in these efforts calls for a huge commitment from leadership from all of the employees. It is pervasive and heartfelt."
The power of purple
"The purple promise drives everything we do," said Stephens. In fact, this was a theme with all three FedExers interviewed. But can it really be that simple? Implementing any program involving interdisciplinary cooperation and a high degree of self-determination is a complex undertaking at a SME, let alone a global corporation.
The "purple promise" has a plainness to it that disguises its power. Perhaps its simplicity is what makes it so effective. Like the little black dress, the purple promise has an unadorned elegance that can go anywhere.
"It's the culture that our CEO Fred Smith created 40 years ago," said Stephens. "We can get a package anywhere overnight. We do what it takes to meet those needs, so we can translate that to disaster, too." FedEx's success is a testament to the power of aligning employees around a common principle, one that they internalize and take to heart.
"It starts with our chairman, and everybody buys into it at every level," said Wells, echoing Stephens. "When employees see examples of this posted on our corporate website, they see the value of it. They see action, which encourages the same behavior and the values themselves."
"It's not something you can fake," added Wells. Fortunately, it is something any company's people can follow, as long as their leaders are willing to lead them.
FedEx plane image by Frank Kovalchek via Flickr.