In 1886, an Atlanta pharmacist named John Pemberton concocted the formula for Coca-Cola. Today, the secret formula for Coke is locked away in a secure vault in Atlanta. Only a select few have access to this recipe that has given longevity to one of America’s landmark companies and strongest brands.
At UPS, the formula for success is not locked away in a secret vault or hidden from view with restricted access. On the contrary, UPS’s formula is out in the open for every employee to see and to provide the guidance the company needs to respond to business needs.
UPS was started in 1907 by a determined 19-year-old, Jim Casey, with $100 in his pocket. His idea for a bicycle messenger service would turn into one of the most successful enterprises in the world. Today, his entrepreneurial spirit lives on in the 360,000 UPSers who are reinventing the business to synchronize global commerce.
UPS’s formula for success is alive and well in the words and actions of the company’s founder, Jim Casey, and in the countless people who have followed in his footsteps to continue his legacy.
As the world’s largest parcel delivery company, United Parcel Service uses more than 500 planes and 100,000 vehicles to deliver on average 18 million packages per day to residences and businesses around the globe.
In UPS’s drive to keep its success formula fresh, one thing remains constant. That is a culture built on the timeless values of integrity, excellence, quality, and the human spirit. It’s about doing the right thing each day to manage the company’s reputation. USPS have a new logo and look at UPS, but the company maintain the values that have served us well. At UPS, everyone is a steward of the brand.
One of the greatest challenges that growing companies face is finding, developing, and retaining leaders. I believe corporate culture plays a big role in this process. Developing a strong culture is necessary to create a sustainable enterprise. UPS contributes to the economy through innovation, job creation, and economic opportunity. That means growing the company’s organizations. I’ve spent my entire career with UPS.
So what does UPS know about the challenges of growing a business? Plenty! UPS’s customer base is made up of thousands of smaller, emerging companies whose leaders have aspirations of greatness. At UPS, the company’s leadership spent years developing the products and services you need to run your business, improve your processes, and better connect with your customers, partners, and employees. UPS offers quality and value, and deliver on a promise of service excellence.
UPS is the largest player in a business where network size matters, both in reaching the most recipients on the planet and in spreading costs over a larger volume of packages.
UPS continually re-evaluate the company’s strategies. Markets change, requirements change, competitors change, and customers change–faster than ever before. There are many threats to the company’s business, but perhaps the greatest threat is if UPS were to become complacent. UPS evaluates its strategies to ensure they are still relevant to the customer and are effective in today’s market. This is a continuation of Jim Casey’s constructive dissatisfaction—the concept of pursuing excellence and the drive to better the company and improve ourselves. When determining where UPS needs to go and what the leadership need to accomplish, they often ask, “What would Jim Casey do?”
Now some people may think of UPS as a conservative company that is risk-averse, maybe even afraid to change. While they are fiscally prudent and make calculated decisions, they really are masters of change. UPS’s history is one of constant re-invention and transformation.
Today, UPS is a synchronizer of global commerce. UPS gets the right product to the right place at the right time in the right physical and financial condition. UPS views every aspect of the supply chain and the management cycle as one continuous and synchronous business process: from sourcing to final delivery, from order entry to fulfillment and returns. It’s about moving packages, but it requires managing critical information about those packages.
Next Generation of Leaders
A big part of UPS’s formula for success is developing sustainable leaders to guide UPS as a company. Soon UPS will be facing intense competition for workers and the next generation of leaders. When 76 million Baby Boomers begin retiring, the number of people exiting the workforce will far exceed the number entering.
Leaders must ask: “Where will our next generation of leaders come from?” Many leaders are putting their budgets where their priorities are. And those priorities include leadership development.
For most executives, leadership development is a major priority. In most cases, senior executives are committed to funding leadership development programs at high levels. Indeed, investment in the bench strength of “high potentials” is not faltering.
At UPS, domestic package operations generate about 62% of consolidated revenue, and international package adds 22%; less-than-truckload freight delivery, freight forwarding, logistics services, and retail stores contribute another 16% of sales.
Investing in UPS’s people for a life-long career has been a big plus for UPS and its people. For UPS leaders, employment longevity enables them to get experience across many different parts of the business. I’ve worked in many jobs in many places—and that kind of experience and training delivers continuity. So when a new chairman takes the reins at UPS, as Mike Eskew did two years ago, the leadership transition is seamless, logical, and strategic. UPS’s experienced leaders are trusted to perform their roles without disruption.
Jim Casey institutionalized these concepts of legacy leadership. He knew that the best way to prepare for the future, to meet the challenges, and to capitalize on the opportunities was to develop people into leaders. He also knew that success was not the result of one person, but rather the combined strength of determined people working together. At UPS, the company fosters an appreciation for the principles of business success laid down by Jim Casey. UPS calls this: “Preparing for the future by studying the past.” These timeless principles include combining structure with room for innovation, putting the customer first, and operating with integrity.
UPS also puts its managers through ongoing training programs and schools to develop their leadership skills, and UPS encourages them to make a difference in their local communities.
The result of all this leadership training at UPS is the creation of a new generation of leaders who can step up to responsibility without the company so much as missing a beat.
In their book, Built to Last, authors Jim Collins and Jerry Porras explore what makes up a great company. A great company has a strong vision that encompasses both an immutable core ideology and envisioned future. That vision transcends the current leader because it has been institutionalized. A visionary company religiously preserves its core ideology—changing it seldom, if ever. From this adherence to a set of beliefs comes the discipline and drive that enables a company to succeed in rapidly changing environments. The fact is, culture matters. It takes more than charismatic, visionary leaders to build visionary companies. It requires a core ideology.
UPS’ less-than-truckload segment (about 5% of revenue) exposes the firm to a market in which slowing demand leads many competitors to bid rates down to break-even margins.
What’s UPS’s secret to maintaining a reputation of excellence for 97 years? Culture, leadership, integrity, and the spirit of UPS. The formula for a sustainable culture is not simply a matter of “just add water and stir.” It takes hard work, constant management, rethinking, reconditioning, refining, and reinventing when necessary. That’s what’s involved in managing culture-using a formula for success to create a sustainable enterprise.