On delivery
Michael J. Pallerino
January 1, 2007
It's amazing how far $100 can take you. In 1907, 19-year-old Jim Casey asked a friend for a loan so that he could act on an idea he had for a new company. The venture would put him smack dab in the middle of Seattle's delivery business, which already had a number of competitors. Casey's company – The American Messenger Company – consisted mostly of teenagers, employed a pretty straightforward strategy. You get the call and you deliver the goods, which included packages, notes, baggage and trays of food from restaurants. Now picture this: Most deliveries in those early days were made on foot, while longer trips required a bicycle. It would be another six years before the United States Parcel Post system opened for business.
The philosophy that Casey and his partner, Claude Ryan, operated under was simple: customer courtesy, reliability, round-the-clock service and low rates. Fast-forward 100 years and those principles still guide UPS (which adopted its current name in 1919) today. That little messenger company has grown into a $42.6 billion corporation that manages the flow of goods, funds and information in more than 200 countries and territories worldwide.
Today, Mike Eskew oversees the guiding principals that Casey and Ryan set into motion. Starting his UPS career in 1972 as an industrial engineer in Indiana, he moved through the ranks as a corporate vice president, group vice president, executive vice president and vice chairman. In 2002, he was handed the company's reins. Ask him and he’ll tell you that the chairman and CEO – only the ninth in the company's history – was just in the right place at the right time.
And he made the most of the opportunity. Eskew was part of the team that spearheaded the company's first international expansion into what was then West Germany, a springboard that eventually opened up more than 200 markets around the world. He also led the company's decision to form its own airline and helped build it into one of the largest air carrier fleets in the country. In addition, Eskew oversaw the development of a multibillion-dollar information technology infrastructure that enables the company to know the exact location at any moment of any one of the million packages it moves every day.
Today, UPS and its leader believe in the convergence of globalization and technology. Eskew says that globalization is both a challenge and an opportunity. “ In 1998, UPS changed the ‘Purpose’ in its charter to four words: ‘We enable global commerce,’ ” Eskew says. “ That's a very ambitious goal to set for yourself. We believe we can become the middleman helping businesses operate around the world because our brand stands for service, reliability and honesty. It's a reflection of 100 years of work by dedicated UPSers. ”
A friend of a friend
Just how successful UPS continues to be can be seen in the number of accolades and awards it continues to receive. As the company celebrates its 100th anniversary in 2007, Eskew is not only proud of the recognition the company received last year, but also that the accomplishments helped set the stage for future growth.
“ We dramatically accelerated the speed of our ground network for packages, taking one to two days out of the transit time for half-a-million packages every day, ” he says. “ We became the first in our industry to offer three daily options for delivery times in major global markets around the world, just as is standard here in the United States. [On the business side] we rebranded Overnite as UPS Freight, secured a new long-term contract with our pilots and announced a $1 billion expansion of our Worldport global air hub in Louisville, Ky. ”
On the branding side, UPS continues to be a model corporate citizen. For example, the company ranked ninth in the United States among 152 companies for its corporate citizenship in 2006. The GolinHarris Corporate survey – Corporate Citizenship Gets Down to Business: Doing Well by Doing Good 2006 – asked 5,000 Americans to rate 152 brands under the premise that “ Americans are sending a clear message to Corporate America: do more … be authentic … and the business rewards will follow. ”
You want rewards – UPS has them. For the seventh consecutive year, the company set a new record for contributions to United Way. UPS, its employees and retirees pledged $59.3 million during the 2006 United Way campaign. In addition, UPS employees volunteered more than 800,000 hours of service around the world in 2006, much of it in the United States helping local communities by repairing schools, reading to children, landscaping for local organizations and assisting food banks. “ This is something that was instilled in us by our founder, ” Eskew says. “ As a company that serves every community every day in the United States, we see first-hand the needs of the communities in which we operate and our employees want to respond. We also recognize that our business is healthier if our communities are healthier. ”
“ IN 1998, UPS CHANGED THE ‘PURPOSE’ IN ITS CHARTER TO FOUR WORDS: ‘WE ENABLE GLOBAL COMMERCE.’ THAT'S A VERY AMBITIOUS GOAL TO SET FOR YOURSELF. WE BELIEVE WE CAN BECOME THE MIDDLEMAN HELPING BUSINESSES OPERATE AROUND THE WORLD BECAUSE OUR BRAND STANDS FOR SERVICE, RELIABILITY AND HONESTY. IT'S A REFLECTION OF 100 YEARS OF WORK BY DEDICATED UPSERS. ”
You want diversity – UPS has it. The July 2006 issue of Black Enterprise magazine placed UPS on its list of “ The 40 Best Companies for Diversity. ” The magazine highlighted numerous statistics, including 70,000 African-Americans in UPS's U.S. workforce and the fact that minorities hold 85 senior management positions and five company board positions and account for 50 percent of new hires last year.
“ As part of our corporate responsibility program, we set ambitious goals for diversity and closely monitor our progress, ” Eskew says. “ Those results are published each year in our Corporate Sustainability Report, which is posted on the Web site for all to read. This includes not only employee diversity, but also supplier diversity. Also, diverse giving is an important part of our philanthropy program. ”
You want admiration – UPS has it. In an annual survey conducted by FORTUNE magazine, UPS was rated “ America's Most Admired ” company in its industry, and also ranked in the Top 10 throughout all of corporate America in seven of the eight criteria used by the magazine to rank companies, including a No. 1 ranking for social responsibility for the third straight year. UPS also was ranked No. 2 in the United States for “ product quality, ” No. 3 in each of the categories of “ best use of assets ” and “ financial soundness, ” No. 5 for “ people management, ” No. 6 for “ management quality ” and No. 9 for “ long-term investment. ” And to top it off, the magazine rated UPS No. 1 with a composite score of 8.54 on a 10-point scale, almost six-tenths of a point ahead of its nearest competitor. In fact, UPS has been ranked No. 1 in its industry for 22 of the last 23 years.
And as proud as Eskew is of his company's past accomplishments, he's also keeping a close eye on the future. “ First, it's our centennial anniversary this year, so we’ll do a little bit of celebrating, ” he says. “ But 2007 will see continued strong growth in international package operations and improved growth and profitability for our various supply chain and freight services. We absolutely believe we’re in a dynamic ‘sweet spot’ because the expansion of global trade plays to everything we do. We live in an increasingly interdependent world and trade barriers are collapsing. ”
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