BY MARK OVERBYE

’ d like to catch the culprit dripping corrosive venom on my confidence at 3 a . m . I ’ m trying to sleep . But certain destructive demons call on me during the darkest hours . And instead of a pleasant wake up bell , it ’ s alarming questions . Will cash flow meet the demand for dollars ? How well supported is the market ? Can vendors supply in time ? What do our customers really think ? Are we on the right track ?

The morning light usually washes away the dark thoughts . But the challenges are real . Every business leader must ask themselves if the structure they ’ ve built can withstand the coming storms . And they are coming . Will the business become the rock upon which the waves crash ? Or will the storm wash the business away .

Attending Yale University in 1962 , Fred Smith rushed to finish an economics paper . The hurriedly written paper conveyed a concept for an overnight delivery service enabled by the emerging computer information age . At the time , Smith didn ’ t think much of it , but that paper set the stage for FedEx .

After graduating from Yale , Smith joined the Marine Corps as a platoon leader and forward air controller flying in the back seat of an OV-10 aircraft . Prior to being honorably discharged in 1969 , Smith received a Silver Star , a Bronze Star and two Purple Hearts while serving two tours of duty in Vietnam . The Vietnam War provided ample opportunity to learn about aviation and war time planning when pressure is greatest .

Upon his return to the US , Smith purchased controlling interest in Ark Aviation Sales in Little Rock , Ark ., an aircraft maintenance company . Shortly thereafter , he shifted the company ’ s focus toward trading used jets .

With his $ 4M inheritance and $ 91M in venture capital , a half billion dollars in today ’ s currency , Smith established FedEx in June 1971 . Connecting 25 cities , 14 Dassault Falcon 20 Fedex planes took off from Memphis , Tenn . on April 17 , 1973 with 186 packages marking the company ’ s first overnight deliveries .

Unfortunately , sky rocketing fuel prices dealt a blow beyond the contemplations of Smith ’ s economics paper . In its first 26 months the company lost $ 29M , putting FedEx on the brink of bankruptcy . Millions of dollars in debt , Smith rushed to raise additional funds .

Attempting to leverage more business loans , a previously successful strategy , Smith failed to find more lenders despite having a promising business model and a fleet of planes then servicing 35 cities .

A week after receiving a particularly disheartening business denial from General Dynamics , Smith found himself unable to fuel his planes for the

coming week , a $ 24,000 bill . To stave off a complete business implosion , Smith tried every trick , including using the pilots ’ personal credit cards and uncashed paychecks to pay for fuel .

His back against the wall , Smith impulsively flew to Las Vegas . Betting the company ’ s last $ 5,000 at blackjack tables , Smith miraculously won $ 27,000 .

Capitalizing on his momentum , Smith ultimately secured between $ 50M- $ 70M from twenty of the leading risk venture firms . At the time , FedEX was the most highly financed new company in US history by venture capital .

Today , FedEx operates the world ’ s largest air cargo business with over 650 aircraft flying to over 375 destinations in 220 countries . Traded on the NYSE , Fedex reported 2021 revenue of $ 84B with a net income of $ 5.23B and a diluted earnings per share of $ 19.45 .

Interestingly , FedEx ’ s operating margin is only 7 %. Even the best business managers cringe at the thought of such a skinny margin . How do you secure your business under such pressure ? You ensure your business is the primary choice by customers , thus sustaining the business .

Proving their value , every day 600,000 FedEx employees deliver 16.5M packages using over 210K vehicles and process over 600M tracking requests with nearly 100 % accuracy . They define a customer centric business . Even when things get tough , people still choose FedEx .

When seas are calm and times are good with abundant cash flow , a mountain of business sins can be covered up . But when the sea of cash recedes , those businesses without a customer centric business model may be left for dead . Accordingly , prudent managers consider customer satisfaction KPI ’ s as religiously as financial metrics .

Thriving in rough seas means asking tough questions : Are we the No . 1 customer choice in our market ? Are we delivering joy at every customer touch point ? Is our brand promise to serve and is every team member dedicated to that mission ?

Unequivocally , striving for Yes is the only answer . Understand that rough seas make the best captains . And the best captains rely on a competent crew , a compass pointing to the right path and a map showing a destination with the happiest customers .

Mark Overbye is the CEO of Anthem Marine , as well as the chairman of USA Waterski and Wake Sports Foundation . He is also the founder of Montara Boats and Gekko Sports .

16 august 2023 www . boatingindustry . com