How Big Companies Become Disruptors

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So often the conversation is that disruption happens by the small fry, the start-up with big ideas and lacking the sense to know any better. Yet, there are a number of Fortune 500 companies who would take umbrage at such a notion. FedEx is one of those.

Dan Kraemer, chief design officer at IA Collaborative, asserts that there is a key design principle that takes large companies from ‘slow + status quo’ to being those on the leading edge. That principle is simple and straight forward: ‘design like David, go to market like Goliath.’

We know Goliath brought the muscle, David the brains, precision, and bravery to face something few were clear how to conquer. FedEx has the might of Goliath, and to bring a totally new innovation to market, they organized themselves to act like David.

In 2015, more than 100+ companies received venture capital money to take on FedEx. Clearly, investors saw that the iconic leader in overnight shipping (as well as a true global leader in all packaging from small freight to everything handled by the Custom Critical business) was ripe for having some of its market share stolen. FedEx knew that it needed to fight its own status quo, so it bet on three key things:

  1. Outpace customers
  2. Work like a digital-only company
  3. Design the conditions for speed.

Anthony Norris serves as FedEx’s SVP of IT and Customer Access Solutions. At the Design Thinking 2018 in Austin, Texas, he shared how FedEx intervened in its typical way of working to become the disruptor to its own business and model. FedEx realized it needed to start making passive investments in areas new to the company, and that it would create demand that started to meet customer’s needs but did not match the existing FedEx structures.

That all sounded good, but FedEx was wise enough to realize that it did not have the flexibility and marketing strength at that point for the rapid prototyping and implementation required. It was great at large scale, but piloting to meet needs outside of its existing strength set would be a heavy lift.

To have FedEx work like a digital-only company, it focused on a few critical things. First, it determined some key insights from customers. A simple one was what everyone in the world knew but FedEx did not: nobody is ever home when FedEx delivers a package. With a set of small but rich customer insights, they looked at them through a digital-only lens. Simply, what would be technological answers to solve these things?

What came forward were the simple solutions that make a lot of sense. For example, today FedEx alerts you by email or text that your package is on its way and, if you prefer, you can reassign its destination from your front porch to somewhere like a nearby Walgreens or FedEx store. Porch Pirates everywhere are infuriated!

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