Yale School of Management

Center for Customer Insights

Advancing the frontiers of consumer understanding

Revolutionary Connections

Advances in both physical and digital infrastructure have made our world more connected. Rajesh Subramaniam, EVP of Global Marketing and Communications at FedEx, sits at the heart of this transformation and the implications, he says, are far-reaching.

March 3, 2015

While an undergraduate at Yale, Frederick W. Smith wrote a term paper that laid out the logistical challenges facing pioneering firms in the information technology industry, and proposed a system specifically designed to accommodate time-sensitive shipments such as medicine, computer parts and electronics.  The paper received just an average grade.  Smith passed the class and graduated from college.  Following service in Vietnam, Smith returned to the idea in that term paper, and Federal Express was born.

More than forty years later, Federal Express is now FedEx, and the world has undergone radical change. Dramatically improved transportation logistics have drawn people closer together, and new telecom technologies—particularly the Internet and smartphones—have done the same for ideas. “The intersection of virtual and physical networks is fundamentally reshaping our world,” said Rajesh Subramaniam, EVP of Global Marketing and Communications at FedEx, in a recent talk for the Colloquium on Marketing Leadership series.

Diving into the specific effects of this change, Subramaniam described the increasing pace of innovation. Today, a shipping address and a mobile device are all that’s needed to capitalize on a good idea. He described Darn Good Yarn, winner of a FedEx small business grant, as representative of this trend. Founder Nicole Snow brought the idea to life from the small, central-Maine town of Sebec. The business has since grown to hire a number of employees and earn hundreds of thousands of dollars in revenue—all from a single house in a town of 600 people.

“We are all living on the same Main Street today,” said Subramaniam. “Innovation is happening everywhere”

The efflorescence of these “micro-multinationals,” as he called them, is key to not only driving innovation, but also growth and competition at all levels of the business world, from start-ups to Fortune 500s. Companies like Darn Good Yarn, with ready access to global markets “are forcing big retailers to think like start-ups,” he said.

And with the rise of rapid innovation and widespread competition, traditional economic powerhouses are watching as new economies emerge and thrive. “Today, a much more expansive set of economies is taking off,” he said, listing Mexico, Indonesia, Turkey, and Vietnam. “These are some of the upstarts of the young global economy.” This evolution in the global market is raising important and unresolved questions about the efficiency and openness of trade around the world—both of which, Subramaniam argued, are required for this new global business paradigm to succeed.

The conversation closed with a vibrant question and answer session that ranged from how FedEx monitors and manages the trade of illicit goods to the ways it is sorting vast troves of data available through scanned packages. A good portion of the discussion also focused on the rise of competition from unconventional corners—Uber, for instance, which began as a ride-sharing service and is now delivering groceries across Barcelona. Finally, Subramaniam discussed one of the interesting collateral effects of the rise of e-commerce, which now constitutes about 14 percent of all global commerce: “We have to think more about our customer’s customer,” he said, meaning individual buyers. “That’s new for us. Where historically our customer base was 25 to 30 million small- and medium-sized businesses in the United States, now, suddenly, it’s become 200 million consumers.”

The outcomes of all this change are decidedly uncertain. Subramaniam was clear that he alone held no definite answers. “But more rapid innovation, quicker and more seamless access to global markets, and a new set of economic powers,” he reiterated. “These three developments no doubt mark the new world order.”

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