BUSINESSWEEK ONLINE : JANUARY 10, 2000 ISSUE
COVER STORY Out of the Box at UPS KEY ACCOMPLISHMENTS Oversaw $5.5 billion IPO in November. Shares are up 35%, to around 67 Made UPS the leader in e-commerce deliveries, with 55% market share Profits should grow 20% in 1999, to $2.3 billion, before special charges From its employees' brown uniforms to its boxy vans, United Parcel Service (UPS) hardly looks like an icon of the New Economy. Don't be fooled. Chief Executive Officer JAMES P. KELLY has repositioned the UPS delivery folks as foot soldiers of the dot.com revolution. ''We're a 92-year-old company that's reinvented itself several times, and we're doing it again,'' he says. Kelly, 55, has lived through many of those reinventions since he started as a UPS relief driver for the 1963 holiday season. Working his way through night school at Rutgers University, Kelly decided to become a full-time driver when he realized it paid double what he was making as an accountant. From there, he rocketed up the management chain, handling labor relations and other divisions before becoming CEO in 1997. These days, the golf fan is transforming the once-stodgy company into a Net darling by spending big on new technology and expanding abroad. The recast UPS is more than just a cargo hauler. Kelly has organized the company to manage an array of logistics systems for its dot.com customers, from managing inventory to performing customer service functions. Some five years ago, Kelly saw the power of the Internet as a sales channel and made it a key focus. Now UPS's vast array of delivery options makes it a one-stop shop for small and large customers alike. Kelly's big bets are paying off. Already, UPS handles 55% of all Net purchases, vs. 32% for the U.S. Postal Service and 10% for Federal Express. Wall Street is happy, too: The privately held UPS sold 10% of its stock in November, the largest IPO ever. Still, Kelly admits a challenge is preserving UPS's collegial atmosphere, at an outfit where loyal workers say they bleed brown. While Kelly is happy that the IPO enriched employees, the culture, he says, ''is the thing we talk about more than any other issue. It's the last thing we want to screw up.'' To avoid creating a short-term mentality, Kelly won't post UPS's stock price inside headquarters. That approach should keep UPS delivering the right stuff. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS INTRODUCTION MANAGERS TO WATCH THE TOP ENTREPRENEURS THE TOP 25 MANAGERS Minuro Arakawa Bernard Arnault Arthur Blank Peter Bijur Gordon Binder Steve Case John Chambers James Curvey Thierry Desmarest Bernie Ebbers Tom Engibous Chris Gent Irwin Jacobs Steve Jobs Mel Karmazin James Kelly Timothy Koogle Ken Lay Jenny Ming Thomas Siebel Masayoshi Son Martha Stewart Keiji Tachikawa Jack Welch Yun Jong Yong ONLINE EXTRAS TO BUSINESS WEEK INVESTOR INTERACT E-Mail to Business Week Online

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