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| First Person: Money & Meaning |
Special Delivery
Lynn Fritz
09/01/2004
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Lynn Fritz is the former chairman and CEO of the San Francisco-based Fritz
Companies, a Fortune 1000 global logistics firm. In 2001, propelled by a
desire to apply his expertise to disaster relief organizations, he founded the
Fritz Institute. The institute helps nonprofits move much-needed supplies around
the world. His ethos is straightforward: Doing things is better than giving
things.
My father started the Fritz Companies in 1933 as a small, customhouse broker
in San Francisco. When I took over in 1970, we did everything manually, and
operations were fragmented. But I saw that the company was part of the large,
highly complex importation process. I thought: If we can automate all parts of
the transaction, it will be great for customers—and we can generate 10 to 15
types of revenue. It seemed that all constituencies would win dramatically. It
took me 30 years to do it, but ultimately we were a very dynamic change agent in
the logistics industry. In 2001, I sold the company to UPS for around $500
million.
 After a 1999 earthquake killed 17,000 people in Turkey, I began
wondering if humanitarian organizations used all the same business practices we
did at Fritz. What was the state of the art? I saw that the disaster relief
sector was growing rapidly. The world is beginning to crumble because of a lack
of sound ecological standards. Where there would not be a flood 20 years ago,
there are floods now because trees have disappeared due to enormous
concentrations of people. I spent a year and a half researching relief
organizations, what they did and how they did it. I found that disaster relief
is 80 percent logistics, and figured that I could help change the way relief
agencies operate. I really like being involved with projects that are change
agents.
In 2001, I founded the Fritz Institute. We did it in a very
businesslike way. We created our business plan, and planned the institute for
some time before we set it up. I wanted to see that there was a value
proposition before I went ahead and launched it. I have put in about $6.2
million so far, and I have set aside money for the institute.
An American Abroad
I spend a lot of time in the Middle East and Africa on
behalf of the institute. I traveled to Lesotho, Zimbabwe and Zambia. I went to
Africa to understand where relief services touch the customer. At Fritz, I
always traveled to visit our customers; everything I ever did was for the
customer. Now I ask questions when I travel for the institute. Does the aid get
there? Does it arrive complete? How does it work? Where does the money come
from? Zimbabwe is suffering a famine because of political strife; Ethiopia
endures famines every two years due to self-imposed economic factors. If we
include the overarching element of the AIDS epidemic in Africa, that exacerbates
conditions to a point that one cannot exaggerate.
| After a 1999 earthquake killed 17,000 people in Turkey, I began wondering if humanitarian organizations used all the same business practices we did at Fritz. |
I remember being in
Lesotho, in a remote village on a hill. It was a poor village filled with hungry
people, and the Red Cross was distributing aid there. One old man asked me to
come into his hut; it had no lights and only one candle. He was the oldest man
in the village, and many of his friends had died during the famine. He told me,
“It’s good to meet the U.S.A., because all I’ve seen are the bags of food and
seeds. I’ve never seen an American.” The delivery system there consisted of two
or three sheds. The use of basic technologies would have created a significant
uptick in the amount of aid that got through.
We are here to help improve our
customers—large nonprofits such as UNESCO, CARE and Catholic Relief. We want to
make them more efficient, more strategically balanced. We go into their
headquarters, or visit them in the field; together we identify solutions and
work them out. The means to the end, we feel, is measurement and accountability
using best practices tools. We do not do the work if the organization is not
willing to be measured and commit to ongoing accountability. When it all clicks,
it is very satisfying to see do-gooders do good. I love leveraging the
efficiencies. One-to-one does not get very far. With the use of planning and
tools—one-to-three, one-to-seven, one-to-10—you can really do something.
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