Kinko's "thin veneer of professional folks riding herd on a vast platoon of semitrained people" is "just not the FedEx way."

James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Graduate School of Business, explains why the two companies did not merge well.

Profit margins at Kinko’s have fallen, revenue has barely grown and employee turnover, which was 42 percent in 2005, was still a daunting 27 percent last year. Paul Orfalea, who was nicknamed Kinko for the full head of curly black hair he sported in 1970 when he founded the company — originally to serve students at the University of California, Santa Barbara — says he will not step inside the stores now.

“It gives me a stomachache to see what’s happened to the place,” Mr. Orfalea, now balding, said.

I adore Orfalea, who wrote a memoir called "Copy This! How I turned Dyslexia, ADHD, and 100 square feet into a company called Kinko's." He got me through the loneliest segment of that 1235 mile drive from Austin to Madison last month as I clicked the satellite radio over to C-Span and heard him giving a talk based on that memoir. What a wonderful, inspiring guy! Did you know Kinko's is called Kinko's because Ofalea was called Kinko because of his kinky hair? By chance, C-Span TV happens to be replaying that show at 12:10 Eastern Time today. [ADDED: Or watch it right here. AND: No, it's gone now.] I'm going to set my TiVo right now. He's incredibly interesting.

“Kinko’s was a way station where you stayed a few years, but you build a career at FedEx,” [said Kenneth A. May, the chief executive of FedEx Kinko’s.] “The Kinko’s people are hip, they’re fun, but they needed oversight.”

Kinko’s workers, many of whom still tell tales of the annual picnics Mr. Orfalea gave for co-workers (he hated the word “employee”), describe an entirely different situation.

Kinko’s coddled its workers, they say, who in turn coddled customers. “I had cornrows and green hair, and no one seemed to mind,” recalled Sharon A. Robinson, once a worker at a Kinko’s in Laramie, Wyo., and now a product specialist....

“It was the People’s Republic of Kinko’s, a place where store managers thumbed their noses at corporate and ran the stores as they saw fit,” said Gary M. Kusin, a retailer who was recruited by Clayton to run Kinko’s in August 2001. [Orfaleo sold his company to Clayton and Clayton sold to FeEx.] ...

Clayton formed a central organization, and proceeded to do what buyout firms do best — cut costs, streamline operations, and groom Kinko’s to go public.

But it went too far, in Mr. Orfalea’s view. “I told them that our biggest asset was the sparkle in our peoples’ eyes,” he said. “But they threw away senior people like garbage.”

Sad!