Change in leadership can be just what's needed in hard times. It may invoke a new hopeful attitude, fresh thinking and revived energy. Whether one thinks new leadership will be stronger than what it replaces may not be as important as the fact that it is simply new. We tend to give new regimes new chances to solve difficult problems, uncover new opportunities and even break loose in new directions. Our new USPS PMG Megan Brennan, our new PRC Acting Chairman Robert Taub, and our new leadership in Congress should all be greeted with enthusiasm and encouragement.
Retiring Postmaster General Pat Donahoe did a commendable job on his terribly turbulent watch. He took the helm of "The USS Postal Service" when it was already taking on losses resulting from declining First Class Mail revenues, exacerbated by the resulting damage of an unavoidable collision with an iceberg called "The Great Recession." Yet he has kept his badly damaged ship afloat and on course. Although it is still taking on water (in the way of debt) the good-ship USPS continues to deliver the goods over vast geography, with celerity, regularity and reliability for remarkably low rates.
Mr. Donahoe maintained USPS's buoyancy mostly by jettisoning cost in the way of workforce reduction (212,000 positions through attrition), processing plant consolidation, (305 facilities and 82 more to come), optimizing window hours (at 13,000 P.O.s) and eliminating delivery routes (23,000). That amounts to $16 billion in annual savings. Relatively small increases in ecommerce-driven parcel revenue have helped a little too. But all this is still not enough to account for the continuing decline in its primary profit generator, First Class Mail, which amounted to $17 billion per annum over the past 10 years.
So our nation's new and first female PMG, Megan Brennan, takes charge of a slightly more buoyant vessel. As PMG Donahoe's Chief Operations Officer, Ms. Brennan directed most of that $16 billion in cost-cutting and as the new Chief Executive she is likely to maintain a "steady as she goes" course, trimming expenses wherever Congress will allow, even though many members object to the additional planned plant closings. She also continues to benefit from the significant reduction in fuel costs, as long as that lasts.
Change in Attitude
Hopefully, change in leadership will bring constructive change in attitudes and relationships along with it. In his farewell address to the National Press Club, PMG Donahoe complained about the lack of change during his term in office, which he blamed on "myopia - shortsightedness," on the parts of Congress, the mailing industry and labor unions. He said, "We never get beyond the narrow set of interests that are determined to preserve the status quo." His position that the Postal Service cannot adapt and transform to meet the disruptive forces of e-substitution all on its own is fair. The USPS may be the heart of the postal circulatory system, but it is dependent upon the rest of the body as well. And, these critical stakeholder groups must change along with it.
Given his desperate need to concentrate on keeping the Postal Service afloat, PMG Donahoe didn't have much breathing room to think about the distant future. In his remarks he asked, "What is the organization going to look like in 10 or 20 years? How will we serve our customers in the future?" He suggested that "the best approach is to take a broad, long-term view of the organization and develop strategies that best serve our customers and employees of the future." He acknowledged that the Postal Service cannot meet "its full potential as an engine of growth for the mailing industry and America's businesses within its current business model."
As a fresh face and voice of authority, PMG Brennan has the opportunity to immediately seek to enlist the governing, customer and employee interests in conversation about change. She can lift the dialogue beyond the "us vs them" cultural perception that lingers and embrace a spirit of ecosystem partnership, collaboration and mutual opportunity. She can initiate an all- inclusive stakeholder discussion about what the future will look like and what needs must be met by which party. Surely industry roles and business models will need to adapt and change to meet changing customer needs.
Customers - Connections - Collaboration
Think about it! Every single person in this country is a "customer" of the U.S. Postal Service, and millions living overseas are too. Not even Facebook, Google or Amazon can make this claim. Customers are not only the businesses that pay the postage to mail and ship things, they are the consumers who receive things too. Infants, the elderly, shut-ins and shut-outs are all USPS customers. And, the Postal Service has the herculean task and "obligation" to meet all its customers' needs, whether it gets paid directly to do so or not.
Yet customers' needs, wants and choices are changing and the Postal Service must understand and accept this and change along with them. New digital technologies are enabling and empowering customers with unprecedented decision making capabilities that must be embraced rather than avoided or ignored. Now customers can easily and quickly change to other means of communication and disconnect from postal services. Yet, the same disruptive digital technologies can be applied by the Postal Service to retain and even enhance its customer connections.
The USPS has made great strides in recent years with the development and deployment of its Intelligent Mail Barcode (IMb) for mail and IMPb for parcels, which are good examples of applying new digital technology to meet its operational needs. These digital information gathering tools greatly enhance the Postal Service's ability to efficiently identify, validate, sort, route, tally individual items and collect postage payment. They serve as excellent mechanisms for electronic connection with their mailing and shipping customers, but they currently stop short of enhancing connections with their receiving customers.
New mail-receiver feedback-loop technology has been proposed and should be considered as a value enhancing application to determine customer needs and preferences, even by allowing them to opt out. Customers will soon be taking more and more control of transactions as it is and by enabling them with bi-directional communication, trust and loyalty will be enhanced and the value and frequency of transactions increased.
The Postal Service is in the "connection" business. It serves as the messenger, carrier and connector between people - business to business, business to consumer and consumer to business. Its sole purpose is to bind its customers together, to connect them. And it accomplishes this by connecting each link in the value chain with the next - suppliers with service providers with transportation contractors with workshare partners and of course with its own postal employees. The connection process is dynamic, contiguous, perpetual, interdependent and universal.
What keeps the lifeblood of the postal value chain circulating is its "collaboration" with the rest of the ecosystem. In the all-American spirit of "E pluribus unum,"out of many participants comes one universal system. This interdependence is what holds it all together and our industry players should deliberately ask, "What can we do to help each other?"
The stagnant economy is now finally moving forward, fuel costs are low, ecommerce is booming, we have new leadership and shared customers are plentiful and everywhere. Now is the ideal time to harness the collective power of "Customers, Connections, and Collaboration" and ride the wave of technological change to our shared success.
____________________________________________________________________________________________
John Callan is Managing Director of postal consultancy Ursa Major Associates, LLC and Founder of the PostalVision 2020 Initiative. Its fifth annual Conference themed "Customers - Connections - Collaboration" takes place at The Ritz Carlton, Pentagon City, March 10-11. Contact John at jcallan@ursamajorassociates.com.
Retiring Postmaster General Pat Donahoe did a commendable job on his terribly turbulent watch. He took the helm of "The USS Postal Service" when it was already taking on losses resulting from declining First Class Mail revenues, exacerbated by the resulting damage of an unavoidable collision with an iceberg called "The Great Recession." Yet he has kept his badly damaged ship afloat and on course. Although it is still taking on water (in the way of debt) the good-ship USPS continues to deliver the goods over vast geography, with celerity, regularity and reliability for remarkably low rates.
Mr. Donahoe maintained USPS's buoyancy mostly by jettisoning cost in the way of workforce reduction (212,000 positions through attrition), processing plant consolidation, (305 facilities and 82 more to come), optimizing window hours (at 13,000 P.O.s) and eliminating delivery routes (23,000). That amounts to $16 billion in annual savings. Relatively small increases in ecommerce-driven parcel revenue have helped a little too. But all this is still not enough to account for the continuing decline in its primary profit generator, First Class Mail, which amounted to $17 billion per annum over the past 10 years.
So our nation's new and first female PMG, Megan Brennan, takes charge of a slightly more buoyant vessel. As PMG Donahoe's Chief Operations Officer, Ms. Brennan directed most of that $16 billion in cost-cutting and as the new Chief Executive she is likely to maintain a "steady as she goes" course, trimming expenses wherever Congress will allow, even though many members object to the additional planned plant closings. She also continues to benefit from the significant reduction in fuel costs, as long as that lasts.
Change in Attitude
Hopefully, change in leadership will bring constructive change in attitudes and relationships along with it. In his farewell address to the National Press Club, PMG Donahoe complained about the lack of change during his term in office, which he blamed on "myopia - shortsightedness," on the parts of Congress, the mailing industry and labor unions. He said, "We never get beyond the narrow set of interests that are determined to preserve the status quo." His position that the Postal Service cannot adapt and transform to meet the disruptive forces of e-substitution all on its own is fair. The USPS may be the heart of the postal circulatory system, but it is dependent upon the rest of the body as well. And, these critical stakeholder groups must change along with it.
Given his desperate need to concentrate on keeping the Postal Service afloat, PMG Donahoe didn't have much breathing room to think about the distant future. In his remarks he asked, "What is the organization going to look like in 10 or 20 years? How will we serve our customers in the future?" He suggested that "the best approach is to take a broad, long-term view of the organization and develop strategies that best serve our customers and employees of the future." He acknowledged that the Postal Service cannot meet "its full potential as an engine of growth for the mailing industry and America's businesses within its current business model."
As a fresh face and voice of authority, PMG Brennan has the opportunity to immediately seek to enlist the governing, customer and employee interests in conversation about change. She can lift the dialogue beyond the "us vs them" cultural perception that lingers and embrace a spirit of ecosystem partnership, collaboration and mutual opportunity. She can initiate an all- inclusive stakeholder discussion about what the future will look like and what needs must be met by which party. Surely industry roles and business models will need to adapt and change to meet changing customer needs.
Customers - Connections - Collaboration
Think about it! Every single person in this country is a "customer" of the U.S. Postal Service, and millions living overseas are too. Not even Facebook, Google or Amazon can make this claim. Customers are not only the businesses that pay the postage to mail and ship things, they are the consumers who receive things too. Infants, the elderly, shut-ins and shut-outs are all USPS customers. And, the Postal Service has the herculean task and "obligation" to meet all its customers' needs, whether it gets paid directly to do so or not.
Yet customers' needs, wants and choices are changing and the Postal Service must understand and accept this and change along with them. New digital technologies are enabling and empowering customers with unprecedented decision making capabilities that must be embraced rather than avoided or ignored. Now customers can easily and quickly change to other means of communication and disconnect from postal services. Yet, the same disruptive digital technologies can be applied by the Postal Service to retain and even enhance its customer connections.
The USPS has made great strides in recent years with the development and deployment of its Intelligent Mail Barcode (IMb) for mail and IMPb for parcels, which are good examples of applying new digital technology to meet its operational needs. These digital information gathering tools greatly enhance the Postal Service's ability to efficiently identify, validate, sort, route, tally individual items and collect postage payment. They serve as excellent mechanisms for electronic connection with their mailing and shipping customers, but they currently stop short of enhancing connections with their receiving customers.
New mail-receiver feedback-loop technology has been proposed and should be considered as a value enhancing application to determine customer needs and preferences, even by allowing them to opt out. Customers will soon be taking more and more control of transactions as it is and by enabling them with bi-directional communication, trust and loyalty will be enhanced and the value and frequency of transactions increased.
The Postal Service is in the "connection" business. It serves as the messenger, carrier and connector between people - business to business, business to consumer and consumer to business. Its sole purpose is to bind its customers together, to connect them. And it accomplishes this by connecting each link in the value chain with the next - suppliers with service providers with transportation contractors with workshare partners and of course with its own postal employees. The connection process is dynamic, contiguous, perpetual, interdependent and universal.
What keeps the lifeblood of the postal value chain circulating is its "collaboration" with the rest of the ecosystem. In the all-American spirit of "E pluribus unum,"out of many participants comes one universal system. This interdependence is what holds it all together and our industry players should deliberately ask, "What can we do to help each other?"
The stagnant economy is now finally moving forward, fuel costs are low, ecommerce is booming, we have new leadership and shared customers are plentiful and everywhere. Now is the ideal time to harness the collective power of "Customers, Connections, and Collaboration" and ride the wave of technological change to our shared success.
____________________________________________________________________________________________
John Callan is Managing Director of postal consultancy Ursa Major Associates, LLC and Founder of the PostalVision 2020 Initiative. Its fifth annual Conference themed "Customers - Connections - Collaboration" takes place at The Ritz Carlton, Pentagon City, March 10-11. Contact John at jcallan@ursamajorassociates.com.
