Saving the post office, or not

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Published: February 6,2011

Tags: MBJ Columns, Phil Hardwick

The U.S. Postal Service is in chaos. That is not necessarily a bad thing because it must change. And for fundamental change to occur in an organization there must be chaos, which is defined as a state of disorder or confusion. Let us look at some examples of the chaos and the ways that the postal service might change.

A Jan. 24 Washington Post article titled “Postal Service to close 2,000 sites in next two years” got a lot of attention. It reported that the Postal Service “plans to save up to $500 million in the next two years as it works to close or consolidate about 2,000 mostly small, rural and rarely visited retail locations.” It went on to say that an additional 500 sites might be closed by June.

The uproar was predictable, especially after several members of Congress made public a list that had been shared with them by the postal service. Across rural America communities mounted “Save our Post Office” campaigns. They argued that the local post office was the heart of the community and that it was the point of contact with the outside world for many people, especially the elderly. Some communities set up websites, conducted petition drives and lobbied their members of Congress.  Newspapers editors opined and readers wrote letters to editors. Most people involved in the campaigns seemed to agree that the Postal Service needed to cut back to survive, but alas, they did not want their local post office closed.

Authors and speakers constantly cite the Postal Service as an organization that must change or die. At the recent 2011 Northeast Mississippi Economic Forecast Conference Dr. John Glascock, a University of Cincinnati professor, labeled department stores and the Postal Service as “dinosaurs” that must change or go out of business.  Even the postmaster general agrees.  Speaking to a group of reporters last year he said that the Postal Service business model is as outdated as that of the newspaper industry.  He predicted a $328-billion shortfall in the next decade if things do not change, pointing out that the number of pieces of mail delivered by USPS dropped from a peak of 213 billion in 2006 to 177 billion in 2009.

When confusion reigns in a business model there is no shortage of competitors to step in and make things better or to snip out the profitable niches for themselves. One wonders how the United Parcel Service, which delivers packages, is so successful when the U.S. Postal Service, which also delivers packages, seems to be unable to compete even though its prices are usually lower. And what is this Stamps.com company that also seems to be in the same business as the post office?  There are even private mailbox companies. Also, let us not forget those wrap it and ship it for you places. The office supply store even has postal-type services.

Much of the change in the business model of postal delivery is attributed to the use of e-mail. Interestingly, the term is “e-mail” instead of e-message, e-memo, e-letter, e-communication or some such. Social media technology is also having a major impact on the postal service. It seems like thank you notes and Christmas cards are electronic nowadays. Technology slapped the U.S. Postal Service right between the eyes.

This is not to say that the Postal Service is not attempting to reinvent itself. One need only review the usps.com website.  Customers can now do many things online that they formerly needed to go to the post office to do. They can even schedule a pick up of a package at their residences at no additional cost.  And what would have been unthinkable in the past is now doable. For example, a customer can create and design his or her own postage stamps even using photos from digital images. USPS is also using a massive advertising campaign to promote its services. By the way, was the Forever Stamp a good idea? This writer purchased a bunch of them when they came out to avoid paying future increases in postage costs.

It appears that the leadership of USPS must have read Tom Peters book “Thriving on Chaos,” for the organization seems to be genuinely reinventing itself. That is exactly what Louis Gerstner Jr. suggested in a recent Wall Street Journal column. Gerstner said that the focus should be on reinvention, not just cost-cutting. “No one wants to the postal service to disappear,” he wrote.

In closing, I must admit that the more research I did for this column the more impressed I became with the attempts of the U.S. Postal Service to implement change and to revamp its business model. It has offered more and different products and services in a short amount of time than I would have thought possible.

Yet in the final analysis it must deal with Congress, an opinionated public, an employee union and aggressive competitors. It must also deal with the juxtaposition of images — one being that of a small town post office and the other being a Web site that offers an online world of products and services.

How the U.S. Postal Service fares will be a business school case study one day soon. The question will be: Did it change or die?

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