A couple of years ago, I was having a beer in London pub with an executive from the Royal Mail of the United Kingdom. We were discussing the reorganization of the UK’s mail system and the challenges it faced. With the recent announcements from the US Postal Service (USPS), I can’t help investigate why these systems are failing.

The USPS has been struggling with a decline in mail and recently announced that it is facing $238 billion in losses in the next 10 years. It would like to close some branches, reduce delivery days, lay off workers and increase rates as a way to fight this downward spiral.

This could be an effective approach and is a good example of stratagem 16: sometimes running away is the best strategy.

This stratagem says that retreating can preserve our strength and maintain the possibility of exerting our power at a later time or place. Nearly 10 percent of the decade’s most competitive companies began their rise with some kind of retreat. Chinese military history is filled with stories of armies that came back from retreat, often after tens of years, to claim ultimate victory.

But it’s not that simple. As an independent government agency, the USPS has to answer to Congress. Even though the USPS does not receive taxpayer dollars and is funded entirely by its own revenue, it is required to follow government rules and regulations.

The Postal Reorganization Act of 1970 prohibits the USPS from closing small branches based solely on economic factors. The act also keeps the agency from expanding its services beyond postal delivery.

We often compare USPS to UPS and FedEx, but how can we? UPS and FedEx are private businesses pursuing profit. They have fewer locations, less overhead and fewer restrictions.

The USPS, on the other hand, has 32,000 post offices throughout the country. It has more locations than McDonald’s, Starbucks, Walmart and Walgreens combined. The USPS can’t cut costs, can’t add services and yet is expected to be profitable.

Despite the fact that the USPS urgently needs to adjust to changing market conditions and reduce costs, there has been massive opposition to cuts in service. Even the President and members of Congress have opposed plans to cut delivery to five days.

Like any business, the USPS needs to adjust to its market and start making money or change its mission.  As we’ve seen by many of the successful “ethonomical” entrepreneurs we’ve covered, its possible to pursue a social mission while making profit. But pretending that you are purely a for-profit entity or purely a social one, leads only to conflict. Congress needs to allow the USPS to reorganize and restructure its business model to be profitable, or its needs to recognize its social purpose and allow it to find a new path.

Companies that successfully extricated themselves from situations like the USPS offer us insight into how the USPS, and you, can win. Start by asking customers to identify their three most important needs. If the USPS can meet those needs, while reducing costs by cutting everything else, it may just find a valuable patch of soil on which to retreat. It is, for example, the only organization that touches every house in the country every day. Maybe there is a better way to extract value from this unique position.

During these rough economic times, ask yourself how you can streamline your business without reducing the most important services your clients rely on.

1.    What would my customers say are their three most important needs?

2.    What other products or services are we offering that we could live without?

3.    How could reducing these products or services affect our bottom line?

4.    Are there extra perks that we offer customers or employees that they do not need?