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
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.
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
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.
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
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.
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
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
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?