Recently it was announced that the U.S. Postal Service (USPS) lost $5 billion in their most recent fiscal year which ended Oct 1, 2015. The last year America’s post office earned a profit was 2006. Since that year, total mail volume has fallen 28%. The biggest decline has been in first class mail, its main moneymaker. Probably the biggest financial problem at the USPS is its unfunded liabilities related to health care and other benefits of retirees, which stand at $125.2 billion. The think tank called Tax Foundation doubts it can ever cover these promises.
The only good news coming out of the U.S. Post Office is that due to the huge increase in online shopping, since 2010 package volume at post offices is up 14.1% and package revenue is up 11.4%. On the other hand, they are very late to this party; FedEx and UPS have built huge businesses over the past ten years due to the emergence of online shopping.
While the USPS has made some modest attempts to improve performance, such as eliminating some rural offices and reducing its staff primarily via retirements, it has never caught up, much less got ahead of, key trends such as online shopping.
Not all the blame should be placed on the management of USPS; a big part of the problem is the U.S. Congress. Specifically, the USPS cannot make major changes in how it operates without congressional approval. Consequently, ideas like closing on Saturdays, which it has wanted to implement, cannot be pursued without a congressional OK and there is minimal interest in congress to making any changes that might inconvenience voters. Net, the USPS operates with this huge “wet blanket” called congressional approval smothering it.
Stepping back, the USPS is a great example of what a thick bureaucracy (i.e., congress), plus a status quo upper management (that accepts its current plight), can do to an organization. For many organizations, the bureaucracy develops as the organization hires way too many people; resulting in committees, staff groups, consensus decision making, and bright ideas being beaten down to mundane thoughts that never see the light of day. Also, for many organizations, any success or period of relative stability causes the top management to simply execute the status quo. The net result of all of this is the “wet blanket” that suffocates any proposal of significant change.
Strong leaders know that at all times the organization needs a mentality of being paranoid about the future; constantly searching for and implementing bright ideas that will enable continued success in the future, and letting nothing stand in the way.