BLOGNAME: LOUDER THAN WORDSAn informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur
|Two Steps Forward And Three Steps Backward|
US Postal Service to Cancel Next Day Service
By Paul Tomori
Monday, December 05, 2011 at 20:35:22 (EST)
The economy is tough on businesses that don't know how to compete. Being lean and agile can give one a lot of wiggle room for course corrections. But, what if your organization is centenarian in its life? What if you are a colossal behemoth entrenched in old ways? What if your top management is an old boy's club of status quo keepers? It would be nice to think you are too big to fail, but that thought alone doesn't pay the bills.
The US Postal System (USPS) may fit these criteria. Today, they announced the discontinuation of next day service. Doh!
There never really should have been an opportunity for Purolator, UPS, Federal Express and so on... The United Postal Service which has predated all of those couriers, has a history of lagging under the weight of its own bloat. I suspect Canada Post is the same and knowing someone who used to work in upper management for Canada Post, if he is any representation of their organizational backward thinking, then their house of cards will fall soon too.
In the cure of financial maladies in a company, whatever happened to trimming the fat, establishing a clear focus, and then ramping up on innovation? Instead the USPS is stopping service in one of the only areas where they can go head to head with competing couriers. Their plan: to underserve their customers. This is going to drive even more customers into the hands of the competition. It's crazy.
So, how should an organization like USPS really do it? Logistics. Look at what has differentiated the couriers like UPS from regular post. Incredible logistics in the handling of business deliveries. Heck, UPS even offers logistics service in other business processes outside of the delivery area. That's how focussed they got on their differentiating strength. What is logistics except process management... and what is process management without innovative thinking. It used to be that the postal system was the convenient choice with all of its drop locations and postal outlets. Then the couriers started doing pickups (we come to you they said). It used to be that postal services would get your package from point A to point B (usually reliably). Then the couriers guaranteed delivery times and included tracking service and insurance. Why didn't the postal service think of those things while they still had the upper hand? Reason: they got out-thunk. It all comes back to that. The USPS needs to out-innovate the competition and identify services that the couriers are unable to provide. You can't do that by discontinuing a premium service. Why can't USPS team up with the likes of Amazon to be the exclusive delivery agent? Reason: they don't have the logistics to give Amazon what it needs in order for Amazon to deliver on its own promises.
How does a dinosaur die? It fails to evolve rapidly enough... and it gets overtaken by stronger, more agile species. This is nothing new. It's just "deja vu all over again".
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