Archive for August, 2011

The Transformational Leader’s Playbook

August 12th

In the beginning, the opportunity to write a study on transformational leadership – interviewing leaders from agencies across the federal government seemed to be such a straightforward thing that I vastly underestimated the value that might becreated by being able to draw togetherthe views of senior officials at this point in time.

First, there is the point in time. There has been no comparable time in the past 44 years of government. In January of 1969 Lyndon Johnson, the father of the Great Society left office but by many measures the age of “big” government had not even arrived.

A combination of technology (because we can), natural resource and economic crisis (Arab oil embargo) and political and constitutional crisis (Watergate & Ralph Nader) would conspire to make the government much larger than the Great Society Planners had ever contemplated.

By most estimates, however, we have now met a time of constraints in which the bills for global leadership, resource dependence and our lifestyle are coming due. Government will have to “right size”. There will be federal managers who have to drastically cut their programs but they aren’t going to have constituent groups coming in and showing them how they can do more with less.

Many will know where they need to go. But they will need a pathway to get there.

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The Uses of History

August 4th

As noted in an earlier post, in 2011, the U.S. Postal Service faces certain bankruptcy if the Congress does not act to modify the retiree health benefits payment required by the 2006 postal reform law.  Some might find it perverse to imagine that a strategic plan of more than a decade ago could be seen as a positive contribution when there a crisis today.

Yet a review of the 1997 strategic plan shows interestingly that the problems that are creating the crisis today were anticipated years ago.  The plans forecast that mail volume would decline and there was an imperative to rethink the nature of the mission of the agency and the means with which it delivers service.

In the introduction to the 1997 five-year strategic plan the Postal Service presented a vision of the future the follows.

As certain and clear as this path is, the future is not. Ten years from now, this same environment may be transformed by technologies in their infancies today. Ten years from now, the United States Postal Service mission responsibilities may be met only by a new understanding of universal service, access, and how best to deliver them. A decade from today, the Postal Service may have embraced technologies and systems as dramatically different as jet airplanes and robotic package sorters would have seemed to the 19th-century letter carrier.

Because this fiveyear plan is a living document, conceived to be flexible and adaptive to such environmental shifts, these challenges and external factors will be examined, weighed and where appropriate — addressed in the years ahead. Ultimately, the philosophy underlying this plan, these goals, and their strategies is to create unique customer value as the Postal Service grows, improves and strengthens its financial foundation. This is a philosophy that embraces change. Because, in change, there will be opportunity for the United States Postal Service to serve its customers better.

Ultimately, government leaders and for that matter, leaders in every sector, are necessarily limited in their capacity to reshape markets, to alter macro economic trends or to change the nature of their agency missions.  Leaders cannot anticipate that their actions will be judged failures if their plans are undercut by massive societal and market shifts.

In coming years there will’s most certainly be frustration with the need to realign government service and to downsize its presence.  Yet, seeing in a larger context, the requirement to publish a formal strategic plan offers an opportunity for proactive leaders to create markers, waypoints on a journey long journey of continuous improvement.

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The American Post: Where From Here

August 3rd

“It’s time to rethink the mission and meaning of the United States Postal Service. The old model is breaking, if not broken.Kansas City Star Editorial

With these simple words the Kansas City Star took on the issue of the future of the Postal Service.
The point that has been lost in many conversations about the future of the Postal Service – and there have been many in the past 2 decades – is that the basic business model of the USPS is not working any more. The postal reform debate has focused on pensions and retirement costs (we will get to that). But the issue of first principles is

  • How will the postal business model be sustained in a world in which customers are choosing to communicate differently?

The question facing the USPS – that is currently urgently imploring Congress to address the issue of a pending multi-billion dollar payment that it cannot make – is simply how can future revenues exceed future expenses? Without an answer to this, there is no sustainable business model and someday soon there won’t be a Post Office unless something changes.

The debate over arcane pension and retiree health benefit topics is about whether the law should be changed to reduce the expenses that the USPS is required to pay. The costs are simply too high.

The discussion over regulation, monopoly, universal service and a host of questions that economists like to discuss is all about what rules should guide the generation of revenue? The revenues are too low.

Television ads from the American Postal Workers Union say that no taxes support the USPS, only stamp revenues. There are three reasons why they are presenting a misleading picture. First, the Postal Service receives “implicit subsidies” as Congressman Darrell Issa points out. The Federal Trade Commission recently detailed the way in which the USPS has advantages that a private competitors do not enjoy. (And, to be fair, it has unique burdens too.) Second, the USPS does actually receive appropriation support, although it is admittedly in the form of “reimbursement” as apposed to classic “appropriations”, and in permissions to charge customers. But most importantly, the USPS is running in the red. It’s losing more than $8 billion and stamp revenues are not going to pay for all of the current costs.

So the post office and Congress are going to have to do something because stamp revenues are not enough to afford the labor costs and the current infrastructure. This is why the Kansas City Star is right on target.

The business model is broken and must be fixed. But to do this, America is going to have to face difficult choices about the mission of an institution that is historically at the core of our culture and our economy – but not so much any more.

The law says that the mission of the Postal Service is to “bind the nation together with the correspondence of the people”.

But in an age of electronic communication and social networks its reasonable to ask whether this is a mission that it can fulfill. (Whether it should extend its reach with electronic services like secure email is another question. But the law would have to be changed to permit it to do so. This was put out of reach in 2006, just as the recession and the electronic invoicing and bill payment was about to hit.)

So what should Congress do? Change the business model or change the mission? Something is going to have to give. In an electronic age in which America’s oldest communications infrastructure is now prevented by law from offering electronic services it is not possible to be “businesslike”, to sustain the old ways of doing business, and to bind the nation together – something is going to have to give.