Rethinking the postal service business model -capitalizing on the local distribution presence of the US Post

// <![CDATA[
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();
// ]]>

If you remember this Seinfeld episode from the "go-go" 90's there was widespread recognition about the impending business challenges to the postal service, going back  at least 12-15 years. Given the huge popularity of the fictional  US Postal Worker character Newman and his associates from US Post it is also evident that there is enormous goodwill of the postal delivery person, the postal counter person at every ZIP code in America.

The US Postal service has posted a quarter loss of $3.5 Billion and it is now really urgent to figure out what the US Postal Service should diversify into. The great strengths of the postal service is its local reach and location in every community. Also generally a lot of goodwill with the public. Perhaps it is time for the US Postal Service to look at local town successes like town Newspapers that are doing great covering local news compared to larger newspapers that are dying because of the Internet.

If the local postmaster was allowed to figure out local revenue streams interesting possibilities could be delivering small packages locally (from say the pharmacy ) and also delivering a whole bunch of federal and state services at the local community level.

Obviously, this requires a great deal of thought but quick action. Simply closing the Saturday postal service is not going to help.

Public Works give work to machines and not “shovel ready” men in the 21st century

Public Works in 21st Century is knowledge based- StratoServe

[This post was published on August 2, 2010 during the recovery process from the Great Recession of 2007-2009. We believe that the core idea idea that you need advanced computer and knowledge skills in large scale shovelling still holds in 2021. Just as Governments worldwide try to dig out of the Coronavirus pandemic – Updated January 10, 2021]

The next time you drive past a sign like this one look around and count the number of machines you see working and the number of men you see working. For the dollars spent on repairing the stretch of road you just struggled through don’t you think that the number of folks actually working is sort of low?

I guess worldwide Governments pump money into public works to try and shore up employment. Unlike the early 20th century when you had lots of people working  on roadworks as you see here today roadwork involves high tech,capital intensive equipment. Yes there are jobs for experienced,qualified earth moving equipment technicians but the “shovel ready” is not really the manual 19th/20th century manual shovel used by unskilled labor. Today’s “shovel ready” is more like knowledge work.

Public Works some-how seemed immune from the computer ,software and technology but that is not the case  if you look closely at the sophisticated equipment on the roads.I know that much of these equipment have a large part of globally sourced components and that does’nt  immediately help the less-skilled segment of unemployed Americans.

About StratoServe.

Understanding the business and running the software- are these some new jobs coming up?

var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();

I was trying to find one bit of good news in the dim job outlook report in the New York Times.Well here is an encouraging quote from the latter half of the  article:

"The crucial driver of growth in the second quarter was business
investment in such things as office buildings and equipment and
software. Such activity rocketed up at an annual rate of 17 percent in
the second quarter, compared with a 7.8 percent increase in the first.
The equipment and software category alone grew at an annual rate of 21.9
percent, the fastest pace in 12 years."

As the article goes on to explain, businesses seem to be going in for technology and equipment as they don't need health benefits like employees. Sounds cynical but businesses are under so much pressure to deliver profits and with demand slow – the only thing they can curtail is costs. Here the first preference is for technology. If technology is not available  then it is  low-cost global  outsourcing and finally the  high cost US employee. 

But there is some wonderful potential opportunities for US employees. Not to replace technology as those jobs are unlikely to come back. Instead the opportunity is to  run the new technology mentioned in the quote above.

Those who understand the business ( say health care) and can deal with the new technology to deliver results should be a prized commodity. The numbers of such opportunities are not huge but they sure would be well paid.

The Facebook Webshift: WikiLeaks and Shirely Sherrod

This is what we call the “Facebook  Webshift.” (This post from July 2010). Just look at Bradley Manning the alleged WikiLeaks person and he could be just any “invincible” college undergrad- anywhere in the world with an average of 300+ Facebook friends- many whom he has not actually met or dealt with. Everyone trusts everyone as in Utopia  to do the “right thing.”

Read the accompanying story and you understand the devastating actions that the Taliban would take against Afghan informants. Whoever leaked these documents did not read the Kite Runner  and think of the potential consequences  at the Afghan end, apart from the consequences for  US forces.

And then there is the Shirely Sherrod matter. An edited video is put out by a blogger which goes viral and the public and the administration goes into over drive and literally makes Sherrod resign while she is driving via her blackberry. Yes the racism allegations were serious but there was no imminent threat to anyone’s life that required an immediate throwing of Shirley Sherrod to the wolves !

In these two examples, it is the webshift which is the escalator and not merely leaked classified documents  or racism. It’s bad to leak sensitive documents but imagine the weight in paper if you had so many documents as in the Wikileaks. The Shirely Sherrod furore  happened  because the edited video could be seen much beyond TV and the public over-reaction could develop-overnight.

Organizations, both public and private need to start thinking about this escalating exponential impact of the web and develop systematic organizational processes to deal with the fallout.

About StratoServe.

“Simplifying” at Ford – Alan Mulally reduces complexity

// <![CDATA[
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();
// ]]>

Ford CEO Alan Mulally launched the 2011 Ford Explorer at New York and I was at once struck by the simplicity and success of Ford under Mulally.

As you might recall, Ford was the only US auto company that did not ask or get Government bailout money  and that gave it enormous freedom to sort out it's business. Alan Mulally's aerospace industry background probably  helped a great deal. For, in aerospace you don't sell lots of airplanes and that helps keep complexity down.

Not so for consumer products, particularly in  US Auto. The process plays out like this: Detroit hires a hot shot MBA Product /Brand Manager and what do you think the young ambitious manager will do? Well add a product variant because that demonstrates her/his contribution. Except that it adds headaches and complications starting at the dealer (you need new posters, new balloons and the mechanics need training) , manufacturing (tooling),parts inventories and a more fragmented  supply chain. Once a product is added you wait around for a global recession and a leader like Alan Mulally who has the courage to call out  "Enough" and do so fairly pleasantly.

Ford was greatly distracted with eight brands Ford, Mercury, Lincoln, Jaguar, Land Rover, Aston Martin, Volvo and Mazda.Now they are focused on only Ford and Lincoln. You could buy Ford Explorer two years ago with 76,000 configurations and now that is down to 1500 configurations . Still a great deal more than founder Henry Ford's idea in 1908 with the Ford T of having only one option – the black color !

Alan Mulally's approach is great and worth considering, no matter what your business.

Sense and respond in a slow economy

var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();

A slow economy means that its not just the demand and market is slow but organizations tend to slow down in most things unless they are getting an order or getting paid! This time is a lost opportunity-because a slow economy is really a good time to upgrade your thinking (even if company training budgets are well-slow) around your value chain. Here are two things to do  to improve your organization's "sense and respond" ability:

  • On the customer side, don't get stuck on just talking about orders. Try to explore how your customers' market is changing. Talk to your  customer's customer if possible. This should give you great ideas of what to change in your offering.
  • Take the time to talk with your suppliers both existing ones and
    potential ones. If you listen you'll find amazing insights – and you
    don't really have to place an order but you can get a good sense of how your suppliers can help in meeting the changing market of your customer.

Boeing announces 18 B $ of orders at Farnborough , England Airshow and US Engine suppliers announce new business

// <![CDATA[
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();
// ]]>

It's really great news that Boeing has signed 30 new 777;s (worth 9.1B$) with Emirates.The total deals for Boeing match up to 18 Billion $ and here is a nice video.

Several of these orders are from the Middle Eastern airlines and augurs well for the aerospace industry suppliers in the US.GE  is reporting 16 Billion $ of deals including the 2 B$ list price GE engines that will power the 30 Boeing 777 's being bought by the Emirates Airlines.There is good news for Pratt and Whitney(UTC)

  too who are reportedly going to supply engines worth 4.8B$ to Airbus of France for 32 planes that Emriates would buy. Typically, global airlines seem to buy both Boeing and Airbus with engines coming from GE,Rolls Royce and Pratt and Whitney. The entire supply chain benefits as these orders start getting executed.

Tell workers that their work matters -Deepak Chopra

var _gaq = _gaq || [];
_gaq.push([‘_setAccount’, ‘UA-857684-6’]);
_gaq.push([‘_trackPageview’]);
(function() {
var ga = document.createElement(‘script’); ga.type = ‘text/javascript’; ga.async = true;
ga.src = (‘https:’ == document.location.protocol ? ‘https://ssl&#8217; : ‘http://www&#8217;) + ‘.google-analytics.com/ga.js’;
var s = document.getElementsByTagName(‘script’)[0]; s.parentNode.insertBefore(ga, s);
})();

Deepak Chopra is an inspiring thought leader , and I am slightly  biased  as for full disclosure  he’s an alumnus from my high school .”Tell workers that their work matters” seems to be his message and here is some interesting information from a survey by Gallup where Deepak was involved in.

In the US 29% employees are engaged  and happy and have a  sense of belonging; 56% employees are  disengaged , sleep walking through the job with  no passion; 15-20%  are actively disengaged and make others unhappy.  A whopping  285 B $/year is   lost every year in the US due to this lack of engagement.Organizations have three segments whose loyalty leads to better financial performance. These are employees,customers and investors. Of these employees come first, if they are loyal and engaged ( some how increase the 29% engaged ones) then customers and investors become more engaged and loyal leading to better financial performance.

Money is important but not the most important motivator for employees.Leaders must take on different roles depending on the situation in their organization and environment: A leader must be, in Deepak’s words :

  • Protector when employees feel unsafe
  • Entrepreneur when they want to achieve
  • Team builder when they want a sense of belonging
  • Nurturer when they want self esteem
  • Innovator when they want to be creative
  • Spiritual guide when they need higher guidance

Try to preserve trust – even with tight working capital

var _gaq = _gaq || [];
_gaq.push([‘_setAccount’, ‘UA-857684-6’]);
_gaq.push([‘_trackPageview’]);
(function() {
var ga = document.createElement(‘script’); ga.type = ‘text/javascript’; ga.async = true;
ga.src = (‘https:’ == document.location.protocol ? ‘https://ssl&#8217; : ‘http://www&#8217;) + ‘.google-analytics.com/ga.js’;
var s = document.getElementsByTagName(‘script’)[0]; s.parentNode.insertBefore(ga, s);
})();

It’s the economy with tight working capital  or messy processes – you might say. Today there are many more instances of suppliers not able to keep up delivery promises and buyers not keeping up with timely payments. The problem is accentuated when both parties don’t keep each other informed. If you are a seller and are having working capital problems or trouble with inputs,its important to directly tell your customer and work out a solution, maybe you can buy from a competitor or let the customer buy from a competitor in case things are getting critical for your customers’ market. Sounds odd? But when you pro-actively look after your customer, you will gain trust and more business as things pick up.

If you are the buyer and you have agreed terms of payment, its really important for suppliers,particularly small suppliers to receive payments on time. If there is a delay,confusion or dispute at the receiving and inspection. Say so. If accounts payable is slow either because of your working capital problems or as a part of your financial strategy,tell the supplier.

Today with working capital being tight its important to retain the trust between buyers and sellers. Not communicating when things are not going as agreed erodes mutual trust and is really avoidable.

Is the mortgage market “once bitten twice shy” ?

var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-857684-6']);
_gaq.push(['_trackPageview']);
(function() {
var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl&#039; : 'http://www&#039;) + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
})();

Despite record low mortgage rates (4.5% fixed for 30 years) the applications for home purchases and refinance is down. In fact applications are the lowest in 14 years.

Yes there was a serious problem of unqualified home buyers, easy mortgages ,lax lending and above all the mysterious derivatives that put the US and world economy in a downward spiral that it is still struggling to come out of.

But the question is : why is everyone acting "once bitten twice shy"? The strangest one I heard was of an employed couple in Florida who want to refinance and the bank refuses to let them because their home value has declined 50% and the current loan is more than the value instead of the standard 80%  loan:value ratio that banking rules require.

Mortgage finance folks are getting lots of calls from prospective customers  but the rules are being followed  "without exception" resulting in genuine  consumers  backing off.

There needs to be rapid action right at the local level like getting the local banker to verify risk issues personally and take a call without fear of dire consequences if there is indeed a default. Other wise someone sitting on a less than market value (high interest) loan  in with no opportunity to refinance will be tempted to walk out of the loan -entirely. So far there is news of only the rich walking out of mortgages. Unless the mortgage market players figure out a way of being more responsive to the needs and situation of good ,honest, middle America  the default malaise might spread.