Entries Posted in Strategy & Public Policy

  • What Customers Really Value

    on Feb 23rd, 2015 in Strategy & Public Policy | 15 comments

    Don’t let the decline in mail volumes over the past few years fool you. People still place a high value on postal services. Postal customers especially value being able to interact with postal employees at a Post Office as compared to other retail alternatives. And while some people might be indifferent to Saturday delivery of letters, they still value Saturday delivery for packages.

    These discoveries are among the key findings in our first-in-the-U.S quantitative survey on the value people place on the services the U.S. Postal Service provides as part of its universal service obligation (USO). In our earlier report on the USO, which looked at the collection of requirements that ensure all users of postal services receive a minimum level of service, we pointed out the need for a quantitative study – one that asks people if a higher level of service is valued enough to warrant the additional cost. We recently conducted such a study, What Postal Services Do People Value the Most?, with market research firm Gallup and postal economist Michael Bradley.

    The new study asked respondents to consider four aspects of the USO:

    • Mode of delivery;
    • Access to postal services;
    • Frequency of delivery; and
    • Price.

    We learned household customers place a high value on getting mail delivered to their door or to a curbside box rather than to cluster boxes or parcel lockers. Even for parcels, household consumers don’t like cluster box or parcel locker delivery, our survey found. At the highest parcel price in the survey, more than half of consumers would prefer paying the higher price to have delivery to the door, suggesting convenience trumps other factors for customers.

    And it turns out that people really like to go to the Post Office. Both households and businesses have a strong preference for visiting post offices for retail services over alternative access points, including kiosks. However, respondents were satisfied with keeping post offices open for just a few hours, and placed minimal value on normal business hours.

    Yet for all services, respondents indicated a limit to the amount of postage they would pay as a trade-off for higher levels of service. It seems both household and business customers value lower prices and might be willing to accept lower levels of service to keep prices from rising sharply.

    We welcome your input on our survey results. What aspects of the USO are most important to you? What levels of service do you feel the Postal Service should continue to provide? 

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  • Infrastructure or Business: What Takes Priority?

    on Dec 15th, 2014 in Strategy & Public Policy | 22 comments

    Is the U.S. Postal Service a business or a public service organization? Well, it’s actually both, and those overlapping – and sometimes conflicting – obligations have created major challenges for the agency over the years.

    Historically, the Post Office was deliberately used by the government to expand transportation services such as roads and passenger air service. In the modern era, the 1968 President’s commission on postal issues, known as the Kappel Commission, declared the Post Office to be a business; however, the Postal Service continues to provide infrastructure services that not all businesses would provide, such as maintaining needed rural post offices that operate at a loss.

    It was easier to manage the ongoing tension between the Postal Service’s dual mandates when postal revenues were strong enough to sustain the infrastructure and also cover all of the agency’s operating costs. But today, the Digital Age is cutting into the volume of the product that contributes more than half of the funds to support the network: First-Class Mail. And this strain has led to more tension between the Postal Service as a public service provider and as a business. Meanwhile, new technologies and global commerce are changing the nation’s infrastructure needs. The Postal Service would benefit from more clarity about what it should offer in this evolving environment.

    Our new white paper, The Postal Service’s Role as Infrastructure, gives three broad options the Postal Service and its stakeholders could consider when deciding how to adapt the Postal Service’s role for the future. These options are not mutually exclusive. But they should be evaluated together so all potential uses are recognized and accounted for as part of major changes to the size and scope of the Postal Service’s infrastructure.

    • Option 1: Adjust the postal network to the changing demand for mail and the growth in parcels. The Postal Service is making efforts to do this now.
    • Option 2: Repurpose the existing infrastructure to address innovative services and new revenue streams, such as micro-warehousing.
    • Option 3: Increase the value of the physical postal infrastructure by digitally enhancing it. For example, carriers could use mobile handheld devices to perform more services at the door or from the truck, such as selling stamps, accepting Cash-on-Delivery (COD) payments, recharging debit cards, or even processing passports.

    What do you think? What options should stakeholders and the Postal Service consider? Is the Postal Service’s role as a national infrastructure still relevant today and how has it changed? 

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  • Putting the Success in Corporate Succession
    on May 5th, 2014 in Strategy & Public Policy | 0 comments

    The U.S. Postal Service’s workforce demographics add an extra layer of challenges to an organization that already has plenty. We recently blogged about the Postal Service’s brain drain – the loss of institutional knowledge due to a large number of workers retiring. This week we look at the additional challenge of creating a robust corporate succession plan when nearly half of the Postal Service’s executives will be eligible to retire by 2015.

    Succession planning is a major undertaking at many organizations. But it’s especially difficult when the pool of candidates is shrinking. The Postal Service has been downsizing for the past decade – 200,000 fewer career employees since 2004. It has an urgent need to identify and develop top talent for future executive positions. Without a sound plan, the organization faces significant operational disruptions. Our recent management advisory on the topic noted that the Postal Service has established a sound Corporate Succession Planning (CSP) program to identify and develop top-performing employees for new or expanded executive roles. We found the Postal Service has incorporated many best practices of successful organizations, such as laying out a strategic vision, getting buy-in from top leadership, providing early career development, encouraging diversity, and emphasizing retention. Further, potential successors said the program met their expectations and was effective in developing them into leaders.

    We encouraged the Postal Service to move quickly to approve developmental activities so potential successors have the skills they need when leadership positions become available.

    Share with us your experience. If you are in the private sector or with a different government agency, how does your organization handle succession planning? Do you see the effects of this plan on training and retention? If you are a postal employee, how can the Postal Service ensure it has a successful executive succession plan when attrition is such a factor?

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