Sections

Weather Forecast

Close
Advertisement

COMMON CURRENCY: Profitable businesses require good processes

Email Sign up for Breaking News Alerts
News Park Rapids,Minnesota 56470 http://www.parkrapidsenterprise.com/sites/all/themes/parkrapidsenterprise_theme/images/social_default_image.png
Park Rapids Enterprise
(218) 732-8757 customer support
COMMON CURRENCY: Profitable businesses require good processes
Park Rapids Minnesota PO Box 111 56470

The two greatest myths in the lexicon of marketing and human resources are the phrases, "The customer is always right" and "Our people are our most important asset."

Advertisement
Advertisement

Neither of these statements is true and both are lousy as a foundation for sound business practices. I am perfectly fine with either of these sentiments as a reflection of the golden rule that we should be civil, polite and courteous with each other, but that is about as far as it goes.

Treating people fairly and decently is good manners. But what a business needs is good processes.

A profitable business is organized around its processes. Identifying target customers, satisfying their desires, and retaining their goodwill is a process. Attracting quality employees, motivating performance and developing their skills is a process.

Good processes yield good results. For most businesses, their most important asset is their processes because good people are attracted to companies that are well organized.

But what happens when an extremely large organization with a 200-year-old business model can't adapt its processes to reflect 21st century technology? Without a process for managing change the inevitable result is bankruptcy.

The United States Postal Service employs almost 600,000 people and owns the world's largest civilian vehicle fleet, more than 200,000 trucks and vans.

The USPS is the second largest civilian employer in the county. Only Walmart employs more people than the USPS.

This year, Walmart will make billions in profits. This year, the USPS will run out of money and default on its obligations to the federal government.

What is the difference?

Walmart is successful because its processes are designed as part of a highly labor intensive, yet efficient distribution system. Most people think of Walmart as a discount retailer, but they are actually a very sophisticated technology company that keeps track of millions and millions of small transactions every day that tells its trucks where to go and what to put on them.

Now if you thought I was going to take a dig at the post office, you would be wrong.

Like Walmart, The USPS is also a highly labor intensive technology business that keeps tracks of millions and millions of small transactions everyday, that also tells its trucks where to go and what to put on them.

The postal service is actually amazingly efficient, and dollar for dollar, has some of the best technology and processes that are out there, and in a real world competition, the USPS could give any competitor a good run for their money.

So what is the difference?

The USPS operates under a universal service obligation. The USPS must, by legal obligation deliver mail to every address in the country. Walmart only operates where it can make a profit.

The post office operates everywhere, and for the same price. The process is designed to deliver affordable universal service everywhere in the country, and it used to be a good business model, until the Internet, online banking, e-mail, Facebook and Twitter came along.

The volume of first class mail is collapsing so fast the USPS is literally bleeding money. It needs to radically downsize itself or reinvent its processes if it is going to survive.

In many ways, the USPS is a victim of its own success. It has so successfully fulfilled its universal service obligation to deliver mail to every address in the country that it is taken completely and utterly for granted.

This is what I mean by the customer is not always right. Your customers can kill you. It will take an act of Congress to change the universal service obligation, a decision that would be very unpopular, especially in rural areas where the universal service obligation is extremely expensive to fulfill.

The other option is to subsidize mail delivery or increase prices. These options aren't very attractive either.

Change is coming, and it doesn't look good for the USPS, but there is, perhaps, an answer if we rethink the idea of universal service.

In the 1930s rural electrification programs provided universal service to farms and small communities, and this was then followed by universal telephone service.

In recent years access to broadband Internet service has become a hot topic for rural economic development. Access to high- speed Internet service is no longer a luxury. It is now necessary for survival, but in this era of more limited resources where is the money going to come from?

Could the USPS become a platform for the delivery of universal broadband Internet service to rural areas?

How much money could the USPS make available to invest in new high speed broad band infrastructure if the "mail" could be delivered electronically, instead of on foot or by car?

If the USPS built the infrastructure, could it charge rents to private companies to ride on its system?

I don't know the answers to these questions, but I do know we must have rural access to high speed Internet service, and high speed Internet service is killing the USPS.

Maybe there is a way to save both.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera tion busted.com.

The two greatest myths in the lexicon of marketing and human resources are the phrases, "The customer is always right" and "Our people are our most important asset."

Neither of these statements is true and both are lousy as a foundation for sound business practices. I am perfectly fine with either of these sentiments as a reflection of the golden rule that we should be civil, polite and courteous with each other, but that is about as far as it goes.

Treating people fairly and decently is good manners. But what a business needs is good processes.

A profitable business is organized around its processes. Identifying target customers, satisfying their desires, and retaining their goodwill is a process. Attracting quality employees, motivating performance and developing their skills is a process.

Good processes yield good results. For most businesses, their most important asset is their processes because good people are attracted to companies that are well organized.

But what happens when an extremely large organization with a 200-year-old business model can't adapt its processes to reflect 21st century technology? Without a process for managing change the inevitable result is bankruptcy.

The United States Postal Service employs almost 600,000 people and owns the world's largest civilian vehicle fleet, more than 200,000 trucks and vans.

The USPS is the second largest civilian employer in the county. Only Walmart employs more people than the USPS.

This year, Walmart will make billions in profits. This year, the USPS will run out of money and default on its obligations to the federal government.

What is the difference?

Walmart is successful because its processes are designed as part of a highly labor intensive, yet efficient distribution system. Most people think of Walmart as a discount retailer, but they are actually a very sophisticated technology company that keeps track of millions and millions of small transactions every day that tells its trucks where to go and what to put on them.

Now if you thought I was going to take a dig at the post office, you would be wrong.

Like Walmart, The USPS is also a highly labor intensive technology business that keeps tracks of millions and millions of small transactions everyday, that also tells its trucks where to go and what to put on them.

The postal service is actually amazingly efficient, and dollar for dollar, has some of the best technology and processes that are out there, and in a real world competition, the USPS could give any competitor a good run for their money.

So what is the difference?

The USPS operates under a universal service obligation. The USPS must, by legal obligation deliver mail to every address in the country. Walmart only operates where it can make a profit.

The post office operates everywhere, and for the same price. The process is designed to deliver affordable universal service everywhere in the country, and it used to be a good business model, until the Internet, online banking, e-mail, Facebook and Twitter came along.

The volume of first class mail is collapsing so fast the USPS is literally bleeding money. It needs to radically downsize itself or reinvent its processes if it is going to survive.

In many ways, the USPS is a victim of its own success. It has so successfully fulfilled its universal service obligation to deliver mail to every address in the country that it is taken completely and utterly for granted.

This is what I mean by the customer is not always right. Your customers can kill you. It will take an act of Congress to change the universal service obligation, a decision that would be very unpopular, especially in rural areas where the universal service obligation is extremely expensive to fulfill.

The other option is to subsidize mail delivery or increase prices. These options aren't very attractive either.

Change is coming, and it doesn't look good for the USPS, but there is, perhaps, an answer if we rethink the idea of universal service.

In the 1930s rural electrification programs provided universal service to farms and small communities, and this was then followed by universal telephone service.

In recent years access to broadband Internet service has become a hot topic for rural economic development. Access to high- speed Internet service is no longer a luxury. It is now necessary for survival, but in this era of more limited resources where is the money going to come from?

Could the USPS become a platform for the delivery of universal broadband Internet service to rural areas?

How much money could the USPS make available to invest in new high speed broad band infrastructure if the "mail" could be delivered electronically, instead of on foot or by car?

If the USPS built the infrastructure, could it charge rents to private companies to ride on its system?

I don't know the answers to these questions, but I do know we must have rural access to high speed Internet service, and high speed Internet service is killing the USPS.

Maybe there is a way to save both.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera tion busted.com.

Advertisement
news@parkrapidsenterprise.com
Advertisement
Advertisement
randomness