Tuesday, January 30, 2001
Mr. Lawrence: Welcome to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of the Endowment for the Business of Government. We created the endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at www.endowment.pwcglobal.com.
The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business.
Our conversation today is with John Nolan, Deputy Postmaster General, and Chief Marketing Officer of the U.S. Postal Service. Welcome, John.
Mr. Nolan: Glad to be here.
Mr. Lawrence: And joining me in our conversation is another PwC partner, Nancy Staisey. Welcome, Nancy.
Ms. Staisey: Thank you, Paul.
Mr. Lawrence: John, in this first segment let's talk about your career. You began with the Postal Service in 1970. Could you tell us about the various positions you've held?
Mr. Nolan: Well, I actually started in the Postal Service as a management intern right out of college, and I did that for a short period of time and then moved into a program management position in Washington. And got involved in the start-up of our new bulk mail centers back then in the late-'70s, or mid-'70s, starting up these 33 centers.
I came back to Washington from New York where I had been starting up the first of those centers and worked in Washington for a while, and then moved back out to the region from our regional office in New York City and held a couple of positions before I became postmaster in New York City.
After 19 years I left the Postal Service and then went to work for Merrill Lynch for 11 years, and like a bad penny I'm back.
Ms. Staisey: John, you served as general manager and postmaster for the New York division, as you mentioned, which is the largest division not only in the Postal Service but also worldwide. What did you learn from that experience?
Mr. Nolan: Well, it was a great job. As postmaster in New York, you're the 800-pound gorilla, and so pretty much you had the opportunity to do what you wanted and people were just happy that you wanted to do it. If you were successful, they wanted you to keep being successful.
But I think the biggest thing in that job, you're really running a business. You really are. You have customers, you have a mission that you have to carry out every day. Constantly talking to your customers and communicating their needs aggressively within the organization I think was the most critical thing because if not for the customers, we don't have a reason for being in existence. So I think in an organization that large, 25,000 employees, and as many customers as we have, you can't overcommunicate. You've just got to constantly communicate.
Mr. Lawrence: You also mentioned that you worked for Merrill Lynch for 10 years after a long tenure with the Postal Service. How do you contrast your experience in the private sector with that in the public sector?
Mr. Nolan: Well, there's a much greater focus on money in the private sector, I'd say. We had one figure really that drove a lot of our behavior at Merrill Lynch, and that was turn on equity. We can't do that in the Postal Service. It's just a little bit more complex so in a sense it's easier in that sector, although Merrill Lynch is a very complex company.
I think our set of problems is very challenging because you not only worry about what a normal businessperson would do in such a situation like this, but what are the political implications because we're not just a regular business. But I think it's very similar in many ways. The business I was running was actually a related business for Merrill Lynch and so they had a lot of similarities. But I found the focus on profits, the overriding focus on money, to be a very all-encompassing one, and a very healthy one in many respects because it forced people to really think about the consequences of what they did in very clear monetary terms very day.
Ms. Staisey: How did your experience at Merrill Lynch prepare you for your present position?
Mr. Nolan: I think that there was a greater breadth at the way we looked at problems that I've got now. I had the postal experience, now I've got the Merrill Lynch experience. I've seen things from both sides. I think I understand better all sides of issues that typically come in front of us.
I was a customer, so I knew what it's like to be a customer at the Postal Service and the satisfactions and sometimes the frustrations in that regard dealing with a very large organization. I had an advantage because I knew about the inside of the Postal Service so that gave me some advantages. But I saw the way our people had to deal with the Postal Service, and I think it's enabled me as we get into discussions of key policies, programs, futures, et cetera, to stop and say, "well, wait a minute, what would I be thinking if I were sitting on the other side of the fence again," and I think that's certainly an advantage.
Mr. Lawrence: What is it about public service that attracts you?
Mr. Nolan: It's just a very challenging period. I was very fortunate in the years I was at Merrill Lynch financially, so I'm able to consider this again because the big drawback for me of course is financially doing this. But I've known Bill Henderson for 25 years, the prospect of working alongside of him and the rest of the management team is one that I thought would be interesting.
It certainly is a very challenging time in the history of the Postal Service. I think finally the one thing that got to me is that 20 years from now Bill said someone is going to write a book about the Postal Service, you need to be in that book, again, referencing the fact this is a particularly critical time. As soon as my wife heard me make that statement, she says, "oh no, you're taking the job."
So I think the challenge, the tremendous challenge, the sheer size and the importance of what we do is something that's pretty, especially, for someone like me, hard to overlook.
Ms. Staisey: Which positions or management challenges provided you the best opportunity to develop as a leader?
Mr. Nolan: I think that being postmaster of New York with 25,000 employees trying to change directions in what we were trying to do, dealing with the unions, the customers, the management groups, really helped me grow as a leader. I think that some of the -- or just before then my position as the regional director of customer services in the Northeast region of the Postal Service and had to deal with the entire regional area and, again, communication being key was one.
Frankly, at Merrill Lynch trying to build a company within a company that's not a mail business to try and figure out how do you get people whose main mission in life isn't what you're to accomplish, but for whom it's very important that we do well, how do you get them moving in that direction and getting people excited about this new company you want to form. I think all three of those things would be things I'd point to.
Mr. Lawrence: You mentioned communication, and I'm wondering about some other key characteristics of leadership.
Mr. Nolan: Well, I think leaders challenge limits. They challenge processes that exist to make sure that we are on the right track. I think leaders have to inspire a shared vision. I think that's a very important thing that just managers sometimes don't do, but that shared vision is very critical.
I think leaders find a way to enable others to do their best and to really serve as a role model to encourage the heart. It's not just the things that you do, but why you do them and to get enthusiastic about those.
I think leaders have a tremendous performance bias. It's not "let's sit down and think about it," it's "let's go, let's go, let's make something happen." So I think those are critical things for a leader.
Mr. Lawrence: How do you do that in such large organizations?
Mr. Nolan: In some ways, I don't know that the size is part of the problem I guess, but it's the bias within the organization. It's the way you structure things. It's the way you challenge people within an organization. Size can be a tremendous advantage because you've got tremendous resources to bring to bear on a given issue. So I think structure comes into play there and how people feel about what needs to be done.
I think the big thing is that you can't get into this mind-set that this is a big ocean liner and when you turn the wheel it takes all those analogies that you always hear. The fact is that you give an order and a whole lot of dust can start to move in one direction if you get people moving that way. So you can make some pretty big changes in a hurry if you're crystal clear about what you're doing and why you're doing it and you're able to communicate that.
Mr. Lawrence: Do you think the characteristics of leadership have changed over time?
Mr. Nolan: I don't know. I think that it may be that the need for increasing flexibility because of the speed at which change occurs is one that's risen to the top of the list of things that leaders have to be aware of and concerned about. So I think that flexibility, of all the things, I think that's probably one that leaders have to be conscious of.
Mr. Lawrence: We're talking with John Nolan of the U.S. Postal Service. This is the Business of Government Hour. We'll rejoin our conversation in just a few minutes.
Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with John Nolan, Deputy Postmaster General, and chief marketing officer of the United States Postal Service. Joining me in our conversation is another PWC partner, Nancy Staisey.
Ms. Staisey: Thank you, Paul. John, as Deputy Postmaster General and as Chief Marketing Officer, what are your areas of responsibility?
Mr. Nolan: Well, there are several. First, I have the chief technology officer who reports to me, and obviously the marketing functions, everything from product development, to pricing. The sales organization is about to shift over to my area of responsibility.
The other area, which is new to the Postal Service, is an area called corporate and business development. We're really looking at more Internet/e-commerce related products and services and alliances and partnerships that we're going to see more and more of.
Mr. Lawrence: Throughout your tenure at the Postal Service you have stressed positive labor/management relationships, particularly in your work in New York City. How have you been able to improve labor/management relationships, and what lessons learned would you advise other managers?
Mr. Nolan: Again, I go in with a certain bias that people do want to do a good job. I mean, you always have the ÄÄÄÄ but you don't structure a whole approach to business for a few people, you do it for the large group.
I think honesty is very important. I mean, if you're going to do something, if you need to do something, you ought to be honest about it and get it on the table and discuss it. I think I try and work hard to understand the other's viewpoint to be direct about what my viewpoint is and to encourage them to see things from my side as well.
And don't give up on important goals. I mean, if the first time you get a "no" that you go off and pout, it doesn't accomplish very much. If people know what's important and you can get a way for people to work cooperatively to achieve a compatible end, I think that's important.
Ms. Staisey: As New York City postmaster, you also improved service and productivity. At the same time, you exceeded safety, performance, and budget goals. How did you do it? What were some of the keys to this success?
Mr. Nolan: Well, following a good management team didn't hurt. George Schuman who was postmaster in front of me, and Bill Dowling who was head of operations really did a great job. The team that I first inherited and then built were very good people.
I think one of the things we did is, we focused very heavily. I think we tried to focus on the customer to make sure that what we were doing made sense for the customer. We paid a lot of attention to that, as well as paying a lot of attention to detail. In our kind of business it's "what have you done for me lately," and it's sticking to the knitting every day and making sure you're doing the fundamentals right.
Then the other big thing as I mentioned before is communication. You just cannot overcommunicate to an organization as large as that.
Mr. Lawrence: What do you mean when you say you focus on the customer?
Mr. Nolan: A lot of times what we do is we say if we do our job right, then the customer benefits because obviously what we're doing is in the customer's best interest. That's an operations- centric look at this, and basically what we're doing may not be the right things for the customer, and what we've got to understand is what does the customer want.
It may be that they're using our products, but they're using our products in spite of the fact that the product is the way it is and they wish that something could be done slightly differently. What we've got to do is constantly look at what are our customers telling us, what do they want? Certainly if you make your budget goals and you make your service goals, in general that's got to be good for customers, but it may not be enough. So I think that's the big think that we tried to focus on.
Mr. Lawrence: How would you describe the challenges today from your current position in terms of improving service and productivity?
Mr. Nolan: Well, in our structure, the chief operating officer really handles the day-to-day operations of the company, but I think that working as part of the management team in a leadership role, we've got to make sure that we're challenging ourselves enough. If you set easy targets, you achieve easy things. If you set very tough targets, you sometimes find a way to achieve those tough targets.
So I think the challenge from our standpoint is to make sure that we understand what is it going to take to be competitive, to meet the needs of the marketplace, and then to try and exceed those and set tough targets. In some cases things that would seem impossible you've got to lay out there as a challenge, just like a number of years ago the Postal Service decided it was going to hit mid-nineties on service, and at the time they were in the seventies and everyone figured that's crazy, that will never happen, and it happened. Why? Because they set tough targets and they didn't take no for an answer.
Ms. Staisey: The Postal Service recently launched a number of new online service such as secure electronic documents and net post certified. Can you tell us more about these and the directions the Postal Service is going in terms of online services and products?
Mr. Nolan: Well, there's been a lot of questions about what in the world are you all doing. This doesn't look like mail. What are you doing going into this business. Our answer is, look, we've been dealing in money, messages, and merchandise for over 200 years. It's what we do. And if you follow that line of reasoning, why in the world did we ever leave the Pony Express?
We helped develop commercial aviation. Mail was the first big user of planes. Our customers are continuing to see incredible value and importance in mail, but they're also trying to communicate in other ways, to move money in other ways, to receive merchandise in other ways over the Internet. We need to be there to make sure we're providing a full range of services.
Just as any other company would seek to diversify if part of its product line was in jeopardy from diversion, we're diversifying. But the big thing is that we think that it's what our customers want us to do. We bring a tradition of trust. The secure messaging, again, the old game, who do you trust. When people ask that question we come up very high on the list so we think we can bring a greater element of trust to the Internet.
We think that our NetPost Certified for example is going to enable government and individuals to take a lot of the difficulty out of transactions, costs out of transactions back and forth by offering the ability to authenticate the sender of information whether it's birth certificate information or medical information and be able to authenticate it. Encrypt the document that's being sent to Social Security or to the Health Care Finance Administration or whoever so that they're able to get it in a mode that eliminates their work to get it in a machine readable format. It will speed everything significantly, reduce costs, enable government to work better, and enable citizens to be satisfied.
Part of what makes it possible is our ubiquity. We're everything, and people have an easy time dealing with us. We've partnered with some very, very good people in AT&T and IBM. The other of course big one that we've mentioned is eBill Pay. Some people want to pay bills online. I mean, we love it in the mail. We like to keep bills in the mail and payments in the mail, but some customers want to do things differently.
We believe that nobody in America or in the world offers a better bill payment service than we do. We've partnered with a very good company there as well, Check Free, and so we bring strengths, they bring strengths, and we think this is helping us be of a complete answer for your customers.
Mr. Lawrence: What are the management challenges of introducing online services?
Mr. Nolan: Well, it's being sure you're very crystal clear about what you know and what you don't know, what you should do and what you shouldn't do and leave to partners on the outside who do this for a living. But that's no different for any company or any issue, whether it's transportation issues or whatever.
But again, things more very quickly. Things that seem really interesting and exciting and a lot of companies want to jump at them right way without thinking. You've heard that dot-coms caused everyone to lose their judgment about what makes sense in business, you've got to, again, go back and do what makes sense in business and not just get enamored with a new technology.
So I think you have to understand the technology, understand the customer and what they want and, again, stick with the things you do well, and partner with the best for those things that you don't.
Mr. Lawrence: Many are apprehensive about having partners so deeply involved in the operation of the organization. They're actually worried about the management challenge. How have you addressed that?
Mr. Nolan: I think first of all what you do is to make sure you're careful about who you partner with. Second of all, you've got to sit down very carefully and make sure that you understand along with your partners what is it that each member of the team wants out of this relationship; what is it that each person on the team brings to the relationship; and how can we make sure that those things are being delivered. Then to constantly reevaluate that to make sure that you're asking the question is the equation changing or are we still in good shape here.
Mr. Lawrence: We'll be back in a few minutes with more of the Business of Government Hour and our conversation with John Nolan of the United States Postal Service.
Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with John Nolan, Deputy Postmaster General and Chief Marketing Officer of the United States Postal Service. Joining me in our conversation is another PWC partner, Nancy Staisey.
Ms. Staisey: John, we've heard a great deal in the news lately about the $6.3 billion alliance between the Postal Service and FedEx. Can you tell me more about this?
Mr. Nolan: No. It's top secret. Actually, what this is, it's a two-part agreement really, and it's a business alliance or business partnership that we've created here. The first is a transportation contract where they're transporting express mail, priority mail, and some first class mail for us on both the night and day network just as we have contracted with other airlines in the past, except they just happen to be one of the largest airlines in the world and have a network that's very beneficial for us and for our customers.
The other is a retail agreement where we are agreeing to enable them to put their collection boxes in front of our post offices so that areas that we can't hit with the services that our customers want, FedEx might be an answer to their shipping needs. So it becomes more convenient for customers, and it's something that FedEx wanted because it's a whole lot easier to explain to people where your boxes are if you say go to the post office.
So we're enthusiastic about the partnership. We think it's good for our customers, for the industry as a whole. I think it's a win-win.
Ms. Staisey: Seems like it's one of the biggest strategic moves ever for the Postal Service.
Mr. Nolan: Yes, and no. Yes, in the -- well, no in the sense that we've done transportation contracts all over the place and other kinds of deals. I mean, you can mail things through Mail Box, Etc. now. So we've done a business partnership with them. You can buy stamps in grocery stores. So that's the "no" part.
But the "yes" part is who would have thought about it. I mean, who would have thought that the Postal Service would actually be partnering with one of its competitors. I think what's that, competition or something like that is used so we're going to compete like crazy in certain spaces where we do compete. Some areas we just don't overlap at all. But I think it does signal for people in this country that this is a Postal Service that's going to do whatever it takes to make sure that we are effective for our customers and are there for them with solid services that are very affordable.
Ms. Staisey: Is it a sign that there will be more new and different ways of doing things in the future?
Mr. Nolan: I would certainly think so.
Mr. Lawrence: What's been the reaction of the various stakeholders?
Mr. Nolan: By and large, positive. I mean, some of the initial questions dealt with antitrust issues, gee, is there a problem here, and we feel strongly that there isn't, and some initial indications are that there seems to be no problems. But some people are concerned about that.
Obviously some of our competitors are curious and concerned about it. You had some of the airlines that were hauling or are hauling our mail that will phase out certainly aren't thrilled to death with it. But by and large, from our customers, from the analysts in the industry, I think it's by and large seen as a very shrewd maneuver.
Mr. Lawrence: How about with the postal employees?
Mr. Nolan: Well, it doesn't negatively impact the postal employees at all. It makes us more competitive we feel. No postal employees are losing jobs because it's a transportation agreement and putting retail boxes in front of our facilities for which we're being paid. So we think it makes us more competitive which should help us sell more product and help pay for the retail structure that we have out there with some additional revenue.
So our employees have been very positive about it. Surprised because we haven't done this with a competitor in the past but again, our people are very sophisticated when it comes to these kinds of things, and I think that they just like any analysts analyzed the thing and saw that it was a good deal.
Ms. Staisey: Besides alliances, does USPS plan to use any other new mechanisms for doing business? I'm thinking of things like joint ventures, teaming approaches.
Mr. Nolan: Yes. Well, we actually already are, interestingly enough. Again, with our e-bill pay service we partnered with Check Free, which is a top company in the bill payment area. On net post certified we've set up a partnership with -- business arrangement partnership with AT&T and IBM. There's a company called Imagitas, which handles our moving guides that we have in post offices for which we were recognized by former Vice President Gore in efficiency in government.
So we've begun to do some partnering. Do I think that the phrase "you ain't seen nothing yet" may apply? I think so. I think that there will be more things we're going to do, more interesting relationships, whether it's with ISPs, Internet providers, whether it's with other companies that can bring something to the table and we can add something. I think we'll look to do a lot more innovative things to make sure that our products and services are everything they can be.
Ms. Staisey: What about taking an equity position with some of your teammates?
Mr. Nolan: Well, it's something that we're looking at certainly. It's not without controversy as they say to some. We think it's -- any business would reasonably look at that and look to determine whether that would be a beneficial way of ensuring financial viability in the future. So I think we acting as a business as we're supposed to do by our law that formed us in 1970 look at all opportunities and try and determine what's appropriate given our statutes.
I think that there are some things that clear that we can do, some things that we can't do, and some things in the middle that we have to sit down and evaluate. But certainly looking to make sure that our investments in services and products give us the best possible return would make you want to look at the financial alternatives that exist.
Mr. Lawrence: There's been talk of postal reform by the Postal Service board of governors and the postmaster general. What do they hope to accomplish with postal reform, and what do they mean?
Mr. Nolan: Well, our hands are tied. I mean, one of our competitors complains that they don't have a level playing field. Every time I talk I say anytime you want to trade playing fields, I'm happy to do it, believe me. The rub is we don't pay parking tickets, we don't park illegally, and we don't pay taxes. We don't make money. You want me to pay taxes? Fine. Give me a chance to make some money.
The big thing for us, frankly, is that you've got a company here that doesn't control 76 percent of its costs, its wages. It's set by an outside arbitrator. We don't control our pricing, we're limited as to what products we can offer, and we can't make investments. If someone said, "Paul, I've got this great opportunity for you. You're going to be CEO of this company and there's only a few things that we're not going to let you do." Would you jump at a chance to run this company? I think the answer to that would be "no."
We need these freedoms to be able to operate in the future we believe. Business is challenging. It has nothing to do with whether mail is relevant or irrelevant because mail is relevant. But the Postal Service sparked a whole explosion in the mailing industry in the '70s and '80s because we freed up the industry to do things.
In some ways we're beginning to be a roadblock. We think with the value of mail that still exists that the industry can explode more, but we need to be freer to offer our customers greater opportunities.
Mr. Lawrence: And yet a tremendous amount of creativity has already been demonstrated through the alliances that you just described. So I'm wondering ...
Mr. Nolan: It's not enough. It starts to go a little way, but it's not enough. Again, when you don't control your prices it's very difficult, or your costs to a large extent.
Ms. Staisey: What are the most critical freedoms that you need?
Mr. Nolan: Well, again, for example, we have a tremendous customer in the priority mail area and our prices are set and are fixed we can't negotiate those. So it enables a competitor to go in there and undercut is anytime they want to. If they happen to have space on a plane and want to fill it up, let's see which customers the Postal Service has and we'll just go with marginal costing and, bingo, we're toast. So I think pricing is a big thing.
I think that offering new products. Again, there's a lot of people that have questioned why are you into these things, the Internet, et cetera. And yet when other companies do it -- boy, that makes a lot of sense. Well, there's no difference there.
From an investment standpoint, again, when you're going to work very closely with a company, the opportunity to make investments so that you grow two ways certainly makes a lot of sense.
Mr. Lawrence: We'll be right back with the Business of Government Hour and our conversation with John Nolan of the United States Postal Service.
Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with John Nolan Deputy Postmaster General and Chief Marketing Officer of the United States Postal Service. Joining me in our conversation is another PWC partner, Nancy Staisey.
John, we hear a lot about the forthcoming retirement wave and the difficulty of attracting young people or new people to government. Can you tell us whether these issues are problems for the U.S. Postal Service, and if so how they're being dealt with?
Mr. Nolan: Well, they are. I think I saw a figure that 85 percent of executives in the Postal Service are within 10 years of retirement. That's a huge number because we have a couple of folks in the executive ranks in the Postal Service.
One way of looking at it is it's a tremendous opportunity. When I joined in 1970 there was a whole wave of retirements that occurred and I got positions of importance a lot faster than I ordinarily would have because they needed people. So I think if there are people listening out there that want a real challenge, the Postal Service is the place to be.
Nobody is as diverse as we are. Nobody values diversity as much as we do I think, and so there are tremendous opportunities. We're stressing very heavily development, redevelopment actually of a management intern program that we sort of had let slide for a while. We have leadership training programs. We've got our own management academy out at Potomac so we do value training.
And we send people to Harvard and Stanford and MIT because we need to have leaders that are savvy, that have rub shoulders with a lot of other leaders in industry. So you've got a great opportunity in the Postal Service to get a lot of responsibility, do a lot of interesting things, and be trained very well.
So I think these are the kinds of things we're trying to stress. We've got 800,000 employees. We're trying to move as aggressively as we can to get people within our own ranks interested in moving up and trying to get people from outside of our industry to move in because the things we do are pretty exciting.
Ms. Staisey: John, one of the demographic trends on the customer side has been an increasing number of new businesses and a great deal of residential development that's been going on. What's the impact of this in terms of the ever-increasing number of daily physical deliveries that USPS has to make?
Mr. Nolan: Well, the way we look at it, last year we added Chicago. We added 1.8 million new deliveries. We added the city of Chicago in terms of deliveries. Now, we don't get paid a penny for delivering to those residences unless there's an increase in revenue from people sending mail. Last year our revenue or the volume went up some, but not as much as it has in the past. So that's a tremendous cost on our operation; 1.8 million, the city of Chicago we added last year, and that's continuing. We don't see any signs of abatement there.
We had a huge influx of dot-coms and we had to build infrastructure to serve them, and then they collapse in some cases. So the breathing that we're doing in and out to grow and shrink from some of those businesses or something, but we haven't stopped growing when it comes to possible deliveries.
Ms. Staisey: Now, are there ways you can use technology to further your mission and also to help serve the ever-expanding number of deliveries you need to --
Mr. Nolan: Well, we're as big a user of technology as almost anybody in the world. That's why we have so many companies eager to do business with us. Unfortunately, there's not many ways that technology can help us walk up to the front door or to the curb to serve new deliveries. But when it comes to the use of mechanized equipment, automated equipment, bar code technology, scanning devices, electric vehicles. Technology is everywhere in what we do. Finding new ways for customers to reach us using the Internet at usps.com, finding ways of making call centers more efficient by using artificial intelligence. I mean, there's very little that we're not looking at or working on. So technology is critical for our future.
Mr. Lawrence: How is the Internet and use of e-mail and even the rise of e-commerce affected the way the Postal Service does business? Does it threaten the volumes?
Mr. Nolan: Well, the way we look at it, the Internet is both a disruptive and supportive technology. It's disruptive in the sense that some of our business could go away, and bill payment and bill presentment is certainly a very big part of our company, 25 percent of our revenues. And so the extent that that's threatened, that would be categorized as disruptive I would think.
On the other hand, it's very supportive. The most important thing that we're doing on the Internet now is using the Internet to reduce our internal costs. It's the biggest thing that we're doing. Second, it's enabling us to build an information platform more efficiently that enables us to manage better what we do every day.
The third thing, we're going to be adding a lot more value to our current core products and services. If you have a post office, for example, in the future we envision that you'll be able to look on the Internet to see whether you have mail in the post office box, whether you need to stop by the post office, and things like that; the status of your mailing. We'd be able to scan documents en route, and you'll know whether or not you're about to receive a package or that the package you sent was delivered.
Finally, the e-commerce initiatives that we've got to offer more products and services. So it really is changing the whole landscape of what we do. It's how we look at the future and how we're tackling the present and moving toward the future.
Mr. Lawrence: How is all this technology changing the way the Postal Service is managed?
Mr. Nolan: Well, we need to have technical savvy, first of all. That's sort of the ante to be in the game. So you need to understand the technology, either through people you have in house or consulting partners or vendors that you deal with so that's critical.
But the big thing is that still the fundamentals apply in managing an organization and it's a matter of understanding customers, and the big challenge here is that not only do you try and understand what the technologies can do for you and what you have to do internally but also how is it affecting your customers and be able to anticipate that impact and be able to be there as the customers change. Because when you've got a customer who very often doesn't know for sure how it's going to impact him, it's pretty hard for them to tell you.
So what you just got to be is more of a futurist I think to examine what's really going on here and to be there at the pass to cut them off and make sure they stick with you.
Ms. Staisey: John, if we could all be time travelers and travel ahead 10 years into the future, what would USPS look like in 2010?
Mr. Nolan: The U.S. Postal Service is the gateway to the household. Nobody in their right mind will go to their household directly. They drop at the Postal Service and let us do that, walk that last mile. No one is more efficient, no one is more effective at doing it. No one is trusted more. So whether it's packages, whether it's videos, you name it, people are going to use the Postal Service to move that last mile.
On the origin end, we've got all the tools necessary for our carriers to make it very easy to hand things to us so you won't necessarily have to go to a post office. You're going to see some post offices changing location. We need to move where the population is. With technology today, with kiosks and all sorts of things, there's a whole easier ways; the Internet. You don't have to come to the Postal Service to buy a stamp. You may not even need the stamp. You can do PC postage now and pay for your postage.
So I think what you're going to see is a Postal Service that has moved with technology and understood clearly what customers were trying to accomplish. You're going to see a lot of different models setting up in different areas. The post office today, there's a lot of sameness to it. It's the same everywhere. Well, in the future I don't see that always being the case. I think that there are certain areas where the post office ought to have a whole lot of services that it doesn't have today, and in other areas that just wouldn't be appropriate. So you won't see some of those services offered.
If you're in a town with no greeting card stores, why not be able to buy a greeting card at the post office. In other places that has greeting card stores, we can't add extra value there so don't do it.
So I think what you're going to see is a Postal Service that's much more tailored to the customer where the customer is, and a greater flexibility and range of service offerings.
Mr. Lawrence: What type of leaders will be in this organization in 10 years?
Mr. Nolan: Probably ones that don't include me, but I think to be effective in the Postal Service 10 years from now you're going to have to be someone that has a vision, and stick with that vision and move aggressively toward it. You're going to have to have sound business knowledge because you're going to be up against the biggest and the best and the littlest and the fastest.
So you're going to have to have a business acumen that's going to be critical for the future. Hopefully there will be a greater movement of executives from outside to inside and inside to outside, but it's going to be a lot of challenges and they're going to have to be innovative.
Mr. Lawrence: I'm afraid we're out of time, John. Nancy and I want to thank you very much for spending time with us. We've had an interesting conversation.
This has been the Business of Government Hour featuring a conversation with John Nolan, Deputy Postmaster General, and Chief Marketing Officer of the U.S. Postal Service. To learn more about the endowment's programs and research into new approaches to improving government effectiveness, visit us on the web at www.endowment.pwcglobal.com. See you next week.