Responsibility without authority

The Postal Service lost $9 billion last year, on about $80 billion in revenue.

Last March, the guy in charge told Congress they'd run out of cash within a year without help.

Now, government services aren't necessarily supposed to make money. That's part of what we pay taxes for. Nobody expects the fire department to turn a profit.

But as government programs go, the Postal Service feels like one that could. You pay for a stamp, they deliver your letter. That's a business.

So what’s going so wrong?

Volume is part of it. Mail volume is about half what it was in 2006.

But the bigger problem got built in back in 1970.

In the late 60s, the government asked a former AT&T chairman named Fred Kappel to figure out why the post office couldn't make money.

His answer: nobody was actually in charge.

So Congress turned it into the U.S. Postal Service and told it to cover its own costs.

The problem was, Congress kept the levers.

Want to raise the price of a stamp? Ask a regulator.

Want to drop Saturday delivery? Ask Congress. (They tried in 2013. Congress said no.)

Want to close some post offices? In 2011, they floated closing about 3,700. Senators went nuts.

Want to cut staff? After six years on the job, the union contracts basically say you can't lay someone off. And people are about three-quarters of the costs.

So USPS management is responsible for breaking even… with almost no authority to do it.

For comparison, UPS is about the same size. It's unionized too.

And it makes money.

The difference is someone at UPS can actually change the price.

Here's what I take from it: when you hand someone a result, you have to hand them the levers too.

Responsibility without authority is a doomed setup.

I've done this myself without realizing. Told a manager "you own this number," then made them run every price change past me.

I stopped. You should too. (My thoughts on how are below.)

Put it into practice

Pick one person on your team who owns a number - maybe revenue, margin, on-time delivery, whatever.

Write down the three decisions that move that number most. Usually it's something like pricing, hiring, and how much they can spend without asking.

Now ask: how many of those calls do they have the authority to make on their own?

Every "no" is a little post office inside your business. Either hand over the lever or take back the number.

A great book on this: Turn the Ship Around! by David Marquet. The guy was a nuclear submarine captain who stopped giving orders and pushed decisions down to the people who actually had the information. His sub went from worst in the fleet to best.

Good luck out there.

Michael

P.S. If you haven’t seen it, I recently did a whole video about the rise and fall of the USPS. It’s a fun story!

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