One of the perils of beng in business is that a perfectly good business idea that has proven to be sucessful over time can suddenly become irrelevant. This point was brought home by the recent news that the U.S. Post Office was going to consider eliminating Saturday delivery of mail (http://www.nytimes.com/2010/03/03/us/03postal.html and for the most part, people yawned and acted with disinterest.
However, there is a business lesson to be learned by how the decision was reached and what led to the necessity of even considering this decision. There was a time when communication of any written sort required sending it through the U.S. Post Office. In fact, it was so pervasive, that many businesses would receive multiple mail deliveries within the same day to keep up with all of the volume of mail that was being sent and received.
Now, with email being so firmly embedded in how we communicate, cell phones allowing us to be reached wherever we may be and able to provide text and graphic downloads remotely, the volume of post office handled mail has been altered. However, the costs to maintain the locations and the labor required to staff them has not diminished. Even if the services themselves could be accomplished more efficiently, the fixed costs are still going to compel the government to seek ways of reducing expenses through different delivery schedules.
With rare exceptions, the Post Office delivers mail in a timely fashion, reliably, and relatively speaking fairly inexpensively. However, the cost of email, texting, and posting documents to a website are substantially cheaper and require less effort in many instances than using the Post Office. In short, the service and value provided seemed almost impervious to competition – that is, until the internet became pervasive. Suddenly, what was a solid business model became suspect.
It begs the question for all business people, “How are you protecting your business from suffering the same fate as the Post Office?” Where are the potential incursions or weaknesses in your business that may prevent the long-term success of your business?
Overlooking The Obvious
In fairness to the U. S. Post Office, they did try to respond as soon as they recognized that web-based delivery and cell phone technology had allowed competition to encroach upon the document delivery business that had been historically owned by the U.S. Post Office. However, the political process of being part of a governmental agency has proven to get in the way of taking proactive steps to change as needed. For example:
- Studies were done by McKinsey Consulting that pointed out that there were any number of post office locations that were under-utilized and could be closed with minimal disruption to service. However, no local politician wanted their constituents to have to “lose” their local post office site, so any plan that suggested closing locations was met with political foot dragging.
- Rather than try to compete, many have suggested that emails, and other electronic means of communicating should be taxed so as to put those methods at a disadvantage and hopefully artificially bolster the use of the Post Office. Needless to say, that has not been a popular suggestion for most businesses or citizens.
Of course, every business must look to see how technology, changing consumer or customer tastes, and competition are evolving and changing. After all, most buggy whip manufacturers never saw the automobile coming and demolishing their whole industry; manufacturers of floppy disks and 8-track tape players were slow to see the impact of CD-ROMs, downloadable music, and changing consumer expectations for increased portability of data or entertainment.
While we can all cluck our tongues at the fine mess the Post Office is in, maybe it is time to look at our own businesses and wonder if we are next and what we are doing now to anticipate and/or preventing it.