In 1753, Ben Franklin was appointed Deputy Postmaster General of the United States. Among his many postal innovations was the “cage” used for the hand sorting of mail. Well over 200 years later, when I worked in the post office as a college student, the post office was still using the Franklin “cage.” Believe me, it was a mind numbing experience. Of course, Franklin’s invention was not quite up the demands of moving literally billions of times the volume of mail that the post office delivered in Franklin’s era. My college education was enhanced by my work at the post office—I gained firsthand knowledge of what the lack of competition produces on both the capacity of an organization to serve the consumer and on the morale of the organization’s employees.
We recently moved to a rural home and found that the post office is still unable to leave behind ancient ways of accomplishing their mission. Although our rural home has a street address recognized by the fire department, the house had never previously received mail. My wife called the local postmaster who explained the procedure for establishing service. We followed the rules; and close to our moving date, we called the postmaster to activate the address. All seemed to go smoothly until we began to change our address. We quickly found out that our new address was “not deliverable;” it was not officially recognized by the postal service national address directory. My wife called back the postmaster who explained that, although she had processed the address in her post office and the address was “valid,” she was unable to link to the national postal address directory. She further explained the post office batch processes new addresses, and it would be at least two months until our new address was in the directory. In the meantime, we would be faced with endless frustration.
I was incredulous! Batch processing? The post office may have moved beyond the Franklin postal cage, but they were still using a centralized data system that required data entry in batches with long time intervals between the processing of the batches. Indeed, before the personal computer, large mainframe computers processed data in batches. Given that computer processing power was at a premium, in the 60s and 70s, batch processing was the most efficient way to handle large amounts of information.
However, the mainframe computer era has long ago passed. The rise of the personal computer has created strong incentives for the decentralized processing of information. Under normal circumstances, changing your address with your bank or for your magazine subscriptions would require little more than going online and entering your new information. No intermediary stood in the way of the consumer being able to instantly update their information. Imagine being told by Bank of America, National Geographic or L.L. Bean that they would take your new information, but it would be several months until they could enter the information in their system. You would take your business elsewhere. Yet, to the post office, it makes perfect sense to prohibit even a local postmaster from entering enter new information in their system. The post office may process information in batches, but they are botching their job.
Of course, the post office is not the only organization where information is not treated in a timely way; and as a consequence, “botched processing” is the norm.
Consider organizations that rely on strict hierarchies to do strategic planning and that treat planning as an annual event. When strategic planning is treated as something that only a few do for the rest of the organization and when strategic planning is an annual event, you can be sure that the organization will be unable to respond effectively to changing market conditions.
Or, consider organizations where large bureaucracies control and delay the flow of information. Employees on the front lines then make botched decisions because they cannot see how their actions fit into the needs of the organization as whole. In her excellent book The Southwest Airlines Way, Jody Gittell explains how Southwest Airlines has a culture of information sharing. The consequence is that all employees understand how their jobs support the needs of the entire organization. In contrast, Gittell explains how American Airlines employees hoard and control information. At American, individual employees have no idea of how their actions impact the whole organization. Not surprisingly, American Airlines employees take much less heed of customer service than do Southwest employees. For example, an American Airlines baggage handler in Chicago may have little appreciation for how their failure to hustle may delay flights in the entire system.
Today, large amounts of inexpensive computing power are available to help facilitate information sharing in decentralized organizations. Of course, many organizational cultures, such as in the post office, are unable to grasp the importance of decentralization and information sharing—they operate under a command and control atmosphere that neither trusts their employees nor their customers. The post office, with its monopoly position, is somewhat impervious to market forces. However, organizations who operate in similar ways, but without a government grant of monopoly, will be early casualties as the current economic crisis deepens.