Botched Processing

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.

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4 Responses to Botched Processing

  1. igli1969 says:

    I’ve had business dealings with different locations of the Postal Service, and can confirm that their organization is, well, disorganized. Even the regional processing centers have only limited authority to purchase services, and when a request for procurement (or payment) goes to the national level, delays and mistakes have always ensued.

    The concept of monopoly-protected market niches will always draw the people who wish to tell others what to do with no consequenses (in junior high, we called them bullies), and those people who will accept that kind of treatment in return for job security and the perception of better pay than they could receive in a competitive environment. It also draws a few who think, often correctly, that they can scam the system. I knew a letter carrier who worked a second job with little problem fitting both into an eight-hour day.

    Chris C.

  2. Frank v2 says:

    Dr. B,

    Ahh the Post Office: a direct marketers best friend and worst enemy, all in one. I do a lot of business to business direct mail in my line of work, and I actually have some good news for you: because your address is not in the central postal system, when a consumer business verifies your address, it will show up as “undeliverable” and you will not receive any “valuable” direct mail fliers or coupons. That is the good news. Sure there is the inconvenience of not getting any mail like bills and other such distractions, but this may be the perfect opportunity to wean yourself off of an out-of-date government-sponsored bureaucratic institution, that I believe has really outlived its usefulness. Yes I use them for cost effective mailings. But the reality is that the only reason it is cost effective is because we the tax payers subsidize this service. And I thank my fellow Americans and hope from a cost perspective that the service keeps going.

    But the reality is e-mail certainly has replaced snail mail from a pure communication perspective, and there are lots of very efficient private delivery services that are profitable and efficient in terms of delivering packages. So perhaps it makes sense to just tell Ben Franklin’s postal heirs to take their kites and well, go fly them. Oh, and perhaps they should tie a key to the future on the string as well! Maybe a little lightening on a string would wake up the organization and make them fiscally accountable; ah, oh, well, maybe not. Oh, and congratulations on actually being able to purchase a property that according to the Post Office is officially “Nowheresville, USA”.

    As a side note, I wonder if when that long lost relative wants to stop by and visit you if he or she will be able to track you down. He / she won’t be able to stop in the post office and ask for directions. Perhaps the fire department will know where “Nowheresville actually is?

    Frank v2

  3. Chris,

    Thanks for your observations. It is not surprising to hear that the post office’s centralized command and control operations extend to other areas too.

    Frank,

    I agree with you that eventually the free-market will continue to find ways to work around the inefficiencies of the post office.

    Do you remember what happened to Kramer (Seinfeld) when he tried to refuse his mail 🙂 ?

  4. Jim D says:

    I agree with Frank, and take it a step further. Not only do I not significantly communicate through snail mail, but I generally don’t do business through it, either. I’ve actually refused business with certain firms because they couldn’t accept an electronic payment. For truly necessary paperwork (large contracts and such), it all is done through a professional (think lawyer or mortgage broker), or the paperwork is delivered fedex or ups. I think the market is very quickly finding ways to work around this gov’t granted monopoly, and noting the increasing rate at which stamp prices are going up, I’d say they’re feeling the heat. Postal service is either going to face an abrupt market-driven change in their business model, or they’re going to go under.

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