Congress Working on Bailout for U.S. Post Office
- "Our business model is broken,” Postmaster General Patrick Donahoe said in an article in the St. Louis Post-Dispatch. “We have insufficient revenue to cover our costs. If the Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings."
- The cost of the Senate bill could prove a major sticking point. The Congressional Budget Office says the bill would cost $33.6 billion over 10 years. Sen. Jeff Sessions, R-Ala., who is on the Senate budget panel, will try to block the bill, saying it's too pricey.
- The Postal Service, an independent government agency, says it wants to deal with declining volume and $12 billion in debt by closing up to 252 mail-processing centers, shutting down 3,700 post offices and eliminating about 100,000 jobs. Otherwise, the agency says, it will lose about $14 billion by the end of the year and could run out of the cash it needs to handle day-to-day operations as early as this fall. The agency says the cuts it is seeking would save $6.5 billion a year.
Apple reported that soaring sales of the iPhone, especially in China, helped Apple explode its net income in the company’s fiscal second quarter to $11.62 billion, according to the New York Times. Apple said it sold 35.1 million iPhones in the last quarter, an 88 percent increase from the same period a year ago. It sold 11.8 million iPads, more than double the number it sold in the same quarter last year.
What can associations learn from these two stories?
Based on my 34 years working in associations, Congress is acting like the board of directors of many national associations. The association staff (in this case the Postmaster General and his management team) have proposed cutbacks in jobs, processing centers and frequency designed to save $6.5 billion a year. But, key members of the board of directors (in this case the U.S. Congress) refuse to approve the cutbacks. After all they don’t want to “kill” their pet projects (aka “sacred cows”) so they keep them alive no matter how ineffective or how costly.
Congress is a “big board of directors” (535 people) where its directors (Representatives & Senators) are focused not on what is best for the organization but rather on what my district needs.
Meanwhile, Apple reminds me of a new member- and customer-centric association with a smaller board and operating model (similar to that described in Race of Relevance) is delivering products customers (members and prospects) want and recording record growth and profits. Apple’s key is destructive innovation ... meaning eliminate out of date products, produce new products and excite your members and prospects.
If you had a choice, would you rather work for A (the U.S. Post Office and Congress) or B (Apple)?
And, if you work for an association similar to the Post Office, what can you do to change it? Or, do you just kill it before all your members have left?