Seven Ways to Fix the U.S. Postal Service

Since the late 19th century, the unofficial slogan of the U.S. Postal Service (it doesn't have an official one) has been guaranteed delivery through rain, sleet, or snow. Nowhere mentioned in that motto is a crippling economy or revenue and budget shortfalls. The government-subsidized service faces a nearly $7 billion net loss by year's end, landing it on the government list of federal programs at "high risk" of collapse, right up there with Medicare and the 2010 census. President Obama even piled on, remarking this summer that America's postal agency looked pretty dismal compared with private competitors like FedEx and UPS.

More than a little red-faced, postal officials point to a clear and obvious culprit: e-mail. Its rise in popularity, along with that of other services that allow users to share documents or images online, has driven mail volume down by an expected 22.7 billion pieces this year, more than a tenth of its annual volume. Yet the USPS has an equally clear and obvious plan to remedy the problem. Answering mounting criticism from Congress (which funds wherever the USPS falls short), the service says it will cut 700 branches, and alludes to more rate hikes on the way.

But in an era of quickened info transfer, is that the best strategy for an agency that's perennially in the red? Anyone who's waited, and waited, in line at the old letter hub knows the service could probably be run better. NEWSWEEK asked a variety of management consultants and business futurists how to turn the old pony express into a sleek, 21st-century moneymaker—or, at the very least, a breaker-even. Listen up, Postal Service (and Congress): for this advice, we'll let you cut in line.

1) Get into the e-business. More people are e-mailing? So meet their needs. "Give every American an e-mail address when they're born," suggests futurist Watts Wacker. Might they look elsewhere for a different one? Sure, but at least you'll maintain relevance in their mind. Plus, you can sell lucrative advertising on those accounts.

2) Increase service. Don't drop from six- to five-day delivery; go the other way, says Kellogg School marketing prof Richard Honack—to all seven. It seems counterintuitive to add service when you're losing money, but people have less faith in the system precisely because of spotty service. Consider tightening hours, but the USPS could be the first carrier to reliably deliver all week.

3) Advertise with coupons. It sounds like an archaic way to attract customers in a new era, but if people are flocking to the Internet, give them an incentive to come back. "We're a coupon-cutting society," says futurist and business strategist Marlene Brown. "Make people feel like there's value added."

4) Make a play for control of government broadband. With Congress considering an expansion of broadband access, why not put it under the USPS, asks futurist David Houle. "That would define the Postal Service as a communications-delivery service, rather than just a team of letter carriers. Don't let the service's tie to Congress make it fizzle. If used right, why not use it as an advantage?

5) Rebrand. No one knows what the Postal Service stands for, says Wacker. "Fly like an eagle, what does that even mean?" A company's brand is its most valuable tool, or its biggest liability. Contract out to find a new logo and slogan that actually convey what you do and how you do it. And then use them. (In this week's NEWSWEEK magazine, we asked three design firms to get started.)

6) Close branches if you must, but do it strategically. Franchise services by region, posits business strategist Gurumurthy Kalyanaram. You don't need a full-service post office every few blocks in New York, for example. Some centers could be for letters only, others for packages. That way you cut down on staff size and service required to and from each.

7) Reorganize and motivate staff. Paying high wages with inflated job security isn't a competitive strategy. Unions may be fierce, but consultant Peter Cohan thinks management should put employee contracts out to bid. And add incentives: if a worker saves money, give him a percentage. Inversely, put jobs on the line to avoid losses. In other words, run it like a real business.