Friday, August 12, 2011

Innovate your purpose not just your product

It's with so sadness that I note the latest news from the United States Postal Service.  Their plans currently call for the reduction of hundreds of thousands of jobs, and the elimination of thousands of post offices across the country.  The Washington Post reports that the Post Office must make billions in payments for employee and retiree pensions, while mail volume has fallen over 20% year on year. 

I grew up on a farm, at a time when there were three major TV networks, of which we could receive two.  We had a party line telephone at first, and our contact with the outside world consisted of interactions at the country store, or when we received mail, which included catalogs, magazines and letters from friends and family scattered throughout the US and across the world.  The mail at that time and in that place opened up a world beyond the farm. 

We've watched, over the last few decades, as the USPS has been racked with competition, from UPS for packages, Fedex for overnight delivery and by the advent of email.  Much bulk rate and important document transfer goes to UPS and Fedex, and we've become a nation of Tweeters, emailers and Facebook posters rather than letter-writers.  Even many businesses have recognized the power of the internet and encourage online bill-pay, so soon all that will be left for the post office is unsolicited mail and advertisements. 

It didn't have to be this way.  The Post Office, like GM, like the big steel companies fell victim to its importance and its world view.  GM, recall, was happy to cede the "low end" of the market to new entrants, Toyota and Honda.  In a Honda dealership recently I saw one of the earliest Honda imports to the US, and I wondered how desperate the buyers in the US were to acquire that car over US manufactured cars.  Big Steel ceded the low end of the market to Nucor and other mini-mills, and the mini-mills discovered that they could do everything Big Steel could do, with better quality and lower costs.  Clayton Christensen's concept of disruption rings true in all of these stories.  Could the Post Office have competed or even introduced the concept of overnight shipping a la Fed Ex?  Of course it could have, but the offering probably would have cannibalized existing customers and services.  Is the Post Office bound by inflexible scope and rules, having to visit every household 6 times a week?  Yes, but could it turn that requirement into an advantage?

Here's the point - it's often as important to innovation your "purpose" as it is your "product".  I'm sure the USPS has introduced a number of new products and services, but has it carefully thought about its purpose?  The famous example being buggy whip manufacturers.  Perhaps, if they had defined their purpose as "Starting Transportation" rather than "whipping horses" they might have made the transition when the car took over.  Who really knows?  But using the Post Office as an example, let's explore a few concepts for purpose.

The USPS states that it has an unfair requirement to visit every home six times a week.  Could that visit be used to create other services or information?  Why not have the Postal Carrier help with the Census?  Why not have the Postal Carrier offer to check in on the lonely or isolated people?  Why not have the Postal Service read a utility meter for the utility company?  Why is Google photographing homes when the Post Office visits every home every day?

Or, could the USPS have delivered something other than the mail?  Could they have structured their routes to deliver groceries or other goods?  After all, they have the most thorough and complex routes of any local delivery service.

Could the USPS have defined their mission as message delivery, rather than mail delivery, and entered the business of managing email systems and servers?  I'm sure there were many barriers put in place to attempt to keep them out of that business, but a simple redefinition of their business and purpose could have placed them at the center of messaging.  Why is a small firm called Twitter managing much of our short messaging to each other?

There were many opportunities, and perhaps some still remain, for the USPS to question its purpose and to reinvent and innovate its purpose.  Historically, in our economy and society, firms had long runway to recognize societal and technological change and adapt to that change.  A firm could be slow, but adaptive.  Those days are over.  Firms must adapt not just their products and services, but must innovate their purpose as well, because even purpose and strategy have much shorter lives than they once did.

Innovate your products, yes, and your services and your experiences.  But don't neglect to constantly question your purpose.  That may be the most important thing to innovate.
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posted by Jeffrey Phillips at 5:43 AM


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