John Potter embraces employees and competition to improve USPS' performance

Russell stopped him. “Now Jack,” he said, “what kind of government do we have?”

“A democracy,” Potter said.

“Well, what does that mean to you?” Russell asked.

“One man, one vote,” Potter answered. “We all have the opportunity at the ballot box to choose the government that we live under.”

“And what is that the product of?”

“It’s the product of some enlightened patriots who had this notion that a better society would be brought about if everyone contributed to government and had a say versus living under a monarchy,” Potter said, congratulating himself that the nuns had taught him well.

“Well, I don’t agree with that,” Russell said. “You know what I think democracy is a product of?” He looked Potter in the eye. “Compromise. Democracy is a product of compromise.”

Russell told him to “keep in mind that you’re not a monarch. You’re not going to be able to just dictate things,” Potter said. “And [that] you’re going to have to make some concessions to the administration or to the Congress or to the mailing community or to the board of governors.” All of Potter’s plans were useless, Russell said, unless he avoided being an autocrat and learned to win consensus.

Potter savors that conversation with the basketball hall of famer as a moment of enlightenment. Balance, respect and compromise have been some of his watchwords as postmaster general.

Those elements constitute an approach to management that has helped Potter shepherd the nation’s second-largest civilian workforce (after Wal-Mart) through some difficult times.

Within a few months of Potter’s appointment as postmaster general, deadly anthrax spores were delivered through the U.S. mail, killing five people, including two Postal Service employees.

Potter was at a conference in Denver when he heard that a Postal Service employee had died. He flew back to Washington that night and met the next morning with the presidents of the four major postal unions and three management association presidents. “When you’re in a crisis like that, you can’t overcommunicate,” Potter said.

He made sure to keep the focus on the employees. “It was always about them,” he said. “We got an opportunity to jointly question some of the advice [from experts about anthrax] that we had been given. I think that approach was very helpful for everybody.” From clerks and letter carriers through the upper ranks of management, “everybody worked together to address what was a very dangerous situation,” he said. “To the credit of all postal employees—every mail handler, clerk, rural letter carrier—everybody rallied around the situation.”

The Postal Service learned lessons from that experience that it later applied to other crises, such as Hurricane Katrina. “We’ve learned to communicate much better with our employees and also more directly, more openly, with the community.” Both experiences helped make the Postal Service “that much stronger,” he said.

Some insiders in Washington think that Potter doesn’t get enough recognition for his leadership on the reform front.

“I’m baffled as to why he’s not held up more as a real leader in the government reform arena—especially now, with the focus and demand on results,” said Carl Fillichio, vice president of the Council for Excellence in Government. “The transformation plan he launched in 2002 has yielded remarkable things: unparalleled productivity growth and impressive financial outcomes. It really should be used as a playbook and guide for other agencies.”

“There’s not a person in the Postal Service who’s not willing to mentor you. Some of the best mentoring I got was from clerks and carriers who would tell me, ‘Gee, it would be helpful if you changed this.’ ” —Postmaster General John Potter

The Postal Service is literally part of Potter’s DNA, Fillichio noted.

The son of a 40-year Postal Service veteran, Potter began his postal career in 1978 as a distribution clerk in Westchester, N.Y. He earned a bachelor’s degree in economics from Fordham University—the Bronx campus, not the Lincoln Center location, he is careful to note. One of this New York native’s proudest moments was throwing out the first pitch in a game at Yankee Stadium last summer in honor of the debut of a Mickey Mantle stamp.

This Horatio Alger-esque rise through the ranks is not uncommon in the Postal Service. In fact, Potter’s predecessor, William J. Henderson, delivered mail in college. The current deputy postmaster general, Patrick Donahoe , started his USPS career as a mail clerk.

When Potter was a clerk, his supervisor’s boss sat him down and asked him what he wanted to be in the Postal Service. “Well, I’d like to someday get to your job,” Potter replied.

“Young man, you have a college degree,” the office foreman said. “You should strive to be nothing less than the postmaster general.”

But Potter credits his rise from clerk to commander to a source closer to home: Dad. “He’d been in the Postal Service for 40 years. He was my mentor, my counselor, my consultant. I could always rely on him for great advice. And he taught me to ask questions.”

The Postal Service fosters an atmosphere where asking questions isn’t only tolerated, it’s encouraged, Potter said. “And there’s not a person in the Postal Service who isn’t willing to mentor you,” he said. “Some of the best mentoring I got was from clerks and carriers who would tell me, ‘Gee, it would be helpful if you changed this.’ ”

Each USPS employee has a special role to play, Potter said. “You can’t disrespect, for example, the union leaders.” Under his leadership as the Postal Service’s senior vice president of labor relations, Potter had helped the USPS successfully reach negotiated agreements with the American Postal Workers Union, AFL-CIO and the National Postal Mail Handlers Union.

During Potter’s tenure as postmaster general, it seems as if he’s battled more dragons than that other Potter, Harry: anthrax, hurricanes and an economic monster, massive debt.

When Potter took the helm at USPS on June 1, 2001, the service was about $11.3 billion in debt. The Postal Service’s budget deficit was $6.3 billion. Potter put the USPS on a plan he called “breakthrough productivity” and also some good old-fashioned thriftiness.

“We started to question every dollar that we spent. Could we spend it in a better way?” The service identified the top-performing employees in the country. “There’s no reason why everyone couldn’t be performing at that level,” he said. “And we put out procedures and processes that were implemented to help people move in the right direction.” By scrutinizing everything they bought, the Postal Service was able to cut its spending on external goods and services by a billion dollars.

Not Dead Yet. Remember the early days of the Internet, when it seemed like postal mail would go the way of vinyl records and rotary phones? It turns out those fears were largely unfounded. Deliveries have grown by about 1.8 million pieces per year. And at the same time, the service’s career workforce has been reduced by more than 100,000 workers since its peak of 871,500 in 1999, to a current workforce of a little more than 700,000. “That’s an indicant that our productivity efforts have taken hold,” Potter said.

The Postal Service also used a one-time windfall to pay down its debt. The service had been overpaying its fund for the Civil Service Retirement System program. Working with Congress, the Postal Service came up with a bill that corrected that payment schedule, and earned a benefit of $9 billion over three years. “We didn’t squander that opportunity,” Potter said. The service is now debt-free.

The Postal Service has faced its competition in a very coalition-building way, too. Potter speaks almost warmly of FedEx and UPS. “When it comes to packages, they are the package industry,” he said. “We’re the small player on the block.” Yet the Postal Service has achieved a sort of synergy with these other players, Potter said. “The biggest customer FedEx has is the USPS. We spend more than a billion dollars a year flying our mail and packages on FedEx planes,” and plans are in the works to fly U.S. mail on UPS planes as well. Both companies are among the Postal Service’s biggest ground package customers. They both have product offerings that use the USPS for the last leg of the journey. “So in a sense, we’re all dependent on one another. Over time you’re going to see that interdependence grow.”

Indeed, this blurring of the line between government and business seems to be changing the public perception of the Postal Service.

Gerald McKiernan, a USPS spokesman, got a call not long ago from someone who said, “I read Mr. Potter’s remarks in the newspaper about stakeholders. That must be a misprint, right? I’m curious about what exchange you are on and what’s the ticker symbol?” The caller thought the intended word was stockholders.

In addition to private industry, the Postal Service has embraced the Internet. “You can go online and buy stamps, you can pay for postage online, you can put labels on packages, you can look up ZIP codes,” Potter said. “Our job is to make it as easy as possible for the American public to access this service that they own called ‘mail delivery.’ ” It’s been a convenient way to “bring the post office to the people as opposed to having to force people to come to the post office.”

But 10 million people each day still visit the nation’s 37,000 post offices. “We’re not turning anyone away,” he said. “We’re just trying to make sure that people know that they have choices.”

The Postal Service, perhaps more than any other government entity, has the unique position of offering a service to every door, every day. Sometimes, in rural areas, the mail carrier may be the only person who checks in with an elderly person each day, McKiernan said. If Potter hears of a mail carrier doing a good deed or special favor for someone, he writes that employee a personal note, McKiernan said.

Such is life in Potter’s world, where the postmaster general tries to balance the needs of the Postal Service’s workforce with those of its stakeholders—300 million Americans.