Usps and Sony Struggle to Create Lasting Organizational Change
When to act and how to sustain your turnaround
When Bill Henderson, postmaster general of US Postal Service (USPS), turned up at the Tour de France in July 1999, things could not have been better. After making loss upon loss, his organization had finally turned things around. USPS was in profit with a strategic five-year plan that was set to see it prosper for years to come. And just to make things even greater, the athlete USPS had sponsored (the guy who was told he would never compete again after being diagnosed with testicular cancer in 1996), had just won the world 's most prestigious cycling competition.
What a difference three years can make.
On a downward trend
Since that summer 's day, USPS has free-wheeled downhill in spectacular fashion. In the fiscal year ending September 2001, profit had turned to loss of around $1.6 billion (less than projected but hardly a success), Budgets were cut and capital spending halted. Then came the terrorist attacks of 11 September and the subsequent anthrax assaults on employees of USPS. This only served to make matters worse for the postal firm and so once again, it was back to the drawing board.
Failing to sustain change initiatives
And USPS is not alone in its failure to implement a successful change initiative. According to recent research by Change Management Online, UK businesses undertake at least three major change projects a year (at a cost of approximately 52 billion in management time alone) yet half of these programs fail to make any lasting impact whatsoever. Whilst USPS faced a bigger challenge than most by attempting to turn the whole organization around (the ultimate change initiative), the fact that it made such a strong start left executives wondering, when things went awry, where did it all go wrong?
Admittedly, transforming USPS into a profit-making outfit looked like something of an impossible task due to its unusual position. The USPS is a huge regulated monopoly and consequently
When Bill Henderson, postmaster general of US Postal Service (USPS), turned up at the Tour de France in July 1999, things could not have been better. After making loss upon loss, his organization had finally turned things around. USPS was in profit with a strategic five-year plan that was set to see it prosper for years to come. And just to make things even greater, the athlete USPS had sponsored (the guy who was told he would never compete again after being diagnosed with testicular cancer in 1996), had just won the world 's most prestigious cycling competition.
What a difference three years can make.
On a downward trend
Since that summer 's day, USPS has free-wheeled downhill in spectacular fashion. In the fiscal year ending September 2001, profit had turned to loss of around $1.6 billion (less than projected but hardly a success), Budgets were cut and capital spending halted. Then came the terrorist attacks of 11 September and the subsequent anthrax assaults on employees of USPS. This only served to make matters worse for the postal firm and so once again, it was back to the drawing board.
Failing to sustain change initiatives
And USPS is not alone in its failure to implement a successful change initiative. According to recent research by Change Management Online, UK businesses undertake at least three major change projects a year (at a cost of approximately 52 billion in management time alone) yet half of these programs fail to make any lasting impact whatsoever. Whilst USPS faced a bigger challenge than most by attempting to turn the whole organization around (the ultimate change initiative), the fact that it made such a strong start left executives wondering, when things went awry, where did it all go wrong?
Admittedly, transforming USPS into a profit-making outfit looked like something of an impossible task due to its unusual position. The USPS is a huge regulated monopoly and consequently
References: Kunii, I., Edwards, C., Greene, J., Grover, R. and Lowry, T. (2002), "Can Sony regain the magic?", Business Week (USA), 11 March 2002, p. 46, ISSN 0007-7135. Reisner, R. (2002), "When a turnaround stalls", Harvard Business Review, Vol. 80 No. 2, p. 45, ISSN 0017-8012.