ActSeed is for Entrepreneurs and Startups

The business world is a sea of constant change. To survive, entrepreneurs and businesses have to be proactive and adaptable to the changes.

Recently, there was a debate on Capitol Hill regarding another bailout for the United States Postal System - an entity that has repeatedly refused to adapt its strategies to accommodate the current market.

I won’t debate if the post office should be granted further subsidies with our tax dollars. Nonetheless, the recent request from the USPS did stir some thoughts on their continual failure to remain both competitive and profitable. This led to a recent discussion I had with a colleague regarding how much more effective private companies are doing the same work than an organization funded with tax dollars does.

A prime example is United Parcel Post. UPS is a massive organization in the package delivery business. Similarly to post office, UPS has longstanding ties in this country; both have labor unions to negotiate with, and other similar operating costs. While UPS and USPS have many similarities, only one, UPS, has been profitable. In 2010, UPS posted a net profit of almost 3.5 billion dollars while USPS reported losses of over $300 million. This amount is even more remarkable when you consider that despite billions of dollars in Federal bailouts, the post office can’t seem to make a profit. On the contrary, UPS has made steady profits for decades in spite of growing competition from Federal Express and other carriers – including the Post Office. This is a prime example of the private sector working more efficiently than a publicly funded entity and that, in this instance, bailouts have not worked.

But how does UPS succeed where the Post Office doesn’t?

I would argue that innovation is fundamental for entrepreneurs to to survive greater competition. Innovation forces even large companies like UPS to continually usher in change to its corporate infrastructure. When was the last time you heard the post office inventing something as oppose to always playing catch up with everyone else?

So how can a small business, or startup, or any private company be innovative with new businesses techniques and avoid the trap of catching up? There are many answers but I routinely utilize the following:

1. Think outside the box. Looking at a situation or problem from all sides and taking it apart can lead to new breakthroughs and answers to questions or problems.
2. Hire people that question the organization rather than simply saying “yes sir.” The best employees I have ever had argue and challenge me. It also demonstrates to me they care about the company enough to take on “the boss” and not just blindly comply for the sake of a paycheck.
3. Look at what your competitors are doing. You don’t have to be the one who created the mousetrap to be successful – just make it better. Apple never invented the mouse for the computer.

Looking at the history of UPS, I am sure you will find many instances where creative thinking, a staff that questions the status quo, and inventing better products and services has made them far more successful than the Post Office.

At your next team meeting, ask the staff, “Are we UPS or USPS?” and see what kind of response you get.

[NOTE: Thanks to Michael S. Duell for this guest author contribution. Mr. Duell is the Director of Business Operations at Ruyle & Ruyle, a firm that includes small business corporate law as one of its specialities.  If you are looking for a good boutique law firm that caters to small businesses and startups, consider Ruyle & Ruyle.]