# Presentation: 785004

## Strategic Transformation

- 2007 Update

**January 30, 2008**

## Transformation

**Start with vision – realistic but ambitious**
**Break it down:  priorities**
**Commit to aggressive targets **
**Sustain change**

## 2007 Update

**How the law impacts strategy**
**Update and reinforce goals**
**Refine key strategies**
**Set the stage for 2013**

## 2007 Update

**Generate Revenue**
**Increase Efficiency**
**Improve Service**
**Create a Customer-Focused Culture**
**Enhance Sustainability**** **

## Generate Revenue

**Add value, improve                                      relevance:  Intelligent Mail**
**Collaborate on new                      applications**_** **_
**Simplify acceptance, expand access **
**Build on domestic to grow international **
**Strengthen outreach**

## Generate Revenue

## Increase Efficiency

**Expand standardization**
**Efficient, customer-focused                  network**
**Streamline processes ****─**** beyond operations**

**Notes:**
To see why, I’d like to share an illustration. 
The Postal Service made about $72 billion last year.  If we were to raise rates to the current CPI – about 3% – that is an additional $2.1 billion.  
   But rates increases also reduce volume.  Based on experience, that decline will trim about $300 million right off the top.  
   If electronic diversion continues to reduce single piece First-Class volume, shown here by 3% each year – there’s another $300 million. 
   We’re adding up to 2 million new addresses every year.  
The good news is that these are new customers.  But the Postal Service also absorbs $400 million in new delivery costs a year to serve them. 
   Health benefits, fuel, utilities, and transportation account for another $1.1 billion increase per year.  
   So, starting with a CPI-based rate increase, that leaves essentially zero to invest back in the business.  And we didn’t even mention salary increases.
This is just an estimate.   Actual numbers may be different in a given year – some higher, some lower.  But the point remains:   We must continue to drive out costs . . . and generate new business.  

## Increase Efficiency

**Accelerate existing efforts:  >$1 billion annual savings. **
**Costs under CPI by class.**

## Improve Service

**Updated standards,                            externally-validated service measurement**
**Cut UAA in half.  Improve addresses and lists.  **
**Move to total mail visibility**

## Improve Service

## Create a Customer-Focused Culture

**Develop and sustain skills****  **

**Minimize distractions  **
**Align compensation and recognition with results**

## Create a Customer-Focused Culture

## Enhance Sustainability

**Improve understanding                                        of the benefits of mail**
**Improve address and list quality**
**Help customers go “green” **
**Expand recycled and recyclable products **
**Reduce fuel use.  Reduce energy use in facilities by 20%**

## Enhance Sustainability

## What’s Next?

## What do you see as growth opportunities?

**Where does your business need to be in                5 years?  How can we help get you there?**
**How do we work together to get new customers using mail?**

**We need your thoughts . . .**

**2013**

## Questions?

_***Your***_** comments **
**         ****questions**
**         ****ideas**
***Transformation @usps.gov***