The United States Postal Service Delivers Financial Value from Sustainability

With a focus on reliability, dependability and sustainability, the U.S. Postal Service strives to be the hallmark of reliable delivery of our nation’s most important communications. Facing an era of unprecedented challenges marked by declining mail volumes and an increasing number of delivery points, sustainability has fostered a new mandate for the Postal Service: supporting the long-term viability of one of the nation’s most trusted and important services. This case study will explore a few of the Postal Service’s leading-edge sustainability practices that are promoting the long-term viability of the organization by supporting and driving financial value.

Sustainability efforts can look very different from one organization to the next. Often, they begin as small, grassroots efforts championed by a cadre of passionate individuals. These efforts typically do not align with the strategic priorities of the larger organization. While grassroots efforts can yield results that support the bottom line and improve morale, their potential is limited in the absence of clear support from leadership or alignment to the strategy and priorities of the broader organization.

The Postal Service has set an example for how companies can integrate and align sustainability efforts to the overall company strategy, and line up these priorities to drive financial value. The organization’s journey has been underway for many years, with dozens of sustainability and greening activities happening throughout the enterprise. Many of these activities did not maximize their potential value due to a lack of alignment with the broader organizational priorities. Through a recent exercise with support from Deloitte Consulting LLP, the Postal Service was able to draw a clear connection to agency priorities by translating the corporate vision down to the specific sustainability goals and initiatives that will support the vision, and enable the development of a more accurate system for tracking organizational sustainability performance each quarter and financial year.

Figure 1  Aligning Sustainability Goals and Initiatives to Corporate Priorities

This exercise required the Postal Service to make tradeoffs and decisions about new areas upon which to focus, and existing areas to de-emphasize that were not in alignment with the vision. By bringing alignment from corporate priorities down to the individual initiatives and actions, the Office of Sustainability was able to enlist support from the highest levels of leadership across the organization. This alignment also helped crystallize for individuals how their actions are important to support the broader priorities of the business. 

With nearly 600,000 employees, the Postal Service is among the largest employers in the world. The people of the Postal Service also represent the core foundation of the sustainability work through the Lean Green Initiative, an effort focused on enlisting hundreds of thousands of employees to implement low-/no-cost projects that support sustainability goals. Working toward these goals will help USPS improve operational efficiencies and optimize resource balancing and conservation, while at the same time reducing environmental impact and saving the agency money. The Lean Green Initiative includes a toolkit that outlines more than 45 projects that can be implemented in each facility, along with clear instructions to help foster alignment and consistency. Lighting efficiency projects, for example, are implemented in a safe and effective manner that is consistent with facilities department procedures and in a way that promotes procurement of materials that are approved by supply management. 

The Lean Green Initiative instills friendly competition among locations and rewards people for stepping “above and beyond” to support sustainability efforts. A performance dashboard highlights leading and lagging indicators of performance to show how many districts and facilities are participating, how many projects have been completed and, most importantly, the progress in meeting sustainability goals (such as reducing waste and energy/water use). There are reward opportunities in place to support and encourage those who go beyond the call of duty, including the Postmaster General Sustainability Excellence award.

While the framework is set for achieving initial results, the Postal Service will need to maintain momentum and keep a watchful eye on the execution of the program of initiatives. In the beginning, it’s relatively easy to drum up interest and momentum in an initiative that promises to do good for the company and the environment, but it’s much harder to sustain that interest over multiple years. In addition, managing a program of over 100 initiatives that span all corporate functions and more than 33,000 facilities is no easy task.

It is important that the Postal Service balance alignment to corporate priorities with providing an atmosphere that fosters innovation. Innovations typically don’t appear on the list of corporate priorities. USPS has had innovative new offerings in development for some time. However, these have been surpassed by product offerings - such as carbon-neutral shipping - launched by its more agile peers in recent months. It will be important for USPS to develop and maintain a formal incubator of sorts, an avenue for continuous innovation to rapidly develop and launch new product offerings that enable customers to reduce their impact on the environment. 

The Postal Service has already realized noteworthy results from its sustainability efforts, and, through its renewed alignment to corporate priorities and the engagement of hundreds of thousands of its employees, sustainability promises to be a key enabler for driving financial results.  Between 2007 and 2009, the Postal Service avoided over $400 million in energy costs.  While energy and fuel use continue to be the largest areas of environmental impact and the greatest sources for financial benefits, USPS has broadened its focus, and aligned its goals and initiatives with corporate priorities, to develop a sustainability program that will reduce costs, drive revenue and promote the long-term viability and sustainability of an important and trusted service.

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