Potter, John E. 1956–
John E. Potter
Postmaster General, United States Postal Service
Education: Fordham University, BA; Sloan Fellows Program, Massachusetts Institute of Technology, MA.
Family: Married; children: two.
Career: United States Postal Service, 1977–1988, started as distribution clerk and moved into operations management, serving in a number of positions, including supervisor of Washington–Baltimore–Northern Virginia field operations; 1998–1999, senior vice president of labor relations; 1999–2000, senior vice president of operations; 2000–2001, executive vice president and COO; 2001–, postmaster general.
Awards: Board of Governors Award, U.S. Postal Service, 1999; J. Edward Day Award, Association for Postal Commerce, 2003; Zumwalt Legacy Award, Marrow Foundation, 2003.
Address: United States Postal Service, 475 L'Enfant Plaza SW, Washington, D.C. 20260; http://usps.com.
■ Postmaster General John (Jack) E. Potter, a lifelong postal employee well acquainted with both the strengths and weaknesses of the U.S. Postal Service (USPS), faced the daunting challenges of terrorist attacks in 2001 and of transforming the massive USPS into a viable business operation ready to cope with the unique demands of the 21st century.
21ST-CENTURY CHALLENGES FACING THE U.S. POSTAL SERVICE
Less than four months after taking office as postmaster general on June 1, 2001, Potter had to confront the problem of ensuring that the nation's post–September 11 mail would be delivered safely. The postal veteran managed to keep the mail moving in the face of a suddenly all-too-real terrorist environment.
He also led the USPS, albeit not without considerable criticism, in coping with anthrax contamination through the mail.
Potter became the sixth career employee to hold the position of postmaster general. Although his experience and familiarity with the postal service were essential in his efforts to reform the USPS, the sheer size of the operation made the transformation task formidable. With more than 750,000 employees as of the early 2000s, the USPS was the second-largest civilian employer in the United States and the eleventh-largest U.S. enterprise on a revenue basis. As of 2004 the postal service generated an annual operating revenue of roughly $66.5 billion while delivering more than 200 billion pieces of mail each year.
Potter took on the challenge of transforming this enormous industry when the U.S. Senate in 2001 asked the postmaster general and his staff to map out a plan to arm the USPS for the demands it would face in the 21st century. On April 5, 2002, Potter unveiled before the National Press Club in Washington, D.C., a transformation plan that he said would "help us secure the future of universal mail service at affordable rates and give us the tools to protect regular mail and ensure a sound national system well into the future" (USPS press release, April 5, 2002).
Besides his responsibilities for spearheading the postal service's own internally generated transformation plan, Potter was charged with integrating recommendations from the Presidential Commission on the U.S. Postal Service into the reform process. Created by an executive order from President George W. Bush in December 2002, the nine-member bipartisan commission was asked to study the economic and structural challenges facing the USPS and to come up with suggestions for possible solutions. The commission issued its final report to the president in July 2003.
In addition to managing the overall nationwide operations of the USPS, Potter needed to streamline the postal service to function in an era when more and more communications are being sent electronically. Even within the frequently disgruntled customer base of the postal service, Potter had a number of champions who seemed confident that the postmaster general could make the USPS more responsive to changing consumer needs and improve its mail service. For example, the Directing Market Association (DMA), the largest American trade association for businesses involved in database and interactive marketing, supported Potter. H. Robert Wientzen, DMA president and CEO, said: "We are confident that Potter's background qualifies him to lead the effort as the Post Office works to solve its present problems" (DMA press release, May 24, 2001).
POTTER'S PROFESSIONAL AND EDUCATIONAL BACKGROUND
Potter began his career with the postal service in 1977 as a distribution clerk in Westchester County, New York. He soon was drafted into the USPS operations-management structure and rose quickly through the ranks. In his various positions, Potter played a key role in the postal service's rate-reclassification efforts and the nationwide integration of letter-mail automation. During his field leadership of the Washington–Baltimore–Northern Virginia postal region, the area improved its performance in the nationwide system from the worst to the best. Along the way, Potter earned a bachelor's degree in economics from Fordham University in the Bronx, New York, and a master's degree in management from the Sloan Fellows Program at the Massachusetts Institute of Technology.
In January 1998 Potter was named USPS senior vice president for labor relations. Under his leadership, the postal service reached negotiated settlements—the first in more than a decade—with the America Postal Workers Union and the National Postal Mail Handlers Union, both of which are member unions of the AFL-CIO. In recognition of his accomplishments in leading all parties to an agreement, Potter received the Board of Governors' Award. In February 1999 Potter was named senior vice president of operations, in which position he was responsible for overseeing USPS operations planning and processing; network operations management; field retail operations; and quality, engineering, delivery, and facilities.
In his last job before becoming postmaster general, Potter served as executive vice president and COO of USPS. After taking over this position in October 2000, he oversaw the operations of the 10 USPS area offices as well as the postal service's nationwide delivery, network, transportation, facility, and engineering operations.
USPS RESPONSE TO THE SEPTEMBER 11 ATTACKS AND ITS COSTS
A little more than 100 days after becoming postmaster general, Potter faced the difficult aftermath of the September 11 attacks on the United States. Having determined that no postal employees had been injured, he ordered the USPS workforce near the World Trade Center to join the rescue efforts. The New York Post Office provided trucks and drivers for carrying much-needed medical supplies, while elsewhere postal workers mapped strategies to keep mail moving throughout the crisis, a challenge made even more difficult when the Federal Aviation Administration (FAA) suspended all passenger aviation operations. In an effort to resolve the dilemma, Potter used cargo flights, including those flown by Federal Express.
Only weeks later, unidentified persons began mailing letters containing anthrax spores. Although the full implications of this crime were not immediately grasped, Potter, with the full backing of the U.S. homeland security apparatus, took various steps to protect postal workers. Nonetheless, two postal workers died, and still others were infected with anthrax but survived. USPS employees believed to be at greatest risk were provided with antibiotics known to help combat anthrax, and some postal facilities contaminated by anthrax-tainted mail were closed until they could be made safe for both workers and the public.
The anthrax attacks proved to be a one-two punch to the USPS bottom line. Testifying before a subcommittee of the Senate Appropriations Committee on November 8, 2001, Potter estimated that the combined costs of the attacks could climb as high as $5 billion. The costs were divided into two categories: $3 billion to cover the attacks' damage to facilities and operations, medical testing and equipment, treatment for employees exposed to anthrax, purchase of sanitizing equipment, disrupted operations, implementation of security procedures, and communication and education of employees and $2 billion to cover declines in both mail volume and revenue.
POTTER'S USPS TRANSFORMATION PLAN
In reshaping USPS to face the future, Potter had to address a fundamental change taking place in the way Americans communicate with one another. In the early 2000s, the postal service's principal source of revenue was first-class mail, a big part of which consisted of mailings containing bills and payments. This type of communication was increasingly conducted electronically. Many consumers chose to receive their bills by email and paid these bills by electronic means, mostly through credit card or checking account debit authorizations. This growing move to electronic communications among Americans contributed to a decline in first-class mail, a drop estimated to total 1.3 billion pieces of mail in the 2004 USPS fiscal year, which ended September 30, 2004. To compensate for losses in first-class mail revenues, Potter's transformation plan called for a combination of stepped-up promotion of other USPS services, cost reductions, and improved first-class service.
The anticipated fiscal 2004 decline in first-class mailings was expected to be balanced in part by an increase of nearly 4.2 billion pieces in standard mailings, which produce less revenue. In releasing his fiscal 2004 projections, the USPS CFO, Richard Strasser, said that he expected revenue to remain flat because of increases in standard mailings and cost reductions of $1.4 billion. The USPS planned to cut costs by lowering its costs of operation, including trimming 25 million employee work hours, largely through attrition, and by expediting debt repayment to reduce interest costs.
Other steps being taken under Potter's transformation plan were initiatives to improve the quality of first-class service, such as careful monitoring of consumer-satisfaction levels and a revamping of the National Postal Forum. In August 2003 USPS announced that for the second consecutive quarter, overnight first-class mail maintained a 95 percent on-time delivery performance. Independent assessment of first-class delivery performance was carried out by the IBM Business Consulting Services division. The IBM unit calculated the lapsed time between the moment a piece of first-class mail was deposited in a USPS collection box and its arrival at one of the 140 million households, businesses, and postal office boxes in the United States that receive deliveries six times a week.
In addition to the IBM measurement of first-class delivery performance, the Gallup Organization has conducted periodic surveys of customer satisfaction with the services provided by USPS. Its Customer Satisfaction Measurement (CSM) survey released in August 2003 showed that 93 percent of all surveyed households rated USPS service as good, very good, or excellent. This finding marked the seventh consecutive quarter in which the CSM rating held at 93 percent.
In 2004, under the USPS transformation plan, the National Postal Forum, which since 1990 had been meeting twice a year at various locations nationwide, began meeting once annually. The content of the forums in the future were to be relevant to a wider range of individual customers and those in the mailing industry. To make the forums more meaningful, workshops would explore ways in which USPS services might be used more efficiently, and more of the postal service's in-house experts on postal sales, marketing, and operations would be available to offer specific advice for customers.
Thanks to its ongoing transformation efforts under Potter, the USPS managed to weather the impact of terrorism and changing customer needs while still turning in a strong financial performance. In fiscal 2003 total mail volume declined a little less than 1 percent, although the number of addresses in the mail-delivery network increased by 1.7 million. Nevertheless, USPS ended fiscal 2003 with net income of $3.9 billion, exceeding its financial plan for the year by $300 billion. The USPS also enjoyed its fourth consecutive year of productivity gains in fiscal 2003. In announcing USPS financial results, CFO Strasser said that Potter's continued emphasis on implementing all aspects of the transformation plan had resulted in another $2 billion in cost reductions.
AWARDS FOR POTTER
Outside his responsibilities at the helm of USPS, Potter was active in civic affairs. On October 1, 2003, he became the second recipient of the Marrow Foundation's Zumwalt Legacy Award, established in 2000 and named for the late Admiral Elmo R. Zumwalt, the foundation's first chairman. Recognized for his efforts in helping patients in need of marrow and stem-cell transplants, Potter said he was deeply honored to receive the award, "named after someone I highly admire—someone whose deeds have left an enduring impact on all of us" (USPS press release, September 30, 2003). Potter in 2003 also received the Association for Postal Commerce's J. Edward Day Award in recognition of "outstanding service rendered on behalf of the postal community and the nation."
See also entry on United States Postal Service in International Directory of Company Histories.
sources for further information
"Appointment of John Potter as Postmaster General," DMA Press Release, May 24, 2001, http://www.pgh-metro.net/bulletin5_2001.html.
Del Polito, Gene A., "Who Is Jack Potter?," Direct, November 15, 2001.
"How Adaptable Is the USPS?," Circulation Management, July 1, 2002.
Jacobson, Louis, "Special Delivery," National Journal, June 9, 2001.
Keane, Angela Greiling, "Modernizing USPS: Postmaster General Calls for Rate-Setting Flexibility, Labor, and Accounting Changes," Traffic World, June 9, 2003.
Knill, Bernie, "How the Mail Went Through," Material Handling Engineering, November 1, 2001.
"PMG Unveils USPS Transformation Plan Today at the National Press Club," U.S. Postal Service press release, April 5, 2002, http://www.usps.com/news/2002/press/pr02_trans0405.htm.
"Postmen Die—and Anthrax Suspected," Seattle Post-Intelligencer, October 23, 2001.
"President's Commission on the United States Postal Service," http://www.treas.gov/offices/domestic-finance/usps.
"Remarks by Postmaster General John E. Potter: Presidential Commission of the U.S. Postal Service," Regulatory Intelligence Data, January 8, 2003.
Stropel, Leslie, "Postal Service Cuts Loss to $676 Million," AP Online, December 10, 2002.
"Transformation Plan Progress Report," http://www.usps.com/strategicdirection/tpprogressreport.htm.
"Zumwalt Legacy Award: The Marrow Foundation Honors Postmaster General John E. Potter," U.S. Postal Service press release, September 30, 2003, http://www.usps.com/communications/news/stamps/2003/sr03_059.pdf.