By: Patrick Lefler
Looking back through history, innovation has often occured when one big thinker envisioned a new way to solve a customer’s problem in an elegant way. A case in point: mail delivery.
It’s hard to imagine the term innovation associated with anything related to the postal service, but if it weren’t for a 19th century British social reformer by the name of Roland Hill, things might be even worse with our mail service than it is today.
Up until the mid-1800s, mail delivery in Europe and the United States was both expensive and slow. The reason for this was that mail was paid for by the recipient (not the sender) and every letter had to be brought to the post office for the fee to be computed according to distance and weight. When a letter was delivered, the recipient had to pay – or they could simply refuse delivery. Fraud was rampant in that coded information could appear on the cover of the letter; the recipient would examine the cover to gain the information, and then refuse delivery to avoid payment. In addition, each individual letter had to be logged. The service was a mess and generally used only by the elite.
In 1837, Roland Hill authored his famous pamphlet, Post Office Reform: Its Importance and Practicability which proposed that postage should be uniform within Great Britain regardless of distance. Hill’s study showed that most of the costs in the postal system were not for transport, but rather for laborious handling procedures at the origins and the destinations. Costs could be reduced dramatically if postage were prepaid by the sender, the payment to be proven by the use of prepaid letter sheets or adhesive stamps – similar to stamps that had been used for years to pay other taxes and fees. Hill’s suggestions were incorporated in the postal service and overnight, mail service became inexpensive and convenient. Anyone could affix the stamp without having to go to the post office. Letters could now be dropped off at collection boxes (post boxes) and because of the new efficiencies introduced, mail service became affordable for all.
Peter Drucker described Roland Hill’s contribution as simply: “In short, ‘mail’ was born.” Drucker went on to further describe Hill’s innovative process:
Hill created utility. He asked: What do the customers need for a postal service to be truly a service to them? This is always the first question in the entrepreneurial strategy of changing utility, values and economic characteristics. In fact, the reduction in the cost of mailing a letter, although 80 percent of more, was secondary. The main effect was to make using the mails convenient for everybody and available to everybody. Letters no longer had to be confined to “epistles.” The tailor could now use the mail to send a bill. The resulting explosion in volume, which doubled in the first four years and quadrupled again in the next ten, then brought the cost down to where mailing a letter cost practically nothing for many years.
Price is usually irrelevant in the strategy of creating utility. The strategy works by enabling customers to do what serves their purpose. It works because it asks: What is truly a “service,” truly a “utility” to the customer?
Here’s the takeaway: The greatest forms of innovation are about solving customer problems; creating utility, as Peter Drucker liked to say.
Patrick Lefler is the founder of The Spruance Group – a management consultancy that helps growing companies grow faster. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over 20 years of industry expertise.