CFO.com talks to the new finance chief of the U.S. Postal Service, Harold Glen Walker.
Stephen Taub, CFO.com
October 05, 2006
"Get your business moving," is what the U.S. Postal Service website prods. And that may be one reason the government behemoth tapped industry outsider Harold Glen Walker as its new chief financial officer. With $70 billion in total costs, a workforce of 700,000, and postal service reform topping the agenda, Walker is rolling up his sleeves to work side-by-side with the U.S. Postmaster General Jack Potter.
Walker's 30-year private sector career took him to three continents. He is best known for introducing Corporate America to shared service centers. Indeed, as CFO at one of Whirlpool's largest overseas divisions, Walker set up a facility in Dublin, Ireland, creating what became a model for centralized corporate services. Most recently, he was vice president of finance and chief financial officer of Invensys Controls, a global automation and controls company based in the UK. Walker started his career at auditing firm Ernst and Young.
In August, he moved into the government sector when he accepted the CFO position at the USPS. His switch to public service doesn't seem puzzling, once Walker begins to explain the similarities between the post office and the private sector. What's more, Walker says he wouldn't have passed up the opportunity to run the finance function of an organization that is equivalent to a Fortune 20 company.
Recently, Walker spoke with CFO.com contributing editor Stephen Taub about his decision to join the government's most intrepid— at least by one measure—department, and discuss his federal mandate.
CFO.com: The U.S. Postal Service needed more than a zip code to find you. How did the federal agency track you down?
Harold Glen Walker: A Korn Ferry consultant who brought me to my previous job gave me a call when they got this assignment.
Was the USPS looking for someone with private sector experience?
The first person I met at the postal service was Jack Potter, the Postmaster General. He was looking for someone from the outside with a lot of experience to contribute to being a change agent. Potential postal reform was on the table. Also, he needed extra ideas to implement the [transition] plan [which included] cutting $1 billion of costs, every year.
How do you make cuts like that?
We have $70 billion in total costs. So, it is relative. Still, $1 billion is a huge number. A lot has been done in the past. The plan for the future is geared around automation—processing mail more efficiently, taking out work hours. About 78 percent of our costs are people. [For example, we will automate around] processing and sorting the mail carrier route, so we don’t have mailmen in the office half the day and on the route half the day.
Does cost cutting also include closing retail branches?
We have done some consolidation in the past. We must work with the unions, which are a major part of our labor force. That's not new for me.
What other areas did Jack Potter want you to tackle?
He [would take care of] the low hanging fruit, but needed help with efficiency process improvement, people improvement, more customer focus, improving and strengthening internal controls and overall management.
Was it those types of goals that attracted you to the job, or something eles? Why did you sign on to be CFO?
I did not do it for the money. Contributing to an organization with 700,000 people was a great challenge at this point in my career. It’s like a Fortune 20 company.
Was leaving the UK, and the private sector, a difficult decision?
[Not for me, but] my wife is English. The hardest thing was to get her back to the States. In terms of professional challenge, it was an easy decision. My family was very supportive. My son [who is in high school] and wife like it here.
What was first on your agenda?
Life comes at you fast. I came into an organization in which everyone has 30 years of experience. So, I have done a lot of listening and learning. At the same time, I have over 30 years experience in business, so I've seen a lot that does and doesn't work. I have to be careful, though, not to come across as an outside know-it-all. You need listening skills.
Is it good or bad that a lot of the postal employees have been on the job for more than 30 years?
It's pretty much a positive. When I came in, I was a little apprehensive that I would be treated like an outsider, that people would be wary if I tried to change things. But the people have welcomed me, and are looking for new ideas. It has been extremely positive.
Civil service workers, and executives, have been saddled with the negative stereotype of having a poor work ethic. Did you worry that employees would think that was your attitude?
It crossed my mind. But, I don’t think they felt I would perceive them that way. I spoke to Jack, the executive committee, board of governors— the picture they painted was very much like the type of people I am used to working for. They are motivated to do a great job. Their performance for the past five years was tremendous. Productivity has increased for the last eight years.
What was your biggest misconception about the postal service?
How apprehensive they would be of accepting an outsider who had no knowledge of the fundamentals of their business. But, they were extremely welcoming. I liken [the experience] to when I went to Germany in the late 1970s with Ernst &Young. At the time, I was one of the only U.S. GAAP experts. I had something they were looking for, so they threw me in. Now, I am coming in with a lot of experience in the corporate world. [My colleagues] want to hear about it.
Did you find any pleasant surprises at the postal service?
The thing that has surprised me the most is the processes and systems they have in place. The most surprising thing is how much [the postal service] resembles Corporate America in terms of their systems, processes, and people. They do a lot of benchmarking with Corporate America. Jack could be a CEO in Corporate America, and so could the deputy [postmaster] and the vice president of marketing.
Several years ago, CFO magazine credited you with being a pioneer in shared services. Is this something you plan to introduce to the USPS?
I hope to bring innovation. [However], one benefit is that I don't have to introduce shared services. They have already implemented that. I need to think up a few other things.
Are you glad that you don't have to deal with Sarbanes-Oxley Act compliance issues now that you work for a government agency?
That's a tricky question. I wouldn't say I am glad. We have a lot of challenges here and one of them is to make sure we have strong internal controls. We are moving in the direction of a Sarbanes environment. We do a lot of things around it, [such as] quarterly reporting, we have audit committees, a board of governors. Documentation and testing of controls are moving in the direction of Sarbanes, but we are not subject to it now.