Putting his stamp on the US Postal Service

SOME years before he ever imagined himself in his new position as the nation's postmaster general, Anthony M. Frank had lunch with then-Postmaster General Paul N. Carlin. ``I remember asking him, `How much money do you make?' And he said, `$82,000.' And I said, `That's a dime an employee.'''

``I could see I just kind of ruined his day,'' says Mr. Frank, with the ready chuckle of an accomplished storyteller.

Now Frank occupies the large corner office at the headquarters of the United States Postal Service (USPS), and things have improved: At $99,500 a year, and with a work force of 761,531, Frank makes 13 cents per employee.

His own compensation, however, is the least of his worries. He knew when he took the job that public-sector rewards were different from those at First Nationwide Financial Corporation, which Frank built from a small northern California bank in 1971 to one of the nation's largest savings institutions before selling it to the Ford Motor Company in 1985.

He still thinks of himself as builder. These days, however, he's more concerned about continuity. The USPS has run through five postmasters general in as many years. Frank, who took over from Preston R. Tisch on March 1, hopes to stay three to five years, so as to help turn around the sagging public image of the USPS.

``You ask the average American about the Postal Service,'' said Frank recently in a lengthy interview in his office, ``and he'll say, `Rates going up, service going down.'''

``That's exactly right,'' he adds, although he notes that ``it would take a political scientist to explain to the American people that [these two issues] are not related.'' The April 3 rate increase came from the Postal Rate Commission, an independent body. The service cuts, which trimmed post-office window hours, Sunday pickups, and some other functions, came in response to an entirely separate congressional budgetary action last fall.

Yet both issues reflect what Frank calls ``the constraints that we operate under.'' These include a budget-cutting Congress, a Board of Governors that has sometimes shown an inclination to micro-manage the USPS, a handful of very powerful unions, some increasingly anxious commercial mailers, a public apparently resigned to three-year cycles of rate increases, a Postal Rate Commission that has at times been sharply critical of postal management, and an administration which, under the impetus of Budget Director James C. Miller III, is intent on ``privatizing'' the Postal Service.

All that is new turf for Frank. ``I can't believe as the chief executive officer of a $40 billion-in-revenues organization that I have no control over pricing,'' he says ruefully.

The control he does have comes from a mixture of priority-setting, hiring, jawboning, and sheer inventiveness. He already has a clear fix on his priorities. The first, he says, is ``to get us on a financial footing that doesn't require as frequent rate increases; second, to restore service; and third, to restore the perception and the image.''

In all three areas, he has found support from what in past years would have been an unlikely source: the postal unions. The increasing amount of talk about privatization - which would strip the Postal Service of its monopoly status and set it in competition with private-sector first-class delivery services - has created ``a lot of concern for the first time'' among union members, he says. As a result, ``the attitude of cooperation between the unions and management here has been closer, I think, than ever before, occasioned by this common threat.''

Sensing a changed atmosphere, Frank has not been slow to seize the initiative. His first lunch after his arrival was with union leaders. The next day he arranged a dinner between union leaders and the Board of Governors - two groups that had never once met in the 18 years since the Postal Reorganization Act of 1970 turned the old Post Office Department into a quasi-governmental corporation.

``One of the few things that I bring to this place - which of course will disappear over time - is the ability to look with what I call a strange eye at things that are accepted and ask questions,'' he says.

So far, that ability has earned him strong support - not only from union leaders and postal insiders, but from the bevy of experts who track postal affairs.

``He's the most promising postmaster general that I have seen in my 20 years of covering the Washington postal scene,'' says Van H. Seagraves, editor of the highly regarded Business Mailers Review.

``He's got a heavy plate,'' remarks Janet D. Steiger, chairman of the Postal Rate Commission, who points to the challenge he will face in focusing on both cost and service. But she adds that ``he's very impressive - very determined, but deliberate.''

Michael Cavanagh, a longtime consultant in postal affairs, agrees. ``This guy really cares, and this guy is really bright,'' he says.

To be sure, he's full of ideas. Some are slightly tongue in cheek. Noting that 16 billion greeting cards are sent each year, he quips that ``one of my ambitions is to get Miss Manners to opine that it's an insult to hand-address an envelope - they should all be typewritten.''

Other ideas are aimed at improving the management structure. He's already lined up business guru H.Ross Perot to advise him on five areas of postal affairs. Frank is also reexamining the Postal Reorganization Act to see what changes might be necessary. One adjustment, he says, should be in the salary and fees paid to the Board of Governors, which have never been raised.

Other ideas, he says, are ``so fraught with danger the palms of my hands sweat.'' Example: a barter arrangement, whereby second-class mailers of periodicals could get a break in rates - or actually get paid by the USPS - for pre-sorting, bundling, and delivering their magazines or newspapers to predetermined post offices.

``I wonder if you couldn't go further and say, `Listen, if you do all these things for me, you've got a right to get something from me, and that's timeliness. And if I don't exhibit timeliness, maybe we ought to pay you for not getting it out there on time.'''

Wouldn't that amount to the USPS paying a fine?

``Why not?'' Frank counters. ``We do it with express mail. Would that make the postmaster more attentive if it didn't get out and he had to pay a penalty? You bet your life it would.''

Despite the flood of ideas, most of Frank's job will center on the old-fashioned virtues of holding costs in line with revenues. Part of the problem, he says, is in aging facilities that drag down efficiency. ``The physical plant is pathetic,'' he says. ``Our average facility is 32 years old. I don't know statistically if that means every time I see a new facility there's one that's 64 years old. I think that's what it means.'' He faults Congress for a budget-slashing that forced the Postal Service to put 750 building projects on hold.

He's also faced with rising volumes of mail. The Postal Service, which is adding 1.7 million postal patrons each year, estimates that it will carry 250 billion pieces of mail by the year 2000 - up from 153.9 billion in 1987. To meet the increase, Frank is pinning his hopes on some new technology - in particular, a new generation of optical mail readers and sorters - rather than on an increased work force. ``If we could hold employment at the present level [through the turn of the century], we'd be doing very well,'' he says.

But so far, he insists, the budget is under control. ``Last year the Postal Service did what in private industry would call for a knighthood: It came within 7/10ths of 1 percent of its budget.''

``Unfortunately,'' he adds, ``that translates into a loss of $223 million. The magnitudes here are unbelievable.''