Well, here is some of the back story I have been told. I think its accurate, but I don't know this first hand. (Warning- this is long)
Oz Nelson was our CEO, and his background was in Customer Service. He pushed for UPS to be more customer oriented and believed in expanding our technology. I met him a few times, and he seemed like a good and honest person. So far, so good.....
He hired the Atlanta Consulting Group. That group concluded that our focus on efficiency was a problem, and that we should not be "The Tightest Ship in the Shipping Business".
Oz was a big proponent of this and advanced the whole push for "Quality" including the team approaches in the operations. There really was a lot of good in this "kinder / gentler" UPS and I still have a candid video of Oz discussing this approach.
What they missed big time, was that efficiency was part of our culture. They also missed that efficiency, teamwork, and good service are not necessarily conflicting goals.
Teams were put in place in many, many centers. In some places management fought the change. In others the Teamsters did.
What was consistent however is that in nearly every place BOTH cost and service got worse. We stopped paying attention to details.
Then, Oz is replaced by Jim Kelly, an operator. Rumor is that Jim never liked the Atlanta Consulting Group approach.
Finally, 1997 hit. Cost and service is poor, and we cannot reach a contract with the Teamsters (I do not want to get into who's fault that is...).
Poor cost, poor service, and poor contract negotiation was three strikes for the ACG and the UPS quality initiative (including driver teams). I'm sure that they would say UPS didn't give it a fair shake.... Others would say that the journey only led to poor cost and service.
To this day however, Oz is seen as a weak CEO and Kelly a strong one. I heard that at the centennial management conference, Oz got almost no applause and Jim a huge ovation....
By the way, in a different thread, there was an assertion as to why UPS started DPS and PAS. One major reason was the poor cost and service picture in 1996 and 1997. By the time DPS and PAS was deployed, much of the lost service and cost had improved, just by more attention to detail. (at least that's what many believe.)
P-Man