Digital transformation: NZ Post finds itself between a poisoned chalice and a silver lining

  • Strategy
  • November 21, 2017
  • Colleen Ryan
Digital transformation: NZ Post finds itself between a poisoned chalice and a silver lining

When was the last time you posted a letter? When was the last time you shopped online?

If your answer was more recent for the latter, that should give you some insight into why NZ Post have undergone an enterprise-wide transformation programme, rebooting their business to make it fit for the future.

Colleen Ryan talked to NZ Post's chief executive David Walsh, and group general manager, customer experience, brand and people, Jo Avenell, about change, leadership and the internet.

Transformation and cultural shifts

Although Walsh only became chief executive this year, he was previously chief financial officer, so was able to describe the whole journey starting in June 2013 with the goal of transforming one of the country’s largest employers, a State Owned Enterprise, and owner of some iconic Kiwi symbols, but one most people viewed as a business in inexorable decline.

Building a future business is the sexy end of a transformation process, but before getting to that NZ Post had to face up to the fact that a very big part of their business was indeed in a bad spot. 

Over a five-year period letters had dropped from over a billion pieces to less than half that. Few businesses can survive such an aggressively dynamic market shift - imagine losing half your sales volume over such a short period. Plus, NZ Post needed to respond to the decline in this part of its business before it could fund regeneration.

“The transformation drive was our core business, core mail, was getting decimated. And the transformation initially started from how do we ensure that we line up to that challenge of letter decline, right size of cost, operational efficiency, everything you could possibly do to get the business viable as that disruption occurred, ” says Walsh.

It was inevitable that there would be a human cost in staff reductions plus a shift in the skill base and competencies required for the future business.

Avenell was emphatic NZ Post prioritised the handling of this process and its impact on staff, with three core pillars of ensuring people understood why the business had to transform, keeping people informed and using clear and honest communication, and supporting people through the process with a programme. 

“We are committed to being very honest and upfront with our people. It is a principle we hold dear and we believed it was important that our people heard the news of change from us as management first, before seeing it in the press. People might not have liked or agreed with the decisions, but I think they by and large trusted that we were doing the right thing," says Avenell. 

The other big cultural shift that needed to be managed was to reorient the business from being operationally driven and inward looking to being a twenty-first century customer centric business.

Walsh and his team recognised that to survive and then thrive, they would not only need to find new customers, they would also have to embed a customer experience approach to what they delivered.

He says the company has always been receivers of mail and now they're having to build our capability.

"Not just at our people level but at a technology level, to win work, to win customers, so it really is a transformation around being customer-centric. That really is it.” 

The journey or the destination?

Timelines seem important at the beginning of the journey because it creates both a sense of urgency and an end point of arrival at success – if you never arrive it’s hard to feel you have succeeded. For this reason NZ Post set themselves a five-year plan and the end is near - or at least the end of 5 years is near.

However, transformation is a process and it doesn’t stop, instead the programme evolves as the business transforms.

“We probably need at some point to think about, the fact that the transformation plan ends next year, I think we need to celebrate that success in the end, but it doesn’t mean we stop adapting. Also, our people worked really hard through all of this, so there’s an element of refresh. You want them to feel like we’ve delivered something, but we might also be starting something else new,” says Walsh. 

Walsh talks about the fact that even the idea of a five year plan now feels wrong. Tethering transformation in this way doesn’t allow for the new developments outside of your control that will come along as you progress. In this regard business planning has fundamentally changed and lead teams need a more adaptive mindset.

“You used to do a business plan that said: in five years, we’re going to do that. I don’t think any business at the moment can be that certain. You can work with the trends, but if you’re planning more than probably 2 years out at the moment, you’re probably starting to lose a bit of focus on what the immediacy issues are, so there’s something in there about being able to be responsive to that disruption, and it is transformational in terms of the business has got to think differently,” says Walsh. 

I asked Walsh where he looked for inspiration. Did they look to any models of frameworks used overseas or did they consider employing consultants to do the work for them?

“It’s those things you read in the textbook that you suddenly see comes alive through practice. If you haven’t got the senior leadership team on board, if you haven’t got the board on board, if you haven’t got the real strategic clarity on where you’re going and the staff engaged, you might as well not start.”

And this has been a great strength for NZ Post’s transformation process – making sure the senior leadership team understood what the challenges were, ensuring they had the right leaders in place and then trusting themselves to effect the change.

There was enough self-awareness to recognise that people have a finite mental capacity so Walsh and Avenell accepted the process would proceed at the pace that the lead team could manage.

“It was a deliberate decision to say – and I think it was a belief – that as leaders we need to be able to lead this. We don’t want to outsource the leadership. We need to own it and lead the way, demonstrate it. From a credibility perspective, we knew what we needed to do, we needed to have the courage to do it.”

The silver lining still has to be won

Least it all seems like bad news, there was a silver lining for NZ Post in that while people weren’t posting letters any more, they are buying more and more online - and someone has to deliver all those eagerly awaited parcels.

And this is a fundamentally difference experience from a handful of letters arriving which largely comprise bills and other things you neither asked for or want. No one was ever impatient to receive their bank statement but as soon as you order something online you want it, and you want it now. So the potential for NZ Post is huge.

“You look at the data points globally and you’re seeing New Zealand at seven percent of retailers online, UK is 15 percent online. Even if that one data point is half right or half wrong, that’s growth. In China, they’re talking Alibaba doing 75 million packets a day. They expect to do 200 million within less than 5 years. So, there is reason to say there is a great opportunity for this business.”

I suggested to David that they got ‘lucky’ that at a time when their core business was declining a new opportunity opened for them. But David is quick to point out that they had to work to win this new business, it wasn’t theirs by right.

“It also means that what was a monopoly business is now also a highly competitive delivery business, so it’s not going to  fall in our laps just by being passively involved in the market, and I think that’s the biggest transformation challenge. In an environment where there are low barriers to entry, there are nimble players, they’re more technology-enabled, they don’t have a legacy of the systems and the culture that we have, and I think that’s our real challenge is how do we make “the Queen Mary to fly like a fighter pilot”?”

We had talked early in the interview about how with a five-year transformation programme the external environment would change along the way and the programme had to be adaptable and able to evolve.

A big change has been the arrival of Amazon, getting ever closer to New Zealand. This was an example of how a growing opportunity like the online delivery market was an opportunity for NZ Post but one where they would be competing with new business models and competing services. The transformation process had to not just bring NZ Post up to date but it had to constantly stay ahead of the changes that were affecting their market.

“If a new entrant comes in, like an Amazon, how are we positioned to make sure Amazon doesn’t need to set up their own competing delivery service? There is something in there about our success is both dependant on how good the market is in terms of growing, but how good are we at actually working with our customers current and future", says Walsh.

Looking forward 

Walsh and Avenell are quite rightly proud of what they achieved but also realistic about what lies ahead. They gave themselves a definite 'A for effort' so far and were very candid about the missteps and the things they might have done differently. But overall they have been stewards and leaders of a very successful transformation of a behemoth that no one with a  feint hearted would have taken on.a

The journey goes on though, and the future is not yet won. But on their record to date you’d have to bet on them getting it right.

“In terms of our preparedness for the next step, we’re not quite at a seven or eight. Because we haven’t quite landed that yet, and that’s what we’re working on now. We talked about how do you manage the decline, well, now trying to get ready for how we service the growth, and we’re still just resetting what that looks like,” says Walsh.

  • Colleen is head of strategy of TRA.

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

Hey, Big Spender: Navigating the wild world of marketing technology
features

Hey, Big Spender: Navigating the wild world of marketing technology

Fun fact: The average CMO spends more on technology than many CIOs. Has the job of the marketer suddenly become complicated? And how do you know you're making the right decisions when it comes to all that tech?

Strategy Creative secures Canterbury Rugby account

  • Advertising
  • February 19, 2019
  • StopPress Team
Strategy Creative secures Canterbury Rugby account

Strategy Creative announced this week that they had won the Canterbury Rugby Football Union (CRFU) account after a competitive pitch process.

Read more

NZME FY 2018 results: profit down and paywall on way

  • Media
  • February 19, 2019
  • Erin McKenzie
NZME FY 2018 results: profit down and paywall on way
NZME Chief Executive Michael Boggs

NZME’s FY 2018 results are out, showing a net profit of $11.6 million, down 44 percent on FY 2017.

Read more

Social scoreboard

Zavy and StopPress have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

topics
Follow The Money
Follow The Money
Follow the money. It’s an axiom that journalists have believed in for years and a ...
Regional Rundown
Regional Rundown
StopPress takes a trip down the country to see who the audiences and agencies are ...
Beyond the Page 2018
Beyond the Page 2018
In conjunction with the MPA, the Beyond the Page series shows how some of the ...
Insight Creative
Insight Creative
Insight Creative specialises in shaping business stories out the core insights that often lie under ...
Beneath the Surface
Beneath the Surface
In this series, brought to you by Microsoft, we talk to a conceptual photographer, illustrator ...
20/20 (tele)vision
20/20 (tele)vision
Media consumption is changing. But by how much?
The Hot List
The Hot List
Our rundown of the hottest shows, brands and creators in New Zealand media. 1. magazine ...
Cannes Lions 2017
Cannes Lions 2017
All the winners, the shortlists and the drama from this year's edition of advertising biggest ...
Merger Mania
Merger Mania
All our stories on the nation's two failed mergers in one place
Bauer Beyond the Page
Bauer Beyond the Page
When it comes to creating branded content, there are few better in the Kiwi market ...
The Indies
The Indies
Over the course of this series of articles, we look at how always-nimble indy agencies ...
AdRoll on automation
AdRoll on automation
Marketing automation is tipped to eventually become the only way advertising is traded in the ...
Game Changers
Game Changers
It’s all about PEOPLE. Join us as we discuss global insights, ideas and innovations from ...
TVNZ-NZ Marketing Awards 2015
TVNZ-NZ Marketing Awards 2015
Celebrating all the winners of the 2015 TVNZ-NZ Marketing Awards.
Future Tense
Future Tense
In a new series, StopPress talks to a range of newsmakers currently trying to shine ...
Beyond the Page
Beyond the Page
In conjunction with the MPA, the Beyond the Page series shows how some of the ...
Up Country
Up Country
In conjunction with News Works, the Up Country series talks with some of New Zealand's ...
Sounding off
Sounding off
As part of a content partnership with MediaWorks, we've asked a few of the company's ...
StopPress Podcasts
StopPress Podcasts
We sit down for a chat with industry leaders to find out what they're up ...

British comedian John Oliver offers solution to NZ being excluded from world maps

  • Media
  • February 19, 2019
  • Radio New Zealand
British comedian John Oliver offers solution to NZ being excluded from world maps

New Zealand's so often getting left out on world maps, even the government is having a laugh - that is after appearing to have somehow missed us off too.

Read more

Ads of the Week: 19 February

  • TVC of the Week
  • February 19, 2019
  • StopPress Team
Ads of the Week: 19 February

A round of applause for The Edge, House of Travel, and Joblist.

Read more
voices
Creative excellence: Shane Bradnick on the Axis Awards, creativity, and change
news

Creative excellence: Shane Bradnick on the Axis Awards, creativity, and change

StopPress speaks with Shane Bradnick about his move from DDB to take up a role at TBWA\New Zealand, his thoughts on award shows and his role as convenor at the 2019 Comms Council Axis Awards.

Identity crisis or brand evolution? Cigarette giant Philip Morris talks angling to make New Zealand smoke-free by 2025

  • Brand
  • February 19, 2019
  • Findlay Buchanan
Identity crisis or brand evolution? Cigarette giant Philip Morris talks angling to make New Zealand smoke-free by 2025

Philip Morris – the largest tobacco company in the world – has declared it will transform the tobacco industry in support of New Zealand's Smokefree 2025 initiative. In time, it plans to stub out its cigarette range – which includes Marlboro, Parliament and Virginia S and move towards a future of fruity, trendy vapes and e-cigarettes. It’s a tactical maneuver from the giant cigarette corporate as alternative cigarettes slowly receive validation by scientists, governments, and consumers – but is the move really a ploy for Smokefree 2025, or more of a smoke screen by Philip Morris? And in the midst of all this, has its sudden departure from cigarettes led to a branding identity crisis? We speak to the managing director, James Williams, who explains the company's foray into the smoke-free market.

Read more

Little Giant appointed digital partner for TVNZ's Re: web expansion

  • Media
  • February 18, 2019
  • StopPress Team
Little Giant appointed digital partner for TVNZ's Re: web expansion

Little Giant, Linked by Isobar has been announced as the digital partner for the development of TVNZ's Re: News channel, which has had a Facebook presence since 2017. Re: News will be launched as a new website in March.

Read more

MKTG announces Kimberly Kastelan as general manager

  • Advertising
  • February 15, 2019
  • StopPress Team
MKTG announces Kimberly Kastelan as general manager
Fleur Skinner, Kimberly Kastelan

Kimberly Kastelan is the new general manager MKTG in New Zealand, a promotion from her previous role as the agency's group account director. The appointment follows Fleur Skinner’s resignation.

Read more

Movings/Shakings: 15 February

  • Movings/Shakings, brought to you by Marsden Inch
  • February 15, 2019
  • StopPress Team
Movings/Shakings: 15 February

Industry happenings at Perceptive, The Trade Desk, and Pead PR.

Read more

Tender love or chicken tender? Hell Pizza challenges Valentine’s Day tradition

  • Advertising
  • February 15, 2019
  • StopPress Team
Tender love or chicken tender? Hell Pizza challenges Valentine’s Day tradition

Yesterday, Hell Pizza and BC&F Dentsu challenged the idea of Valentine’s Day with a campaign promoting a night for one, rather than a night out with the masses at a restaurant or bar.

Read more
The Stoppies 2018: All winners revealed
features

The Stoppies 2018: All winners revealed The Stoppies 2018: All winners revealed

A rundown of those who walked home with a treasured doorstop last night.

FCB appoints Slade Gill as creative director

  • Advertising
  • February 15, 2019
  • StopPress Team
FCB appoints Slade Gill as creative director

FCB has confirmed the appointment of Slade Gill as a creative director.

Read more

Matt Kingston joins TBWA as head of strategy and planning

  • Advertising
  • February 14, 2019
  • StopPress Team
Matt Kingston joins TBWA as head of strategy and planning
Matt Kingston, Catherine Harris, Shane Bradnick

TBWA\New Zealand has announced the appointment of Matt Kingston the role of head of strategy and planning across TBWA Group New Zealand.

Read more

Gray Matters: the best of OOH, retailers as advertisers, an unconscious bias, and customer labels

  • Voices
  • February 14, 2019
  • Graham Medcalf
Gray Matters: the best of OOH, retailers as advertisers, an unconscious bias, and customer labels
Picture from Reddit

Graham Medcalf takes a look at the week that was, covering clever out-of-home campaigns, retailers putting their data to use, diversity in the industry, content marketing as advertising, and the humanity of consumers.

Read more
Next page
Results for
Topics
Jobs
About

StopPress provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2019 ICG Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise

Contact Vernene Medcalf at +64 21 628 200 to advertise in StopPress.

View Media Kit