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Route to high performance

Leading postal organizations succeed in a changing, cutthroat marketplace using powerful technology that helps them innovate and excel.

by Brian Moran

Like businesses in most industries, postal organizations are facing unprecedented competitive and organizational challenges. Whether they act as government organizations in a true monopoly, subsidized operations, or for-profit companies competing in the open market, posts are under enormous pressure to succeed amid changing market conditions.

Route to high performance
Brian Moran, managing director at Accenture, shares the company's insights on what drives high-performance postal organizations.

While the challenges differ by business model and geographic location, in general, dramatic change is being driven by the freeing up of competition, from the liberalization movement in Europe to the pressures of ubiquitous e-mail and overnight delivery services. Even so, some innovative posts are combining unique capabilities, culture and strategic clarity to achieve competitive success.

The opportunities to innovate are significant. Forward-thinking executives can help postal operations, once responsible only for transactional mail deliveries, transform into service organizations that efficiently distribute growing volumes of materials. Increasing globalization also represents a critical opportunity for postal organizations as goods moving around the world drive robust growth in product shipments.

Contents of the high-performance package
To understand what drives high-performing posts, Accenture conducted extensive research on the postal industry and its leading providers. This effort follows similar Accenture research on more than 5,000 companies in 21 other industries, such as telecommunications, finance and insurance.

In the postal industry, high-performing organizations share several characteristics. First, strategic clarity is clearly linked with performance. Which strategy the organization chose seemed not to matter. What mattered was that executives defined the organization's intentions and committed to that strategy over the long term.

A high-performance culture is also key. Successful posts anticipate market developments and constantly innovate. They also cultivate a strong pool of talent and are viewed as a desirable employer.

Keys to high performance
> Clarity. Where the organization is and where it wants to be in the market
> Culture. Become a desirable employer by making investments in employees
> Capabilities. Make investments needed to build essential operational abilities
> Competitive advantage. Take advantage of this singular opportunity to excel by identifying the right strategy and enabling it through process industrialization and excellence

The final shared characteristic is the ability to manage costs. Profitable postal organizations have a track record of running efficiently with strong cost-management capabilities. This allows them to focus on growth opportunities rather than reactively dealing with profitability issues.

Advantage in the data
Technology is essential to maximize performance. Some posts use technology to add value to core mail products. Using package and logistical data, for example, organizations can supply tracking information to customers.

The use of business intelligence (BI) is a trait of high performers in multiple industries, including posts. High performers use data analysis and BI to identify customer trends, create new services, determine productivity issues and add business value.

As the industry's competitive pressure increases, high performers will expand their use of technology. Using sophisticated applications, industry leaders will collect more data than other organizations, perform additional analytics and use BI to extend their advantage. Employing BI will also allow an organization to be more customer-centric.

What drives high performance?

Since 2003, Accenture has been researching high-performance companies in 21 industries. Based on this body of research, Accenture defines a high-performance company as one that creates a performance gap over its competitors during a sustained period and always finds a way to stay a step ahead—even through multiple industry cycles. According to Accenture's research, three traits differentiate high performers from other companies:
> Performance makeup, including culture, training, talents and other human factors
> Differentiated capabilities, areas where the organization excels or for which it is well-known
> Market focus and positioning, the markets served and customers targeted


Building the high-performance post
High-performing postal organizations in future competitive markets will defend their core customer segments and gain market share in new geographies and segments. Accenture's analysis of other deregulated industries—such as transportation, utilities and telecommunications—reveals some clear trends regarding organizations that prosper.

Financial strength has a huge impact as a market deregulates. Even organizations that execute poorly can survive as a result of their size and particularly their financial wherewithal. On the flip side, smaller organizations are at an inherent disadvantage. The ones that stumble are typically consumed through acquisition with unattractive terms. But smaller organizations that have unique capabilities can not only survive—independently or through acquisition with attractive terms—but also prosper.

Culturally, high performers will retain talent and leadership. Some will attract employees from their competitors, while others will view their employees as valuable assets. Leadership, clarity of vision and execution excellence are likely traits of the future high performers.

Differentiated capabilities are another key to prosperity. High performers tend to have a unique business capability or technology that makes them powerful and valuable.

High-performing postal organizations will also likely possess the following operational capabilities:
The use of technology to create product value. High performers will seek out ways to use IT to create new products and add value to existing ones. For instance, one delivery service company virtually created an industry using then-new track-and-trace capabilities.
Supply chain excellence. Supply chain costs comprise 60% to 90% of total operational costs for posts. Optimizing supply chain efficiency—which takes time and willpower—can turn average posts into high performers.
Customer-centricity. Most posts today are built around products rather than customer needs. In industries that Accenture has surveyed, customer-centricity is a differentiator for high performers. Building products and services based on buyer values, as well as the willingness of customers to pay for these offerings, will create competitive advantage. The end result will be a post that finds ways to fulfill customer needs rather than having customers find ways to use the post's products.

Sure route to success
Becoming a future high-performing postal organization requires several fundamental steps. Clarity of mission is critical. The mission must be well-communicated, not just to employees but also to management and consumers.

Posts must also reinforce capabilities and characteristics that fulfill their strategic missions and are aligned with their strengths. For example, a post that is creating competitive advantage through lower cost will focus on operating excellence and require capabilities such as network planning, product planning and reporting. A post that is creating competitive advantage through customer differentiation will focus on customer segmentation, sales and service.

Technology investments are critical to high performance. Of course, the technology investments must be synchronized with the post's strategy and complemented by process excellence. Part of the technology investment should be focused on converting data into actionable information.

The opportunity for postal organizations to position themselves for viability and long-term success is fleeting. In an industry experiencing marked change, the decisions posts make now and in the near future may define the industry for the next decade. T

Brian Moran is a managing director at Accenture, the global management consulting, technology services and outsourcing company. Brian specializes in assisting posts in the design, development and implementation of supply chain and logistics business processes and IT solutions.

Teradata Magazine-December 2007

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