Royal Mail has been struggling for a while. Shares are far below their 2013 floatation price, the company has fallen out of the FTSE 100, and it continues to face challenges as the decline in letter-sending accelerates.
With that said, the business has managed to post a significant uplift in both half-year revenues and profits. And ultimately, it should have a brilliant future in a world where people are buying and sending parcels at record levels.
Yet it’s share price was slashed by 14 per cent last week. Why? Because chief executive Rico Back admitted that the business was significantly behind on its transformation plans. He also said that industrial action was likely in the run-up to Christmas, increasing the risk that the UK operation tips into a loss next year.
Mr Back joins the legion of chief executive whose problem isn’t what to do in the face of market disruption — but how on earth to change faster than the world outside.
And what is the critical lever they’re struggling to pull? Getting all of their people on board with the change.
The business should have a brilliant future, if it can get its transformation strategy right
Companies often talk about engagement. But engagement isn’t enough to drive change faster than the world outside. What you need is deep, massive, sustained emotional commitment.
Most businesses chronically under-invest in getting every employee to understand why changes are needed. Instead they rush straight to whacking them over the head with their new strategy and the plan that must be delivered.
I don’t know about you but I don’t automatically trust big institutions or business leaders anymore. And if you want me to go to the effort and pain of doing things differently, please treat me like an adult, help me understand why the changes are needed, and give me space to debate and discuss the plan of attack.
Rico doesn’t need engagement. He needs people willing to run through walls to make the changes needed actually happen.
How do you do that? Here’s what I would do.
Why and what
Start with why change must happen. Don’t just give people a plan to go and execute.
Unless they have connected with the “why” first, they won’t give what is needed to deliver the “what”.
And that’s not a PowerPoint or a speech. Let them argue out the scale of change to build a deep understanding of the full richness of threats and opportunities we face.
Leave the lecture behind
Don’t lecture your team about the strategy. Treat them like adults, give them the chance to discuss the strategic direction of the business.
Also give them the space to challenge it, debate it, maybe even refine it — only then will they really be able to make sense of and commit to what they need to go and do.
Unleash the team
Once your staff are committed, give them the opportunity to come up with ideas for the changes that are needed. Don’t be fooled into thinking you have the answers at the top or even in the middle of your business.
Make sure that they have clear guardrails around where to focus their ideas — and give them clarity around how they can get the support and resources they need to execute them.
Royal Mail has a rich heritage and potentially a very rich future. But the journey ahead will be far from easy.
If Mr Back can lift up and out of the acute market pressures he’s facing — and take the time to get his people connected to the direction that the team needs to go in, maybe (just maybe) he’ll generate the emotional commitment needed to get his business moving faster than the world outside it.
I, for one, am rooting for him.