Achieving High Performance in the Postal Industry: Accenture Research 2009

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Market fluctuations have always influenced the postal industry, and the effects of the current global economic volatility are certainly no exception. In fact, the challenges faced today by organizations in the postal industry constitute a “perfect storm” that strikes across every major source of revenue.

Research undertaken by Accenture in 2006 indicated that high performers were those organizations that had strategic clarity, a solid focus on cost management and a strong talent equation. What was unusual about these results is that strategic choice had little effect on performance—it did not matter what strategy was chosen, rather a clear, consistent strategy was the critical factor. In addition, we found little capability distinction among the operators. We saw this finding as characteristic of a relatively uncompetitive market and predicted that future performance would be far more dependent on strategic choice and capabilities.

Our latest research indicates that the factors driving high performance have changed significantly and that strategic choice and capabilities are much more critical to performance.

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In 2009, Accenture refreshed research undertaken in 2006 to assess the industry trends and the financials of global postal and express players or integrators. In addition to the 16 companies originally researched, Accenture added an evaluation of a further seven countries.

Our research approach focuses on understanding industry trends and the financials of each postal player. In doing so, we assess the relative and absolute performance of postal agencies and determine the strategies, operating models or attributes that allow some players to outperform their peers. This research, conducted using Accenture’s stringent methodology, is further enhanced by Accenture’s own high-level industry capability in helping clients achieve high performance.

The scope of the research is global and, in line with the 2006 study, includes both traditional postal organizations and global express players. The rationale behind this selection is that the traditional boundaries between the two are blurring. A significant number of universal service providers offer express and logistics services that compete against players such as FedEx and UPS. Conversely, global express players (also known as integrators) are now offering mail-related services. It is Accenture’s view that all players, universal service providers and integrators, are servicing the same demand: to transport information and goods from point A to point B.

High performance in the postal industry is being driven by:

• Diversifying revenue sources through geographic expansion, new products and services.
• Leveraging the human capital of the organization and partnering with labor.
• A strong focus on innovation.
• Focusing on the customer and leveraging key customer attributes such as reliability.
• Use of technology to deliver services, manage the business and interact with customers.
• Investing in “the network,” whether this is a physical, telecommunications or retail network.

Perhaps surprisingly, value creation has not come from traditional cost-cutting measures or a focus on operational excellence unless the attainment of these factors has been driven by a strategy to capture customer demands such as the need for greater reliability or visibility.

As our research has shown across multiple industries, achieving a balance between the three building blocks identified by Accenture as essential for high-performance business—market focus and position; distinctive capabilities and performance anatomy—is a critical factor. Indeed, while strength in one dimension is good, strength across all dimensions is the strongest indicator of high performance.

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