Innovation is a strategic priority for CEOs everywhere and Posts are no different. However, choosing to focus energies on continuous improvement or opening your organization to disruptive innovation will make a big difference for long-term sustainability and growth.

 

This article was fist published in Postal Technology International (June 2014).

Game Changers – Frank Cianciullo explains why Posts should engage in Disruptive Innovation

Posts face formidable challenges

Posts face both internal and external pressures – declining lettermail, substitution of advertising mail, increasing online activity, accelerating privatization, growing competition, increasing customer expectations, dramatic changes in consumer behaviour, growth of social media, increasing health care and delivery costs, union pressure on wages, pressure to innovate products and services, politicization, resistance to downsizing of the postal infrastructure, government controls, progressive deregulation, rising cost of USO obligations, economic stress, globalization and calls for profitable operations.

Posts do innovate

On the spectrum of sustaining innovation or continuous improvement – postal innovation stretches from implementing traditional strategies of cost cutting, pricing levers and productivity efficiencies; to the diversification of services into such things as mobility, financial and banking services; to seriously reengineering the organization for future parcel growth and giving customers more control over their deliveries.

It is disruptive innovation that creates new growth

We all admire the classic cases where revolutionary and innovative ideas upset industries and generated wealth – 3M, Nike, Patagonia, Starbucks, Amazon, Apple, Google, Instagram, Netflix, Rakuten, Natura Cosmeticos, Cisco, Whole Foods, Airbnb, Tesla, etc.

Yet, most companies continue to focus on sustaining innovation because their managers are goaled on meeting short-term targets with no incentive to focus on long-term growth. Continuous improvement of core products, services and processes is certainly important; but it is disruptive innovation, despite its early low sales and profits, that creates new growth.

Competitors know your Achilles heel and find here the initial foothold that will eventually capture an increasingly larger share of your market.

Over recent years, we have seen dramatic growth in competition. It has succeeded because it is giving customers something that the Posts were not; be it – a different product at different speed of delivery, timelier product tracking or a different level of customer service.

Posts must ask themselves – Are we all about the traditional and obvious strategies?

While it is true that Posts have always innovated, rarely has that innovation been truly disruptive by literally uprooting and changing how we think, behave or do business. Rarely have Posts created something totally new, more efficient, worthwhile or redefined the industry by creating opportunities, a new market or a value network.

High-performing Posts, like Deutsche Post, have succeeded in using game-changing ideas to reinvent their organization and differentiate themselves, mobilize hidden organizational assets, add customer value, identify new customer needs and redefine the basis of competition – that’s disruptive innovation.

Capitalizing on the projected dramatic growth in online buying in South East Asia, SingPost has taken a bold step in offering a seamless, end-to-end eco-system solution for e-retailers that includes a website, catalogue management, on-site marketing, customer call-centre, payment solutions, inventory management, warehousing, shipping, delivery and returns.

What would it take for us to see more greatness in postal innovation

Key among the common denominators of truly innovative companies and high performing Posts is inspiring leadership that focuses on growth, leads by example and rallies employees and customers alike via an articulated, concise idea or vision that expresses the soul of the company, or what it wants to be, and ignites excitement.

It’s also all about the transformation to an innovation culture that – removes the barriers to innovation; engages employees who consistently contribute ideas that help the company succeed; listens and learns from others; creates commercializable products that are taken quicker to market; and deeply respects customers and all stakeholders.

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