Without a doubt, the Post Office is intrinsically linked to the fabric of our nation. Indeed, today 99% of the population live within three miles of one. “People care deeply about it even if they don’t use it that much,” says group people director Neil Hayward when we meet. Yet, perhaps surprisingly, the Post Office has not made a profit in more than 25 years. And while many see it as synonymous with Royal Mail, the latter was actually floated on the stock market in 2012 by the then Secretary of State, Vince Cable, while the Post Office remained in public ownership.
“When we were part of Royal Mail group, there was a tendency – across society and inside the organisation – to believe the government would keep writing a cheque to ensure the Post Office’s existence,” reveals Hayward. “In the age of austerity, no government can make that commitment.”
The challenge facing the network is tough: government subsidy has been reduced from £200 million per year to £50 million by 2017. “We need to fill the space with genuine revenue or cut costs to ensure we break even despite the loss of government support,” explains Hayward. “We need to get this business to a commercially break-even state by 2018.”
So Hayward’s remit is largely to help change the way the business runs amid these new economic realities, while building for the future and protecting the best points of the legacy. “History will judge our success – it will be too difficult to claw it back if the next five years aren’t successful,” he acknowledges.
During his 18-month tenure, Hayward has worked hard to make change happen – removing roadblocks, licensing innovation and experimentation and improving the senior leadership team’s bench strength. “I never signed up to be chief policeman or chief process officer, I am a change agent,” he asserts.