An innovative approach to organisation

Mike Liston, Chairman & Ian Carr, Managing Director Postal Business
Mail & Express Review 2009 The next chapter in Jersey Post’s history

Jersey Post Group introduced a new business structure in April 2009, with one unit focussed on the traditional and regulated postal business, and a second on new enterprises not facing the same regulatory constraints.

Jersey Post was incorporated as a limited company in 2006, and is wholly owned by the island’s government, the States of Jersey. It is 40 years since it was separated from the British Post Office.

Two business units and two business leaders

Jersey Post has been streamlined into two autonomous trading businesses, a core traditional postal business headed by Ian Carr, and a new Enterprise Business led by local telecoms entrepreneur Lord Whipp. His unit will concentrate on the further development of technology-based solutions for businesses in an increasingly digital world, as well as expanding the business into new markets.

Jerseyman Carr joined as a postman in 1975, working his way up to Operations Director before taking on his new role.  Since the early 1990s he has developed and led some of the major changes in postal services on the island. These have not only improved efficiency and quality, but also established Jersey Post as a recognised global industry leader.

Lord Whipp has more than 20 years of experience in the telecoms sector. In 1989 his company was one of eight licensed by Sky Television to market its products. More recently he has been involved in marketing Cable and Wireless Voice products to the business sector, later acquiring the business and developing it for several years before divesting to Carphone Warehouse in 2005.

Whipp is currently Chief Executive of Newtel Solutions, a licensed public telecoms operator in both Jersey and Guernsey. In 2007 he was appointed a Non-Executive Director of Jersey Post International Limited.

His experience provides the right skills for an Enterprise Business focussed on developing new technology based solutions, and entry into new and expanding markets outside of the traditional regulated postal sector.

The strategic rationale for organisational change

In discussions with Mail & Express Review, Jersey Post’s Chairman, Mike Liston, explained that the new business structure reflected the twin pressures of cost reduction in the core postal operation, and the pace of technological innovation the post had to maintain to keep ahead of customers’ needs for electronic commerce.

Liston explained how traditional and digital businesses have already evolved:

“Jersey Post’s core business transports nearly 100m packets, parcels and letters a year, in a well established, very competitive and regulated market where cost efficiency and quality are the main management imperatives. But the company has also developed a platform of digital mail services such as hybrid mail, under which it uses smart technologies to turn raw data from its mainly corporate customers into special document designs, brochures and such, which it sends electronically for conversion into a physical form only when it nears its final destination.”

He added that Jersey Post was poised to launch a new service that would revolutionise worldwide shopping for islanders.

“Jersey Post will have been ‘States owned’ in its own right for forty years on 1 October 2009, but postal services have been in existence on the island for more than two hundred years. The traditional core business of providing a quality postal service is still very important to the group, but in an ever changing market it has to refocus and realign if the group is to continue to be successful and profitable,” Liston explained.

He outlined recent commercial successes for the business including the development of J promail (the document design and mailing house business), establishing J logistics (the bulk mail export operations to support the online retail boom), and the move into the courier sector with the launch of J express. At an operational level, significant efficiency improvements have delivered in excess of £1m in cost savings, and better quality, value and choice for customers, he stated.

“Unlike the postal industry in the UK-where Royal Mail is in financial turmoil as it faces massive pension deficits, significant market liberalisation, and drastic cost cutting measures -the Jersey Post Group, as a result of good strategic vision and planning, and being in a different situation with its regulatory regime, is a successful, forward looking and profitable organisation,” the Chairman concluded.

Going forward: Ian Carr’s perspective

Past pension liabilities of £11m at the time of incorporation in 2006 have been fully repaid to the States of Jersey. Operations are efficient and competitive according to Ian Carr. Jersey Post believes it has an industrial relations model of which many companies in the postal sector would be envious. The group has successfully diversified into new markets that complement the core postal operations, helping to keep the company profitable and self-sustaining.

Ian Carr offered the Review these closing thoughts:

“Technology and digital solutions will continue to change the way people communicate and do business, and consequently reshape the postal industry. While email, digital technology and the Internet have all significantly reduced traditional letter mail volumes; the online shopping revolution has generated significant new volumes of packages to be delivered worldwide.

“For many years postal operations across the world have been designed around high letter volumes delivered nationwide to the door. The fast changing profile of the mail that postal operators handle today, with a shift towards bulk packages that do not fit through the letter box-coupled with customer requirements to track packages and expectations of value for money-are forcing a redesign of operations and of products, and a commercially driven diversification into new markets.

“These challenges and opportunities are no different for Jersey Post. With further liberalisation of our local postal market potentially on the agenda, and continual decline in letter volumes and traditional retail counter transactions, the future sustainability of the group can only be achieved by the significant shift that the restructuring will deliver.”