Consignia's cultural challenge

In a fortnight or so, more than 80 of the senior management at Consignia will learn that theyare out of a job. The list of casualties will mark the completion of a radical 18-month assessment of the company's top talent.

The multi-stage management job-cuts programme smacks of the current genre of TV shows where thousands of wannabe stars are brutally whittled down to a shortlist.

At Consignia, the planned 30,000 headcount reduction among rank- and-file staff over the coming three years is spreading swiftly from mail rooms and sorting offices to the hallowed upper floors.

Stage one, completed last Friday, saw about 320 CVs, drawn primarily from inside the organisation, pared down to 90 senior men and women who will comprise the organisation's new inner sanctum.

The 90 will in effect replace what has until now been called the "Top Y" – a group of 120 – and will take ultimate responsibility for an organisation that announced losses of £1.1bn in June and that now wants to foster a culture where a leaner management supports the rest of the workforce.

Mindful that Consignia pays about 20 per cent below market rates for its most senior people, the new cadre of 90 – roughly a third of whom are understood to be relative newcomers rather than Consignia "lifers" – are to be offered significantly more pay for their newly expanded roles.

For the 230 or so senior managers currently left without a job, the good news is that most will be invited to go forward to stage two of the so-called "management renewal" programme, which in effect happens immediately.

The bad news, though, is that Consignia, which becomes Royal Mail Group next month, says it is unlikely that there will be enough jobs to go round.

The company's so-called "corporate resource" pool of second-tier managers is ultimately expected to be no larger than 100 to 150, leaving at least 80 people without a job by the time the internal list has been finalised.

David Marshall, Consignia's group personnel director, acknowledges that some of the casualties of the management reassessment will be reluctant to leave but says the company is determined not to clog up the succession route for younger talent with a new tier of "political" appointments.

"Many of the people left out of the reshuffle could have been offered senior jobs elsewhere inside the organisation – but that would simply have hampered the career progression of today's rising stars.

"By assessing the strengths of the most senior people in the workforce, as well as postmen and women, we are making the rationalisation programme as fair as we possibly can for all."

Mr Marshall, a Royal Mail employee of 30 years' service, dislikes the notion that the organisation is keen to rid itself of the remnants of a generation of old-timers who are out of step with the new pressures of a more commercial environment.

But his team acknowledges that many of the managers who are likely to be cast into the wilderness this year will be "old-school" Post Office or even the earlier General Post Office (GPO) staff.

Although age is no barrier to a senior job at the organisation, which is embroiled in a radical restructuring programming to restore profitability, the message is that an uncommercial business philosophy certainly is.

Holding Consignia's hand throughout the management assessment programme has been Kiddy & Partners, a firm of business psychologists that favours "business simulation" methods over psychometric testing or lengthy interviews and whose clients include Goldman Sachs and the Central Office of Information.

Kiddy was drafted in early in 2001 and its role has been to scrutinise attitudes, experience and achievements among every one of Consignia's highest-paid staff and to assess them against comparable post-holders outside the group.

It has also helped to fill all senior jobs that have become vacant in that time, from inside or outside the organisation.

Partner Simon Brittain says: "Although many organisations who bring us in complain that their managements are inadequate in some way, we have found some outstanding individuals inside Consignia and have helped recruit some outstanding individuals from outside too.

"While I would say that most senior people at the company have a baseline commercial understanding, and have proved themselves very good at cracking the costs problem, they now need to focus more squarely on increasing revenue," he adds.

Mr Brittain argues that a succession of organisational changes over the past decade has left many of Consignia's most senior managers unable to cope with stability and almost addicted to the implementation of new strategies before the old ones have been given time to take effect.

"Change excites rather than frightens many of the senior people at Consignia. But there's a case for saying that there is almost too much change in the company. What we're saying is that too much change isn't that helpful in the long term."

The challenge for Consignia will be to keep this message in mind as it goes through its current management upheaval.