Just put your lips together and blow

Ever seen an orange postman?

You might have done if you live in a city, where TNT – latterly “Whistl” – has been rolling out its “final mile” delivery service to rival Royal Mail’s “final mile” delivery service.

turns out unicycles were not the answer
turns out unicycles were not the answer

This week, whilst most of us were wondering just how staggeringly inaccurate online opinion polls* can be, “Whistl” withdrew the service, threatening 2,000 job losses (and shockingly not paying half of its workers on zero hours whilst it thought about it).

“Whistl” (back to brand school whoever is responsible for that) couldn’t make the case for continued investment in the business, citing “market dynamics” and “regulatory complexity”.

Which is another way of saying “this is really hard and doesn’t work”. But maybe they shouldn’t have been trying in the first place.

Postal delivery requires systemic leadership not squabbling competition

Businesses and organisations that have an impact on the way we live – utilities, banks, food companies, transport, infrastructure – would do much better to start thinking systemically rather than competitively.

The Whistl saga demonstrates why. From any angle – economic, resource utilisation, environmental – competition for who is marching up your garden path delivering your Amazon parcel doesn’t make sense.

Royal Mail have been complaining about competition in the postal market for ages – not always in a very lovable way, sometimes sounding a bit sour grapes – but in many ways they have a point.

The economics of postal delivery are brutal. Flat pricing whether delivering to Canning Town or the Cairngorms, but costs of delivery that vary wildly with population density and distance between dwellings.

And there’s a big change in the stuff that’s being delivered:

  • fewer letters, fewer bits of mail – lots of it is being digitalised, even your bank statement
  • fewer CDs, fewer books – nice light things that were easy to carry and were good business for Royal Mail, increasingly becoming digital with streaming and e-books
  • more clothes, shoes, electrical items, gardening equipment – we love shopping online, but increasingly what we’re buying is big and heavy and needs a van to deliver it.

The future for posties looks like fewer light letters, more heavy parcels. (Grimly it looks like 88% of the letters will be “direct mail” or bills).

the postbag of the future - fewer things, but heavier
the postbag of the future – fewer things, but heavier. Poor Pat.

The result is a tough enough business to run even if you’re a monopoly. Allowing the orange unicyclists to cherry pick the densely populated urban areas without having to deal with the people in the sticks was not just unfair, it was silly.

Time for some systemic leadership

Royal Mail used to be a public service – it was not very efficient and lost lots of money. Now it’s a public business with a social purpose – subject to competition upstream (collecting from businesses) and a lot sharper commercially than before.

It’s a leaner, meaner Royal Mail that’s just getting used to competing (having not had to compete for several centuries). And like anyone learning a new trick it’s got a little bit over focused on competition – arguing basically that the universal service (same price everywhere, six days a week) would be threatened if the Royal Mail business became economically unsustainable (because the unicyclists were doing all the easy deliveries).

Which is true. But there’s a much better, more obvious case that Royal Mail should be making. One not about their competitive position but about their unique role in the system.

“It’s the environment, stupid”

As we get more used to shopping online, and less likely to take a trip down the High St, the volume of stuff delivered to our doors is just going to continue rising. Without some kind of systemic intervention the future of home delivery will be ever more vans driving down your street to deliver a single item to your door. Van sales are shooting up in the UK – 239,000 in 2012 to 334,000 this year and 344,000 next. More stuff, more vans. They’ll be queuing up down your street.

Which is an alarming waste of resources and a waste of energy in a world that is fundamentally resource constrained. What’s needed is a systemic intervention where all the stuff gets aggregated and delivered in one go, once a day.

But such a system would cost billions to build and require the kind of infrastructure that could reach every household in Britain every day. Royal Mail already has it.

The demise of Whistl presents an opportunity to show the kind of leadership that the great brands are made of – leadership that recognises the unique systemic role the business plays that nobody else can. Only Royal Mail has the ability to solve home delivery in a way which works economically and environmentally for everyone, including their competitors.

Nobody else can come close.

The businesses that are shaping the future are beginning to recognise that competition is a bit last century. What matters in a resource constrained world is how the whole system works.

It requires a new kind of leadership. Leadership that’s more concerned with outcomes than beating the competition. Systemic leadership.

* it wasn’t us – it was “lazy Labour” voters, apparently

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One thought on “Just put your lips together and blow

  1. Great article…illustrates the changing nature of competition which in it’s current form is at odds with the overarching requirements of our resource challenged world but presents a new opportunity. The ownership of the ‘last mile’ for customers is increasingly presenting an channel / market / corporate opportunity all of its own.

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