Episode 6: Staging a transformation, and trusting the executive team

David 
Welcome to Transformation Talks. My name's David Lancefield and my aim in this podcast series is to explore the topic of transformation through the lens of a diverse group of people who have driven, lived through or studied transformation in their own ways. We’ll give you ideas, research and experience to help you develop better strategies, more effective leadership and healthier cultures in your organisation, or at least that’s the intention.

I'm delighted to welcome Dame Moya Greene, until recently the CEO of the Royal Mail Group, a non-executive Director at Easy-Jet and Rio Tinto and a Trustee of The Tate. Prior to joining Royal Mail Moya was the CEO of Canada Post where she lead another successful transformation, significantly improving profitability despite declining mail volumes. And prior to that Moya held a number of senior roles in TD Securities and Bombardier and in the Civil Service overseeing the privatisation of CN Rail and the deregulation of the country’s airlines.

And as I said Moya was appointed Dame for services to business and to the postal sector in the New Year’s Honours List, many congratulations. And a very, very warm welcome. Thanks for coming. 

Moya
Thank you.

David
Coming into Royal Mail Group and no doubt your previous roles you had a whole series of complex stakeholders, competing demands from customers, employees, unions, regulators, government, investors and probably more. When you were thinking about your plan for transformation of the organisation, how did you try and sell it into all those groups? How did you try and position it?

Moya
In parts. I didn’t do it all at, you know, one time. I used the first three months to really get my arms around the business to take my own measure of where we were. When I came into Royal Mail the year before, the company had had major disputes with its employees and with its unions. In fact in 2009, which was the year before I arrived, we probably lost more days to strikes at Royal Mail than the rest of the UK business combined. 

What people did every day. It really was a major set of changes. So you couldn’t do it all at once. And I think the most important thing that I had learned, even before I arrived, was that we had to have a very different relationship with our people to do any of it.

And then secondly, you know previous governments – I think four of them – had had the aspiration of getting private capital into Royal Mail and none of these efforts had been successful. And I think there was one common thread around the lack of success, and that was that governments weren’t prepared to do all of the things necessary in order to make Royal Mail an investable proposition for a group of people - pension funds, long-term funds - who might be prepared to invest in Royal Mail. But we had to present to them an investable proposition where they could feel reasonably secure that any money that they invested in the company was going to return to them with a reasonable rate of return.

So these governments had failed for basically the same reason. The things that needed to be done and they were hard things. These governments weren’t willing or able or weren’t interested enough to get done.

So the second part of the plan that came early to me, and in fact before I arrived, was the need to quickly get my arms around the business so that I could go and talk intelligently to this government and say: ‘you may have an aspiration to privatise Royal Mail, but it will come to failure if you do not look at it in these four or five different ways’. You will need to be a spear carrier with me to present to a group of investors what I called an investable proposition.

So those two things I knew. I knew I needed a different relationship with our people in order to modernise the operation, the fleet, the network, the technology, all of the changes that would affect people’s lives. So that had to happen. And I knew I needed to know enough about Royal Mail, the temperature of it, where we stood now, the competitive landscape. What was going on with the regulator. All of those things I needed to know enough in order to speak sensibly to the government to say: ‘your part of this privatisation will likely include these things’.

So it didn’t happen all at once.

David
You talked about getting the temperature of the business. How did you get your arms around the organisation because it has quite a lot of complexity. People will probably be asking your view before you are even ready. So how did you go about just getting that picture of the organisation?

Moya
Well you have to talk to a lot of people. And you have to be out in the field a lot. You know, the real brand of Royal Mail are the 139,000 people, the people in all the processing facilities, the people who are on the streets of every village, town and city of the United Kingdom every day in all kinds of weather. I mean the 502-year-old institution is really driven by the heart and the soul of all of those people. And you know they are not a homogenous group. They have different views, because the changes that take place at Royal Mail have affected them in different ways.

And so to get your arms around it, it is a big place - that is true - but first and foremost I think you need to be committed to going out there and listening and trying to sift through all that you are being told to find out alright, what is the roadmap that I need to put in place here? What is the staging that I need to do and that will be acceptable to people? Because at the end of the day, you know, we in the United Kingdom sometimes have a way of, you know, talking about unionised organisations as if it were simply the executives of unions who are resistors of change. My experience is that is not true. Unions do lead their membership, but they also follow the views of their membership. So if a group of people - whether they are unionised or they are not unionised - if they don’t want to do something, if they are not willing to go in a certain direction, they don’t, whether they have a union or not.

So I think the first part starts with going out, being ready to listen, being in a lot of places. Being on every shift. Trying to get a feel for all the different jobs that you have to do in order for, you know, 16 billion items to get into thirty million mail or address boxes every day, six days a week. A lot has to happen and a lot has to go right.

David
You have to immerse yourself in that and get out there, a lot of effort?

Moya
So you do have to immerse yourself, get out there and talk to people.

David
So once you have captured all that and you will be listening to what they say and how they say it and you will get a feel for the organisation at different levels, how did you consolidate that, how did you consolidate that and sort of then prioritise it?

Moya
That is a really, really good question, because a lot of what you hear is not surprisingly problems that are in existence in that local area and they may not be the same problems somewhere else. And they may not actually have that much to do with the changes that need to take place regionally or nationally. But you have to be alert to them because if they cause a group of people to feel we are just not moving, even if intellectually we know the world around us is changing, we are just not moving. If they cause that kind of resistance factor it has a contagion effect. 

So sifting through, it is a good question that you ask. I would come home and I would go over my notes. I always promise to get back to people and that caused me to realise I needed to set up a really, really good internal communications programme that was organised. And it caused me to understand I needed the best communications professional in the United Kingdom to help me with this because it is so big. It isn’t just worrying about what the media says, and God help us in the United Kingdom you know we get a lot of media and we are in it, the Royal Mail is in it somewhere every day.

But it isn’t really about that. The change is not about that. It isn’t even about - although it is important - that parliamentarians represent the people that used to own the company. So you have to be alert to what parliamentarians think, what is going on in their constituencies. But really fundamentally, change, the kind of change we had to do, is only possible if you are alert to what the people think, what your customers think and what your employees think.

So that caused me to really understand those early opportunities I had to be out in the field. I knew I needed the best professional I could find to help me organise it and help me sift through it. Help me be responsive to everything, even if it was to say, ‘I can’t deal with that now, but I have heard you. I remember’. And emails do not go unanswered, not if you take the time.

David
Because that spreads as well positively. But hearing, listening carefully, responding and then actually convincing people to change. The convincing people to change is the hard bit, right. Because you can have a rational argument about whether it is declining mail volumes or financial matters and so on. And if you are a person on the front line you may not feel it or see it. So I know there are lots of constituent groups. But how did you convince people, what style of approach did you use? Because that’s what from my experience where things fail. You have a great plan, you listen to the people and you convince and they don’t move or they don’t come with you. So what did you do?

Moya
You need a lot of people to help you because there are just so many people and as I say it is not a homogenous group. Most of our people are very intelligent. They’re in their communities all the time, they know what’s going on. And intellectually, after those three strikes in 2009, they knew that there had to be changes or else never mind who owned the company, the company wasn’t going to survive. I mean after all this company had not made money in its whole market for a decade before I arrived. So how do you convince? It takes a lot of people and you have to figure out who can be an effective ambassador for that set of messages, who can help you. And sometimes it is local management, sometimes it is the local union rep. Many of the CWU [Communication Workers Union] union reps knew better than I did what was going on in the UK delivery industry. 

So you have to be available and sometimes even if you in a broad brush way know what you need to do, you don’t need 69 mail processing facilities in the year 2010. You know, this network needs to be reconfigured in the year 2010. We need the technology to be a lot more modern and even if you know broad brush, you need a lot of people to help you have very local discussions. Sometimes the ambassador to help you to get people to understand is going to be your union rep, sometimes it is going to be the local manager. Sometimes it is just going to be a peer, coach, who is very widely respected. Sometimes it is going to be an old hand who has seen a lot of change. It is going to be different people. But that is where being visible and being out there again helps you identify who in this area.

And you know sometimes your managers are not going to be able to do it for you. They see things maybe through a lens that might have been perfect 15 years ago but it is not the right lens today.

David
How do you stage it? Because you talked about staging and you can’t do everything at once, it is just too big. But from what you said there and from what I know, you knew where you wanted to get with the organisation. At the same time you have to have a certain degree of patience, right, in terms of taking on the job. How did you manage both the visionary part of you - which I know you had a sense of where you wanted to go - versus the practical realities of, I have got a sequence here I have got to stage it. Because other CEOs find that a big tension. Too slow doesn’t work, too deliberate doesn’t work. Similarly if you leap to the big picture you don’t take the organisation with you. So how do you marry that tension?

Moya
I think the first thing that I realised was that we were always pressing the operation to make the changes and reduce the numbers of people and there is a good reason for that. That is where our big employment group is.

But it was also very clear to me that we had a very top-heavy organisation and we had a lot of people in central functions where just on the basis of my experience. I mean I wasn’t a young woman when I arrived at Royal Mail, I had done a lot of things before. But just on the basis of that experience I knew, that cannot be right.

So by putting a plan together for the central functions and working on right-sizing central functions first, it helped people in the operations to know that it is not just going to be focused on the operation. And that helped me be credible when I started to talk about sadly, even though you might have given all of your career to this company, we just don’t have enough work to think in terms of you spending the next five or seven or eight years.

And then the second thing we did, we did negotiate what I considered to be – and the CWU should take a lot of credit for this – the best terms and conditions for people in the operation who could no longer find their employment at Royal Mail. And you know in some cases depending on the length of time that people had been working for us, it was a level of income support that is not usually available certainly, definitely not in our industry. But it was enough to help people who probably felt, ‘I have been here long enough, there are other things I want to do in my life, I don’t want to let my health deteriorate so that these things I had planned to do I can no longer enjoy’.

So it helped us do a lot of change voluntarily. It was really important to be able to say to people, we are going to have to make change, the numbers are, we just don’t have enough work.

David
And be open and clear about that.

Moya
We were very clear, I was very clear about that. And I think you know, not everybody is going to say that they like Moya Greene. But I don’t think very many people would say that I misled anybody. I was pretty straight with people and always willing to listen about the ‘how’ because you know, London is a perfect example of this. You can get to Trafalgar Square many, many different routes and the same is true in massive change. And you just have to be willing to listen and to say, OK well actually nothing is lost if I do this first rather than that.

David
So you have to have flexibility and an openness to consider different routes?

Moya
To consider different routes.

David
You touched there on some negotiations and you will have had some pretty crunchy negotiations whether not just with the unions, but with I imagine government, regulators and others. What did you do well? Because without negotiating certain aspects, I am not trying to pry into particular matters, but what did you do well? What did you learn from those big negotiations? Because they are critical to transformation and you have to get through them?

Moya
Again, there is not one answer.

David
I thought you might say that.

Moya
Yeah there is just not one answer. Like sometimes we, we’re just too rigid, we think, okay we’ve got to have that.

David
It becomes positional?

Moya
It becomes positional, and maybe again this comes from having done a lot of negotiations before I got here. You know, I have learned that it is just far better to be yourself. If you are in the room yourself and lots of times you shouldn’t be in the room. That there is somebody way better than you to be in the room. Sometimes the union will want you in the room, but lots of times you are not the right person to be in the room, that there is somebody that has got more expertise in a particular matter, let them be in the room.

But whatever room you’re in, be yourself and state the facts as clearly as you know them. Try not to have any hidden agendas. Try to tell people, here is what I am trying to do and try to work toward it and know that there is not just one route, there isn’t just, there’s always two or three ways to get there.

David
So the transformation journey was bumpy. Some great moments, some difficult moments. How did you sustain yourself through that?

Moya
Ah that’s a good question too. I think the way anybody does. You know everybody in everybody’s job, you have good days and you have not so good days. I don’t care what you’re doing or who you are. And what gets us through the rocky patches are friends, are family. Changing your mindset entirely, go read a book, go to a movie. Just go for something else for a couple of hours. I am a big walker. I - my goodness - I have walked a lot of miles in the United Kingdom in the time that I’ve been here and when I first came here, any extra time I had I would just walk. And sometimes I would get on a train on a Friday night and go visit a different part of the country and walk. And in those walks I would noodle things, noodle things and then you see other people that you could play into a problem. You see other ways that you might tackle the same problem.

David
Freshens your mind.

Moya
Yeah.

David
l was just thinking about these sort of, when you got to the point where you rang the bell at the Stock Exchange, right.

Moya
That was fabulous. 

David
Tell me how did that feel?

Moya
It felt like, you know, the end of the beginning is how it felt. But the end of a part that was a very long, winding, intense, wonderful path. And you know there are a lot of people who talk about high places and Sir Francis Bacon I think said ‘Any high place, you only get there via a winding path’. And that is true, that is what it felt like. And to have, you know, not all 139,000 of us. Because you know all of our people had shares in the business too which was a wonderful thing and they were gifted the shares. They didn’t have to pay for the shares. For some of our people next to their houses or their cars it was probably going to become the biggest asset that they would have. It was a wonderful thing for the government to have done.

So I felt I was standing there after this winding path, ringing the bell, but it was the beginning, it was the beginning of something. And so there was both real pleasure that we got there and that we had done enough of the transformation to convince really good investors that this was an investable proposition and we had taken our people with us through an enormous amount of change. We had a great team of colleagues at the leadership table who were, you know, just an amazing group of people and some of them will be lifelong friends.

So that was a very big moment, it was the culmination of a wonderfully intensive, but driving, positive time. It was wonderful.

David
And the next chapter for the next person?

Moya
And the next chapter, yeah.

David
And the next chapter for you, because obviously you are non-exec, you are a trustee and you will be seeing CEOs and executives going through their own change and transformation. What advice would you impart based on your experience, not just with the Royal Mail Group but earlier in your career as well, as a non-exec? What sort of advice do you share?

Moya
Mostly executive teams don’t need much advice. That’s, you know, the truth is good executive teams run the company and boards. They provide advice and they are there when needed. And they certainly have a governance responsibility and there are certain rules around being listed and even if you are not listed, even if you are a charitable organisation like the Tate, there are certain things the board of trustees just simply have to do. 

But you know, David, the truth is executive teams generally speaking are very good, they’re very competent and they run the show. So they don’t. And every transformation is different. That is the other thing, you know they are not all the same. If you’re a technology company or what you’re trying to do is to tap into a whole new generation of technology minds, you are not a big asset company, you are not a big industrial company. But you still have a huge competitive landscape that you need to stay on top of. The transformation in that company is going to be different than the transformation in Royal Mail.

So they are all different and as a board I think you need to be respectful first and foremost that the executive team, only if you see, if you see real clear evidence that there is thinness in some key area, some key executive area, either your going in proposition should be, they probably know more than you do about their company.

David
It’s refreshing actually. So you start with the assumption they are capable unless told otherwise.

Moya
Unless you see signs that they’re not or you start to look at their succession plans and there is nobody behind them. But then you need to say: ‘well you need to shift your focus a bit and concentrate on getting people behind you’.

But I think your ‘going in’ proposition should be that they’re capable, they know the business far better than you do. They know what they’re doing. And any transformation that they have to do, they will have had the intellectual capital and the emotional ‘smarts’ to figure it out. And then what you’re doing as a board member if they present that plan to you is you’re just looking to see, is there something missing. And with the right executive team nine times out of 10 there isn’t.

David
Brilliant conversation, I loved it. So candid, refreshing. You talked about really getting into the front line, listening to people, talking to people in different walks of life. Staging the plan, making sure you sequence in the right way but recognising its meandering road to Trafalgar Square and lots of other parts of the UK and beyond. Being kind to yourself as well, to keep yourself fresh. But also having an open mind in terms of how either negotiation or critical decisions can be made and that was very candid in terms of both yourself, are you the right person always to lead? And indeed what’s the balance between the exec and the board in terms of starting an assumption that the exec should be capable and be respectful of that. 

Really grateful for your time, it has been a great conversation, thank you Moya. 

That was another edition of Transformation Talks. Please listen to other podcasts and you can get them through iTunes, Acast and Soundcloud. Thank you.

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David Lancefield

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