The Post Office Saves the Day

November 22, 2007

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The Post Office offers a Christmas savings scheme to meet the needs of savers damaged in last year’s Farepak crash. This is a financial services innovation which is welcome news to many of the most vulnerable families in the community. It also demonstrates that The Post Office may still be able to develop new strategic options for itself

The Post Office has been under threat for some time. It has hardly won accolades for its leadership, as competition increasingly invades once-protected markets. The Royal Mail group continues to present a beleaguered image. Its current news bulletin begins

We apologise to all of our customers for the inconvenience and disruption caused by the recent industrial action and are pleased to announce that there is no strike action currently taking place.

The announcement concludes in less than convincing style

We are pleased to confirm that the CWU EC has ratified the deal on pay and modernisation and that this acceptance of the proposal means that Royal Mail is now able to go ahead with plans to modernise the business and make it more flexible, efficient and able to compete more effectively. We are making sure that any changes we make will not cause any disruption to our customers and where we have mail for customers, deliveries will be made each day across the country.

The Post Office and Royal Mail

As its website indicates,

Post Office Ltd is a wholly owned subsidiary of Royal Mail Group Ltd and operates under the Post Office® brand. Managing a nationwide network of around 14,300 Post Office® branches, we are the largest Post Office network in Europe and the largest retail branch network in the UK handling more cash than any other business…

Post Office Ltd is one of the three arms that make up the Royal Mail Group, along with Royal Mail and Parcelforce Worldwide. Post Office Ltd’s Chief Executive and non-executive Chairman sit on the Group’s management board.

A leadership opportunity?

When are there leadership opportunities? At times of great threat. Why? Because there the obviousness of the threats will have encouraged considerations of what to do about them? Doing nothing may indeed by good for rather subtle reasons. This amount to ‘doing nothing in a calculative way’ rather than in a helpless way, the latter backed up by denial. Doing something can also be backed up by denial and by false calculation.

In other words, not acting is also a possibility. Acting or non-acting can be strategies. They can be considered strategies. They can be well considered and doubtfully considered. The circumstances surrounding threat at least may increase conscious efforts to do something better and different. Sometimes the strategy has been elevated to a leadership principle of masterful inactivity.

The opportunity in the threat

My unexpected conclusion is that the Post Office has a rare asset that it carries through the financial crisis, and which is one that most other financial institutes do not have. The asset lies in the confidence of customers that any deal offered will be as near as safe as any deal can be.

The implication is that the proposed savings product, although a relatively small one, could be an indicator of futher possibilities based along the same lines of guaranteed safe and regular savings. This was the strength of the home-savings schemes and of the offerings of the door-to-door insurance salesmen epitomized by The Man from the Pru. , The Pearl, The Refuge for a century or more.

The healthy option

If this is the case, it will be a healthy option that has emerged partly as a consequence of a breakdown of trust in the current business image of high street banks and their current accounts (no pun intended). Healthy, because the good old Post Office was hardly a considered option by many ordinary people who considered themselves to have more financial savvy than to follow the untutored practice of saving with the Post Office, or with the friendly societies.

The possibility is healthy because it is not dressed up in dubious marketing promises of foolishly attractive yields. What you are offered is what you will get. Maybe, just maybe, the simple promise can not easily be copied by competitors.

Straws in the wind?

The idea is based on several assumptions. First, that the various beffetings to the international and national financial systems are producing a shift in attitudes among members of the general public. These in effect result in beliefs that banks are no longer safe havens for money. In the UK this week, the missing computer records of thirty-five million members of the public may contribute to such atttitudes for some time to come. The second assumption is that the Post Office is, in contrast, safe. Not safer, but safe.

We will see.