Faced with disruptive technologies and other serious threats, Singapore Post, the lion city’s public listed Public Postal Licensee, adopted a highly effective strategic leadership model. In particular, SingPost’s success hinges on equipoised transformation achieved through what I call the “SIT” framework—a powerful combination of strategic competence and discipline (S), innovation excellence (I) and a transformational execution platform (T), which are mutually reinforcing.
Let me now decode the distinctive strategic leadership approach.
1. Strategic competence and discipline
When you navigate amid a storm, an accurate map and clear directions are vital. SingPost has developed a strong competence in crafting strategy. First, it distinguishes itself by an acute awareness of megatrends and their impact on its industry. It regularly benchmarks its performance against what internally are called “postal peers.”
Based on a profound understanding of the evolving competitive landscape, with a clear sense of the dangers and silver linings in micro-segments, it puts in place a smart strategic game plan to achieve sustainable, high performance.
SingPost stresses strategic discipline, too. It reviews its strategic initiatives every quarter and has a dedicated team to support strategy implementation.
In industries facing disruptive technologies, players often commit one of two mistakes. Either, being blinded by ossified mental models, they ignore radical changes. Or, they succumb to “threat bias”, overcommitting resources to new technologies at the expense of the still valuable core business. Kodak invested heavily in digital photography when the future of this technology was still unclear and lost market share in traditional photography, which was an important source of cash, to Fuji.
SingPost so far has managed to avoid both pitfalls, striking a balance between realizing the clear and present danger while maintaining calm amid the storm. Pursuing the vision of becoming a diversified regional company, it is successfully defending its cash-generating core while developing new growth vehicles in adjacent industries across the region. The components of its strategy are mutually reinforcing and scalable.
While SingPost invests in talent, IT and other necessary resources to continue to grow organically, the preferred growth acceleration vehicle remains acquisitions.
One strategic priority is to defend profitable positions in its core business, among other things by focusing on profitable products and services (such as hybrid mail, parcel and courier services, and vPOST) and increasing productivity. At the same time, SingPost attempts to tap new sources of growth through related diversification (such as into financial services) with a special focus on digital services, experimentation with new growth vehicles (such as e-commerce), and international expansion focusing on Asia.
Leveraging the outsourcing trend in data and document processing, it has invested in the data printing business in the region, for example, acquiring DataPost and increasing its stakes in Efficient E-Solutions. Its 20 percent stake in Shenzhen 4PX Express and investment in Clout Shoppe signal its strong interest in e-fulfillment and e-commerce.
2. Innovation excellence
Innovation at SingPost can be conceptualized as a holistic process. Its aim is not just to develop and launch new products and services, but also to conceive of new business models and other novel approaches.
Lateral thinking is an important feature of SingPost’s innovation process. For example, its leaders saw the potential to leverage its strong brand and distribution network to offer financial services.
Out-of-the (post) box experiments include housing a trendy restaurant in the Killiney Road post office and accommodating retail outlets in the Tanglin post office.
SingPost also excels at using seemingly pernicious trends, such as digitalization and disintermediation, to its advantage. It will launch a digital mailbox service for consumers, making it easy for them to access their mail, such as bank statements and business correspondence, from their computer or mobile device. This digital mailbox will include online bill presentment and payment, as well as other value-added services. On Clout Shoppe, the new luxury lifestyle e-commerce portal, consumers can purchase branded products that had previously been unavailable in Singapore, and benefit from virtual private sales.
3. Transformational execution platform
SingPost has put in place a powerful execution platform with valuable resources that supports its pursuit of strategic priorities and enables it to achieve innovation breakthroughs. To start with, it possesses a strong bench of leaders, which is continuously enhanced by outside change agents of different professional backgrounds and diverse perspectives, including foreigners.
Importantly, SingPost not only engages in a war for talent, but strives to get the best out of ordinary employees, for example, by choosing a “Postman of the Year” and offering other similar awards.
SingPost also benefits from strong organizational agility. At the beginning of 2011, it restructured its organization into two main business units and adopted an innovative “dual-CEO structure,” to achieve the twin objective of core business defense and growth. One unit was focusing on mail and the corporate business, while the other managed a plethora of international growth businesses, ranging from logistics to retail and financial services. The latter was headed by a foreign leader, Dr. Wolfgang Baier, a former Asia-based McKinsey & Co. partner from Austria. In another reorganization move announced in October 2011, he was appointed as Group Chief Executive Officer and Board Director—a decision taken to support SingPost’s ambition to expand growth frontiers in the region.
SingPost’s execution platform also combines other powerful tangible and intangible assets, including an ample pool of cash, strong distribution network, valuable brand and privileged relations in Singapore and abroad.
Last but not least, SingPost has demonstrated its ability to learn, such as when it acknowledged problems created by an ill-fated publicity campaign, in the course of which a specially commissioned masked man defaced its postboxes with graffiti.
Asian roots of equipoised transformation
SingPost’s legacy assets so far have proven to be a springboard for future growth rather than an obstacle. Global competitors can learn valuable lessons from its Asian-style, delicate balancing act.
It is reminiscent of China’s value-creating transformation strategy (“crossing the river by feeling for the stones”) rather than Russia’s destructive shock therapy.
SingPost’s abilities will be tested over the coming years, in the course of which it will have to accelerate its transformation to cope with the ever-changing saw wave environment and global competition.
Well-targeted organic and inorganic investments will be required to achieve this feat.
The key to SingPost’s future success will be its ability to discern which aspects of its business need to remain unchanged coupled with the continued willingness to experiment with novelty and ability to learn and readjust based on performance feedback from a great variety of internal and external stakeholders.
(Part 2 of series on “Poised transformation”)
“Prof. Kai on Strategic Leadership” Column Number 53.
Kai-Alexander Schlevogt (D.Phil. Oxford) serves as Full Professor at the Graduate School of Management (GSOM), St. Petersburg State University (Russia), where he holds an Endowed Chair in Strategic Leadership. He also is the director of the IBM-GSOM SPbU Growth Market Leadership Program. His latest book, “Brave New Saw Wave World” (ISBN: 978-81-317-5403-0), is available at Amazon.
Website: www.schlevogt.com; email: schlevogt@schlevogt.com.
