What Royal Mail can teach water companies

Dean Wheeler suggests water firms would benefit from looking at how Royal Mail manages crises.

At first glance, Royal Mail doesn’t have much in common with a water company. But scratch the surface, particularly at this time of year, and the similarities are bigger than you may have first imagined.

Handling the logistics at Heathrow for Royal Mail gave me a front row seat at the busiest time of year for one of the UK’s largest processing centres. Last year Royal Mail handled 130 million parcels in December, just over 4.5 million a day. Tricks I learned there I am now using in the water industry.

As an integrated business, Royal Mail needs all its different processing functions to work in harmony for the system to work perfectly. Outside of Christmas, minor issues with this integration can be managed easily because there is spare capacity in the network, but as December progresses and demand picks up there is little or no spare capacity and any problems can be catastrophic. Even if each site is performing perfectly, the weather is always unpredictable.

Unpredictable demand

Neither Royal Mail nor the water industry can control the inputs to their systems. Loos keep getting flushed and customers keep ordering online regardless of the systems’ capability. Blockages in both systems can drive huge disruption, which results in poor customer service, huge increases in costs, reputational damage and loss of business. For water companies this can also result in pollution incidents that may incur clean-up costs, ­customer complaints and fines.

Royal Mail has created strong foundations within the business that focus on delivering great results every day, not simply in times of crisis. These are based on three main areas:

• Strategy execution – understanding the key challenges facing the business and working to transform the business to meet these challenges;

• Clarity of purpose – ensuring everyone knows their role and how it contributes to delivering great service;

• Clear line of sight – putting the right measurement systems in place so it can “see” the performance of the business.

Contingency plans have been carefully designed based on previous incidents. Royal Mail captures lessons from previous problems and uses these to ensure the next one is managed as effectively as possible. After an event it looks at what worked well and areas that could have been improved.

At Christmas the business is much more sensitive when problems occur, but the same routines remain in place. The teams have clear roles and responsibilities and know the larger and more complex problems are managed centrally, while small issues are managed locally. When there is an issue, the right team works on fixing it while the rest of the business continues to function as usual.

Constant improvement

Royal Mail began a programme of continuous improvement in 2008. This investment in its posties and managers gives it the tools to improve performance. Accidents and costs have been reduced, and quality has improved. Not only is this delivering a culture change across the company, it has improved resilience and reliability, from collection to processing to delivery.

The investment in continuous improvement over time increases the capacity and resilience of the whole system. Machines have fewer breakdowns, processes have become more efficient and the number of quality issues has fallen. This all reduces pressure on the system when it’s under the greatest strain.

So when the bad weather causes flooding and the water system is overloaded this Christmas, it is worth thinking “what would Royal Mail do?”.