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Notes of the Counters’ executive committee meeting on 28 January 1994
Present
Item 1
1.1
Item 2
2.2
2.3
2.4
Richard Dykes for item 3 Madeleine Nicholson
Mike Flanagan Brian White
Bob Peaple for item 4 Mike Granville
Roger Tabor Paul Zealander
David Taylor
Dick Wheelhouse
John Denham
Scott Duncan
Gillian Clelland
Notes of the meeting of 17 December
The notes of the previous meeting were agreed
Status of matters
Capital plan 1994/95 CEC(93)02
The outstanding action point - to calculate the level of I Roger Tabor
capital expenditure that the business can afford has been and Scott
held up due the delay in settling the operating plan and == Duncan
budget. It is anticipated that this will be resolved and a
note circulated to CEC members within the next four
weeks.
Organisation update
Danny McDonough circulated a note which outlined our CEC members
performance on spending our capital allocation. CEC
agreed that this was not a good year to underspend on
capital and directors should encourage completion of
any outstanding projects before the year end.
Roger Tabor updated members on the current progress
of within region reporting. The current issues are what
to do in the interim stage now that within region
reporting in up and running. The replacement system
will take some time to develop and will be called MICA
- management information costing and accounting.
CEC noted that, at any one time, the business is
carrying a surplus of some 200 staff and this is the
reason for the discrepancy between the numbers and
costs of surplus staff previously reported by John
Denham.
CTs —
fi Sil niCT bei CONF IDENCE
Item 3
3.1
3.2
33
3.4
K A.
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Organisation review report CEC(94)03
CEC welcomed John Denham, Madeleine Nicholson
and Brian White who reported back the results of their
data gathering exercise on the effectiveness of the
implementation of our new organisation.
CEC were reminded of the objectives of the
organisation review, the critical success factors and
measure originally agreed by the organisation review
steering group.
CEC noted the methodology adopted by the
organisation review team which was based on individual
interviews with over 400 staff, focus groups, the output
of the business leaders workshop in November,
questionnaires from front line staff, monthly reports
from business unit leaders, detailed systems analysis
and individual cases and correspondence received by the
review team.
The process adopted by the team was to carry out a
preliminary sortation of over 1500 different issues -
many not at all related to the organisation review. By
use of affinity diagrams the team identified 17 key
issues and using cause and effect, an interrelationship
diagraph and tree diagrams, related the issues to the
objectives for the organisation review. CEC noted the
complexity of the issues identified and the elaborate
interrelationship between issues.
The 17 issues are:
© computer systems not believed to be supporting the
new organisation
© computer systems not delivered
© varying level of computer support for users
© significant weaknesses in the management of data
and information
© difficulty in developing a transfer pricing policy and
mechanism
© factors inhibiting the introduction of retail focus
* lack of commitment to profit accountability
3.6
pf
3.8
3.9
3.10
3.11
3.12
lack of understanding of the .aanagement process
lack of consistent leadership behaviour
barriers to empowerment
no service level agreements in place
weak management of expectation against delivery
lack of ongoing systems standards and or adherence
to standards
inadequate training provided
lack of appropriate skills and experience
inappropriate resourcing levels
lack of acceptance and clarity of roles and
responsibilities
Of the 17 issues four have not been developed further
for the moment these are:
© no service level agreements in place
© inadequate training provided
© lack of appropriate skills and experience
© weak management of expectation versus delivery.
These elements are outside of the objectives set for the
review of our organisation.
CEC noted that the issues identified did not carry equal
weight since the findings were largely based on
qualitative feedback.
CEC noted the sub issues which contributed to each of
the 13 areas described in detail by the review team.
Approaches to resolve the issues were also suggested.
In discussing each issue the following points arose.
The factors contributing to inconsistent strategic
direction were actually about leadership behaviour and
this should be noted for future communication.
An alternative approach to resolving the issues around
transfer pricing would be to replace the system with a
process more in keeping with activity of other retailers.
The factors contributing to lack of understanding of the
management process were also about acceptance of the
new process. For example in some activity the role
being played by head office direct reports was akin to
that of a line manager. This appeared to be at odds
with the management process.
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3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
The biggest area of concern was around roles and
responsibilities. Resolution of many of the other factors
would in turn contribute to the clarification of roles and
responsibilities in general.
CEC noted the template issues that had been identified
in the feedback. These were reported as being
insufficient in the areas of agency training, audit and in
posts supporting the management of information. In
addition it was noted that feedback suggested the
structure - that is the balance of resources between
business units in the areas of personnel, finance,
distribution and retail were inappropriate.
CEC agreed that it was important to get the balance
right between what the feedback reported and the
appropriate allocation of resources from the business
perspective.
CEC agreed that it was important to ensure that best
practice between units is shared before increases should
be made to template numbers.
CEC noted the systems issues and the proposed
approaches to resolve them. Many of these are within
the finance area but in some cases systems are
completely lacking for example QPA monitoring.
CEC noted the review team’s recommendation that each
region be equipped with a computer manager.
CEC agreed that directors should take ownership of the
key issues identified. The organisation review steering
group would be resurrected for the time being to
prioritise the activity that needs to be undertaken and
quickly drive through any changes.
Richard Dykes will take the first steps in prioritising the
issues, suggesting allocation of ownership and setting
out the role of the revised organisation review steering
group. The way the group manages itself needs to be
consistent with our new management process.
CEC members raised their own areas of concern that
had not been highlighted in the report back. These
were:
e the balance between support work and line
responsibilities for retail network managers
Richard Dykes
and John
Denham
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3.22
3.23
Item 4
4.1
4.2
4.3
¢ distribution
© congruence between data gathered for this exercise
and that input to the Customer First workshop
allocation of offices to retail network managers
¢ financial management within and between business
units
CC agreed that communication on this would be
expected by staff. For the moment the notes would
communicate the results of the discussion to business Denham
leaders. Once the organisation review steering group
had reconvened and prioritised the issues to be tackled a
wider communication could be made along the lines of
the updates issued as the organisation was being
implemented. This would take place very quickly.
CEC thanked John Denham and his team for their
feedback.
Pay tactics for 1994 CEC(94)02
These notes are circulated only to those present for the
debate.
CEC welcomed Paul Zealander and Mike Granville.
The debate concentrated on whether 2% should remain
the ceiling for pay negotiations in 1994, taking into
account the risks of the lottery negotiation, our
commitment to developing a commercial partnership
with agents, possible industrial action by the UCW and
our commitment to improving staff attitudes.
CEC noted the changes in Government attitudes towards
pay - that is - there should be no effect on overall
productivity.
CEC noted that the full year RPI assumption was 3%
and the operating plan and budget assumes a settlement
1% below RPI.
Richard Dykes
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4.4
4.5
4.6
4.7
Item 5
5.1
5.2
5:3
Item 6
6.1
CEC agreed that 2% is what can be afforded and this
should be assumed to be the ceiling. However
pressures such as the lottery negotiation, or from board
to settle in the likelihood of a dispute could be major
and therefore a contingency should be provided for. A
further £4 million could mean that any spot RPI figure
could be matched which is likely to be the figure
should be available for both staff and agents although
need not be used equally between each settlement.
CEC agreed that approval of these pay tactics should be
sough at the budget meeting with Bill Cockburn on 7
February rather than through the formal Post Office
Executive Committee process.
CEC noted that Bob Peaple will be seeking negotiating
authority prior to the negotiations taking place.
CEC noted that long term pay strategies would be
discussed at CEC in the near future.
Business performance and the Operating Plan and
Budget
CEC noted Roger Tabor’s presentation outlining our
current position. The variance between profit reported
to POEC and that forecast by business units was £9.5
million adverse.
CEC noted the position of the operating plan and budget
and the action taken to satisfy the requirements of the
Chief Executive. An expenditure gap of £19.6 million
remained. Directors would meet separately to agree
how this gap would be closed.
CEC agreed that the roll forward base used to settle this
year’s difficulties could not be used again in subsequent
years since it does not reflect accurately the basic
operating cost of our new organisation.
Leadership feedback
Due to time constraints it was not possible to discuss
this item. This will be discussed during the next
opportunity at a prayer session.
Richard Dykes
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Item 7
7a
7.2
Item 8
8.1
8.2
8.3
8.4
Item 9
9.1
9.2
Communication
Performance for 1993/94 should be communicated to
business unit leaders through circulation of slides
presented at the meeting and by a covering note from
Roger Tabor
Progress in settling the operating plan and budget
should also be communicated to business unit leaders as
soon as possible.
Other Business
CEC noted Richard Dykes’ report on the outcome of
the recent POEC meeting.
POEC expect firmer forecasts from the businesses on
financial performance next time. There was a concern
on how volume for Girobank and Parcelforce business
was calculated, given the recent changes reported.
There was concern over how much all of the businesses
spend on publications. In particular it has been
suggested that Post Office Counters’ review and
accounts be a strongly branded part of the corporate
publication rather than a separate document.
CEC should feed their comments on the proposal for
this year’s business plan document to Scott Duncan by 4
February 1994.
To ensure that CEC members are using their time
effectively, Ben Callan will be interviewing each
member and suggest improvement for the CEC as a
team.
Mike Flanagan will be nominating representatives to sit
on the focus groups testing the ideas resulting from the
supply chain review.
Review of meeting
positive
© topics this time were very interesting
¢ inputs were of a very high quality and professionally
delivered
¢ the finance presentation was spectacularly lucid
improvement opportunities
* not all the items on the agenda were covered
© the process of having authors of papers present was
very effective and this should be encouraged.
Roger Tabor
Roger Tabor
CEC members
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