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POST OFFICE LIMITED
GROUP EXECUTIVE REPORT
Title: Ethos Programme Meeting Date: I 13'* September 2023
Author: im Ferkins, Programme Sponsor: Owen Woodley, Deputy CEO
Input Sought: Discussion and Approval
The Group Executive is requested to:
i. Approve the initial scope of the Ethos programme;
ii. Approve the proposed timeline of the Ethos programme; and
iii. Commit to the investment of time as a Group Executive to enable the programme
scope.
Executive Summary
A noting paper on Cultural Transformation went to the Group Executive Meeting on 02"
August 2023.
Critically, the Ethos Programme is not a ‘culture change’ programme and will not set out to
change the culture of Post Office. Instead, it is a programme that sets the foundations to help
others evolve the culture of the organisation through consistent approaches, iconic actions
and systemic change over time. This recognises that culture is an evolving set of beliefs and
attitudes, rather than an end state to be achieved. What the programme will do, however, is
ensure that the culture of the organisation can be measured and assured - providing the
clarity that is currently missing.
Ethos will increase the visibility and measurability of the Post Office’s culture to a broad range
of audiences - its employees, Postmasters, commercial partners, shareholder and other
stakeholders. The programme is expected to run to at least April 2024.
The programme is likely to consist of 5 initial core workstreams - one to support the Group
Executive; another focused on People; a further stream on Ethics and Governance; a work
stream on Assurance, and a stream of work focused on ‘plumbing’ or ‘hardwiring’ ethos into
the organisation.
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Report
Overview:
1. There has been a lot of action taken over the last 4 years to change Post Office with
significant focus on, and achievement in, addressing the criticisms of the organisation in
the Common Issues and Horizon Issues Judgments.
2. Despite this work, and further work undertaken in the People team, the organisational
culture is still unclear and is not sufficiently measurable (and therefore, evidencable).
3. There are 5 key contributing factors to this:
a. there are overly complex frameworks (e.g. purpose, strategic intent, ways of
working, draft leadership behaviours, policy documents) in use across the
organisation;
b. actions and behaviours of leaders are still seen to contradict the stated
expectations in these frameworks;
c. the organisation’s guiding ethics and beliefs are not defined and, therefore,
cannot be shown to be fully embedded in the organisation;
d. assurance and holistic measurement of the organisation’s cultural health is
missing;
e. Ownership of culture has not been seen to sit with the Group Executive
4. To resolve these issues, an ‘Ethos’ programme will run from now until at least April
2024.
5. Ethos will focus on culture as applied to the broadest definition of Post Office as an
organisation. It is important that the ethos of Post Office is clear and evidencable to our
employees, to Postmasters, to commercial partners, to our shareholder and to other
stakeholders.
6. Efforts around culture to date have focused on employees or Postmasters in relative
isolation and the Ethos programme will draw all the current cultural transformation
activity into one place and assess it to ensure alignment and clarity (broadly using a
start, stop or continue approach).
7. Ethos will also aim to go further than previous culture activity in 2 key areas:
a. the programme will consider the role of ethics in the organisation, drawing on
the work that has started with the Institute of Business Ethics, so that Post
Office can evidence the ethics and morality in its decision making going
forwards.
b. the programme will also establish the shared guiding beliefs of the organisation
so that any values, behaviours and ways of working are aligned to, and outputs
of, the shared guiding beliefs.
Expected outcomes:
8. To succeed, the programme will need to achieve the following outcomes:
a. establish a clear definition of the guiding ethics and shared beliefs of the
organisation;
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b. deliver some iconic actions that redefine culture through actions rather than
words;
c. enable an organisation-wide reckoning with the past - it is vital that the
conditions that allowed past failings to occur are recognised, understood and
widely known;
d. radical simplification of the frameworks in place associated with culture;
an agreed set of metrics or a scorecard to facilitate measurement of
organisational culture;
f. ongoing assurance of the organisational culture
Approach and proposed workstreams:
The Group Executive workstream
9. To achieve these outcomes, the Group Executive must lead on defining the guiding
ethics and beliefs and on delivering the first set of iconic actions.
10. Industry best practice and research clearly demonstrates that unless these activities are
completed by the most senior leaders in an organisation they are unlikely to become
accepted or embedded within an organisation.
11. Furthermore, given that only 39% of respondents in the November 2022 Employee
Engagement Survey agreed that senior leaders lead by example and behave in line with
our Ways of Working, it is important that the Group Executive don’t just sign up to, but
authors, owns and delivers against newly defined guiding ethics and beliefs.
12. To enable the Group Executive to do this, we are considering, subject to procurement
processes, working with a specialist external provider. This external support will likely be
from a consultancy specialising in organisational culture - for example, businessfourzero
who have helped Tesco, TSB, bp, Aviva and D&G amongst others with similar work and
with impressive results.
13. The external support would provide stretch and challenge to the Group Executive on
their role in setting and role modelling culture in the organisation. We will also be able to
assess whether there is a role or requirement for external support in further Ethos
activity.
14. The time commitment required for the Group Executive with the external support would
likely include a one-to-one telephone consultation and two sets of 2-day offsites. We
need to get on with these and are therefore proposing to do them in October.
15. The indicative cost of the services of an external consultancy is yet to be confirmed and
any funding requests would be presented to IADG.
16. While it is important for the Group Executive to lead on defining the guiding ethics and
beliefs and on delivering the first set of iconic actions, several additional activities will be
delivered cross-functionally across the organisation. These can be categorised into four
further workstreams:
a. People;
b. Ethics and Governance;
c. Assurance; and
d. ‘Plumbing’ or ‘Hard-wiring’
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People workstream
The key activities of the People workstream will include, as a minimum:
17. Ensuring that the guiding ethics and beliefs and any associated behaviours are built into
the performance management cycle and introducing 360-degree feedback into talent
and performance conversations for all employees.
18. Recognising individuals who demonstrate the ethics, beliefs and behaviours of the
organisation both informally and through formal recognition processes.
19. Consideration of the role that an ideas scheme or platform can play in strengthening the
connection between employees, Postmasters and senior leaders.
20. Developing an externally facilitated leadership programme for senior leaders in the
organisation to develop self-awareness, potential and cultural awareness in line with the
defined ethics and beliefs of the organisation. This is likely to be a more intensive
investment in a smaller number of key leaders and key future leaders and build on the
Leading to Serve content that has already been delivered to a wider audience.
21. This programme needs to feel very different to previous leadership development in the
Post Office and is likely to involve more financial and time investment than any previous
leadership development completed by our leaders. The aim is for one key investment in
leadership capability to have a sustainable and long-term impact on leadership in the
organisation.
22. Developing an immersive experience that allows all our people to understand the
conditions that led to historical failings - and the human impact and emotional turmoil of
these failings - so that everyone working within the organisation is, in effect, an early
warning system that safeguards and regulates the behaviour of all.
23. Reviewing all Post Office personnel who were employed prior to the Group Litigation to
ensure that those who work for Post Office today are able to work in line with the
cultural requirements of the organisation today and are not employed in roles that could
create a conflict of interest in resetting the organisation post the Group Litigation.
24. In addition to this, developing specific guidance for ‘managing cultural
underperformance’ to allow line managers to quickly and effectively manage any
behaviour that is not in line with the cultural requirements of the organisation.
25. Reviewing the current usage of consultants and contractors in the organisation, bringing
a proposal for action on reducing the proportion of the workforce made up of
consultants and contractors and a proposal for targets and sign off on the future use of
consultants and contractors. This is required because cultural alignment of consultants
and contractors is more difficult than for employees and significant use of consultants
and contractors is likely to impact progress on cultural change required in the
organisation.
Ethics and Governance workstream
The key activities of the Ethics and Governance workstream will include, as a minimum:
26. The introduction of a simple ethical decision-making framework for use by anyone in a
decision-making role in the organisation when faced with decisions that they may feel
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uncomfortable making. This is a best practice approach, used, for example, in the Home
Office following lessons learnt from Windrush about the lack of engagement and
empathy with those impacted. It will be based on the guiding ethics defined by the
Group Executive and will be particularly important in decisions made concerning
Postmasters.
27. Consideration of the need for a Board sub-committee, with responsibility for ethics. This
may be in a traditional ESG (Environmental, Social and Governance) form or a more
tailored form - for instance just focusing on Ethics and Governance (E&G). The role of
the sub-committee will be to review and monitor:
a. Post Office’s conduct regarding its obligations, reputation and opportunity as a
responsible corporate citizen;
b. the delivery of ethical and governance commitments;
c. the alignment of internal plans and policies to the ethical guiding beliefs of the
organisation;
d. that an external perspective is considered in Post Office’s view of its ethical and
governance performance and strategy
28. Consideration of the need for appointment of an Ethics Advisor whose role it will be to
ensure the Board and/or the sub-committee of the Board is tasked with ethics
considerations, obtains independent ethics advice or appoints an existing Non-Executive
Director to lead on ethics considerations and chair the sub-committee of the Board.
29. Simplification of Post Office governance including consideration of membership of key
governance groups. This will be led and implemented by the Chief of Staff but given the
impact that governance has on the ethos and culture of the organisation is included here
for completeness.
Assurance workstream
The key activities of the Assurance workstream will include, as a minimum:
30. Creating an agreed set of measures or a scorecard of the cultural health of the
organisation. This measurement needs to consider the cultural health of the organisation
as experienced by our employees, Postmasters, commercial partners and other
stakeholders - it is therefore more all-encompassing than any existing measures.
Progress needs to be measured over time and the creation of a single, agreed scorecard
will ensure that the measure of cultural health used by the Shareholder is the same as
the internally used measure.
31. The agreed set of measures or scorecard will need to include people measures -
including engagement and EDI metrics, Postmaster measures - including engagement
and Common Issues Judgment remediation metrics, and other measures of the cultural
foundations of the organisation potentially including Speak Up, safety, and digital
readiness.
32. Definition of how, beyond quantitative measurement, Post Office assures its guiding
ethics and beliefs are delivered against by its people. Longer term, this is likely to be
through the performance management cycle, but in the short to medium term there
may be a requirement for roles with specific responsibility for assuring the culture of the
organisation. These roles would be impartial and independent of management, reporting
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to the Chairman or Non-Executive Director with responsibility for ethics and could be
based around the role of the independent side (formerly the critical side) in the John
Lewis Partnership model. In the short to medium term, this could also allow upweighting
of assurance around Common Issues Judgment remediation.
‘Plumbing’ or ‘Hard-wiring’ workstream
33. The key purpose of a ‘Plumbing’ or ‘Hard-wiring’ workstream is to ensure that all aspects
of the organisation are aligned to the defined guiding ethics and beliefs of the
organisation - this includes the language and nomenclature used in the organisation,
symbols of the ethos of the organisation, and rituals and routines used in the
organisation. There is also a need to ensure that radical simplification of existing
frameworks is a deliverable for the programme.
34. There are two key areas where the defined guiding ethics and beliefs need to be
‘plumbed in’ or ‘hard-wired’. These are:
a. Communications - The ethos of the organisation needs to be a ‘golden thread’
through all internal and external communications; and
b. Policies - A full policy review to assure the fit with ethos will need to be
completed. Some of the key policy areas that will require review are:
i. Postmaster Policies - to ensure that the guiding ethics and beliefs of the
organisation are apparent to Postmasters
ii. Recruitment and onboarding - to ensure Post Office is hiring in line
with the ethos of the organisation
iii. Learning and development - to ensure that Post Office is developing
the ethos of the organisation through its people
iv. Speak up - to ensure that formal and informal speaking up consider
the guiding ethics and beliefs of the organisation and all stakeholders
know how to report issues relating to these
Next Steps & Timelines
35. An outline of the Ethos programme will be taken to the Quarterly Shareholder Meeting
on Thursday 14" September and this paper will go to Board on Tuesday 26" September.
36. A full programme plan for Ethos will be brought to the October Group Executive and to
the October Board.
37. Funding required for the programme will go through the normal IADG processes.
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