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POST OFFICE LIMITED
BOARD REPORT
a People Strategy I Culture, Talent ; ,
Title: and Capability Meeting Date: I 27 July 2021
. Daisie Jope, Organisational Design . Angela Williams, Interim Group
Author: I Director Sponsor: Chief People Officer
Input Sought: Discussion
You will be discussing our proposed 2025 vision during the 27/28 July Strategy Away Days,
including detailed discussions focused on the four major activity areas that deliver it:
Commercial (Mails and Banking Automation), Postmaster Engagement, Network Strategy and
Technology (Digital Transformation / SPM).
A key enabler of all aspects of these activities, and the successful delivery of the overall
strategy, is to ensure that we have the right people, with the right skills and capabilities in
place, for the right period of time. This paper asks you to review and discuss the proposed
approach to the People strategy and activities that will enable delivery of the overall business
strategy and ensure we have the right culture, talent and capability in place at Post Office to
meet out 2025 strategic objectives and vision.
Previous Governance Oversight
Organisational Effectiveness - People Change Projects
e Board level Approvals:
o POM / OD - Board Approval (June), PRB, IC (July) - returning for approval in
December.
« PRB/IC Approved
o Culture Transformation programme - returning for approval in
September/October.
o PSSC Success Factors - closing in December.
« New projects - being scoped/defined:
o Talent + Capability Transformation
o PSSC Service Now - OD Enablement
o Other OD Enabling projects — to be defined through OD work.
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The Strategy on a Page, which has been developed to provide a framework for engagement
and focus across POL for the coming years is shown below, and has provided the backdrop for
the development of a clear and focused People Strategy:
Executive Summary
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The Post Office — Our Strategic Roadmap
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“To work in partnership with our postmasters tomake the services people depend on
accessible in communities across the UK”
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Ramedying the Past
This paper positions the enabling activity required to deliver the 2025 Strategy and,
specifically, the four programmes that will drive it:
e Commercial (Mails and Banking Automation)
* Postmaster Engagement
e Network Strategy
« Technology (Digital Transformation / SPM)
Currently, we do not have all the right capability in the business to deliver these priorities.
We need to start laying the foundations now for these key people enablers, which we believe
are:
Culture
Organisational Design
Talent and Capability
Reward and Recognition to ensure we are competitive in the marketplace
In this paper, we have outlined the People approach and subsequent initiatives that are
required to meet our aspiration to ensure the organisation is ready, willing and able to think
and act like a retailer. To deliver our strategic objectives, we need to fundamentally reset
the business as a commercial retail and financial services business with a social
purpose, with the right cost base, talent and culture, enabled by the right technology and
systems.
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We have also included a PowerPoint deck to be read alongside this paper, which provides an
aesthetic version of this paper.
We will return to Board in September with the outputs of this Strategic Review and input from
the thinking at the July Board Strategy sessions including detailed roadmaps, approach and
measures for success for the core activities.
Questions addressed
1. What is the context of the People Strategy and roadmap towards building culture, talent,
capacity, skills and capability to meet our 2025 vision?
2. I What critical skills gaps do we face across the four major activity areas?
3. What is the People Strategy to enable the delivery of our 2025 vision?
4. What does the Culture element of the People Strategy look like?
5. What does the Organisational Design element of the People Strategy look like?
6. What does the Talent element of the People Strategy look like?
7. I What does the Reward and Recognition element of the People Strategy look like?
8. What other People activities are being planned to enable the People Strategy?
Report
1) What's the context of the People Strategy and roadmap towards building culture,
talent and capability to meet our 2025 vision?
1. To meet our 2025 vision, we have identified several contextual issues that need to be
resolved to address the past, deliver the present and put the foundations in place to deliver
our future aspirations. These are:
« Address the Past:
°
Culture and Legacy Issues: The words used in the Court of Appeal judgement
about POL, published on 23 April 2021, were “Egregious, oppressive, obstinate,
complacent and self-interested.” The end state vision is to have a culture that is
psychologically safe, engaging, humble, high performing, collaborative and
focuses on delivering for our customers, through and with our Postmasters every
day.
Delivery Focus: Today, the experience for customers is fragmented and
inconsistent. We are focused on fixing the basics and integrating legacy systems.
Things are not easy for our Customers, Postmasters or Employees. To enact this
technological change, we need strong IT and digital capability where knowledge
is maintained and embedded within the organisation. We need to ensure we have
the right talent to deliver a major systems transformation, both culturally and
technically, for our Customers, Postmasters and Employees, including supporting
any new contract types that may be required.
« Deliver the Present:
°
Understanding our Postmaster and Customer: To date, we have not built the
story and narrative about what makes Post Office an attractive place to work and
articulate our approach as a franchise operation for our people, our Postmasters
and our customers. Ultimately we are building our Postmaster, Customer and
3
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People promise to rebuild trust and grow engagement with our brand and the
services we offer. The business is starting to think like a retailer and build the
voice of the Postmaster into the plans. Our end state is a definite improvement
in our [to be defined] trust index rating, ensuring our people are aligned with the
strategy and are clear on their role in delivering for Postmasters and Customers
and we can attract and retain high performing talent to fill the roles that we need
now.
« Put the Foundations in Place to Deliver the Future Ambitions:
o Strategic Direction: Prior to March 2021, we didn’t have a clear strategic direction
to meet long-term self-sustainability. The 2025 vision has now been defined, and
we are reviewing how we can ensure we are set up to deliver the future. We will
need to invest in attracting, retaining, developing and rewarding great people,
with the right skills, capabilities and behaviours to ensure the organisation has the
capability to be fit for the future.
2. We also came to you in March to set the scene on the internal leadership capability and
talent in the organisation that underpins these contextual issues.
2) What cri
ical skills gaps do we face across the four major buckets of activity?
3. In order to deliver the Strategy on a Page, we need to ensure we have the right skills in
the business to deliver the major activity areas:
Major Activity Where we are now Where we need to be
Area
Commercial Lacking in digital capability, particularly User I Fully transitioned from ‘relationship
(Mails and Experience and digital journeys; Lacking in I management’ product ownership to digital
Banking Mails capability depth, particularly around product ownership, with strong negotiating
Automation) strategy, operations, customer pricing,
carrier pricing and commercial
management.
and influencing skills to manage partners. Fully
realised value chain for each product and the
core skills to manage this whether a platform
or distribution product.
in the business that can re-frame the
business to “think like a retailer” - this puts
a strain on their capacity. We have started
the journey to turn data into postmaster
Postmaster Partially consolidated field teams, but more I Clear service and support model with engaged
Engagement work is required to understand what the field support with the right skills, in the right
role of the field team should be, and what places at the right times. Cultural pivot for the
skillsets they need. Lacking in talent organisation to understand these roles should
development / succession plans in the field I be for our high potentials, bolstered by a talent
space. Contact centres across both strategy (graduate schemes / D&l initiatives)
Postmaster and Customer estate are that ensure we have high potential talent in
fragmented and inconsistent — various KPIs I these key roles. Underpinned by a clear
and measures, which don’t consistently contact centre strategy where agents are
identify areas to improve. helpful and motivated to add real value to the
Postmaster.
Network We are a franchise organisation but we only I Led by thought leaders with strong
Strategy have a handful of franchise thought leaders _I backgrounds in franchise leadership.
Postmaster insight is systematically used to
inform strategic and operational decisions.
Franchise leaders understand our Postmaster
Promise and want to work for Post Office to
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insight, but now need the business to
understand it.
We have identified in-branch automation as
a major lever to improve postmaster
profitability but experience from other
franchise organisation like McDonalds
shows that a diverse range of capabilities
are required to make this a success which
we currently lack, including customer-
centric design thinking and UX expertise.
While we have a long track record of
managing network change, we don’t
currently have the capacity to manage
wholesale reform of contracts and
remuneration. Lastly, we need to continue
to strengthen the Area Manager population
to support postmasters with both the retail
and PO side of their business.
continue to build the franchise. In short, we
know how to create propositions which work
for Postmasters and their customers. From a
retailer perspective, managing business change
and engagement is embedded as the norm.
Beyond 2025, we plan to restructure contracts
and remuneration but this will require
significant investment in resource to deliver
this business change / communications and
engagement process.
Technology
(Digital
Transformation
// SPM)
Core digital build skills are held by external
parties (contractors, consultancies or
suppliers) which means that deep technical
knowledge on the IT build is not retained in
house. Skilled IT workers are not attracted
to Post Office because of our total reward
package, and overall proposition hasn’t
been defined. Service / Run IT roles are
difficult and clunky, because of legacy
issues, so individuals unable to learn
forward facing technology skills whilst still
tethered to past processes.
Core IT operating model is defined so we are
clear which skillsets are permanently needed,
and which ones are more temporary and can
be bought in. Core skillsets include
development, testing, data, architecture,
change engagement. The IT leadership team
will have clear succession plans and we will
grow our own digital / IT talent internally. Our
approach to IT suppliers will be considered
with a clear in-sourcing / out-sourcing strategy.
Digital workers / IT builders will feel proud to
work for Post Office and be remunerated
according to their market value.
Outside of the IT Team, the business will
understand more about digital ways of
working, and understand its usage and power.
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3) What is the People Strategy to enable the delivery of our 2025 vi
in?
4. In order to deliver the Strategy on a Page, we have built a People Strategy to enable the
2025 vision. The strategy is made up of 6 pillars of activity and aims to address our Past,
Present and Future contextual issues.
In partnership with the business, we will invest in attracting, retaining and developing great
people to ensure the organisation has the capability to be fit for the future.
! t
i {
t
> !
, '
{ People Proposition Rebuilding Relationships Data & Technology i
14. Detning& atoning ouremployerbrana.& I I‘ Ensuring posmasters are ot thebestof 4. Enabling sf service '
H Narrative to (rebuild POL reputation 2 Rendtengi Soop strategy for at 2. Streamlining systems H
1 I 2. Turing communication into engagement 3. Eabed nom ways of woring & ceive cutorel 3. Building a core suite of content H
1 I 3. Building a strong franchise proposition for change 4. Utilise technology for engagement Hi
t ail Postmasters 4 Build strong and beneficial relationships with '
H 4. _IRVER enables POL to be fit for the future shareholder and suppliers ‘
1 1
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' oH) HOY '
t ma = H
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H Simplifying the Basics Talent & Capability Organisational Readiness '
1 I 1. identity & improve core activities 1. Identity & develop critical skits required so 1, Building or. efectvanase & 0 Hl
1 I 2. Complete major regulatory & historic issue we're fit for future 3. Change eset a on enebiee of business t
1 projects 2. Build & deliver attraction & retention sioteny Golwery H
I I 3. People Shared Services process strategy 4 Reward, recognition & performance as 8 key '
1 I improvements 3. Embed diversity & inclusion enabler t
! Bute eect jo design & eritecre '
' 1
' 1
Team capability and performance
Team rhythm and routine (RACI and meeting cadence)
5. To address our PAST - where the business retained much more siloed thinking, lacked a
retailer/customer service approach and the historic issues that have arisen we have to:
= Embed new ways of working and drive cultural change, re-calibrating past
behaviours
= Complete historic issue projects, ensuring the right organisational design for the
Historical Matters and Inquiry Teams - and building robustness into our
operational structures
= Complete major regulatory projects, addressing historic pensions issues
= People Shared Services process improvements, improving our colleague promise
and driving efficiency.
6. To deliver the PRESENT - we need to pivot the business to think more like a retailer —
we need to:
= Evolve the culture and leadership capability
= Ensure organisational readiness through reviewing our organisational design,
capability and skills.
= Launch the POL ambassador programme, so everyone is engaged, aligned and
understands their role in delivering the strategic priorities
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= Ensuring the right reward and recognition is in place through clear recognition,
remuneration and incentive structures
= Enabling union relationships so we are fit for the future
= Building a strong franchise proposition for all Postmasters including addressing
the Starling challenge.
7. To lay the foundations to meet the aspirations and deliverables of the FUTURE - in
which the business will be delivering like a retailer - we have to:
= Build and develop critical skills to transform the organisation for Postmasters and
customers
= Embed diversity and inclusion into our Postmaster, Customer and Employee
promise
= Ensure Reward, recognition and performance is a key enabler of POL’s success
= Deliver and embed IT and ital transformation and adoption, enabled by
effective resources and prioritisation of ensuring we have the correct knowledge,
skills and experience within the organisation.
8. These activities make up a holistic People Strategy from which a clear roadmap can be
developed and delivered against, enabling the business to have the right talent, culture
and capability in place to meet the 2025 vision.
4) What does the Culture element of the People Strategy look like?
9. To deliver the organisation Strategy and drive trust in the Post Office, we need to ensure
we have the right culture and ways of working that will build trust for and with our
Postmasters, our customers and our people. To support this, we aim to build our company
promises and create tangible measures of success / trust index measures (shown in
brackets) for each of promises that will enable us to track progress and ensure we continue
to focus on what is important to deliver the overall Strategy. This will be delivered by the
development of the following:
« Customer promise (Customer NPS [metrics to be defined])
e Postmaster promise (Postmaster Satisfaction - as defined by the Quadrangle metrics)
« Employee promise (Colleague NPS [metrics to be defined])
10. These promises will be supported by a consistent internal and external narrative that will
drive and lead engagement for our customers, postmasters and people. Clear action plans
are being developed to deliver each promise and define the correct measures to drive
business output:
Promises What difference does having the Key Deliverables
promise narrative make?
Customer « Creates alignment and clarity for « Alignment on what good
Promise - employees on what good looks customer service will look like -
People team as like for customer service at Post input from key teams e.g.
facilitators and Office Commercial, Retail + Franchise
enablers «Gives direction on journey Network etc.
design, target measures and « Agreed ownership for pivoting
approach for tracking these towards the Promise, e.g.
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Serves as anchor for aligned
branding and messaging
(internal and external)
Enables a consistent,
recognisable Post Office service
Business change considerations
for implementing:
© Approaches, action plans,
adjustments to
supporting change
projects.
o Key insights, journey
design, end metrics and
leading indicators for
course correction.
Postmaster
Promise -
People team as
facilitators and
enablers
Clearly articulates our strategy
to work collaboratively with
Postmasters to improve our
service, services and products.
Leading to reduced
waste/errors, improved
retention, stronger partnerships
and greater profitability
Gives direction on journey
design, target measures and
approach for tracking these
Serves as anchor for aligned
branding and messaging
(internal and external)
Enables a consistent,
recognisable Post Office service
Alignment behind what good
Postmaster experience will look
like and what we expect from
Postmasters in return.
Agreed ownership for pivoting
towards the Promise E.g.
Business change considerations
for implementing:
o Approaches, action plans,
adjustments to
supporting change
projects.
o Key insights, journey
design, end metrics and
leading indicators for
course correction.
People Promise
- People team
lead and
managed via
People Strategy
and Projects
Creates alignment and clarity for
employees on what good looks
like for them at Post Office
Improves employee engagement
and satisfaction. The 2020
Gallup data shows, companies
with higher employee
engagement see over 20%
higher productivity than the
competition
People feel invested in, know
what to expect from Post Office
and enjoy their experience
leading to a better service for
customers and Postmasters
Serves as anchor for aligned
branding and messaging
(internal and external)
Enables a consistent,
recognisable Post Office
colleague experience
A clear definition of the new
Employee experience at Post
Office. Supported by clearly
defined Employee Value
Proposition and updated
branding to attract and retain
good talent.
Talent attraction strategy,
approaches and messaging
updated.
Internal communication and
engagement approaches pivoted
to support.
Guidance and coaching for
leaders in creating a positive
colleague experience,
engagement and high
performing teams
New tools and techniques to
support engagement
Colleagues as ambassadors for
Post Office
11. Based on Postmaster and Employee feedback, we know we must move the current Culture
from what it is today, to an organisation that is fit, capable and agile for the future with
the right talent, skills and behaviours. This cultural shift will enable us to meet our
strategic vision. We will measure this by reassessing our OHI scores in 2022, compared
to the late 2019 results.
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12. Below we have included ways in which we want to show how our ways of working are
transforming the business:
Now Future
Postmaster Focused (in pockets) Postmaster Focused (as a way of life)
Lack of direction Purpose, vision and plan
Managers Leaders
Firefighting Forward planning, outcome driven
Slow to act Agile and responsive
Parent/Child Adult/ Adult
Hierarchical and bureaucratic Trusted to do the right thing
Not heard or listened to Everyone has a voice
Lack of accountability Empowered and accountable
Siloed thinking Cross functional working
Busy and unsure what to focus on Highly Productive and Motivated
In order to deliver these promises and embed our new ways of working, we have put in place
a Culture Transformation programme with a three-year roadmap as shown in Appendix 2.
5) What does the Organisational Design element of the People Strategy look like?
13. The 2025 Strategy will be enabled by our change in approach to Organisational Design.
14. We recently came to the Board in June to provide an update on the next phase of
Organisation Design, highlighting that structural “quick wins” are no longer an option to
release FTE — we have already streamlined processes and activities, through finding clear
efficiencies, and addressed the issue of the organisation being cost heavy and duplicative.
Without significant investment in technology, systems and data in the future, we will
struggle to reduce FTE further.
15. Whilst we have only tackled FTE reductions in the past, now we need to widen the cost
optimisation scope to four strands:
« Continuing to reduce FTE staff cost
« Contractor spend
* Consultancy spend
« Non-Staff Supplier spend, e.g., IT supplier spend
16. By rightsizing our reliance across these other strands of resource cost, we can achieve
significant savings to the business and reduce our “cost to serve.” We will do this by
identifying opportunities for entire workforce optimisation, which pivots our measures of
success from FTE reduction to overall “cost to serve” - this will include FTE reduction, as
well as the other strands outlined above.
17. By looking at cost holistically, we can build a better organisation, with the right resources
and capabilities in the right places, so we are set up for a sustainable, successful future.
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18. Please see Section Financial Implications for the proposed forecast on overall “cost to
serve” reduction.
6) What does the Talent and Capability element of the People Strategy look like?
19. To bridge the critical skills gaps identified in Question 2, we need to build a clear Talent
and Capability strategy which aligns to the workforce needs to deliver the 2025 vision.
This requires developing a clear Employer/Employee proposition that enables us to attract,
retain and motivate employees throughout their time with Post Office. We need to be able
to differentiate ourselves in the market and ensure we can attract the right skills,
experience and behaviours to ensure we are fit for the future.
20. We will return in September with a roadmap which answers how:
« We will reposition our employer brand, refreshing our messaging in support of our
new vision, strategy and narrative to attract the best talent
e We will strengthen the talent and succession pipelines in the organisation to ensure
a pipeline of skills and capabilities to deliver the strategy, underpinned by a clear
Diversity and Inclusion strategy
e We will build the Employee Promise to enable the organisation to attract and retain
top talent and build short, medium and long term talent pools.
7) What does the Reward and Recognition element of the People Strategy look like?
21. It is becoming more challenging to attract key talent with the remuneration provision we
currently have in place especially as we move into a more technologically/digitally driven
world with a scarcity of talent and skills in this area. While we have implemented variable
pay arrangements for the 2021/22 and LTIP for 2021-24 we do need to undertake a full
reward and recognition review, by job family, and at all levels across the organisation,
including the Group Executive, and Senior Leadership Population to ensure we can be
competitive and attract the best talent to drive and deliver our strategic priorities.
22. In 20/21, we hired 87 roles with IT and Digital capabilities (primarily in the project space
as we haven't designed the IT Target Operating Model yet) with an average time to hire
of 65 days and a cost of £202k on recruitment agency fees. This capability build is slowed
by an annual turnover of ~6% employees. Today, we have 99 open IT and Digital
vacancies to meet SPM / IT project demand. The information we are getting from
candidates is that the reward and recognition package isn’t meeting market expectations.
We need highly skilled IT workers that are more focused on being ‘portfolio workers’ than
long-term employees and we need to update our Reward and Recognition strategy to meet
this demand.
23. To note, this isn’t just in IT and Digital. There are also examples in senior, roles requiring
specific skills and experience in other areas of the business that are difficult to recruit for.
For example, in Commercial, the Head of Letters and Parcels (a direct report to Proposition
Director — Mails) has been live since September 2020 and we are still struggling to find
candidates with the right level of experience and innovation. In the Legal, Compliance and
Governance function, we are encountering issues with the 2 x Director vacancies we’ve
introduced to the structure to manage Historical Matters and Inquiry respectively.
Candidates are telling us that the profile of the role, longevity of the role (fixed term
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project) and the remuneration offered don’t match the level of capabilities required. We
need to address flexibility in our offer to be more agile as candidate markets change.
Once we have identified the capability build we need to deliver the 2025 strategy, our
Reward and Recognition strategy will be reviewed and informed, in order to attract and
retain the best possible talent, with the right job family, performance-driven reward.
What other People activities are being planned to enable the People Strategy?
As well as the Culture Transformation and Organisational Design review, there are suite
of core activities that the People Team will need to enact to meet our 2025 vision. We
have grouped these into the 6 buckets of deliverables that make up the People Strategy
which are shown in the Appendix 3.
Financial Impact
26.
27.
This is a Discussion paper which synthesises many People programmes, with their own
business cases, into one clear Strategy paper. Therefore, if there are any questions on 7A
financial implications, we would recommend that relevant detailed business cases are .
reviewed.
However, given the importance of the OD programme in the Strategic Plan submission,
we have pulled out the top line cost and benefit below.
Organisational Design (a.k.a POM - “Post Office Operating Model”)
28.
By designing the organisation for the future now, we propose to return to the Board in
September with a suite of levers that can be pulled (our OD Strategic Review) which
identifies opportunities across the workforce and plans to reduce and avoid cost. The
numbers below have been submitted into the Strategic Plan funding request, as we believe
with the right investment into talent and capability now, we will be able to drive down
costs across the four strands of workforce optimisation (FTE, contractors, consultancies
and non-staff spend) over the coming years:
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29. POM benefits include j« sper annum delivered in Tranches 1 and 2. Outer year benefits
from FY23/24 activity will be delivered through both staff and non-staff cost reductions
(overall workforce optimisation).
30. In addition to the main POM programme, there are several other smaller Organisational
Design projects that are being delivered or planned concurrently. These are separated out
in order to reflect required technology and/or process re-engineering investment and
associated benefits in the same business case (e.g., FTE reduction):
* PSSC SuccessFactors Enablement
e People OD Enablement - Service Now
31. To be validated through current design work:
« Data OD Enablement
« Finance OD Enablement
Alternative Options
1. Do Nothing
32. We could relinquish funding and stop progressing the People initiatives. Risks are that the
business will not address “the past”, deliver “present requirements” or meet its 2025 vision
as it does not have the right talent, culture and capability to deliver the agenda.
2. Accelerate Faster
33. We could go faster but we would need greater investment in culture and organisational
design SMEs, or we would compromise quality of delivery.
34. There is also a point around capacity as you need business stakeholders on each
workstream to ensure the changes land and are embedded in the business. A recent pulse
survey of SLG colleagues indicated high workloads and serious fatigue, due to CV19 /
Inquiry / various deadlines, and we would be reluctant to increase the pressure on top of
this with a commitment to disrupt the business through major change in organisation or
culture. That said, we have committed to implement design workstreams and realise
benefit as soon as possible when they are designed and locked in, enabling benefit as
soon as possible in the process.
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Risk Assessment, Mitigations & Legal Implications
35. Tier 1 Risks fall into 3 main categories covering the following:
1. Talent and Capability - Tracking overall as RED
2. Culture and Brand - Tracking overall as RED
3. Organisational Readiness - Tracking overall as AMBER
36. As with the Strategy, all risks have designated direct risk owners within the People Team
although accountability for the overall risk may sit elsewhere. Tier 2 Risks are also being
tracked closely.
37. The People risk appetite for the Tier 1 risks is averse on the basis that if the risks are not
mitigated, we will not be able to deliver our 2025 priorities. However, individual
intermediate/Tier 2 risks may have a more flexible appetite.
38. Operational risk appetite examples have also been defined to ensure consistency across
the organisation in dealing with People related risks and issues.
39. A paper detailing these risks will be presented to RCC on 13" July 2021 and subsequently
to ARC on 26" July 2021.
Next Steps & Timelines
40. We will return to Board in September to update you on our approach and plans aligned to
the Strategic Plan and post the Board Strategy Day input:
« How we plan to address the past, deliver for the present and prepare to meet the
future
e Update on Culture: How we move the organisation to “think like a retailer” in terms of
our culture, behaviours and ways of working
« Update on Organisational Design: What are the outputs of our organisational design
review entail and what roadmap are we proposing
« Update on Talent and Capability: What are the plans are to meet our 2025
deliverables, including embedding diversity and inclusion
« Update on Reward and Recognition: What should the outline Reward and Recognition
strategy and framework look like to ensure we can attract, retain and motivate all
employees, which includes working with the Postmaster Team to ensure we have the
correct options available for future postmaster contract models
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Tab 7.1 People Strategy Report
Appendix 1
Please see supporting document - PowerPoint entitled "People Strategy Deck - July Board” for a more
aesthetic version of this report.
Appendix 2
Three-year roadmap for our Culture Programme:
Our Culture Programme — Three year Roadmap
Year 1- 2028-2022 Your 22020-2023 Yeor 32023-2024
Maturity timefine
Te
ee
promive
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Appendix 3
Activity across the People Strategy 6 buckets of activities:
People Where we are / why it's I What we are doing Where will we be
Deliverable I important
People + No Postmaster, Colleague or I + Define and deliver our + We are experts at
Proposition Employee brand or promise Value Proposition through understanding our
that supports our our Postmaster, Customer Postmasters, customers and
new vision, strategy and and Employee promises to colleagues
narrative. enable the organisation to
attract and retain. We are I * We have a clear promise to
+ Don’t attract the best focusing on each audience, that has been
entrepreneurs to the activated through a clear
franchise or talent to the + Re-designing our promises engagement plan
organisation
+ Creating promise
activation plans
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Tab 7.1 People S
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Defining our trust index
measures as measures of
success
Simplifying the
Basics
Major issues with legacy
technology, processes and
data
Current processes and
systems don’t make things
easy for our colleagues
Pensions Assurance
programme ongoing and
seeking resolution with our
pension's shareholder.
Focusing on process
improvement for our
people promise, improving
SuccessFactors, processes
and data flows with the
customer at the heart of
everything we do,
Building a People TOM that
more closely aligns with
requirements of our
colleagues and
Postmasters.
Changes we make to our
process improvements and
systems are informed by our
strategy
Movement to proactive,
rather than reactive, in order
to future proof
Rebuilding
Relationships
Fundamental reset of our
culture
Need to embed the Ways of
Working and put Postmasters
at the heart of our decision
making
No approach for future of the
workplace
Greater alignment required
with our stakeholders to
partner on shared vision and
suppliers on shared risks
Continue to embed our
new culture as part of our
Strategy, Narrative and
Promises to ensure in area
of our business our new
culture is tangible
Develop and share the
strategy, narrative and
promises
Build trust measures so
we know we're heading in
the right direction
Upskill our leaders and
frontline colleagues
Develop a Postmaster
empathy programme
Help our people to become
ambassadors of the Post
Office through embedding
our Ways of Working and
delivering the programme
Culture is embedded as a
core part of our Postmaster-
centric strategy. It is well
communicated and improves
business decisions and
operations
Talent and
Capability
Post Office must strengthen
the talent and succession
pipelines in the organisation
to ensure a pipeline of skills
and capabilities to deliver the
strategy
Building a clear talent and
capability strategy aligned
to the workforce needs to
deliver the 2025
Re-define our Talent
Management Process
Increase Leadership
capability through
delivering upskilling on a
Coaching Culture
Diversity and Inclusion
Reward and Recognition
We attract and retain top
talent at Post Office, and
people feel proud to work for
Post Office.
We have clear succession
plans and talent pipelines,
ensuring that legacy
knowledge is retained, and
we have the right talent in
place to lead Post Office
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Data and .
Technology
Focus on fixing the basics
and resolving issues with
legacy systems or policies
Things aren't easy for our
Postmasters or employees,
and we haven't enabled
technology
Good progress in
designing systems and
processes that improve
interactions across the
employee lifecycle
Identified other areas of
improvement and
roadmap to delivery
Investment is needed to
continue this development
Postmasters and people are
enabled, and all our systems
and processes are optimised
to deliver great interactions
Self-service is embedded and
we use technology for
engagement
Organisational
Readiness
Org model doesn’t meet our
2025 vision
Cost base is high across
temporary resources
(contractors, consultancies)
so legacy knowledge isn’t
maintained
Reward strategy doesn’t
align with 2025 vision, where
there is an ‘entitlement
culture’ at POL
Conducting a strategic
review which widens the
scope of the programme
to review overall
workforce optimisation /
cost to serve - identifying
opportunities across our:
Employee headcount
Contractor costs
Consultancy spend
Non-staff supplier spend
We're building a clear OD
strategy and plan which
we will return to Board in
September. The OD
strategy will be
underpinned by a Reward
strategy
Lean organisational model
with the right resources and
capabilities in the right
places, so we're able to meet
our 2025 vision without
reliance on external
capabilities and set ourselves
up for a sustainable,
successful future
We will have a performance
driven reward philosophy
that underpins this
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People Strategy:
Ensuring we have the Culture, Organisation, Talent, Capacity
and Capability to be fit for the future and deliver our 2025
ambition and beyond
July Board
Angela Williams
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Contents
- KBayeng edoog
You'll be discussing our proposed 2025 vision across 27/28 July at the Strategy Away Days, including
a detailed breakdown of the 4 major buckets of activity that deliver it: Commercial (Mails and Banking =
Automation), Postmaster Engagement, Network Strategy and Technology (Digital Transformation /
SPM).
This deck outlines the People enabling activity that needs to be done to ensure we are ready to
deliver these 4 major activity areas. We have outlined the approach and initiatives that underpin our
aspiration to ensure the organisation is ready, willing and able to think and act like a retailer. To
deliver our strategic objectives, we need to fundamentally reset the business as a commercial retail
and financial services business with a social purpose, with the right cost base, talent and culture,
enabled by the right technology and systems.
In this deck, we will cover:
* People Strategy which enables the business to meet its 2025 vision
* Spotlight on Culture pillar
* Spotlight on Organisational Design pillar
* Spotlight on Talent pillar
* Spotlight on Reward and Recognition pillar
* Next Steps - we will provide the more detailed delivery plans in September Board.
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Context and Background]
Address the Past:
Culture and Legacy Issues: The words used in the Court of Appeal judgement about POL, published on 23 April
this year, were; Egregious, oppressive, obstinate, complacent and self interested. The end state vision is to have a
culture that is psychologically safe, engaging, humble, high performing, collaborative and focuses on delivering for
our customers, through and with our Postmasters every day.
Delivery Focus: Today, the experience for customers is fragmented and inconsistent. We are focused only on fixing the
basics and integrating legacy systems. Things are not easy for our Customers, Postmasters or Employees. To enact this
technological change, we need strong IT and digital capability where knowledge is maintained and embeddedwithin the
organisation. We need to ensure we have the talent to deliver a major systems transformation, both culturally and
technically, for our Customers, Postmasters and Employees, including supporting any new contract types that may be
required.
Deliver the Present:
Understanding our Postmaster and Customer: To date, we haven't built the story and narrative about what makes
Post Office an attractive franchise operation for our people, our postmasters and our customers. We are building our
Postmaster, Customer and People promise ultimately to rebuild trust and grow engagement with our brand and the
services we offer. The business is starting to think like a retailer and build the voice of the Postmaster into the plans.
Our end state is a definitive improvement in our [to be defined] trust index rating, ensuring our people are aligned with
the strategy and are clear on their role in delivering for Postmasters and Customers.
Put the Foundations in Place to Deliver the Future Ambitions:
Strategic Direction: Prior to March 2021, we didn’t have a clear strategic direction to meet long-term strategic
plans. The 2025 vision has now been defined, and we are reviewing how we organise ourselves internally. We will
invest in attracting, retaining and developing great people, with the right skills, capabilities and behaviours to ensure
the organisation has the capability to be fit for the future.
We also came to you in March to set the scene on the internal leadership capability and talent
in the organisation that underpins these contextual issues
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“To work in partnership with our postmasters to make
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‘“We’re here, for the pedple who rely on us”
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the services people depend on
accessible in communities across the UK”
te ae
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“ ss We will build jie will create
Jin Mails, workingII strengthen our prioritise I 1 secure I commercial We will invest II value for our
I with more I I network, making strong, I free, II partnerships, to in new branch. I shareholder I
carriers and II sure we have trusting and II convenient and I launch new technology for with a
delivering more I I the right rewarding I reliable access I products and Postmasters and successful,
of what customers II branches in the relationships II to cash in II services in our online for II sustainable and
want and small II right locations with all our II community II branches and their customer I efficient
Epusinesses “need Tattonwide Postma: = mir = = a —
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We will work Ssly with government €o make sWFe that the people affected by past mistakes are given redress quickly, fai
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We must also embed the culture anything like this from h. ng again
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Critical Skills Gaps — Current State Assessment
Major Activity Area
Commercial (Mails and
Banking Automation)
Where we are now
Lacking in digital capability, particularly User Experience and digital journeys; Lacking
in Mails capability depth, particularly around strategy, operations, customer pricing,
carrier pricing and commercial management.
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Where we need to be
Fully transitioned from ‘relationship management’ product ownership to
digital product ownership, with strong negotiating and influencing skills to
manage partners. Fully realised value chain for each product and the core
skills to manage this whether it's a platform or distribution product.
Postmaster Engagement
Partially consolidated field teams, but more work is required to understand what the
role of the field team should be, and what skillsets they need. Lacking in talent
development / succession plans in the field space. Contact centres across both
Postmaster and Customer estate are fragmented and inconsistent — various KPIs and
measures, which don't consistently identify areas to improve.
Clear service and support model with engaged field support with the right
skills, in the right places at the right times. Cultural pivot for the
organisation to understand these roles should be for our high potentials,
bolstered by a talent strategy (graduate schemes / D&l initiatives) that
ensure we have high potential talent in these key roles. Underpinned by
a clear contact centre strategy where agents are helpful and motivated to
add real value to the Postmaster.
Network Strategy
We are a franchise organisation but we only have a handful of franchise thought
leaders in the business that can reframe the business to “think like a retailer’ - this
puts a strain on their capacity. We have started the journey to turn data into
postmaster insight, but now need the business to understand it
We have identified in-branch automation as a major lever to improve postmaster
profitability but experience from other franchise organisation like McDonalds shows
that a diverse range of capabilities are required to make this a success which we
currently lack, including customer-centric design thinking and UX expertise.
While we have a long track record of managing network change, we don’t currently
have the capacity to manage wholesale reform of contracts and remuneration. Lastly,
we need to continue to strengthen the Area Manager population to support
postmasters with both the retail and PO side of their business.
Led by thought leaders with strong backgrounds in franchise leadership.
Postmaster insight is systematically used to inform strategic and
operational decisions. Franchise leaders understand our Postmaster
Promise and want to work for Post Office to continue to build the
franchise. In short, we know how to create propositions which work for
Postmasters and their customers. From a retailer perspective, managing
business change and engagement is embedded as the norm. Beyond
2025, we plan to restructure contracts and remuneration but this will
require significant investment in resource to deliver this business change /
communications and engagement process.
Technology (Digital
Transformation / SPM)
Core digital build skills are held by external parties (contractors, consultancies or
suppliers) which means that deep technical knowledge on the IT build is not retained
in house. Skilled IT workers are not attracted to Post Office because of our total
reward package, and overall proposition hasn't been defined. Service / Run IT roles
are difficult and clunky, because of legacy issues, so individuals unable to learn
forward facing technology skills whilst still tethered to past processes.
Core IT operating model is defined so we are clear which skillsets are
permanently needed, and which ones are more temporary and can be
bought in. Core skillsets include development, testing, data, architecture,
change engagement. The IT leadership team will have clear succession
plans and we will grow our own digital / IT talent internally. Our approach
to IT suppliers will be considered with a clear in-sourcing / out-sourcing
policy. Digital workers / IT builders will feel proud to work for Post Office
and be remunerated according to their market value. Outside the IT
Team, the business will understand more about digital ways of working,
and understand it's usage and power.
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Strategic ambitions are supported by our People Strategy
In partnership with the business, we will invest in attracting, retaining and developing great
people to ensure the organisation has the capability to be fit for the future.
People Proposition
“aa
Rebuilding Relationships
Data & Technology
1. Defining & aligning our employer brand & 1 crowing ne ge are at the heart of 1. Enabling self service
narrative to (rebuild POL reputation Pan vols )sadee Ea 2 Streamining system ont
2. Turning communication into engagement 3. Embed new ways of working & drive cultural . Building a core suite of conten
3. Building a strong franchise proposition for change 4. Utilise technology for engagement
all Postmasters 4. Build strong and beneficial relationships with
4. IRJER enables POL to be fit for the future shareholder and suppliers
Simplifying the Basics Talent & Capability Organisational Readiness
1. Identify & improve core activities 1. Identify & develop critical skills required so 2 Redes cuca peanle cesta
2. Complete major regulatory & historic issue we're fit for future 3. Change reset as an enabler of business
projects 2. Build & deliver attraction & retention strategy delivery
3. People Shared Services process strategy 4. Reward, recognition & performance as a key
improvements 3. Embed diversity & inclusion enabler
5. Build effective job design & architecture
Team capability and performance
Mn ee a a a a eS OO a SS SS SS SS OO DD
Team rhythm and routine (RACI and meeting cadence)
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Our People Strategy builds a roadmap to 2025
Past
Lacking retailer mentality
= Embed new ways of working and drive
cultural change, re-calibrating past
behaviours
= Complete historic issue projects,
ensuring the right organisational
design for the Historical Matters and
Inquiry Teams - and building
robustness into our operational
structures
= Complete major regulatory projects,
addressing historic pensions issues
= People Shared Services process
improvements, improving our
colleague promise and driving
efficiency
Present
Begin to pivot POL to think like a retailer
= Evolve the culture and leadership
capability
= Ensure organisational readiness through
reviewing our organisational design,
capability and skills.
= Launch the POL ambassador programme,
so everyone understands their role in
delivering the strategic priorities
= Ensuring the right reward and recognition
is in place through clear recognition,
remuneration and incentive structures
= Enabling union relationships so we're fit
for the future
= Building a strong franchise proposition
for all Postmasters including addressing
the Starling challenge
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Future
Delivering as a retailer
= Build and develop critical skills to
transform the organisation for
Postmasters and customers
» Embed diversity and inclusion into
our Postmaster, Customer and
Employee promise
= Ensure Reward, recognition and
performance is a key enabler of POL’s
success
= Deliver and land IT and digital
transformation and adoption,
enabled by effective resources and
prioritises maintaining knowledge
within the organisation
These are all key deliverables to build a sustainable operating model to ensure POL delivers its strategic intent @
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What is the Culture element of the People Strategy?
To deliver the Strategy and drive trust in the Post Office we need to build the promises below. These promises set clear expectations of “what
good will look like” , supported by a consistent internal and external narrative. Culture programme leads this as cross functional effort.
Roadmaps are being developed to deliver each promise and measures, which includes technology enablement.
The promises drive the trust index metrics which in turn drive focus, engagement and performance:
Our Customer Promise
Trust Index measures TBD, e.g.
auiES) Our Postmaster Promise * Customer NPS
« Postmaster Satisfaction
5 = Coll NPS
Our People Promise om ague
Based on what our Postmasters and Employees are telling us,
we know we have to move the current Culture from what it is
today, to an organisation that is fit, capable and agile for the
future with the right talent, skills and behaviours. This cultural
shift will enable us to meet our strategic vision.
This will also build trust and move forward from the GLO, as well
as provide evidence of progress to the GLO Inquiry.
This also supports and enables the link between happier
employees — better postmaster and customer service — increase
in profits (Service Value/Profit Chain)
Postmaster Focused (in pockets) Postmaster Focused (as a way of life)
Lack of direction Purpose, vision and plan
Managers Leaders
Firefighting Forward planning, outcome driven
Slow to act Agile and responsive
Parent/Child Adult/Adutt
Hierarchical and bureaucratic Trusted to do the right thing
Not heard or listened to. Everyone has a voice
Lack of accountability Empowered and accountable
Siloed thinking Cross functional working
Busy and unsure what to focus on Highly Productive and Motivated
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Culture Deliverables: Target Business Outcomes
Promises
Customer Promise - People
team as facilitators and
enablers
Key Deliverables
Creates alignment and clarity for employees on what good looks like
for customer service at Post Office
Gives direction on journey design, target measures and approach for
tracking these
Serves as anchor for aligned branding and messaging(internal and
external)
Enables a consistent, recognisable Post Office service
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Example Outcomes (To be validated through Insights
and planning work)
Alignment on what good customer service will look like — input from
key teams e.g. Commercial, Retail + Franchise Network etc.
‘Agreed ownership for pivoting towards the Promise, e.g. Business
change considerations for implementing:
Approaches, action plans, adjustments to supporting
change projects.
Key insights, journey design, end metrics and leading indicators
for course correction.
Postmaster Promise -
People team as facilitators and
enablers
Clearly articulates our strategy to work collaboratively with Postmasters
to improve our service, services and products. Leading to reduced
waste/errors, improved retention, stronger partnerships and greater
profitability
Gives direction on journey design, target measures and approach for
tracking these
Serves as anchor for aligned branding and messaging (internal and
external)
Enables a consistent, recognisable Post Office service
Alignment behind what good Postmaster experience will look like and
what we expect from Postmasters in return
Agreed ownership for pivoting towards the Promise E.g. Business
change considerations for implementing:
Approaches, action plans, adjustments to supporting
change projects.
Key insights, journey design, end metrics and leading indicators
for course correction.
People Promise - People
team lead and managed via
People Strategy and Projects
Creates alignment and clarity for employees on what good looks like for
them at Post Office
Improves employee engagement and satisfaction. The 2020 Gallup
data shows, companies with higher employee engagement see over
20% higher productivity than the competition
People feel invested in, know what to expect from Post Office and enjoy
their experience leading to a better service for customers and
Postmasters
Serves as anchor for aligned branding and messaging (internal and
external)
Enables a consistent, recognisable Post Office colleague experience
A clear definition of the new Employee experience at
Post Office. Supported by clearly defined Employee Value Proposition
and updated branding to attract and retain good talent.
Talent attraction strategy, approaches and messaging updated.
Internal communication and engagement approaches pivoted
to support
Guidance and coaching for leaders in creating a positive colleague
New tools and techniques to support engagement
Colleagues as ambassadors for Post Office
experience, engagement and high performing teams
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What is the Organisational Design element of the People Strategy?
Structural “quick wins” are no longer an option to release FTE — we have already
streamlined processes and activities, through finding clear efficiencies, and addressed the issue
of the organisation being cost heavy and duplicative
Whilst we have only tackled FTE reductions in the past, there are three other ways we spend on
resources, which are: Contractors, Consultancies and Non-Staff Supplier Spend. By
rightsizing our reliance across these other areas of resource, we can achieve significant savings
to the business and reduce our “cost to serve”
We now need to turn our attention to reviewing overall cost reduction and identifying
opportunities for entire workforce optimisation, which pivots our measure of success from FTE
reduction to overall “cost to serve” ("the costs required to deliver each £ of revenue") - this will
include FTE reduction, as well as other levers
Without significant investment in technology, systems and data in the future, we will struggle to
reduce FTE further
By doing so, we can build a better organisation, with the right resources and capabilities in the
right places, so we are set up for a sustainable, successful future
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OD Strategic Plan Submission
POM benefits include per annum delivered in Tranches 1 and 2. Outer year benefits from FY 23/24 activity will be
delivered through both staff and non-staff cost reductions (overall workforce optimisation).
In addition to the main POM programme, there are a number of other smaller Organisational Development projects that are
being delivered or planned concurrently. These are separated out in order to reflect required technology and/or process re-
engineering investment and associated benefits in the same business case (e.g. FTE reduction):
+ PSSC SuccessFactors Enablement
+ People OD Enablement — Service Now
To be validated through current design work:
+ Data OD Enablement
+ Finance OD Enablement @
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OD Deliverables — example case studies
Overall approach shifts dial from FTE to total cost to serve to meet 2025
Past
Lacking retailer mentality
19/20
Greater focus on FTE reduction
Tranche 1 (Sep 20) and Tranchi
IRRELEVANT
E.g. in Commercial, all Products were
consolidated into one function, with clear
common capabilities, rather than individual
empires for each product. This workstream
‘out of the business wit!
across POL and Payzone-
-> Starts to build our Customer Promise
Design work on the Inquiry and Historical
Matters teams led to the separation of
accountabilities in July 21 to drive focus and
improved outcomes --> Right structure, right
capability and right level of experience to
deliver
Present
Begin to pivot POL to think like a retailer
20/21
Greater focus on tech enablement &
contractor spend, and capability build to
ensure fit for future
Process improvement work enables us to release
administrative FTE, e.g. PSSC process
improvement work produces a net saving -->
Continues to build our Employee Promise
Review resout je spend. Current spend on
contractors is it! with the majority of the
key skills (60%) from this pool as basic change
delivery. -> Right internal talent
SLG employee staff cost is: yet we do not
have strengthened capability to lead us to 2025 or
succession plans to GE. Risk - organisational
instability, as well as tangible costs. By
strengthening capability now, many non -key SLG
roles will fall away in the outer years --> Starts to
build our Employee Promise and build delivery for
2025 vision
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Future
Delivering as a retailer
21/22-24/25
Greater focus on non-staff supplier
spend, and previous work on
enablement / capability build allows
further FTE reduction
IT operating model needs clarity t
deliverables — current IT TOM i:
budgeted annual staff cost; SPI
requesting‘
resource costs (mé
IRRELEVANT
design needs to be putin place --> Building
our digital and IT talent for the
future; maintaining critical skills in-house
Commercial Contact Centres — 14 managed
services @ on -Staff spend (no clear
KPIs, consistency in customer service
i entres with!
improves clarity on roles
We are working across the business on each workstream to ensure a joined up approach
PP
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What is the Talent element of the People Strategy?
To bridge the critical skills gaps identified on Slide 5, we need to build a clear Talent and Capability
strategy which aligns to the workforce needs to deliver the 2025 vision.
This requires developing a clear Employer/Employee proposition that enables us to attract, retain and
motivate employees throughout their time with Post Office. We need to be able to differentiate ourselves
in the market and ensure we can attract the right skills, experience and behaviours to ensure we are fit for
the future.
We will return in September with a roadmap which answers how:
*« We will reposition our employer brand, refreshing our messaging in support of our new vision, strategy
and narrative to attract the best talent
+ We will strengthen the talent and succession pipelines in the organisation to ensure a pipeline of skills
and capabilities to deliver the strategy, underpinned by a Diversity and Inclusion strategy
* We will build the Employee Promise to enable the organisation to attract and retain top talent and build
talent pools.
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What are the other elements to the People Strategy?
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There are other key People activities that enable the 2025 vision:
* Performance-driven Reward and Recognition Strategy
* It is becoming more challenging to attract key talent with the remuneration provision we currently have
in place especially as we move into a more technologically/digitally driven world with a scarcity of talent
and skills in this area.
+ While we have implemented variable pay arrangements for the 2021/22 and LTIP for 2021-24 we do
need to undertake a full reward and recognition review, by job family, to ensure we can be competitive
: and attract the best talent to drive and deliver our strategic priorities.
E * Delivering Pensions Assurance
8 * Starling negotiations and outputs
* Succession plans, underpinned by Diversity and Inclusion strategy
+ Fixing the basics —- People Shared Services process improvements
« Enabling self-service and use technology for engagement
08 10d
More detail shown in Appendix
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Risks
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Tier 1 Risks fall into 3 main categories covering the following :
1. Talent and Capability - Tracking overall as RED
2. Culture and Brand — Tracking overall as RED
3. Organisational Readiness — Tracking overall as Amber
As with the Strategy, all risks have designated direct risk owners within the People Team although
accountability for the overall risk may sit elsewhere. Tier 2 Risks are also being tracked closely.
The People risk appetite for the Tier 1 risks is averse on the basis that if the risks are not mitigated, we will not
be able to deliver our 2025 priorities. However, individual intermediate/Tier 2 risks may have a more flexible
appetite.
Operational risk appetite examples have also been defined to ensure consistency across the organisation in
dealing with People related risks and issues.
A paper detailing these risks will be presented to RCC on 13! July 2021 and subsequently to ARC on 26 July
2021
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Next Steps
We will return to Board in September to update you on our approach and plans aligned to the Strategic
Plan and post the Board Strategy Day input:
How we plan to address the past, deliver for the present and prepare to meet the future
Update on Culture: How we move the organisation to “think like a retailer” in terms of our culture,
behaviours and ways of working
Update on Organisational Design: What are the outputs of our organisational design review entail
and what roadmap are we proposing
Update on Talent and Capability: What are the plans are to meet our 2025 deliverables, including
embedding diversity and inclusion
Update on Reward and Recognition: What should the outline Reward and Recognition framework
look like to ensure we can attract, retain and motivate all employees, which includes working with the
Postmaster Team to ensure we have the correct options available for future postmaster contract
models
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Appendix
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Legend
Our Culture Programme — Three Year Roadmap
Year 1- 2021-2022 Year 2 - 2022-2023
Year 3 - 2023-2024
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Maturity timeline Detine & capture measures ester inne ‘
ambitions
future culture and demonstrate our bling our cultur
. y with ourpariners, people
“ag Fecognise our current ~~ commitmentto culture ~~ «ante. We actualy aches ine te
challenges. Governance _ change and recognise sad tat Staal ad Z De bon Otice culture te nas
Rollout narrative, strates isoften seenasa ) —ourleaders role in
and Promises in conference blocker bringing it lie
when it isn’t lived, Our aoe
‘governance supports for all colleagues to
where we're heading describe and live
‘Adopt an Area
Postmaster Duy
promis Inimhetsion activities for Postmasters Immersion activtie
Leading to serve
Upskilling front line colleagui Upskilling front line colleagues
F Postmasters
dership development
Upskilling front line colleagues Upskilling front line coll
3 romise :
3 le Forums for regular conversations on big topics and dialogue based engagement Forums for regular conversations on big topics and dialogue based engagement
Rollout of Ambassador programme (with external oversight/coaching)
Customer Ty
promise
Define FTE requirem
50% contractor resources
50% FTE
Delivery profile Recruitment campaign for
FTE roles starts
External
Internal »
100% contractor resources ve
New roles start on
Culture programme sdding & sustaining transit
I 20% contractor resources
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Key Culture Successes to date
Purpose launch & Culture programme (Aug 2020):
© « — Indirect support of the launch of the Post Office purpose - “We're here, in person, for the people who rely on us” the Culture programme was initiated to help enable
I xipueddy - ABareng eidoeg 22 aeL
this through the resetting of the Post Office Culture.
« — Objectives of the programme are to transform our culture through a series of complementary initiatives, events and campaigns und erwritten by the new ways
of working which are at the heart of the programmes work that supports the Post Office purpose to become a successful retail franchise business that is
fundamentally Postmaster centric
Adopt an Area (since Jan 2021)
Senior Leader pairing with Area Managers to adopt the branches in their areas, build empathy & partnership and _ log and resolve any issues raised via an online
dashboard
= 62 leaders have been out on site visits with feedback from 174 unique branches captured with a total of 486 successes and challenges logged with 314 being
addressed and closed to date.
= Approach currently being reviewed and refined to continuously improve awareness and outcomes.
8 Our New Ways of Working (from Feb 2021) - replaced previous Values (Care / Challenge/Commit):
= Over 200 colleagues worked together to co -create and shape our new ways of working via listening groups
8 « Launched our new Ways of Working at the 'We are Post Office’ colleague conference on 27 Apr
S « — Of those colleagues surveyed 97% rated the sessions as good or excellent.
= “Areally good session and I genuinely left the session feeling positive that change was coming for the good”. Knowledge in creased 6.5/10 to 8.5/10 in first sessions.
g * Functional areas are now embedding Ways of Working within their own context — with continued support from programme.
Week in the life of Postmaster (from Apr 2021)
= Support function colleagues were put in the shoes of our Postmasters, learning about the challenges and rewards _ they face running a business and asked how they
could improve their experience of working with Post Office
fe=) = 90.7% of colleagues rated their session as good or excellent and colleagues rated their Postmaster knowledge after their sessions with a 20% uplift based on
eg
previous knowledge
= Will continue to educate about Post Office formats, operations supported by good storytelling.
Cultural hub launch (from May 2021)
® = Acentral hub for toolkits, events, resources, sharing stories and giving feedback & ideas - continues to evolve based on feedb ack. @
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Other Key People activities to support delivery of Strategic Plan (1/2)
People here we are / why its What we are doing Where will we be
Deliverable important
People * No Postmaster, Colleague or Define and deliver our Value Proposition through our + Weare experts at understanding our
Proposition Employee brand or promise that Postmaster, Customer and Employee promises to enable the Postmasters, customers and
supports our new vision, strategy organisation to attract and retain. We are focusing on colleagues
and narrative. Re-designing our promises + We have a clear promise to each
+ Don't attract the best entrepreneurs = Creating promise activation plans audience, that has been activated
[non employees] to the franchises or = Defining our trust index measures as measures of through a clear engagement plan
talent to the organisation success + Remuneration, reward and recognition
= Ensuring remuneration is relevant and drives the programmes that attract, retain and
right behaviours and attracts and retains the right motivate great talent
talent
Simplifying the + Major issues with legacy technology, I = Pensions Assurance programme ongoing and seeking + Changes we make to our process
Basics processes and data resolution with our pensions shareholder. improvements and systems are
* Current processes and systems = Focusing on process improvement for our people promise, informed by our strategy
don't make things easy for our improving Success Factors, processes and data flows with I » Movement to proactive, rather than
colleagues the customer at the heart of everything we do. reactive, in order to future proof
= Building a People TOM that more closely aligns with
requirements of our colleagues and Postmasters.
Rebuilding + Fundamental reset of our culture Continue to embed our new culture as part of our Strategy, * Culture is embedded as a core part of
Relationships * Need to embed the Ways of Narrative and Promises to ensure in area of our business our our Postmaster-centric strategy. It is
Working and put Postmasters at the I new culture is tangible well communicated and improves.
heart of our decision making = Develop and share the strategy, narrative and business decisions and operations
+ No approach for future of the promises
workplace = Build trust measures so we know we're heading in
+ Greater alignment required with our the right direction
stakeholders to partner on shared = Upskill our leaders and frontline colleagues
vision and suppliers on shared risks = Develop a Postmaster empathy programme
= Help our people to become ambassadors of the °
Post Office through embedding our Ways of @
Working and delivering the programme 20
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Other Key People activities to support delivery of Strategic Plan (1/2)
Deliverable
Where we are / why it’s
What we are doing
Where will we be
important
systems or policies
+ Things aren't easy for our
Postmasters or employees, and
we haven't enabled technology
Talent and + Post Office must strengthen the Building a clear talent and capability strategy aligned to the We attract, retain and reward top
Capability talent and succession pipelines in I workforce needs to deliver the 2025 talent at Post Office, and people feel
the organisation to ensure a = Re-define our Talent Management Process proud to work for Post Office.
pipeline of skills and capabilities = Increase Leadership capability through delivering We have clear succession plans and
to deliver the strategy upskilling on a Coaching Culture talent pipelines, ensuring that legacy
* Diversity and Inclusion knowledge is retained, and we have
= Reward and Recognition that attracts retains and the right talent in place to lead Post
motivates and is aligned with delivery of key Office
business priorities Reward and recognition programmes
drive and motivate performance.
Data and * Focus on fixing the basics and + Good progress in designing systems and processes that Postmasters and people are enabled
Technology resolving issues with legacy improve interactions across the employee lifecycle and all our systems and processes
Identified other areas of improvement and roadmap to
delivery
+ Investment is needed to continue this development
+ Our talent and capability has significant gaps in this area
and we need to ensure we have the capacity and
capability to deliver the changes to technology and
adoption
are optimised to deliver great
interactions
Self-service is embedded and we use
technology for engagement
Organisational
Readiness
+ Organisation model doesn’t meet
our 2025 vision
+ Cost base is high across
temporary resources
(contractors, consultancies) so
legacy knowledge isn't
maintained
* Reward strategy doesn't align
with 2025 vision, where there is
an ‘entitlement culture’ at POL
Conducting a strategic review which widens the scope of
the programme to review overall workforce optimisation /
cost to serve — identifying opportunities across our:
+ Employee headcount
* Contractor costs
* Consultancy spend
* Non-staff supplier spend
We're building a clear OD strategy and plan which we will
return to Board in September. The OD strategy will be
underpinned by a Reward strategy
Lean organisational model with the
tight resources and capabilities in the
right places, so we're able to meet
our 2025 vision without reliance on
external capabilities and set
ourselves up for a sustainable,
successful future
We will have a performance driven
reward philosophy that a I
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Business Case Overlay — which projects make this plan up?
I xipueddy - ABareng ejdoeg 22 ae1
PSSC Success Factors
OE
Change PSSC Service Now New OD Enablement
Projects (People OD Enablement) Leche Me ae Sree
enabling tech/process
(Business
it)
Cases) Culture Transformation Programme (including Future of Talent + Capability Project iselyenw)
Erelect esaianes, Workplace and the Promises)
Promises
(Culture
output) Customer Promise
Postmaster Promise
Employee Promise
People
Strategy ( Hh ) I Pas Ww
Themes ‘=
Data & Technology People Proposition Rebuilding Relationships Talent & Capability Orannlestionst Readiness
Simplifying the Basics 1 ering sere 1: Datong 8 tang ow engin I_I * tara pain wet tt 1. lt tg ec! it rogue 1} Seiegay etc ch
1. nty& impo core etn 2. Steomsnng systems aranr o(ebold POL epcaion : se ap te sewers tierce 5 ee eat ee snes
2. Cemoone mae tute 8 enon 3 Bakang ce so of cotat 2. Tanngemmmneatonine eraagenert IS ee ee et 2. Bund deve atacton &reterson coor es
‘seo proecre 2. Chase nein or engngement 3 Gunang » song ranovee popcenon i seo Po — + --— noe
2, PSC process provements feanPosmanes 4 Seaderng stent orig in 2 Ered dverty & inchaion como
4. TER oats POL be ft fre Rae teeenate eager 5. Beaten ean kc
Obtaining funding for the above business cases is a key enabler and issue.
Culture, OD in particular have been constrained by change budget
reductions.
Underpinned by 2025 Intent and priorities for 2021-22
In partnership with the business, we will invest in attracting, retaining and developing great people to °
ensure the organisation has the capability to be fit for the future. @ 2