THE MANAGEMENT INTERVIEWJohn Allen – Licking NZ Post into shape

New Zealand’s top postman, John Allen, is an enthusiast. compulsive optimist. Last month he was out there again, all smiles and singing the praises of his “great enterprise” New Zealand Post.
That he was happy was understandable. Despite continuing drop in his core business of delivering letters, the State Owned Enterprise had delivered yet another increase in net profits, up from $21 million in 2001 to $36.5 million last year and $40.4 million in the first six months of this year.
Allen’s succession to the chief executive’s chair at NZ Post in 2003 may have been ordained, but it wasn’t without incident. Remember Post’s international consultancy Transend and ACT MP Rodney Hide’s hounding from office of board chairman Ross Armstrong for what Hide called perk abuse? Tainted by association, it took the gloss off an otherwise polished performance at the top by Allen’s predecessor Elmar Toime.
Toime recognised Allen’s potential when, as partner in law firm Rudd Watts & Stone, Allen worked with NZ Post’s senior management team, leading the negotiations with the Crown to deregulate the letters market in 1994. He was then seconded to NZ Post as its general manager, business planning, for two years. The stint was successful and Toime suggested that, having “successfully deregulated the business”, Allen should quit his promising law career and get into management. “The challenge of doing something different in territory where I didn’t even know the language was simply too exciting to refuse,” he reflects.
Allen’s coy about whether Toime saw him as his natural successor, but he was unquestionably given text book tour of duty and appointed to succession of key jobs. By 2003 he was immersed in the mail business and helped orchestrate the emergence of growing portfolio of new postal services.
The transition from the law to management was, says Allen, surprisingly easy. “Exercising judgement is at the heart of both the law and business. They are about making decisions based on diverse information, analysing it and coming to conclusion. Lawyers may not see themselves as businessmen, but the process which underpins advising in law is largely the same as what I do on day-to-day basis running this business.
“Most lawyers would love the opportunity to get on and do something. To make the decisions rather than simply advise on them. I certainly do. The opportunity to implement things, test things, try things and even fail with some things was, and is, exciting.”
Allen may have been anointed by Toime but their management style is, he concedes, different. Toime was known for his professional detachment. “I’m little more directive than Elmar. I tend to get personally involved,” he says, little uncomfortable with the direct comparison. “But like him I know you need diversity of opinion and views in the leadership team to achieve goals.”
Now he’s at the top, what does Allen want from NZ Post? Well, he wants it to become the first “world-class customer-centric” postal organisation. Postal businesses have, he says, been built around operational excellence. And, operationally speaking, NZ Post is up with the best in the world. But he admits operational excellence won’t generate new business or more income. “We need to re-think the model and build it around customers, value and competitive advantage. We need to understand those things.”
What, then, do his customers want? Three things apparently. “They want to find and speak to their customers – we are marketing tool. They want our marketing tools to be cost effective. With multiplicity of marketing channels they want us to cut through and reach their customers. And post can still do that,” he says emphatically.
“Then they want us to deliver whatever they have sold. And finally, they want us to facilitate payments for the goods after they have been delivered,” he adds. “These three core propositions underpin the services our customers are looking for.”
To deliver an increasingly diversified range of services Post has built portfolio of 19 subsidiaries including brands like data management services company Data Mail, retailer Books and More, Kiwibank, courier companies like Courier Post and, of course, the greatly diminished international postal management consultancy, Transend. Revenues last year topped $1 billion for the first time and the dollars were delivered by more than 17,000 employees.
But if Allen wanted to get into business, why join the state sector? “Why not? It’s good company. Being owned by the people of New Zealand is huge competitive advantage,” he argues. “It creates some responsibilities but on balance the advantage to New Zealand is also positive.”
Allen thinks the Government has been “good shareholder”, willing to back business plans that demand investment in future growth. “There is no reason why it can’t be just as successful under government ownership as under private ownership.” His attitude is not, he says, ideological. “The question is simple. Does the model work? The answer is yes and I think it can continue to work so why change it?”
He’s equally dismissive of suggestions that his recently announced joint venture with Deutsche Post’s global courier company DHL is privatisation by stealth. “It’s simply not,” he retorts. The approximately $170 million deal was done to “sustain the future growth of our courier business”, says Allen. “We need access to international distribution networks and when you start thinking about that and about our need to distribute up into Asia there aren’t many partners to chose from. DHL was an obvious choice.”
NZ Post has long working relationship with Deutsche Post. “Our capabilities marry and I’m comfortable with the cultural fit which is also important. Being owned by Deutsche Post means DHL has postal heritage,” he says. “It is significant deal for us and it signals an attitude to growth and willingness to explore models to create more capability in future.”
He may not have anticipated business career but Allen thinks he’s learned at least five valuable leadership lessons since he joined the firm.
Lessons like setting clear goals. “It is surprising how rarely people actually set their goals,” he adds.
Be consistent. “It is critical to be consistent about applying goals and the strategic and tactical steps you use to achieve them. Flip flop too often and people get confused.
Talk constantly to people in the organisation. “Don’t just rely on the data and the spread sheets. The messages you get from people inside and outside the organisation provide an invaluable context for all the other management information.”
Learn to say no. “The most important thing I had to learn. My natural inclination is to allow people to explore opportunities and pursue their creative thinking. The corollary to this is, be prepared to stop things. Too often we start something in business, it gains momentum and we let it roll on too long.
“And finally, keep sense of humour and curiosity about life and business. Read widely,” he suggests. “Leaders are readers.”
Allen concedes he is an “enthusiast” about life and particularly about his job. “Enthusiasm is important. It is not substitute for solid analytical thinking or sensible strategic decision making – in and of itself it is not the be all and end all. But people like to work with people who are enthusiastic. And I maintain it by working with like people.”
So has his irrepressible, inspirational and often hands-on leadership style changed the culture at NZ Post?
The culture is changing, he says. But the change is driven by the market. By changes in customer attitudes, technologies and everything else that is happening in this country “rather than by any single thing I might do or say”, he reasons. “We have been changing the organisation to ensure that we are up with or ahead of the changes we see coming in the community.”
Allen sees three major challenges for him and for NZ Post. The first will be maintaining grow