Business Excellence Review at Royal Mail (NW/NW):

A Case of Strategic Communication Management

Dr Richard J Varey, Director, BNFL Corporate Communications Unit, The
Management School, University of Salford
Robert L Hamblett, Strategic Communications Process Manager, Royal Mail (North
Wales & North West)

Introduction
One difficulty for managers who desire superior performance and competitive
advantage in their business operations is to find a set of quality practices which can
help, whilst avoiding the bag of tricks mentality. The challenge is to grapple
simultaneously with structures and systems and with organisation culture. Intense,
focused, and prolonged attention is required to the managerial leadership tasks.
Systems, processes, practices, and roles necessary for implementing a value-creation
strategy for customers, must be established. System changes and the behaviours they
require must drive the change process, and be supported by tools so that people can
turn the written strategy into results-oriented action.
A strategy for change is required. Following the lead of other major organisations,
Royal Mail, the UKs major postal services organisation, has adopted and adapted a
business excellence model using the criteria from an established and tested quality
award model. This paper discusses the approach taken at Royal Mail (North
Wales/North West), the origins and evaluation of the model used, some early business
performance improvement results, and a programme of key improvement initiatives
which address the communication issues highlighted by self-assessments in the North
Wales & West of England regional operating company.

The Organisation
Royal Mail (North Wales/North West) is one Division of 17 Business Units of Royal
Mail, the largest business within the Post Office Group in the UK. Royal Mail is
responsible for the collection, sorting and delivery of letters and packets, and operates
with an estimated 15% share of the UK communications market for the transfer of
information, funds ands personal messages nationally and internationally. In 1969 the
Post Office ceased to be a Government department and became a public corporation. A
reorganisation in 1986 created four separate businesses, of which Royal Mail is the
largest. Royal Mail has consistently returned a profit for the last 17 years. In 1993-94
the businesss revenue was 4.23bn which returned a profit of 296M. Results for
1994-95 showed considerable gains in efficiency. Revenue was up 7.3% to 4.54bn,
with a return of 449M in profits, up more than 50% on the previous year. Royal Mail
has around 160,000 employees at over 1,900 locations, handling around 16 billion
letters in 1993-94 and 16.5 billion in 1994-95, with collections from up to 120,000
sites every day and deliveries to up to 25 million addresses on six days every week,
utilising a fleet of 27,500 vehicles covering around 390 million miles per year.

Business Excellence Review

In 1988 Royal Mail embarked on a Total Quality strategy (Customer First) in which
clear statements of current and desired future states for Royal Mail were developed.
This followed recognition of declining market share, with customer and employee
dissatisfaction. Employee opinion surveys and a Customer Satisfaction Index (CSI)
were introduced. In 1990-91 benchmark visits were made to a number of UK and
overseas companies, resulting in the identification in the US of an established model of
Business Excellence - the Malcolm Baldrige National Quality Award (MBNQA). Upon
further investigation it was found that a number of top companies were attributing
significant enhancement of their business to progress with the model. The Deming
Prize model was similarly adopted by companies in Japan in the 1950s.
In 1989 the European Foundation for Quality Management (EFQM) was established
and adopted the Baldrige and Deming models as the basis for a European model. The
first European Quality Award (EQA) was presented to Rank Xerox in 1992.
At Royal Mail it was realised that the ability to measure current position and progress
was fundamental to the success of Customer First. The European model was duly
considered and thought to provide the most appropriate proven framework for an
internal business excellence review process. As a model for excellence the EFQM
Model for Total Quality was thought entirely consistent with the corporations business
approach and was duly adopted in 1992.

The European Quality Award Model

The EFQM Model has nine weighted performance criteria, of which five are enablers
and four are results for business excellence:
Leadership (E) [10]
Policy & Strategy (E) [8]
People Management (E) [9]
Resources (E) [9]
Processes (E) [14]
Customer Satisfaction (R) [20]
People Satisfaction (R) [9]
Impact on Society (R) [6]

The behaviour of all managers and employees in

team leadership roles in driving the organisation
towards Total Quality
The organisations values, vision and strategic
direction, and the ways in which it achieves them
The management of the organisations resources
The organisations approaches to the management of
its resources
The organisations approach to the management of
its value-adding activities
The perceptions of external customers regarding the
organisation
Employees feelings about the organisation
The perception of the organisation amongst the
community at large. Includes views on the
organisations approach to quality of life, the
environment, and the preservation of global
resources

Business Results (R) [15]

The organisations performance against key business

targets
(E = enabler; R = result; [weighting %])
The model defines attributes against which the business unit can assess itself. The
model was customised by Royal Mail to ensure that it addresses the business in the
most meaningful way.

Business Excellence Review at Royal Mail (NW/NW)

The Business Excellence Review at Royal Mail is a joint self-assessment process which
compares business unit operations with a world class model for business excellence
(the EFQM Model). This is intended to produce fair and objective feedback on the
strengths and opportunities for improvement and to establish a prioritised key issue list
for action planning. A database of measures of performance can be established so that
progress can be tracked by capturing future performance and comparing it with past
records.
The process operates at Divisional, Strategic Business Unit, Business Centre, and
Strategic Headquarters levels, and is now part of the Royal Mail Management Process
and contributes directly to business planning. Members of each unit are involved at all
levels and across all functions.
Unit members apply the External Quality Assessment (EQA) scoring and
feedback processes in an intensive one week on-site review that produces a report
which highlights strengths and opportunities for improvement. Following this, the unit
produces an action and review plan. This is assisted by a Support Team comprising
Process Consultants from Royal Mail Consultancy Services Group and an Executive
Team of senior members of the business who have been trained as assessors.
Acceptance and credibility for the review process is ensured through the signing of a
Code of Practice, covering such issues as confidentiality, by all participants.

Business Excellence Review Results

Since the adoption of the EFQM Model of Total Quality, Royal Mail has focused on:
Leadership - a business-wide Leadership Charter has been created which is the core
of the Effective Leadership Feedback Process used for developing leadership qualities
Business processes - the business has 15 processes, of which 5 customer-facing key
processes have been defined and prioritised. Others are support processes and
management processes. Measures and goals have been established and systematic
improvement efforts have begun
Self-assessment - The EFQM Model has been used as the basis for creating and
implementing an internal self-assessment process for use by and within Business Units.

The first assessment took place at Royal Mail (NW/NW) in 1993 and has been
repeated in 1995 to check for progress. The results of the 1993 assessment have been
taken as a baseline on which to plan and action improvements, with the results of the
1995 assessment being used to track progress against each of the criteria. A tabulation
(below) provides a summary of 1993 Business Excellence Review results against each
of the criteria which have a significant communication implication and/or consequence,
and a comparison with 1995 Review results is given to highlight significant
performance gaps. A range of key communication initiatives which will significantly
improve business performance are listed and discussed in the next section.

Impacting Initiatives
Some examples of significant developments are now outlined.
1. Policy & Strategy
The 1993 Business Excellence Review showed that little information was collected to
influence strategic decisions. The employee opinion survey and customer satisfaction
data was not analysed with this purpose in mind. In the 1995 Review evidence was
clear to demonstrate that the Customer Satisfaction Index is driving the Access
Strategy. Business and social customers had been distinguished and the collection
times from company premises and collection boxes were changed to meet clearly
identified customer requirements. This has already impacted on the CSI scores in the
areas in which the Access Strategy has been rolled out during 1995.
In 1994 the Corporate Communication structure was put in place. The Divisional
Management Executive Committee was then convinced of the need to share
throughout the Division the decisions they were taking on both strategy and policy.
There is clear evidence from the 1995 Review that there is sound cascading of business
policy, including the Business Plan. This has resulted in outputs from both monthly
policy meetings and monthly performance review meetings being distributed to all
managers in the organisation. Managers are encouraged to use these outputs during
their Team Briefing sessions.
Each year a 3-year Business Plan is produced. Until 1994 this was given only to the
top 200 managers. Since then, all managers receive the Business Plan. All employees
receive an abridged version and are able to request the full version if required. In 1994
over 2,000 front-line employees (about 10% of the Divisions workforce) received the
full Business Plan on request.
2. Training
Evidence from the Business Excellence Review showed that managers were poorly
trained in business skills. This was borne out by the employee opinion survey which
indicated inappropriate treatment of employees by managers and a failure of the
Division to recognise the achievements of its employees. As a result of the Review
personal development plans are now in place. This has been achieved through a
collaboration between the Communications Process team and the Employee
Development & Support Process team (formerly the training department). The former

have determined and driven the programme and the latter have responded with a
suitable provision. This has been a key impacting initiative in which the
Communication Process professionals have determined criteria and course content for
people skills and ways of recognition, rather than allowing this, as previously, to be
decided by the trainers. Within 12 months all front-line operations managers had
attended both workshops.
3. Communication channels
There was little evidence of communication channel effectiveness. This resulted in the
establishment of cross-functional end-user groups at all sites, facilitated by
Communication Managers rather than line managers. This was less threatening for
employees who were able to express their true feelings since the discussions were
about the quality of communication rather than about individual managers.
The mystery shopper technique was introduced from the Communication Process.
This is a valuable way of testing customer perceptions of Royal Mail, as well as the
responsiveness and knowledge of customer-facing service people. For example, the
mystery shopper team was commissioned by the Communication Process team to start
measuring key message delivery. Around 150 calls were made over the 5 day period
after a key message had been sent out. This represents some 30% of identified Team
Briefing Managers, who were asked about the subject of the briefing, the key learning
point, and the name of the contact identified for further information. This provided
quick feedback on communication effectiveness in terms of the extent to which key
messages were being delivered to the target group.
4. Information Systems Plan
Internal communications media are often taken over by IT specialists without input
from communication professionals. In 1994 there was no evidence of a plan for an
information system to specifically address business improvement issues. By 1995
information systems had been teamworked by the Process teams, including the
Communications Process team. For example, the information systems were working
with the Pipeline Process to provide better and more timely management information
reports. There is also now an Information Systems/Communication Process subprocess group operating as an add-on to the main Communication Process Team. This
group is looking at IT solutions to traditional communications problems. The
Executive Information System has been upgraded to provide the top forty managers,
including the Board, with a visual display of operations and financial performance on a
day-to-day basis, using hotspot technology. This is a form of visual process control
which reports any element of a parameter-based performance reporting system which is
operating outside of the agreed parameters. Colour changes on-screen indicate
anything which requires attention - a form of management-by-exception.

Evaluation of the EFQM Model

The Malcolm Baldrige National Quality Award was introduced by the US Department
of Commerce in 1987 as a gauge of performance and to stimulate competitive
behaviour in industry. This is done by:

 Creating awareness of quality as imperative to competitiveness

Improving understanding of the requirements for excellence in quality
Fostering the sharing of information on successful quality strategies and their
benefits.
The Award criteria are intended to support results-oriented goals: delivery of
continuously improving value to customers, and improvement of overall company
operational performance (and not just product and service quality). The ten core values
upon which the criteria are based, apply to all customer, operational, human resource,
supplier, and public responsibility issues:

Customer-driven quality
Leadership
Continuous improvement of all processes
Employee participation and development
Fast response
Design quality and waste (i.e. non-value adding activity) prevention
Long-term view
Management by fact
Partnership development
Corporate responsibility and citizenship.

Since no conceptual model was previously available for evaluating Award applications,
a review of management literature and the experiences of practising managers was
carried out. This revealed areas of major requirements for business excellence:
A strong customer focus to provide customer satisfaction - quality is defined by the
customer
Effective, hands-on leadership which articulates clear quality values and builds them
into the way the organisation operates
Good systems for acquiring, analysing, and using information decisions must be
based on facts rather than opinions
A strategic, long-range view on quality planning
A focus on human resource development and excellence, so that all are trained,
developed, and involved in quality activities
Effective process management which requires continuous improvement and
shortened response times
Design quality and defect prevention are key parts of the quality system
A focus on a variety of quality and operational results indicators.
A framework was constructed for each of these basic areas, with specific, actionable
requirements, which could be equally valid for commercial and public service
organisations, in order to facilitate sharing and networking between sectors. The 1987
model has been evolved as a discipline structure to currently comprise twenty-eight
examination items for the Award.

The criteria relate to results, as measured by a composite of measures, including

customer-related, performance-related, employee-related, and supplier-related indices.
The framework links processes to results, and is really a comprehensive process
improvement model which incorporates dynamic feedback for organisational learning.
The criteria allow wide latitude in approaches to meeting basic requirements since they
are non-prescriptive of tools, techniques, systems, or organisations.
The focus of the criteria is on requirements that produce results, not on prescribed
procedures, tools, etc. This encourages organisations to develop creative, adaptive,
and flexible ways of meeting basic requirements - through incremental as well as
breakthrough improvements. The selection of tools, techniques, etc. is recognised as
dependent on characteristics of the business and organisation, and prescription is
avoided to ensure that an organisation fosters understanding, communication, and
sharing - thus encouraging diversity and creativity.
Many organisations have used the Award criteria to guide their transformation. Others
have been critical, for the following reasons:
The model does not provide an adequate conceptualisation of quality
The customers opinions on quality are not considered - organisations nominate
themselves for the Award
Much time and money is required to follow the Award application and dissemination
requirements (for example, Cornings MBNQA application in 1989 took 7,000
hours to prepare - and they did not win, according to Fortune, July, 1991)
The efforts to apply and compete can become bureaucratised
Implementation teams can win awards without managers getting sufficiently
involved
Many winners use the Award simply as an advertising message (for example, in
1990 GMs Cadillac Division won the Baldrige Award and, helped by enthusiastic
advertising executives, announced this to the American public, who had yet to see
tangible quality improvement in the cars - the implications of the award were
overstated and GMs claims lost credibility, according to Howe et al, 1993)
Organisations can get hooked on winning rather than on quality improvement and
solving business problems, and quality is then not managed
The Award doesnt guarantee product superiority or financial success (for example,
IBM, Motorola, and Xerox all saw profits fall after winning the Baldrige Award,
according to Munro-Faure and Munro-Faure, 1992; other winners have experienced
share price fluctuations, product development delays, and new venture failures,
according to Howe et al, 1993)
Performance at the point of assessment may not be due to good management and/or
may not be sustained after the award
The award does not deal with innovation, financial performance, or long-term
planning
Managers may not realise the implications and consequences of communication
issues, since many of the assessment items merely connote communication issues
rather than stating them more explicitly.
Despite these criticisms, however, many organisations have found that with leadership
vision and knowledge, the framework can be adapted to meet some basic business

excellence requirements, whether an award is sought or not. It can significantly raise

consciousness amongst managers on matters of quality, and can provide the framework
for measuring efforts to address quality issues. Such an award can be a lever for
change, but must not be an end in itself.
The value of self-assessment on quality has been recognised in Europe as valuable in
the development of a quality culture. The European Quality Award model recognises
that processes are the means by which an organisation mobilises the abilities and effort
of its people to produce business results. Furthermore, the processes and people are
the enablers to results. The EFQM model supplements the MBNQA with categories for
financial results and impact on society.
These models provide a basis for gap analysis by involving employee, customer, and
supplier views on the organisations progress on quality issues. Where appropriate the
self-assessments can be the basis for external third-party assessments, but the prerequisite must be real progress on improvement.
Oakland (1993) has suggested some communication themes for the European Quality
Award model criteria.
Total Quality Criteria
Leadership & Behaviour

Strategic Planning

Techniques & Continuous Improvement

People

Quality Assurance
Quality & Business Results

Communication requirement
Senior managers provide clear vision and
values, and an explicit quality policy. The
way things are done must encourage full
participation and empower employees to
share in teamwork, in order to pursue
internal and external customer
satisfaction. Structure and processes must
promote active listening, clear
understanding of requirements, teamwork,
and team leadership.
Business strategies incorporating quality
goals are understood throughout the
organisation. Critical success factors and
critical processes are identified to give
clear mission, purpose, and goals through
participation.
Data and information gathering processes
are effective - networking is promoted data is accessible to all.
Opportunities are provided for training,
development, involvement, responsibility,
and teamwork in an open environment.
Communication mechanisms and
messages encourage open behaviour and
active listening.
Continuous improvement is integrated
with documented traceable systems of
quality assurance.
Effective measures are used to quantify
results and targets for production and

Customer Satisfaction

Community

process improvement. Results are used to

set priorities and update critical success
factors. Measures of customer satisfaction
and financial performance are used to
focus resources on process improvements.
Internal and external relationships are
systematically managed to provide clear
understanding of requirements to meet
external customer needs. Service
standards and results are shared with
customers and regularly updated.
All employees value and promote the
organisation within the community, and
recognise its social responsibilities in
balance with the demands of its
shareholders and other stakeholders.
Special regard is given to communication
and mutual education.

(source: modified from Table 6.4, p. 152-3 in Oakland (1993))

The Way Forward

Since 1988 significant progress has been made on service quality in Royal Mail, in a
period of economic recession and rising customer expectations. Specifically:
Next day delivery has improved from 74% to over 92% of letters and packets
posted
Productivity has risen by nearly 30%
Profitability has achieved or exceeded targets each year, rising from 94M in 198889 to 296M in 1993-94.
Royal Mail (NW/NW) is currently preparing a submission for assessment for the UK
Quality Award. This follows participation in the 1995 European Quality Award which
gave the Division a greater understanding of their business in the context of the EFQM
model of Total Quality.
The guiding principles employed by Royal Mail in their submission for the EFQM
assessment process are:
To demonstrate openness in all aspects of the application and assessment process
while presenting Royal Mail and its strengths positively and clearly
To develop the content for the submission through wide involvement by crossfunctional teams of managers led by the senior management team
To utilise the companys extensive experience of self-assessment (i.e. the Business
Excellence Review process) and the large base of assessor-trained senior managers.

By adopting the approach outlined in this paper, Royal Mail (NW/NW) have been able
to address the running of the business, support for managers, and the nurturing of
employees.

Discussion
Self-appraisal using a comprehensive framework can play an important role in
improving a business in a planned, purposeful way. Considerable effort must then be
applied to align business processes and to relating peoples roles and responsibilities to
the processes in which they work. This is particularly true of the professional manager
of communication processes.
The assessment criteria provided by the models discussed should not be pedantically
adopted as a model for success, but rather as guidelines which may have to be adapted
to be clear and meaningful for a particular organisation. The application for an award
should be the result, not the aim, of any continuous improvement programme. The
major reward for a programme of continuous improvement is commercial success
through improved internal and external customer satisfaction.
In almost all cases, if not all, the texts on quality management urge good (i.e. open
communication) but focus on techniques (messages and mechanisms) for the
achievement of this. Perhaps more attention is required on the nature and purpose of
human communication, in order to set the tools and methods in the proper business
context.
Survey evidence shows that award winners do gain in terms of improved market share,
sales per employee, return on assets, and the ability to deliver products on time (Howe
et al, 1993, p. 5). However, excellence initiatives seem to tend to work best for bluechip organisations who already know how to effectively manage their operations.
Fundamentally, it is the quality of the organisations management which wins through.
The business excellence criteria focus attention on the key issues. The realisation of
business excellence requires major effort in attending to the communication of quality
and the quality of communication.

References
Bounds, G., Yorks, L., Adams, M. and Ranney, G. (1994) Beyond Total Quality:
Toward the Emerging Paradigm, McGraw-Hill
Howe, R J., Gaeddert, D. and Howe, M A. (1993) Quality on Trial, McGraw-Hill
Munro-Faure, L. and Munro-Faure, M. (1992) Implementing Total Quality
Management, Pitman Publishing/FT
Oakland, J S. (1993) Total Quality Management: The route to improving performance,
2nd Edition, Butterworth-Heinemann
Post Office (1993) Business Excellence Review: Executive Team Briefing
Royal Mail (1995) European Quality Award submission document