INNOVATION IN THE POSTAL SECTOR: Strategies, Barriers and Enablers
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1 INNOVATION IN THE POSTAL SECTOR: Strategies, Barriers and Enablers Kristian J. Sund, PhD Senior Research Associate Managing Director,
2 Agenda 1. Generic Strategies 2. Opportunities for Innovation 3. Barriers to Innovation 4. Innovation Enablers 5. Conclusion
3 Strategy for Innovation The worst strategy is to have no strategy at all In a dynamic environment, adaptation is key to survival There is no universally optimal strategy the best strategy depends on the particular environmental context What works at one point in time won't necessarily work at another
4 Main Perceived Changes Affecting the Postal Sector (results of 2006 study) Very important Important Less important Not important Growing Competition Growing competition 84.2% 15.8% 0% 0% Customers' demands 63.2% 36.8% 0% 0% The growing role of ICTs 42.1% 52.6% 5.3% 0% Pressures to reduce costs 36.8% 52.6% 10.5% 0% Regulatory pressure 36.8% 52.6% 10.5% 0% Globalization 15.7% 57.9% 26.3% 0% Security concerns 10.5% 57.9% 31.6% 0% Customer demands Technology Regulatory
5 Generic Strategies: Innovation Orientation, Customer Orientation, Market Scope Prospector Innovation Orientation High Low Shape Interact Isolate Follow Low High Market Orientation Analyzer Defender Defender Scope Narrow Broad
6 Generic Strategies: Miles & Snow Typology Reactor No clear market and product orientation. Constantly changes strategy or has no strategy at all. Defender Late adopter of innovation Protects its position Prospector Pursues new business opportunities First with innovation Analyzer Maintains stable product area Selectively adopts innovations Innovation Orientation High Low Shape Interact Isolate Follow Low High Market Orientation Defender Analyzer Prospector Defender Scope Narrow Broad
7 Generic Strategies in the Postal Sector Several strategic types were represented in our sample Strategic Type Surprising number of prospectors ANALYZER PROSPECTOR Still some defenders in the industry Innovation Orientation DEFENDER DEFENDER Operators seem to be in a phase of seeking new future products and services Scope
8 Generic Strategies: Innovation Strategy Typology Innovation Orientation Willingness and ability of a firm to look for and implement new ways of producing or creating new products and services Market (Customer) Orientation Ability of a firm to understand and serve the needs of its customers Innovation Orientation High Low Shape Interact Isolate Follow Low High Market Orientation Defender Analyzer Prospector Defender Scope Narrow Broad
9 Low Innovation Orientation Innovation Orientation High Low Shape Interact Isolate Follow Low High Market Orientation Analyzer Prospector Defender Defender Scope Narrow Broad Low Market Orientation (customer focus) High Market Orientation (customer focus) ISOLATE Internal focus Efficiency-focussed Short term profitability Little innovation-market interaction FOLLOW Market drives innovation Innovation is a response to needs of existing customers Improvement of existing products & services
10 High Innovation Orientation Innovation Orientation High Low Shape Interact Isolate Follow Low High Market Orientation Analyzer Prospector Defender Defender Scope Narrow Broad Low Market Orientation (customer focus) High Market Orientation (customer focus) SHAPE Innovation shapes the market Innovate to innovate Create new needs INTERACT Perfect interaction between innovation and market Respond to existing needs and create new ones
11 Generic Strategies in the Postal Sector All innovation types were represented in our sample Surprising number of Interact Different countries, different contexts Many operators seem to be successfully transforming themselves
12 Pricing 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Opportunities for Innovation Customer service New services Promotion & marketing Staff training Delivery Sorting Organizational design Transportation Payment systems Collection Many Opportunities Some Opportunities Few Opportunities
13 Opportunities for Innovation 1. Customer Service 2. Creating New Services 3. Promotion & Marketing 4. Staff Training
14 New Letter Mail Services (2006 Study) Enlarged Traditional Services developed new ITbased services Developed new sales channels Established multifunctional post off ices Other services
15 ICT-based Services Currently in Use by Incumbents (2006 Study) Interactive website(s) services Hybrid mail Electronic authenticat ion syst em M ail account Elect ronic stamp Tracking and tracing Online ordering of postal products E-banking
16 Barriers to Innovation Long internal decision-making processes Gov ernment regulations Difficulty to attract skilled and innov ativ e workers Corporate culture does not encourage innov ativ eness Limited market potential of home market High lev el of bureaucracy in organization Lack of job rotation Lack of funds for inv estment Univ ersal Serv ice Obligation Lack of competition Market uncertainty Management does not encourage creativ ity No risk willingness of top management Lack of pressure from customers Lack of innovative products and services from suppliers Not Important Very Important
17 Barriers to Innovation Internal External Long internal decision-making processes Difficulty to attract innovative and creative employees Government regulations Limited home market size (problem in regulated industries) Corporate culture that does not encourage creativity
18 Enablers of Innovation How important are these stakeholders in enabling or encouraging innovation in your organization? Top management Customers Middle management Gov ernment International organizations Non management employ ees Suppliers Unions Not Important Very Important
19 Enablers of Innovation Internal External Top management!!! Customers Middle management Government International organizations Suppliers
20 Conclusions There is a lot of diversity in strategies of the postal sector (even with our limited sample) It seems many operators have woken up to the fact that they need to innovate and adapt Many opportunities to better serve the customer and to find new customers Innovation has a lot to do with the inside of organizations!!!
21 Inaugural Edition of our Global Learning Journey Washington DC EPFL Georgia Institute of Technology Atlanta National University of Singapore Swinburne University of Technology Melbourne
22 Focus Degree from top school Strategic Leadership Leaders in Innovation Leadership through Technology Mix of academic and practical content Best practice oriented Numerous site visits Leadership Through Organizational Transformation Global audience Global delivery
23 Next Edition Start April 2009 Applications until March 2009 Brochure and application forms available online
24 Contact Details EPFL-CDM-MIR Bassenges Station 5 CH-1015 Lausanne Tel Fax kristian.sund@epfl.ch
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