A right royal mess at Royal Mail

It's been a grim couple of months for the Royal Mail, with two nationwide 24-hour strikes, the first such actions in a decade, the current two week-long staggered action, and the loss of the flagship Amazon.co.uk delivery contract - worth £8m a year - and now further aggro amid disputed claims that its retirement age is going to go up and that its final salary pension scheme is going to close down.

Last Updated: 31 Aug 2010

The strikes - over pay and conditions, what else - could hardly have come at a worse time for a business which is still struggling to come to terms with its position in the liberalised postal marketplace. Doubtless they have prompted many other big clients to have a closer look at alternative providers, and some of them may well follow Amazon's example and switch.

No matter how big, no business can afford to lose many contracts that size. This is the kind of hard competitive reality that most of us in business live with - and indeed thrive on - every day. After all, where does the money for pay rises and pension funds come from, if not from your customers? It may be one of the most basic tenets of free-market capitalism, but Royal Mail's obstinate employees remain extremely reluctant to take it on board nevertheless. When even Allan Leighton - one of the country's most accomplished managers and something of a workers champion - can't persuade them, you know it's a tough sell.

But then, the Royal Mail as it currently exists isn't really a proper business, nor is it a public sector utility anymore. It's in a very uncomfortable no-man's land between the two, a uniquely painful situation that the other former-utilities - BT, BG, the water and power companies - were mercifully spared when they were privatised.

Times change, and what people need from their service providers moves with them. The sooner the Royal Mail learns - or is forced to learn - the truth of this, the better for everyone; employees, management and, most of all, customers.

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