Sir William Barlow has a good story about his days as chairman of The Post Office. Finding, early on, that policy proposals constantly came up against the same objection, that they were "contrary to the manual", he asked his PA (now an executive member of the Post Office board himself) to provide a copy of this frustrating document. Some days later, rather irked that nothing had appeared, he repeated his request more forcefully. The PA apologised. "If you'd like to come this way, sir," he said, and led Barlow to a bank of shelves supporting what looked like several complete editions of the Encyclopaedia Britannica. This was of course "the manual". It occupied, Barlow recalls, 13.5 feet of shelf space.
The Post Office has changed a good deal in the dozen or so years that have passed since then. The manual no longer runs the business. There is far greater flexibility in operations and manning. Mechanisation in the sorting offices, long regarded as a threat to jobs, is now accepted as a necessity, even as a "totem of success", by postal workers. Productivity is up 25% since the early 1980s. Volume has increased by 50%, to well over 15 billion letters handled every year. Quality of service is gradually improving. International comparisons, independently conducted but loudly trumpeted by The Post Office, indicate that the UK already has the most reliable, fastest, cheapest postal service in Europe. And Post Office managers, who once reached the "Guinness Book of Records" for running Britain's biggest loss-maker, can now boast of 15 consecutive years of profits.
The culture, and processes, of the organisation have further gained from the introduction of new people with new skills. When Sir Ron Dearing succeeded Barlow in the early 1980s (after the separation from British Telecommunications), The Post Office employed only half a dozen qualified accountants, and none at all outside its headquarters. It was Sir Ron, the spare and avuncular former civil servant, who appointed the first director of marketing to sit alongside the members for finance and personnel on a functionally structured board. But out in the field, Post Office managers were invariably generalists, responsible for all aspects of their operations: sales and marketing, bookkeeping, personnel, transport, the lot. "It was essentially a transport business yet it didn't employ a transport specialist," recalls Sir Ron.
There are arguments in favour of generalists - which are well understood in the armed services, for example. The old inward-looking Post Office produced managers who, having spent their entire careers in the service, had a close knowledge of its workings. They were, says Sir Ron, "very dedicated, very loyal". They were also, all too often, very conservative, unenterprising and out of touch with what was happening in the business world around them. And they were ground down by poor industrial relations, and a tradition of management-by-manual, with little prospect of any improvement.
While BT and the postal service remained united, the conventional wisdom held that the latter was in terminal decline. Telephony was where the future lay. The labour-intensive postal side faced slow strangulation by rising costs in a static market.
This did not happen because businesses steadily generated more mail. But when, after BT split away, the Post Office board decided to "go for growth", the aim was more of a hope than an expectation. However, the pursuit of growth demanded a sharper focus on the needs of users, with greater concentration on innovations like the fax service (which flopped in the event) and on the encouragement of direct mail advertising. Unhappily, activities such as marketing and promotion did not come easily to the local, generalist, head postmasters and their assistants. "The structure did not allow scope for the development of expertise within management," affirms Ken Young, former personnel director and currently deputy chairman to Sir Bryan Nicholson.
"Round about 1983", says Young, a Welshman, "the board began to think about reforming the structure in order to reform the culture." At shopfloor level this meant, in effect, pulping the manual: negotiating a way round union resistance to part-time labour and new technology. But the real reformation of the structure came with the famous reorganisation of 1986, which, for all operational purposes, carved the still huge and monolithic Post Office (even though shorn of BT) into separate businesses: The Royal Mail (the letter post only), Parcelforce and Post Office Counters (the shops). Until sold off into the private sector just a year ago, Girobank made it four.
The reorganisation removed a regional layer of management from the postal services, leaving the letter post, for example, with a smaller number of local units (renamed districts), reporting to London. For 160,000 postal workers round the country, authority no longer lay with some regional director, nor even with the chairman of The Post Office tucked away in his St James's sanctum. The people to watch out for were the managing director of The Royal Mail and his executive team. The Royal Mail head office on the northern edge of the City was the centre for business planning and control, and the main repository from which skills flowed out into the field. But some specialists, such as accountants, were for the first time appointed to all districts.