Two senior Australia Post leaders, Rick Wingfield (Partner, Australia Post Accelerate) and Gary Starr (GM Enterprise & Government Solutions, Trusted eCommerce Services), share their insights on how Australia Post is leading the way in digitising government services.
In 2008 it became clear to Australian Postal Services leaders that the internet was going to disrupt the future of the letter. Instead of just letting a digital takeover happen, they took the opportunity to explore what could be done, embracing digital transformation and creating a culture of innovation.
Now beyond the traditional mail and parcel delivery business AusPost provides a suite of leading capabilities in identity, payments and information management. It’s also working hard to connect the community to essential everyday services through innovative and emerging digital products.
I asked Australian Postal Service leaders, Rick Wingfield and Gary Starr, what it takes to evolve Australia Post to thrive in this digital era.
Traditionally, AusPost has been referred to as a postal service. What would you refer to it as today? (Gary Starr)
Our Post Office network and delivery business are what we are most well-known for; they are a core part of Australia Post and we are continuing to invest in transforming this part of the business. Over the past few years, we’ve spent a lot of time modernising our core services business, innovating through new technology and new partnerships and empowering our people to create an innovative culture.
By getting our core business right, we’ve been able to build out two new digital platforms — identity and payments which are focussed on delivering a range of eCommerce services and experiences that meet our customer’s changing needs. It’s something that we are less well known for but are key to serving our customers, the economy and the citizens of Australia.
To put it into perspective, we do millions of transactions a day through these four platforms and although we experienced a 40% drop in foot traffic over the past few years (due to a reduction in our core mail business), there are 182 million digital transactions a year and growing and there’s still 249 million face-to-face transactions, so that’s about 10 million transactions per day.
Today, I’d describe Australia Post as a delivery and services business and it’s important that we leverage and grow our offering of solutions across all four of our platforms; retail, delivery, payments and identity.
What inspired AusPost to create a Digital ID? (Rick Wingfield)
For over 200 years Australians have been trusting Australia Post to securely deliver the sensitive information their letters and parcels contain. We also conduct over 6 million identity checks each year through our post office network.
However, when we spoke to our customers they told us that the systems for verifying identity online have failed to keep up with the digitisation of the economy — or the expectations of consumers. Frustration, a lack of control and inefficiency is costing Australia’s economy up to $11 billion in missed opportunities.
Starting in 2016 we conducted research into digital identity, in conjunction with the Boston Consulting Group (BCG), which showed:
- Consumers want to be in control of their identity but are happy to share data if it makes life easier
- For business, a single digital identity could increase conversions and reduce the cost to serve and risk of fraud
- Increasing uptake in an opt-in system is challenging and will depend on the private and public sectors working together
With Digital iD™, Australia Post offers a secure digital alternative to prove your identity and manage your personal information.
Has there always been a willingness to innovate at AusPost? (Gary Starr)
Absolutely. We’ve been disrupted many times over the last couple of hundred years. In the last century, for example, we have seen the introduction of the railroad, the telephone and the fax — all of which affected our core mail business and the way we went about doing things. But the change we have seen in the last decade has been unprecedented
As the pace of digital transformation accelerated, our organisation was impacted significantly. After taking over 200 years to peak, our letter volumes have halved in the last nine years. We have also seen a significant reduction in Post Office foot traffic. At the same time, we’ve seen customers’ preferences change irreversibly as they transact online or on mobile. Our research has shown that customers want choice in how they access our services — 94% of consumers want all services to be available online, yet 70% of these individuals also want the choice of physical access to services.
Innovation is core to our strategy and by continuing to invest in market-leading technology, we ensure we stay relevant. We have been investing heavily in our identity platform which will help transform and sustain Australia Post, ensuring our continued viability and profitably. We are working on capabilities that enable organisations to drive a step-change in how they digitise parts of their services, how customers can access them and importantly give organisations new ways to acquire and reach their customers.
Collectively we see these as important pieces of national infrastructure and also core building blocks of eCommerce enabling people to easily access, verify, pay and have their goods and services delivered.
How do you approach transformation — through small incremental adjustments or wholesale change? (Rick Wingfield)
We think about transformation across three horizons:
- 90% of the organisational change effort should be on implementing the large programs of work that are required to keep our business competitive. Today this includes programs such as our Ultimate Customer Network and Post Office Transformation
- 9% of effort should be on incubating horizon two ideas that could be material to our future in 3 to 5 years. Today this includes work on-demand and crowdsourcing, identity protection and management and smart cities and communities
- 1% of effort should be on exploring horizon three, further out innovations that could be transformative in over 5 years, this includes our work on drones and blockchain
Occasionally one of the many ideas that we are incubating will start to gain enough market acceptance, and the revenue and strategic impact are so material that it will require a pivot of the organisation strategy such that this new business or product receives the full support of all parts of Australia Post to reach its scale potential. This is what Geoffrey Moore in his book Zone to Win calls the Transformation Zone. Digital iD is rapidly getting to this point.
Do you experiment with new ideas? If so, how? (Rick Wingfield)
There are three broad ways we experiment with new ideas and support innovation at Australia Post:
- Helping all our people listen to customers and solve customer problems. The key to continuous improvement is to be able to listen to customer feedback and measure improvements. We empower everyone starting with our customer-facing staff to develop empathy, and use experimentation and evidence to validate new ideas
- Co-creating new products and services with our customers. We use standard incubation methods based on lean startup and design thinking in our product and segments teams.
- Launching the Australia Post Accelerator. We partner broadly across the startup ecosystem to create businesses for the organisation and incubate them internally or invest in them via our venture fund
Was there a turning point, a decisive moment when a change in attitudes/ways of working occurred? (Gary Starr)
A pivotal turning point for Australia Post occurred back in 2012 when we launched our Digital Delivery Centre (DDC), with a cohort of 12 digital natives at the time. This team was a seed of change from a cultural perspective and was really the start of an evolution in our ‘Ways of Working’.
Moving the development activity to the cloud was a no-brainer, but the team also invested heavily in tools and automation. 5 years ago, standing up a development environment could take up to 50 days whereas the DDC can now stand up a full data centre environment in under 10 minutes and each team can manage their own environment. Teams can now experiment in near real-time to test and iterate new ideas. This fundamentally changed the way they worked and the nature of what they worked on.
The key differentiator is that these teams are made up of smaller cross-functional teams from across the organisation and they are funded to pursue a customer opportunity — they are given time to deeply understand customer needs and evaluate innovative approaches. The ability to rapidly prototype has meant that we can co-create with our customers; it means we can be much more nimble, responsive and, importantly, customer-focused. Something we could not have done only a few years ago.
From a small group of 12 people in 2012, we’ve now grown the model with over 450 people across the organisation. These are now some of the most engaged teams in our organisation and has led to a fundamental change in culture at Australia Post.
What could AusPost look like in 2030? (Gary Starr)
Given our current rate of change and growth, the possibilities are limitless. If you think about it, in only a few short years, we’ve come from a position of being disrupted to one where we are able to disrupt sectors. We’ve learnt that through our own change, we can help drive change in other organisations.
Our core purpose over the last 200 years has remained the same — to make it easier for individuals to undertake everyday tasks — and we don’t see this changing. However, our strategy for the next 10+ years is focussed on growing the next wave of products and services in the identity and payments sector that will sustain Australia Post’s future. At the core of that strategy is the need to make sure we introduce market-leading innovative products and services that our customers will love and advocate for.
We verify 6 million Australians a year, so about a quarter of the population — over the counter and digitally, and we deliver services for 200 government organisations. So, our focus is on transforming those services from physical to digital or to Omnichannel. Similarly, we are focussed on evolving our payments platform as we see a digital shift in the way customers pay bills, withdraw or deposit cash, transfer money and shop online.
This represents a huge opportunity for Australia Post along with the opportunity to expand this model globally. We understand this is something that gets realised over several years. It takes time. However, we are committed to this vision over the next 10+ year; to contribute to the digitisation of Australia, its citizen and the communities in which we operate, and we are well on our way to realising that vision.
What other ideas are underway for the future? (Rick Wingfield)
We are investing in the future by evolving our products and services to create new opportunities for growth and participation in the digital economy. For Australia Post there are three material arenas of the future that we are focussed on:
- The future of eCommerce — platforms, marketplace, and supply chain innovation is transforming the nature of manufacturing and retail
- The future of Trusted Services — digital identity enables transformation in health, education, financial and government services
- The future of Community — sustainable inclusive communities where everyone is enabled by work platforms and eCommerce opportunities
It’s important that we continue to invest in start-up and entrepreneurial programs that drive innovation within the company.
We support what we call an ‘Accelerator’ program which is a fund where we invest in start-ups that are closely aligned with our business, and where it makes good business sense for us to invest. We have an accelerator program at Melbourne University with a dedicated environment for start-ups to work and we assist with mentoring.
We also support internal ‘Hackathon’ events where Australia Post employees are encouraged to come up with a business idea that supports Australia Post and is aligned to a theme over a set time frame i.e. six weeks. The program gives our staff permission to come up with an idea and empowers them to make a difference to the business and the community as a whole. At the end of the program, there is a voting system where we commercialise the winning idea.
These entrepreneurial programs are really important and they’ve driven a fantastic cultural change within the organisation. I certainly see us evolving and growing these programs to ensure we remain at the forefront of technological and digital innovations.
No one is immune to disruption
Learning to adapt to change at pace means being open to trying new things. Doing this allows any organisation to become more sustainable and future-proof itself. What AusPost has demonstrated, is that even some of the oldest industries can apply innovative solutions that expand on its core service, trusted user-relationships and vast experience. Transforming its offer with the use of digital and technology so that they stay ahead of what’s going on and aren’t left behind to perish and be forgotten.