Critical Investigation of Risk Mitigation Strategies: Royal Mail UK

This dissertation provides a critical investigation into risk mitigation strategies during operations transformation, using Royal Mail UK as a case study. It highlights the necessity for businesses to adapt to market demands and maintain a competitive advantage. The research explores Royal Mail's transformation process, its initial failures due to lack of market analysis, inability to incorporate digital platforms, and poor communication. It further analyzes the strategies implemented to overcome these failures, including the adoption of digital technology and automation, as well as the formulation of a new business plan benchmarked against leading courier organizations. Based on secondary data from Royal Mail reports and other sources, the study employs non-probability sampling to examine the reasons for failure and the techniques used for mitigation, ultimately offering conclusions and recommendations for successful operations transformation.

Running head: LEADERSHIP AND TEAM MANAGEMENT DISSERTATION
Research Topic- a critical investigation of risk mitigating strategies within operations
transformation: a case study of Royal Mail UK
Name of the Student
Name of the University
Author Note

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Acknowledgement
Firstly, I would like to thank my Principal Mr./Mrs./Ms. ____________________________ to
provide me the opportunity to be a member of the _______________________ University. I am
grateful to complete my education under his guidance.
I would also like to thank my mentor Mr./Mrs./Ms. ____________________________ for his
hours of guidance and encouragement that helped me to gain confidence.
I want to thank my parents for supporting me throughout the project which has helped me to
sustain all the obstacles that have obtained.
My friend and classmates also have a supporting role in helping me with the research papers.

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Executive Summary
This research highlights the critical research on the risk mitigating strategies within operations
transformation in case of Royal Mail UK. It is evident that in order to maintain the need of the
market and obtain customer demands, a business needs to improvise their business function. This
will provide them with a competitive advantage. In case of Royal Mail, the transformation
process was initiated after many years of their annual loss and the first initiative failed. The main
reason for the failure of the business transformation process was lack of professionalism in
analyzing the market demand, the inability of incorporating the digital platform, implementing
modernization and lack of communication among the employees. Moreover, the strategies that
are taken by the organization for overcoming the failures of the business transformation process
is also explained. The processes that they have considered were implementing digital and
automation technology to make the business processes fast and effective. Moreover, Royal Mail
also formulates a completely new business plan for overcoming the drawback. This time, they
have compared their plan with the leading courier and mailing organizations so that the newly
formulated plan can sustain all the odd of the market and customers. This research is based on
secondary analysis and finding from the Royal Mail’s reports, collaborating organization’s
websites and authentic newspaper sites. Thus, non-probability sampling is implemented in order
to accomplish this research study.

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Table of Contents
Chapter 1: Introduction....................................................................................................................8
1.1 Background of the study........................................................................................................8
1.2 Rationale of the research.......................................................................................................9
1.3 Problem statement...............................................................................................................10
1.4 Aim of the research..............................................................................................................10
1.5 Objective of the research.....................................................................................................10
1.6 Question of the research......................................................................................................11
1.7 Structure of the research......................................................................................................11
Chapter 2: Literature review..........................................................................................................12
2.1 Background of the company................................................................................................12
2.2 Theories of change management and business transformation...........................................12
2.2.1 McKinsey 7-S Framework............................................................................................12
2.2.2 Lewin's Change Management Model...........................................................................16
2.2.3 Kotter's 8-Step Change Model......................................................................................18
2.3 Causes of failure in business transformation.......................................................................22
2.3.1 Improper planning........................................................................................................22
2.3.2 Improper alignment of stakeholder’s objectives...........................................................22
2.3.3 Inefficient execution.....................................................................................................23

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2.3.4 Poor communication.....................................................................................................23
2.3.5 Lack of acceptance and commitment...........................................................................23
2.3.6 Poor leadership.............................................................................................................24
2.4 Techniques of mitigating failure of transforming the operation..........................................24
2.4.1 Establishing transparent communication system..........................................................25
2.4.2 Meetings with business experts....................................................................................25
2.4.3 Adopting risk management techniques.........................................................................26
2.4.4 Developing learning plan..............................................................................................26
2.4.5 Designing reward system..............................................................................................27
2.4.6 Developing new team...................................................................................................27
2.4.7 Spreading the risk.........................................................................................................27
2.5 Methods of transforming the business operations...............................................................28
2.5.1 Preparing flow chart.....................................................................................................28
2.5.2 Force Field Analysis.....................................................................................................28
2.5.3 Data Collection.............................................................................................................28
2.5.4 Culture mapping...........................................................................................................29
2.5.5 Project plan...................................................................................................................29
Chapter 3: Research Methodology................................................................................................30
3.1 Research Philosophy............................................................................................................30
3.1.1 Justification for selected research philosophy..............................................................30

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3.2 Research Approach..............................................................................................................30
3.2.1 Justification for chosen research approach...................................................................31
3.3 Research purpose.................................................................................................................31
3.3.1 Justification for selected research purpose...................................................................31
3.4 Data collection process........................................................................................................32
3.5 Data Analysis techniques.....................................................................................................33
3.6 Sampling Technique............................................................................................................33
3.7 Ethical consideration...........................................................................................................34
3.8 Research limitation..............................................................................................................34
3.9 Research Timeframe............................................................................................................34
Chapter 4: Data Analysis and Findings.........................................................................................36
4.1 Reasons that cause failure in business transformation........................................................36
4.1.1 No plans for incorporating parcel service.....................................................................36
4.1.2 Inability to incorporate digital transformation..............................................................38
4.1.3 Battle for Modernization through Privatization............................................................40
4.1.4 Poor communication among stakeholders....................................................................44
4.2 Techniques for mitigating failure of transforming the operation of Royal Mail.................46
4.2.1 Privatization of the company........................................................................................46
4.2.2 Incorporating digital platform and automation.............................................................47
4.2.3 Changing the entire business procedure.......................................................................51

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4.2.4 Internal communications program................................................................................53
Chapter 5: Discussion....................................................................................................................54
Chapter 6: Conclusion and Recommendation...............................................................................58
6.1 Conclusion...........................................................................................................................58
6.2 Recommendation.................................................................................................................59
Reference List................................................................................................................................61
Appendix........................................................................................................................................73

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Table of Images
Image 1: Structure of the Research................................................................................................11
Image 2: McKinsey 7-S Framework..............................................................................................13
Image 3: Lewin's Change Management Model.............................................................................16
Image 4: Kotter's 8-Step Change Model........................................................................................19
Image 5: Overall Inland Mail Volumes in UK from 1981 to 2012...............................................36
Image 6: Projected Volumes of projected volumes, 2005 to 2023................................................37
Image 7: Projected Volumes of Total inland parcels, 2005 to 2023.............................................38
Image 8: Operation of the compensation scheme for 2016/17......................................................39
Image 9: Strike by Postal Worker of Royal Mail..........................................................................41
Image 10: Operational Transformation in Royal Mail..................................................................48
Image 11: Future Vision for Transformation Journey...................................................................50
Image 12: Royal Mail’s Business Plan..........................................................................................51

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Chapter 1: Introduction
1.1 Background of the study
Paul et al. (2014) stated that the term business transformation refers to a strategy to align
the employee, stakeholders, operation functionalities and technology with new mission and
objectives of the organization. Donaldson et al. (2015) furthermore affirms that business
transformation is nothing but innovate the existing business strategies. However, transforming
business operation is a critical issue for those organizations that do not focus on Business
Improvement Review (BIR). Statistics show that failure rate of change program can go to 70-
80%; whereas, organizations using effective transformational procedures can also obtain 80%
more success rate (Ravanfar 2015). In recent times, the transformation in business can be
witnessed mostly through a digital transformation as people are no longer attached with the
traditional way of doing business. Buranapin and Ratthawatankul (2015) highlighted that in retail
stores, online website facility allows people to shop for their required products at their homes
and get the delivery on their preferred day. On the other hand, in the courier service
organizations, the service for letter delivery is replaced by delivery of parcels.
Looy et al. (2014) moreover portrays that a successful business transformation results in
better streamlining the business operations with greater agility and improved effectiveness. This
process also enhances the productivity of the organization and put their impact on stronger
financial and process control (da Rosa and da Silva 2015). Another advantage that can be
obtained by an organization due to successful business transformation is improved customer
service and higher financial growth. In some of the cases, development of a re-energized
leadership can also be seen and this leader proved to be efficient for driving the augmentation of

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the entire organization. This research highlighted the approaches used for mitigating the failure
of transforming the operation of Royal Mail.
1.2 Rationale of the research
Aithal (2017) stated that the reasons due to which the business transformation objectives
failed is due to not seeking proper professional advice, lack of personal growth, lack of
experience, lack of focus, wrong expectation and desire to copy other business irrespective of the
fact those organization perform a completely different operation. da Rosa and da Silva (2015)
furthermore depicted that sometimes, improper planning, improper alignment of the stakeholders
and absence of executive support become the reason for the failure of the transformation of
business operations. Mafini and Pooe (2014) also affirms that poor communication channel also
results in lack of collaboration which diminished the professional bonding among the different
stakeholders starting from the initial days. Moreover, lack of continuous enhancement strategy,
improper analysis of the situation, lack of acceptance and commitment and improper resource
allocation also leads to failure of the business transformation process.
In case of Royal Mail, there were five main objectives set by the organization,
modernization, privatization, separation, commercialization and automation (Cox 2013).
However, the problem arises when the concerned organization desires to the implement
modernization without privatization. Mafini and Pooe (2014) also stated that the company did
not initiate the process of modernization for many years as they believe that modernization will
bring about job losses. There were two massive strikes in this postal company when automation
technology had been introduced. This research thus highlights the problem arises due to change
in business and how the organization mitigated the business transformation procedure.

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1.3 Problem statement
In order to meet the current demand of the market and the customers, some business has
to change their operational procedures and management. However, some organization invests
financial resources for initial research for identifying the current demands of the customer,
carrying out market analysis and selecting effective stakeholders (Gokdeniz et al. 2017). These
organizations are more likely to get success than those organizations that do not develop any
prior strategies to implement business transformation procedures. (Cox 2013) furthermore stated
that in some cases, businesspeople had to take certain steps than may have a harsh impact on the
organizational environment but proved to be a successful decision after a certain time period. In
this case, Royal Mail intends to change their existing business operation but at the same time,
they also want to keep their employees associated with them. This is the reason when they have
declared about the implementation of modern operational facilities; some employees had a
negative attitude. This research thus shows the problem that was raised due to the decision of
incorporating modern business operation and the mitigation plan that the organization adopted to
overcome the adversity.
1.4 Aim of the research
This research thus, aims to highlight the mitigation strategy that the organization, Royal
Mail has taken when their approach to transforming the business operation failed.
1.5 Objective of the research
 To analyze the reasons that cause failure in business transformation for Royal Mail
 To assess the techniques of mitigating failure of transforming the operation of Royal Mail
 To develop suitable for methods of transforming the operations for Royal Mail

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First Chapter: Introduction to the Research
Fifth Chapter: Discussion
Second Chapter: Literature Review
Fourth Chapter: Data Analysis and Findings
Sixth Chapter: Introduction to the Research
Third Chapter: Research Methodology
1.6 Question of the research
 What are the reasons for failure in business transformation of Royal Mail?
 What are the techniques for the mitigating failure of transforming the operation of Royal
Mail?
1.7 Structure of the research
Image 1: Structure of the Research
(Source: Created by Author)