Case Analysis

Title Singapore Post: Transforming Mail Services in the Internet

Case no SMU-13-0016
Subject Corporate Transformation

A Retrospective Assessment
You are a COMM101 student at the Singapore Management University. You have been thinking
about the key issues that business leaders must confront as they implement corporate
transformation programmes. You wonder why corporate leaders would even consider such
programmes, when the data show that fewer than half of such programmes succeed, and almost all
are painful to leaders and employees alike.

“Change is inevitable … extinction is a choice,” you muse sleepily as you try to re-read the assigned
Singapore Post case and your COMM101 readings in preparation for the in-class activity on Difficult
News Messages. Despite your best efforts, you find yourself nodding off.

An Alternate Reality… In Another Time

Suspend disbelief as you read the following scenario, as some information has been manufactured.
You are in dreamland, after all…

It is 10am on a Monday morning in November 2011.

Dr Wolfgang Baier has been Group Chief Executive Officer of Singapore Post Limited (SingPost) for
one month, and is preparing to announce his Ready for the Future programme. Dr Baier recognises
that HR is a key enabler of any transformation strategy: “Transformation is 99% people
management, and only 1% is getting the right direction and framework”.

The faster that staff see work as survival of the most creative and adaptive and not as an ‘iron
ricebowl’, the faster and more effective SingPost’s transformation will be. To this end, SingPost will
be unrolling various leadership development and training workshops. Central to Dr Baier’s Ready
for the Future programme is a new Compensation & Benefits plan to encourage continuing
behaviour change beyond the concepts taught in these workshops. SingPost is also planning to
strategically hire expertise to help it grow its new focus areas, notably in e-commerce. SingPost
needs to make sure that all employees understand the expectations of the organisation and adopt
SingPost-style behaviours from Day One.

The Ready for the Future programme and new compensation structure dovetail with Dr
Baier’s desire to get everyone on board, transforming SingPost into a world-class provider of mail,
logistics and e-commerce solutions.

A New Compensation & Benefits Plan

The new plan has been carefully calibrated to transform employee behaviour. Currently, all
employees receive a base salary and year-end bonus. Under the new plan, the customary year-end
bonus will cease to exist, and 20% of all employee salaries will be performance-based. A key
performance metric includes proactive problem-solving — how much initiative employees
demonstrate anticipating and resolving problems as they crop up, instead of waiting for someone
else to handle it because “it’s not my job”. The higher the cost savings and revenue uplift to
SingPost from employee-generated solutions, the greater the performance bonus.

Based on their annual performance, employees will receive a ‘pot’ of money to ‘buy’ benefits. When
the ‘pot’ crosses a threshold, an accelerator kicks in so that employees receive 1.6 times the original
sum. Excellent performers might thus receive 30-40% of their salary to buy benefits like more
vacation days, Uber limousine luxury transport, and travel upgrades to business or first-class.
Employees can also choose to take the whole amount home in cash.
Also, the awards come in tranches: from basic benefits, such as dental treatment for the children, to
ultra-luxurious benefits, such as attending a conference with Bill Clinton as a keynote speaker or an
exclusive Arctic Circle spa holiday for SingPost employees.

---------------------------------------------------

In your dream, you are an intern in SingPost’s HR department, responsible for taking minutes of all
meetings related to the Ready for the Future programme. You ask your manager Ms Penny Tan if
you can draft Dr Baier’s letter to all SingPost employees, announcing his initiative.

“It’s a great Compensation & Benefits plan”, you say to Penny. “I’m sure everyone will be really
excited about the new SingPost we are building.”

“I don’t want to curb your enthusiasm,” Penny replies. “But, Dr Baier himself knows that the vast
majority of employees will not welcome his Ready for the Future initiative and new Compensation
& Benefits plan because it may only be the top 1% of employees who enjoy the accelerator effect
and ultra-luxurious benefits. Below-average performers will likely attain only 90% of their current
salary. Imagine the impact this announcement will have on them. Anyway, go ahead and draft the
letter. Have it on my desk first thing tomorrow morning, so that I can forward it to Wolfgang to
review.”

Your Task
Using the Indirect approach, draft Dr Baier’s email to SingPost employees, informing them about his
Ready for the Future programme and the new compensation structure. Do so in a way that will
encourage SingPost employees to stay the course through this corporate transformation
programme.

Address your email to your manager Ms Penny Tan (pctan@singaporepost.com). She will forward
it to Dr Baier for his final review. Dr Baier’s secretary will then email it to all SingPost employees
before the company townhall meeting and cocktail party next Friday.

Your email may begin as follows:

To:
From:
Date:
Subject:

Dear Penny,

As promised, here’s the draft of Dr Baier’s letter to SingPost employees.

Cheers,
your name

…
[Baier letter with appropriate formatting, subject line, salutation and sign-off.]