Innovation and the UPUBy
INNOVATION AND THE UPU – Some ideas from the Global Address Data Association
The members of the Universal Postal Union are currently engaged in the periodic debate over how the UPU will be structured, and what its strategy and work agenda will be, after the next governing Congress in 2012. The private sector body of the UPU, the Consultative Committee, debated at its recent meeting at the UPU what that work program should be.
The following proposals of the Executive Director of GADA were inspired by that debate. They specifically regard one of the four goals of the proposed work agenda, “Goal 3–Promote innovative products and services, within the 3-dimensional network: physical, electronic, and financial.” Underlying this Goal are four proposed “programs”. This paper is built on the comments made by the Executive Director during that debate and is offered to a wider audience as a starting point for industry discussion of the topics it covers.
The reader may proceed beyond the More Tag below, but is warned that the paper is 8 pages long, and lacks any pictures or designs. In the alternative, you may download a pdf of the document here: Thoughts for the UPU on Innovation (1006)
What is Innovation?
I start my discussion of this proposal by posing the question “What is “innovation”?” “Innovation” is defined by the Strategy Focus Group as “improving processes, reducing costs, strengthening customer loyalty and service”. Certainly innovations can be any of those things. However, this seems to me too “me and now”. In one sense it defines “innovation” as modifying what you are already doing. “Improve our current processes” and “reducing costs”, and strengthening something you already have – a relationship with a customer.
Well, of course these are important things to do and new process improvements are made on a daily basis. A simple reference to any issue of the magazine Postal Technology International magazine shows that.
And of course any “innovation” should hopefully avoid or reduce costs, such as installation of new sorting equipment, or a new way to schedule parcel pickups. The company Intermec, for example, developed a hand-held device with optical character recognition and computer and radio capacities that can read an address on a parcel, produce a shipping label, and communicate with a database to record the parcel and even invoice the client. It could also verify the delivery address on pickup.
Unfortunately, there are few countries where validation within the Postal system is possible, let alone across borders, so some of the promise of the tool is unrealized.
Also, “strengthening customer loyalty and service” should be for any business or government organization, a primary goal. And in fact, should be, so engrained in the culture of the organization that it need not be verbalized. Unfortunately, few organizations ever reach that level.
What is the Postal business? It’s not the medium. It’s communication.
The US railroad industry used to think that its function was to take people and goods to every population center in the country and to haul goods to markets, but two developments ended that role. The first was Henry Ford’s affordable automobile and the second was President Eisenhower’s Interstate Highway System. People could transport themselves, and trucks could transport goods everywhere. What was left for the railroads? It took them awhile to finally fully appreciate their role as bulk commodity carriers (grains for export and coal for electric generation plants). It took them even longer to finally accept intermodal shipping containers. Finally, they became masters at what had been only a part of their business: bulk shipment of massive quantities of goods and bulk commodities long distances. [C1]
The universal Postal system is about communication. Start with that thought, not with letters and email.
It also bears noting that referring to the Postal network as having “three dimensions”, physical, electronic and financial, distracts us with false differences. Referring to “physical” and “electronic” is good to remind us that Posts increasingly are obligated to join the digital world, but it also distracts us from what the Posts really do – provide for communication. The Posts are in the business of facilitating communication among the peoples of the world.
So, it seems to me that these terms “improve”, “reduce”, “strengthen” are inward looking, and imply only simple internal evolutionary change to what one is now doing. Internal Darwinian change at a slow pace.[C2] “Physical” and “electronic” are distracting.
Evolution is not enough.
We are not in a Darwinian world where change can be accommodated over time. Most Posts do not have time; their innovations must be paradigm-destroying, revolutionary, and destructive. Posts must continue to deliver letters and parcels, of course, but to thrive they have to diversify and innovate.
Transformation is not an option now.
Posts are becoming banks, mobile phone providers, online e-commerce merchants, grocery delivery companies, insurance companies, freight agents, technology consultants, direct marketing agencies and list and data processors – in short, they have to master new data processing and communications tools, because they are now focusing on satisfying new needs of new customers.
Innovation for Canada Post has been a major investment in an online marketing vehicle designed to be free for the advertiser, especially small business. It is called CentrSource. The advertiser pays only if a consumer accepts an offer, not for a click. This is a substitute for unaddressed admail, which may well be legislated out of existence in Canada in the near future.
This is true innovation. The advertiser is a “mailer” who only pays if the ad works!
It’s about needs. And customers have many of them.
From my point of view, being from the marketing world, innovation is the art of understanding needs, sometimes unmet needs, and often undiscovered needs, and discovering how to satisfy them better, or for the first time. For small businesses in Canada, getting on the Internet was an unmet need, and CentrSource satisfies that need.
I think we see this most often in the parcel business, where the Posts are finally beginning to understand who their customer is. It used to only be the shipper. The addressee of the parcel was considered a nuisance. She had to spend a lot of time and energy to get her parcel, maybe even take time off from work to be at home when the Postman came, or as in one European country, having to go to a Postal warehouse in a dangerous part of the capital city to collect it.
Now, Estonia Post sends you an SMS when it gets a parcel addressed to you and asks you when you want it delivered, and where. InPost in Poland and Deutsche Post will even suggest a nearby parcel delivery machine where you can pick it up at your leisure, 24 hours a day. And, by the way, you can return the parcel the same way, at your convenience.
Those are innovations because they aren’t primarily about Postal operations or efficiency, although they lead to efficiency. They are about solving a customer’s problem. And here there are two customers: the sender who wants his customer satisfied, and the recipient who wants her parcel with a minimum of effort.
True innovation satisfies needs, which you will not know about unless you think about the customers.
The company Cycleon has satisfied a very costly need for two customers – buyers of products at a distance who want to return the product, and the seller of the product. They satisfy especially [C3] the need of the merchant to make the buyer happy.
The company focused on the client’s total business need – keeping customers. No Post thought of this because they were not thinking about the parcel shipper as having more than one need. They didn’t look at his whole business and all his needs. If a Post is focused on thinking about its internal processes and saving money, it won’t think about what its customer needs– merchants lose customers if customers can’t return products. Merchants lose money on handling returns, of course, but if the return goes smoothly, the buyer is satisfied. If the customer can easily return products, she is much more likely to buy again. If she cannot, she won’t, and the merchant and the Post are both poorer for that.
Let’s choose to not be Darwinian and let’s strive to break molds.
The Work Group has presented 4 potential programs of work within this Goal of promoting innovative products and services. They have not provided a performance indicator for any of these programs, which means the hard thinking is left to be done. What shall we propose that the International Bureau (IB) do? These things, or something else?
Program 3.1 – Modernize and diversify Postal products and services.
It is painfully clear that the IB does not have the resources to actually invent innovative products and services itself, or to determine what aspect of Postal products or services or technologies can be modernized or diversified. In any event, it seems to me that especially the liberalized Posts and those Posts facing ambitious private companies, are modernizing and diversifying at an extraordinary rate. Attendance at, or reviewing the programs of, any of the Triangle World Mail and Express Conferences held regionally around the world will prove that. They are looking for needs to meet, and the IB is not positioned to do that. The IB’s customers are the Member States.
On the other hand, there is a clear role for the IB to do constant surveying and identification of new products, services, and technologies, something they are doing, but only on a somewhat ad hoc basis.
For example, the IB recently put on a day long program of experts in the electronic services field which brought forth interesting developments, but it was pulled together on short notice and not promoted widely beyond a limited community. If they are to continue providing these kinds of “conference and symposium” services, and they should, they need to do it more professionally. Conference management is a profession.
Program 3.2 – Stimulate market growth through the use of new technologies [to develop new products and services].
Dot Post is a good start at providing such stimulus, and the innovative thinkers in the dot Post project have many ideas on how it will stimulate growth, but to complete development of dot Post and to launch it fully requires funding. In fact, it probably also requires the political courage of the membership to delegate clear authority to a Work Group of members to spend that money as it sees fit, and to do so quickly.
While this will be stimulative, is this truly the mission of the UPU? The charter does not refer to this sort of economic mission. In any event, the Posts themselves are better placed to apply new technology to stimulate growth.
It seems to me the IB is better placed to help the Posts to learn about the processes of developing and applying new technologies so they can stimulate market growth in their own countries.
Program 3.3 – Continue development of postal networks along 3 dimensions. Physical, electronic and financial.
Dot Post, International Financial Services, International Parcel Service. All these are meaningful developments already built or soon to be finished through funding provided by volunteer Posts.
I would point out that the latter two are extra-budgetary, paid for as a special contribution and not out of the UPU budget due to political concerns and thus this discussion becomes terribly sensitive. Are these services part of the universal service, or are they not?
But it is clear that with the growth of e-commerce, efficient and secure handling of parcels and payments are becoming more and more critical to Posts and to economies. However, as this occurs, it is becoming clear that the cross-border delivery and payment systems of the Posts with respect to parcels are inadequate and trapped in 19th Century processes. The network is missing something so fundamental that it in fact is not a true network. It has a big hole in it called addressing.
A consumer or small business is now able to order a product from a distant country over the Internet with amazing ease. However, in many countries, if not in most, neither the seller nor the Post carrying the parcel to the destination country is able to verify or correct that parcel’s address, and, to our knowledge, no Post itself does so on receipt. The system waits until the local Postman is unable to deliver a parcel, or it is trapped at Customs because no one comes to pay duties, since the related address is incorrect.
In short neither Post is acting like part of a network with respect to that piece of information, which should be easily and cost-effectively made available to users of the system. Both Posts in that chain have three customers, the sender, the receiver and the other Post, and they don’t act like they understand that.
Consequently, I propose the following.
Program 3.x (1) That the IB survey all Posts with respect to the number of parcels and letters within the system which are of international origin and which are undeliverable and/or abandoned and/or deliverable only to an address other than the one originally placed on it. (2) That the IB convene a conference which will study and debate the creation of a global address verification system usable by all senders of letters and parcels, or a system of universal access to all Postal address systems for such purpose.
All customers of a Post, be they senders, recipients, or dispatching or receiving Posts, should be able to ascertain that an address is correct, current and deliverable.
Why can’t an address on a letter or parcel bound for another country be verified through the UPU network automatically and electronically on intake? Why do the Posts wait until the parcel gets out of the country, past Customs, and at a local delivery point to discover it’s not validly addressed? As noted above, four “customers” have a need in that regard: the shipper, two Postal systems, and a receiver.
This is not now possible.[C4]
Program 3.4 – Facilitate international e-commerce
In many respects, the suggestion above under Program 3.3 is significant enough to be included here, also. In that discussion I pointed out that we needed to think about customers’ needs. Which customers will we think about? Consumers and businesses who buy things across borders? Or who don’t buy? Or do we focus on the Postal processes?
Much has been done on the consumer behavior side by the thousands of professionals in the marketing field, so perhaps the UPU should focus on the needs of Posts. What are the problems, or opportunities? [C5]
In my view, the three major “Postal/business” obstacles to generating much more international e-commerce traffic are (1) expensive or inadequate payment mechanisms, (2) obscure and opaque customs procedures and duties, and (3) inadequate address data or address data that is not readily available to mailers. These are the concerns of the business side. On the consumer side, the major issues are assurance of quality products and ability to return a purchase and get a refund.
I have already proposed a major project with respect to item 3, addressing. But there remain two other clearly articulated areas of concern
The UPU should have a program to quickly study, do best practice surveys, and make recommendations in these two subject areas. (1) Should provision of a payment system be part of the universal service? In many countries the only possible payment system for much of the unbanked population is the Post, India being the largest example. (2) How many parcels become “undeliverable” or are rejected and must be returned across borders? How many are abandoned at Customs because the buyer refuses to pay duties or for other reasons?
A Program beyond those suggested.
Finally, as suggested above under Program 1, [C6] I believe there is something that must be done within the UPU almost before anything else. In fact, it will support all of these programs.
I propose the following:
Program 3.y (1) Hire professional personnel trained in communications and knowledge management who will be tasked to make recommendations and implement programs that will modernize research, knowledge collection, conferences and meetings. (2) Establish programs and systems that will collect, interpret and make available in a systematic and searchable form, and where necessary distribute to the Posts worldwide, records of those meetings, as well as the latest in Postal product and service developments, especially regarding new applications of technology, but also including meeting and other documents and studies relating to topics currently being debated at the UPU. (3) Study, select and implement systems that will enable remote participation in UPU meetings and conferences by both audiences and speakers. (4) Make all such information fully available to the public.
The IB needs to devote some significant resources to studying how it can improve its effectiveness in gathering information and in communicating with members and the world in general. In short, it needs to address how it collects, stores and disseminates information.
Hire a professional.
The skills of collecting, storing, analyzing and communicating complex information are now professional skills in their own right, and deserve some investment. The decisions of what information to collect, determining what it means, choosing the intended audience, putting it in an appropriate form, and archiving it in a manner that permits it to be easily found again, are skills requiring training and experience.
This needs to be done so the IB can focus specifically on more efficiently bringing to the attention of all UPU members knowledge of what is being done to modernize and diversify products and services in the Postal world. (This will also permit more efficient communication of policy debates on UPU issues.)
The need? The members’ need to know “what is the latest”.
I believe innovation in the Postal world will come out of companies and individual Posts, and the best role the UPU can play given the resources available is to collect, analyze, store and disseminate information about those innovations to the members, and to provide forums to discuss those innovations. It can thereby become an incubator.
What sorts of things do I mean?
A start could be made with the website[C7] , which has no search tool. A document or presentation is impossible to find unless one knows the meeting in which the document was put forward. Information on developments within an issue or topic are not traceable or trackable. They should be.
I previously mentioned the magazine Postal Technology International. It is basically a catalog of new products by Postal vendors, but they give food for the imagination, and they satisfy needs that some Posts might not have recognized. The UPU could help assure that its content reaches all Posts, everywhere, and it could provide commentary from its own experts on these innovations.
Seek important material from industry parties.
How about the UPU obtaining and distributing Triangle’s WorldMail Award entry data? This competition is famous for bringing to light fascinating developments across all aspects of the Postal and Express industries. However, Triangle has not had the resources to make this information widely available. I have spoken to them about this and believe they would welcome a partnership with the UPU to do just that.
Tap the wisdom of the crowds.
The UPU could have an ‘Idea Page/Forum’ on the UPU website and invite Postal and logistics experts world-wide to contribute thoughts and commentary on a problem. How about a blog on the website for the senior executives of the Posts, or for their engineering staff? An informal ad hoc group of Postal experts in the US have launched “PostalVision 2020” to discuss the future of the US Postal Service under the rubric of “What would Google do?” the name of a best-selling book by Mr. Jeff Jarvis, who is one of forces behind PostalVision 2020.
How much more quickly could S-42 have been adopted and implemented world-wide if “how-to” materials were Posted in multiple languages, and a “help desk” facility provided, perhaps staffed by volunteers from the countries who have promoted the standard.
And surely some portion of these materials should be available in more than one language.
Advertise and advise.
Recently, the IB organized an E-commerce Workshop on short notice, and speakers from many private companies and Posts attended to show their innovations. This event was not promoted or advertised and was only “publicized” by an entry in a revised version of the Calendar which simply noted there was an “Ecommerce Forum”. News of the content and speakers apparently were shared only by word of mouth, as best I can tell.
It was by all accounts an inspiring meeting. This is all very nice, and of course the presentations are available, but even in that respect one has to know about the meeting, its title and date and the committee which organized it to even know the presentations are available, or how to find them.
Again, the science of knowledge management is not a science currently being practiced by the IB. Neither is communication with its constituents with respect to programs and coming events.
Thoughts on formats of conferences.
The IB should of course hold conferences. It is skilled and knowledgeable in identifying participants and organizing agenda. But are they the best way to satisfy the needs of the customers, that is, the Posts from around the globe?
Perhaps it should do these conferences in a completely different format. Perhaps it should examine more closely a way to make available on the Internet as much news of innovations and change as it can.
In person conferences are inadequate to spreading knowledge to the vast audience we must reach. Perhaps they should be recorded and made downloadable, or rebroadcast on a delayed schedule.
Maybe on one or another subject one does not convene an in-person conference, but the IB has a selection of speakers on a topic recorded and archived, and the speeches are released in one batch for review with commentary by a “moderator”. Or the conference is “live”, but remote, with speakers from around the world participating by video streaming. There are available numerous “virtual conference” software tools to accomplish these things.
Holding in-person conferences where numerous people must gather in one place at one time to hear a succession of speakers who have in many cases travelled long distances to speak and must wait for each other before they can talk, seems terribly inefficient and 19th century. Today I can have a conference call with video which has people together online from around the world. And I can do this for free up to a certain number of participants.
This proposal set out in bold above will enable the IB to become innovative in the practice of “promotion” through enhancing (1) the resources devoted to obtaining information in many forms, (2) its analysis, (3) its cataloging and storage in an easy-to-search medium (what would Google do?), (4) its means of communicating with the UPU membership, and (5) its ability to partner with the private sector in accomplishing all of those goals. The IB can help stimulate growth and efficiency by bringing to the attention of the Posts around the world news of the use of new technologies and how they are being deployed, news which would come out of nearly every Post in the world. Call this the wisdom of the crowds. Or call it looking to the best. But call it also contemporary electronic and physical high-speed research, development and dissemination.
Conclusions and Recommendations:
With respect to Goal 3, promote innovative Postal products and services, a program should be added as follows:
Program 3.y (1) Hire professional personnel trained in communications and knowledge management who will be tasked to make recommendations and implement programs that will modernize conferences and meetings by employing technologies to enable remote participation by speakers and audiences. (2) Establish programs and systems that will collect, interpret and make available in a systematic and searchable form, and where necessary distribute to the Posts worldwide, records of those meetings, as well as the latest in Postal product and service developments, especially regarding new applications of technology, and including meeting and other documents and studies relating to topics currently being debated at the UPU. (4) Make all such information fully available to the public.
And the following Program should be implemented:
Program 3.x. (1) That the IB survey a selection of ecommerce merchants and all Posts and Customs authorities with respect to the number of parcels and letters within the system which are of international origin and which are undeliverable and/or abandoned and/or deliverable only to an address other than the one originally placed on it.
(2) That the IB study what barrier Customs procedures and duties actually present to ecommerce.
(3) That the IB study restrictions by Posts on foreign mailer/service provider access to address databases for deliverability confirmation.
(4) That the IB study licensing terms of Posts for access to address databases by businesses, domestic or foreign and recommend best practices that will result in maximum availability of address data.
(5) That the IB convene a conference which will study and debate the creation of a global address verification system usable by all senders of letters and parcels, or a system of universal access to all Postal address systems for such purpose, and propose concrete steps to realize such a system.