There is an aura of optimism that greets anyone visiting the Postal Corporation of Kenya (PCK) offices for the first time. And why shouldn’t there be? Only recently the Corporation secured a multi-million Independent Electoral and Boundaries Commission tender to transfer election materials countrywide. The Corporation is also fresh from launching a new transfer product – Mpost – that allows users to transform their mobile phone number into a formal postal address, making them able to receive letters and parcels wherever they are in Kenya. In June this year, Mpost won the top award for innovation during the Africa Public Service Day (APSD) in Kigali, Rwanda. It was declared the best innovation in the Youth Empowerment Programme category.
Thanks to its new CEO, Dan Kagwe, and a revamped and vibrant workforce, the Corporation is finally waking up from years of recession to appreciate emerging technology and market diversification, which had seen it fall victim to a worldwide decline in mail business. PCK is no longer the poorly run, loss-making government entity of years past. Not if you ask the IEBC, National Treasury or a host of reputable lenders scrambling to identify with it as business partners.
A study on “Corporate turn-around strategy in Postal Corporation of Kenya” by Catherine Kalee had rightly observed that PCK has been hit by the dynamics of change in economic environments.
“From legislation that allowed entry of new and more vibrant privately-owned companies into the market, which it initially, solely, dominated, to the constantly changing consumer needs, alongside advancement of technology, the organisation has faced the need to revolutionise its strategies if it is to remain vital in the modern markets.”
The CEO admits that PCK was slow in embracing technology, noting that if the organisation had been quick in picking up some of the innovation when they started creeping into the market – like mobile money transfer – the Corporation would have been many steps forward in its sector.
“We had this mentality about having the monopoly of Postal Services and that made us lose in terms of technological uptake. The global decline of mailing business further compounded the problem, resulting in cash flow issues because of shrinking revenues from that line of business, never mind that expenditure was still increasing. We had to devise innovative ways of covering the deficit and that has driven us towards growing the e-commerce opportunities,” says Kagwe.
“Key focus was placed on incorporating technology, which is already paying dividends as you can see from Mpost, and maximising the potential of our workforce as well as that of our vast network of assets.”
In the 15 months Kagwe has been CEO, initially in acting capacity, PCK has used the 630 branches in Kenya that had been severely underused to attract business from various service providers, including banks. In the recent past, several banks have teamed up with Posta to deliver services to their clients. “We have got the biggest network. Banks are cutting on brick and mortar to save on cost, so that they will not need a building to offer services. All they need is Point of Sale service (PoS) system which is integrated with our system,” says Kagwe.
Banks that are currently working with Posta include Barclays, National bank, DTB, Co-operative and KCB.
Kill negative perception
Kagwe admits that the Corporation has made positive strides towards changing the negative mind-set that had been associated with it. Banking on this positivity, he exudes confidence that it has immensely contributed to the organisation, attracting new business opportunities from various companies because of the trust that it has earned. He points out “negative perception is what kills more business and that is what we do not want”.
“IEBC has trusted us to deliver all their material countrywide during the general election. We are handling their logistics and, to me, that is a belief in our organisational capacity. When people perceive you as trustworthy, they will want to work with you,” explains Kagwe.
The CEO adds that he believes in growing leaders from within by fostering teamwork and matching people with the right skills and knowledge to a given job. That way, he says, they can increase efficiency in service delivery. When recruiting, Kagwe says he focuses on someone’s knowledge of the job, work commitment and availability to execute the work at hand expeditiously. “These are the qualities that describe my leadership style.”
The Corporation hopes that by becoming more innovative, it will be able to shed off its current tag of a government business unit that is not paying dividends to its only “shareholder” yearly. Since inception, it has only done that once, in 2014 when it gave the National Treasury a cheque of dividend worth Sh17.3 million.
However, the very same government that expects dividends has not been keen on supporting its “baby”.
“All the years that we have been in operation, we have never received a subsidy from the National Treasury; we have been on our own. What we actually want to happen, and that is what we have been pushing for, is for government services to be offered at Posta. Such services include courier, clearing and forwarding, and payments (financial inclusion) among others. We have written a paper to our parent ministry to express our wish,” says Kagwe.
Ironically though, the Ministry of Information Communications and Technology formed a task force to revamp Posta. In handing over the report, the task force had a radical proposal on what the Corporation needed to do to reduce its wage bill and become a profitable outfit. Though not public in its entirety, the task force report said that Posta has a “bloated workforce” and thus recommended that hundreds of workers be laid off.
However, Kagwe is of a different opinion; he does not believe that laying off some of its 3200 staff is the right thing to do.
“The phrase ‘bloated workforce’ comes from lack of money to pay staff or lack of work to give them. So, in our case, what do we do? Do we get rid of people or do we increase our business? My belief is we should build our business and not fire people.”
He adds that sacking people affects a lot of families negatively and thus the right thing to do is to transform most of those staff into aggressive marketing agents. “I’d rather use the personnel I have positively rather than fire them,” he says.
Through its dedicated workforce, Kagwe is confident that PCK is heading in the right direction, a fact that was observed recently as the company reviewed the progress of its Corporate Strategic Plan (CSP) 2016/19.
“A major observation we noted is that we are on our way to doubling our revenue this year from Sh3 billion in the last financial year 2016/2017 to about Sh5.2 billion June 2018,” says Kagwe in optimistic conclusion.