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Save for the uniforms, postal services have very little appeal amongst young adults today. Why snail mail when you can email? Why pay for stamps and envelopes when you can send documents electronically, at no charge? Why head to the post box or post office when this can be done just about anywhere? These questions do not confound Wilson Tan, Group CEO of Singapore Post – or as it is commonly known around the country, SingPost.

As the country's most established postal company, dating way back to 1819 – the year that Singapore was founded by the British – SingPost has had a long tradition of delivering the mail. According to its most recent annual report, this very vocation of providing postal services to the masses is has generated revenue of $268 million in the nine months between last April to December – not too shabby for an organisation that charges a mere 26 cents for every piece of standard mail delivered locally.

With mail revenue accounting for nearly seven out of every ten dollars of revenue, it is by any measure, SingPost’s core and single largest business segment. However, there is disquiet in the air. In the three months to December, the company reported that its mail revenue dipped by 1.2% to $94.4 million. Thus, many questions loom in the minds of stakeholders. How can a postal service provider possibly survive in a world where everything seems to be tilting in favour of digital delivery? Are current profit levels sustainable in the long run? Will employees lose their jobs in the future? To those questions, Tan has a response: "Forget about postal services. Concentrate on Sing Post services."

Reclaiming "cool"

Tan is not overly optimistic about the future of the snail mail. Speaking at a recent Wee Kim Wee Centre CEO talk, he told an audience of mostly SMU undergraduates of a worry – What happens to SingPost on the day postal services become unnecessary? "Every year, postal letters that we send are reducing at a rate of about 5%. It may go up to 7-8%, maybe even 10%. When you start to compound this annually, in 10-15 years, letters may no longer be relevant!"

Adding to this worry is the fact that youths today no longer send letters or visit the post office as often as they used to. The "uncles and aunties" who make up SingPost's primary customer base are also declining. As such, the youth market becomes especially crucial, if for anything, to protect the company's future revenue sources. That is why SingPost is going all out to woo the young – and getting into trouble while doing just that.

Over the 2010 New Year holiday, a masked "vandal" painted graffiti art on six SingPost post boxes. This was intended as a publicity stunt that would put SingPost into the good book of the rebellious, bold and anti-establishment youth. Instead, it got into the bad books of the authorities and some Singaporeans who complained that the campaign would send the wrong messages to the young. The company's marketing spokesperson explained to the press that the stunt had been conceptualised as a viral marketing effort that was meant to strike a nerve with the young and young-at-heart as being "innovative" and "out-of-the-box". It was intended to promote an art competition where post boxes would double up as canvases for street art. But faced with a wave of negative public reactions, Tan had to issue an apology.

Botched as the campaign might have seemed, Tan remains steadfastly determined to pursue the youth market. "Viral marketing is the way forward, in terms of how we should communicate… If you don't send letters and you don't visit the post office, how do I communicate with you? If I go online and start a Facebook page, (I can't think of any reason) why you might visit my Facebook page," he said. "Youths are the new customer base. How should SingPost interact with youths? If we don't go out and use viral campaigns to reach out… can we be cool?"

Diversify and deliver

It may be impossible to preserve the art of communicating via letters. As such, Tan believes that, in order for SingPost to survive in the long run, it must think outside of the (post) box. This underlies his reason for insisting that his employees forget about postal services and instead, focus on SingPost services. "When you think only about postal services, you're constricted… you restrict yourself to only postal activities. But if you step back and understand that this is not just about postal services, but rather, what the organisation, as a whole, should do; that even though the organisation is called 'SingPost', our services can mean a lot more."

Indeed, this openness to non-postal-related business ideas has spawned several new revenue streams. There's "vPOST", a service that facilitates the shipping of items purchased from American, European or Japanese online stores into Singapore. There's "S³: Self Storage Solutions", a no-frills consumer warehousing service. There's also "CASHOME Remittance Services", which offers real time money transfer services to countries like the Philippines, Indonesia, China, India and Malaysia – countries of origin for most of Singapore's foreign and migrant workforce. 

Then there's "KPO", a prominent new development which stands for Killiney Post Office, located by the junction of Killiney, Penang and Orchard roads – a prime real estate, right smack in the city's tourism and shopping belt. What used to be just a regular post office now doubles up as a trendy pub and café. According to Tan, the concept has proved so popular with customers that one should expect to queue on weekend nights just to get in. But beyond its short-term gains, "KPO" is not without a strategic intent.

"It's important that we go out and engage our customers. The issue is how we go about executing this… connecting with you guys. With KPO, (the concept was based on the understanding) that youths are not stepping into the post office anymore, but we know that they will visit pubs and cafés. So as you head into our pub, we can, at that point, learn more about you: what makes you tick; how we should interact with our next generation of customers and clients," said Tan. "I'm very convinced that we will not be able to persuade a new generation into the post office, but we can certainly deliver SingPost services to them. That's where we are choosing to focus."

Reinventing the core

With a varied mix of businesses all coming under one stable, the act of balancing between the old and the new can be tricky. Where should the heart of the business be? Can new ventures really succeed if the organisation remains preoccupied with the old? How can old businesses evolve if the organisation has its hands stretched across multiple new areas? Here, Tan takes, what he calls, a "surgical" leadership approach. What this means is that he is always prepared to slice off the areas to which he thinks are no longer worthwhile to the company, and reallocate resources accordingly.

"We need to adapt ourselves to the environment. There will be times where we must be prepared to cut off things that have been good for us in the past, but may no longer be relevant today… Sometimes, we hold on to the things that we've been doing well, so we tell ourselves to continue doing 'this' again and again, but perhaps the time has come where 'this' is no longer relevant," he noted. "Sometimes, it's better to 'shift gear' and move on."

While seeking out new gains is important for long term survival, a company also needs to protect its core revenue streams. After all, gestation periods for new product and service offerings may be long drawn. It may also take a while to garner that critical volume or traction needed to turn in a profit. Then there is the chance that the venture might fall flat and fail miserably. Tan admits that the core business of postal services is not an easy one to be in, given the odds that are stacked up against it in this digital age. But instead of channelling frustrations at technological advancements, Tan is all for technological change.

He bragged that of all the letters sent in Singapore (by 7pm within the central business district, 5pm anywhere else), 99% gets delivered by the next working day. This, he said, is achieved through a culture of embracing change. Not too long ago, letters were sorted by hand. Back then, many employees were hired just for that menial task and yet, only 93 % of the mail would make it out of the post office by the next day.

Enter the mail sorting machine – a piece of equipment that reads postal codes on envelopes and sorts them accordingly. What happens when the handwriting is illegible? The machine separates those into another belt; a human reads the address in a different room (via video feeds) and re-codes the envelope with an electronic marking. The letter is then routed back into the main sorting belt – all in a matter of seconds. With technology, employees who were once tasked with mundane, menial tasks can be "retrained and retooled", and put on jobs that are new, less tedious and more fulfilling, said Tan.

Balancing between the old and the new is a delicate act that Tan likens to an orchestra. Sometimes, the strings may take the lead, and at other times, the woodwind may take the lead. This analogy applies to the company's business units because different businesses can be tasked drive the organisation forward at different points in time. It also applies to employees because no matter where the "musician" sits, there will be occasions in the symphonic movement where one instrument takes the lead.

Good music does not come from the conductor, but it helps if the conductor listens attentively, he said. So the best thing that a CEO can do is to hire well, so that he may surround himself with better, smarter and more competent "musicians". At the end of the day, as long as there is beautiful music, there will be applause.

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