"We're stronger if we're more than just the sum of all our parts"
Frank Appel, CEO of Deutsche Post AG, unveiled the Group strategy for upcoming years in Bonn. The company will rely on its two strong pillars, Mail and Logistics, which its new name reflects: Deutsche Post DHL. In the following interview, Appel explains the key aspects of the strategy.
Mr. Appel, you've been at the helm of the Deutsche Post for a whole year now. Are you now turning the Group upside down?
Appel: No. We don't have to turn the Group completely upside down. Over the past decades, a company has emerged that offers an outstanding foundation, so we don't have to reinvent the Group. We do, however, have to change ourselves from within in order to be prepared for the challenges of the future. This is all about improving structural interconnectedness, a new transparency in the Group and integrated solutions for the customer.
Does that mean there are deficiencies in these areas?
Appel: We are set up quite well, but we could be much, much better. We must unlock all available strengths to increase organic growth.
Which areas are affected?
Appel: Generally speaking, all of them. The Group has to adjust its structures to be able to work more effectively. Our company rests on its two pillars, MAIL and DHL. The core aspects of this include more closely integrating the DHL business units, programs to streamline planning processes, focusing even more strongly on the changing needs of the customer and an incentive system that emphasizes performance and respectful interaction.
Don't the DHL business units work well with one another?
Appel: Not well enough. We see several opportunities to improve collaboration. With Express, Global Forwarding/Freight and Supply Chain, we have three strong divisions at DHL. But thinking and acting within DHL boxes doesn't help us move forward. This is why we've planned various projects to support cooperation, to present ourselves as "ONE DHL" and to become even more attractive to the customer.
Appel: The integration of the DHL business units will be driven by an Executive Committee DHL. We see the new "DHL Solutions & Innovation" as the organizational unit which will drive innovative logistics solutions. In the interest of the customer too, DHL business unit growth in specific key industries such as life science and technology will be encouraged, and a special cross-divisional sector management implemented.
Is the Mail division going to be less important in the future? With electronic media, isn't the letter obsolete?
Appel: Of course not. And that's why we draw from two pillars of support, one of which is Mail. We are clearly committed to the mail business. But in this area as well, we need to reorient ourselves to maintain our past success. We'll press ahead with concepts that integrate physical and digital solutions in dialogue marketing as well as introduce an online letter to provide secure online communications and integrated sender and recipient services at Parcel Germany. But the physical letter will not disappear. That's why we will continue our efforts to remain the market leader in Germany in terms of quality and coverage.
The emphasis here is on Germany. Have you said goodbye to the international mail business?
Appel: Our international mail business is going quite well and will be further expanded. I believe, however, that there are better businesses for us in Germany and in the cross-border markets than in the foreign domestic division, that is, becoming active in domestic mail markets abroad.
Interaction is strongly emphasized in your strategy. Why is that so important?
Appel: We're stronger, if we're more than just the sum of all our parts. This applies not only to the divisions and Group headquarters but also to every single one of our 500,000 employees across the globe. We've developed a new guiding principle based on the idea of "respect and results." Treating one another and customers with respect is a core element - but the goal is to achieve this without comprising results. The guiding principle should markedly increase employee involvement and commitment. Openness and responsibility are at the center of this effort. For management, there is another specific requirement to promote communication among the Group's divisions: Individuals wanting to become managers or continue to advance in the Group, will need cross-divisional experience.
In the past, you've also launched various programs which had a central focus on customers and employees ...
Appel: Yes, and these programs have established an excellent platform for taking the next step, the one we are taking now. If I want to focus my attention even more on customer's needs, then we've tackled many things successfully with First Choice. If I want to support my employees and help them work together more effectively, then our regular employee surveys help tremendously, and they provide us many suggestions about where we need to improve. Roadmap to Value and cost discipline achieved through our program IndEx are additional strategic programs that will continue to aid us. In the area of corporate social responsibility, we are focusing our efforts on the climate-protection program GoGreen, our disaster management program with its DHL Disaster Response Teams and on education, and training programs like Teach First Germany.
You've described a number of small and large initiatives that are a part of your Group strategy. How does it all work together?
Appel: In our highest goal. We want to be the first choice for customers, employees and investors. In some areas, we're already there; but in others, we're not. In the interest of our own business and to take responsibility in the world where we operate as a leading global logistics provider, we need to unlock our potential. In terms of profitability and rate of return, I firmly believe that we will offer strong mid-term results. We want to achieve annual organic growth of 1 percent to 2 percent above the market average in every business division. In the short term, the task is to deal with the global economic crisis. Success will come if we consistently follow our strategy. If we have satisfied employees and customers, then we'll also have satisfied investors.
Is there a motto that sums up the strategy?
Appel: There's a clear statement that encompasses everything: We want to remain "THE Mail Provider for Germany" and become "THE Logistics Company for the World."