With testy union-management relations, declining mail volumes and customer disenchantment, the new man will have a very full in-tray, writes Emmet Oliver
After almost five months, one of the most high profile, if hugely challenging, roles in the State-owned sector has been filled.
Carrying an annual remuneration package of €351,000, the chief executive's job at An Post goes to a man with relatively limited experience of the State sector. Donal Connell (53), replaces a veteran of the semi-state sector, Donal Curtin, who spent most of his career with the Electricity Supply Board (ESB). The lack of semi-state baggage carried by the new man probably has both advantages and disadvantages.
Like most things that happen with An Post, the appointment process was not without its controversies or hitches. Several candidates' names came tumbling into the media over the past few weeks, embarrassing some of those who had applied. At the weekend, it was reported that Waterford Crystal chief executive John Foley had been appointed, but within 24 hours it transpired he had turned down the job. Another candidate, David McRedmond, commercial director at Eircom, had withdrawn his application a week earlier.
Many observers looking at the recruitment process believe the length of time it took to appoint a candidate (Mr Curtin announced his departure on January 26th) may have created a vacuum that was filled with media disclosures and comment. If a new chief executive had not been named yesterday, there is little doubt that observers would have started using the word "saga" about the whole process.
Yesterday, company chairwoman Margaret McGinley strongly denied the accusation An Post had gone "around the houses" to select the new chief executive. She said confidentiality, at least on the selection committee's part, had been maintained and the response to the original advertisement had been very positive. She declined to comment on media reports carried over the past few weeks that Mr Foley was first choice.
Asked what were the main challenges facing the new man, she said implementing the change programme, getting the Fortis joint venture in place by the first quarter of 2007 and, of course, boosting revenue growth.
Mr Connell takes up his job on July 14th.
The recent problems at the company (it posted a pre-tax loss of almost €30 million just three years ago) might have dampened the enthusiasm of some would-be candidates. To be fair, the company has managed to turn itself around under Curtin. It produced a pretax profit of €41 million last year and managed to cut costs by €12 million.
But the real financial picture lies beneath these headline numbers. Put bluntly, An Post is a business in decline. Its stock in trade, the collection and delivery of letters and other items, is at the sharp end of this trend. The number of items per capita has fallen in the past four years by almost 10 per cent. In other words, the public, whether for reasons of technological change or dissatisfaction over price rises, has started to desert the service.
More worrying though is that, even with a rising population, the total number of items delivered has also fallen by 4 per cent in the past four years. As for margins in the business - they are at rock bottom at 2.1 per cent.
Sometimes unflattering numbers of this sort would encourage all sorts of confident executives to take up the challenge, hopeful they could put a better gloss on the performance. But the ability of any one individual to re-shape a company like An Post is rather limited because of the relations between unions and management.
An Post has had a less than harmonious industrial relations climate for several years. Most of the time an atmosphere of mutual loathing exists between leading members of the Communication Workers Union (CWU) and An Post, for instance.
Even yesterday, as Donal Connell was getting used to his new surroundings at the GPO, the CWU was trying to force an apology from the departing chief executive, Mr Curtin. Earlier this week, at an Oireachtas hearing, Curtin alleged that absenteeism rose sharply at An Post's mails centre during certain World Cup matches. This drew a sharp rebuke from the CWU national officer, Sean McDonagh. He claimed official An Post figures showed the level of absenteeism actually falling.
He said: "According to the official report from the company, month-on-month absenteeism has decreased in mail centres, with levels in May standing at 6.9 per cent, down from 8.39 per cent in March. There is also no evidence to support Mr Curtin's claim that absenteeism in mail centres has risen during the period of the World Cup."
He claimed sick leave among managers at the company was up, not absenteeism among sorting staff. Proving the accuracy of such statements is difficult, but either way it illustrates the difficult atmosphere Connell will step into on July 14th. Looking over his CV there is little experience of heavily unionised companies.
One area where Connell does bring impressive credentials is in supply chain management. At 3Com Corporation, he was vice-president of worldwide supply chain operations, during which 3Com won awards for its supply chain performance. An Post has a sizeable supply chain - 1,570 post offices, 2,905 delivery vehicles and 756 million items sent to the end consumer annually.
While the new man has experience making supply chains more efficient and less costly, Connell will soon discover that others have failed to make this happen in An Post before.
An Post also has a strict universal service obligation (USO). A USO is an obligation placed by the State on An Post to provide a service of a specified quality to all users irrespective of geographical location, at an affordable price.
So with a tough USO in place, testy union-management relations, declining mail volumes and customer disenchantment, the new man will have a very full in-tray when sits at this desk in mid-July.
