“People are still one of our core assets, as they directly deliver the customer experience.”
Interview with Ken Allen
“Our success depends on everyone in our organization having a ‘network mentality’.”
Mr. Allen, in the express business it all comes down to speed of delivery and reliability of service. On top you’ve got rising demand from the vast majority of players along the value chain for eco-efficient products and services. The goal, of course, is to provide time-definite delivery using efficient route planning and a fleet of energy-efficient, low-noise delivery vehicles – operated by a staff practiced in “green driving” techniques. What does the reality check say – are you close?
We are well on our way. We have sophisticated capacity and route planning systems in place that ensure we take the shortest and quickest aggregate route to our customers. We provide guidance to couriers on employing driving techniques that are safer and more environmentally-friendly, in a number of markets with the help of telematics systems. And we have accelerated our program to deploy greener delivery vehicles – including electric vans and cargo bicycles – as well as walking couriers, particularly in urban areas. These measures have contributed positively to the overall carbon efficiency improvements every year in our global network, despite the fact that the rapid growth of online retail is changing the pattern of last-mile deliveries – with more individual deliveries (and therefore more driver stops) over greater distances to private addresses. We recognize that there is of course still plenty that we can do to improve our efficiency in our ground operations, and we will therefore continue to renew our fleet, refresh our driver training approaches and continuously review our routings to ensure that we are meeting customers’ expectations for eco-friendly delivery processes.
To reach the Group’s long-term environmental targets there is a need to continue reducing emissions in the air cargo business. The Express division operates one of the largest air fleets in the world – what is your division doing to tackle the environmental dimension in the transport and aviation sectors? Which of these measures are most important for your business?
We need aviation in order to deliver the speed and global connectivity that is at the heart of our service offering. At the same time, it is the single biggest contributor to our emissions, so it is an area of intense focus for our network operations team as we work to minimize our environmental footprint. Until someone develops an emissions-free aircraft – which would require a dramatic leap forward in technology from where we are today – the greatest impact we can achieve in reducing emissions will be through greater efficiency. For Express, this means a combination of using more modern aircraft with lower fuel burn per kilo carried, achieving better capacity utilization of our aircraft fleet and planning routes efficiently. Where we can achieve the same connectivity and service levels by using slower, cleaner modes of transport, we also take advantage of this.
Employee engagement is a critical success factor in a business that has millions of customer contacts a day. The Certified initiative, the Group’s new employee development and engagement program, was rolled out not too long ago. Are you starting to see positive results at DHL Express? What does the cultural change look like?
The Express division actually pioneered the Certified approach. The initiative has been built on the back of our hugely successful Certified International Specialist program, which we launched globally in 2010. We have seen positive impact on our business every year since its roll-out – from increased engagement and active leadership scores in our Employee Opinion Survey results and higher customer satisfaction scores to the productivity improvements that have contributed to our earnings performance over the last seven years. Despite the multi-billion Euro transportation and technology infrastructure that we operate, people are still one of our core assets, as they directly deliver the customer experience. I’m incredibly proud about how the Certified approach has shaped the ‘can do’ culture of DHL Express and to see the program expand into a Group-wide initiative within Strategy 2020. I’m also absolutely convinced that it will drive the Connect pillar of Strategy 2020 and allow our employees to harness the incredible power they have to further deliver great service and value as a team.
Express employees often talk about the importance of team spirit in their daily work. How do you foster this sense of belonging and how does your management team keep in touch with its people on the ground?
Our success depends on everyone in our organization having a ‘network mentality’. One of my personal mantras is that a senior manager should be “in the field and on the ground” as much as possible. I encourage our managers around the world to spend the majority of their time in front of customers and walking the floor engaging with employees. This is the only effective way of ensuring that we can stay on top of the things that motivate our employees and build customer loyalty. The same applies to my senior executive team. We each spend more than 70% of our time visiting our country organizations, meeting customers and employees, conducting facility visits to identify improvement opportunities and reviewing performance from the ground up. Formally, we have embedded these leadership values within our culture through the Certified International Manager program. Our global management board personally facilitates CIM and CIS sessions, which underlines our commitment to the values. It also helps us to have a regular open exchange with people at all levels within the business about how we can strengthen our teamwork and improve performance.
This year’s Corporate Responsibility Report focuses on “Seeing the bigger picture”. In your opinion, which innovations and trends will make the biggest waves in the express business in the years to come – and what will you be focusing on in 2017?
The international express sector is well-established and highly competitive. The main players all have expansive infrastructure and the base level of service quality is relatively high across the overall industry. However, there are still plenty of inefficiencies to be found within global supply chains and international trade regulations, which means that we can deliver dramatic service improvements with the help of what I would call incremental innovation – relatively small changes within our networks and processes that have a big impact on our global service offering. For example, in 2016, we introduced a new automated sorting technology for heavier shipments at our European Hub in Leipzig, Germany. This significantly reduced processing times (as well as costs and the risk of handling errors) for these shipments, which translates into more value for customers. Over the longer-term, I am excited by the potential that automation has, for example, to make our network even more efficient and support growth. I also anticipate that we will take advantages of developments in electric vehicle and aircraft fuel technologies to make our global transport fleet even greener.