Hanna Arayasilasie is one of the youngest CEO’s in the government structure. Her leadership at Ethiopost as a CEO is applauded for reviving a failed, corrupt, and bankrupt age-old institution from its sad demise towards the height of a firm-standing, profitable and exemplary establishment. Addis Zeybe’s Abiy Solomon sat with Hanna to discuss her journey of reform at Ethiopost.
Addis Zeybe: Tell us about your background, to begin with.
Hanna: I attended high school at Nazareth School, graduated in law from Addis Ababa University, and took my master’s degree in Legal Theory from a university in New York. I worked in a management consulting firm after graduation and practiced law for some time.
Addis Zeybe: How did you get into the government structure?
Hanna: I really had the interest to work in a government institution. Many shun serving in government duties for many reasons such as inefficiency or politics. But if you consider it in terms of impact, it gives a better opportunity to serve the people. Because the little effort you exert brings about vast returns. This is one of the reasons. When I used to work in management consulting many of our projects were public projects. At that time I found the low competence and interest level in government institutions concerning. The lack of seriousness in the handling of grand governmental issues really concerned me in those particular public projects. I wished to be on the other side of the table.
Then when I was learning my master’s degree in New York, I was thinking about which government institution I could serve. Thus I reached out to my former teachers who worked at the Ethiopian Investment Commission at the time and requested them to hire me. That’s how I joined a governmental institution. I really wanted to do something good and solid there.
Addis Zeybe: How was your stay at the Ethiopian Investment Commission (EIC)?
Hanna: I had a good experience at EIC. One of the reasons I was interested to work at EIC is I studied Legal Theory for my master’s Degree and did my thesis on the developmental state economy. At the time the Ethiopian government was implementing the developmental state. And since one of the significant undertakings in the developmental state is the establishment of mega industrial parks which was being managed by EIC by then, I become interested to serve there.
My first assignment at EIC was as an expert in the industrial park division. There was a lot of excitement during the time of attracting foreign investors to the country. After that, I worked in the Prime Minister’s office when Prime Minister Abiy Ahmed took power. But I returned back to EIC assigned as Deputy Commissioner of the industrial parks division. And in March 2020 I joined Ethiopost as a Chief Executive Officer.
My assignment to Ethiopost is related to the part of the government’s 10 years Digital Ethiopia initiative to work intensively on e-commerce. Postal service is believed to play a significant role in the e-commerce system. However, the postal institution wasn’t found at that level of competence and was a significant concern. So, I was given this assignment to transform this institution in order to enable it to play the intended role in e-commerce.
Addis Zeybe: In what shape did you find this institution when you were assigned as a CEO?
Hanna: The postal office was at a concerning status when I joined. I heard the institution had serious administrative problems. In the briefings I had with the management team on my assignment, I could learn in a few days that the office was in a really worrisome status.
The postal office had no internal financial control system. It hadn’t a basic controlling mechanism any profit-making company need to have. It hadn’t had financial statements for a number of years and property registration, among others. Attributed to this, many false reports claiming year-to-year growth of the postal service used to be presented to higher supervising entities. But the reality on the ground was otherwise. Beyond the inexistence of proper control, corruption, theft, and embezzlement were clearly common. For instance, what was shocking is a new car that is bought is reported to be lost, and an amount of 200 million is said to be gone because of unspecified reasons. That was very shocking to me because I came from budget institutions where a loss of petty amounts such as 11 birr from a big budget raises concern. The enormous wastage was startling to me making me question how such a mess went this far without supervision.
Moreover, at a management level, there were also misplaced funds and unaccounted money. Hence, this has remarkably tarnished the institutional image. This has given the image to the employees that their bosses are not being responsible to the company. It has made the members of the office depressed and insecure about the survival of Ethiopost. There were also significant problems with the services we deliver such as the unusual loss of posts. Generally, everything had been dysfunctional.
Addis Zeybe: After you spotted what was wrong in the enterprise, what was the first measure you took?
Hanna: Since the financial issue was very concerning, I let the finance be audited. That’s the first measure I took. I considered the first measure in two ways. The first thing was clarifying the past financial flaws and the next was tightening the upcoming financial control system. In this regard, we’ve issued a new financial procedure.
Addis Zeybe: What were the major areas of your reform?
Hanna: So as I’ve told you earlier the first area of the reform is improving our financial standing and increasing our revenue. When I was assigned Ethiopost was at a loss of 78 million ETB. There are about 2400 employees, 10 years' tax wasn’t paid, and we had a number of customs payables. So since it was an institution whose revenue and expense was not clearly stated, paying salary had even been a struggle. Thus, our major concern was how we can maximize our revenue and cut unnecessary costs. To this end, we have centralized cost allowance completely. Accordingly, if it is not permitted by the head office, no cost can be incurred. This is done with the belief that we can at least go from that extreme toward discipline. As a result, we decreased our operational cost in the 2012/13 Ethiopian fiscal year by 86%. It became evident that these expenses weren’t even important previously and used to drown in individuals’ pockets.
In the framework of raising our revenue, we planned to revise and renew our basic postal service. Our office delivers basic postal services and on the other side, we undertake sales services for other companies as a representative. And since much of the embezzlement was in the services we deliver as representatives, the basic postal service was ignored. As a showcase of this, our postal tariff wasn’t revised for about ten years and you can imagine what kind of loss we have been operating. As the focus of the management was on other issues, the postal sector was forgotten.
In this regard what we consequently did was revise our tariff and make our mailing services generate more revenue. The other measure we took was restructuring our debts such as requesting our creditors to give us a relief time. This is among our financial reforms.
The other direction our reform focused on was recovering our customer service and corporate image in general. The Ethiopian postal service was away from the public’s visibility. Rebranding the office and its image was part of this. We moved on to recalibrating the company’s structure. In this regard, we have created a separate customer service department which was previously merged with another one with an intention of taking customer experience seriously. Improving customer experience included laying down an effective employee control system. In addition, we have implemented a system in our finance, property management, and HR which were previously being handled in traditional and manual ways.
The rebranding work we undertook comprised renaming the company from Ethio Postal Service to a short name Ethiopostal and redesigning the logo in keeping with the previous brand identity.
Furthermore, we have implemented a system mainly in the company’s finance, property management, and HR operations replacing the former mostly manual ways. What should be finally mentioned about the measures in the reform is we have worked in enhancing the capacity of our employees with various training.
Addis Zeybe: What was the outcome of the reform?
Hanna: When we look at what we did in finance, we have been in a 78 million ETB loss in the 2012 Ethiopian fiscal year. And in 2013, we could achieve a gross benefit of 72 million ETB before tax. This is mainly attained because we have made our mailing services more actively operational. In the past Ethiopian fiscal year 2014, we scored a profit of 180 million ETB which is a growth of 120%. And we yearn to double that this year. Our plans might be ambitious. An institution that lasted this long shouldn’t only strive for profit but is expected to contribute to the country’s economy.
On the other side, our mailing service was the one which was much complained about because there was incompetence and diligence in the operation. We have made significant improvements concerning this. As a testament to this progress, we were placed in 117th place when we were independently ranked by the Universal Postal Union. In 2021 we could be privileged to be at the 68th level in the ranking.
Addis Zeybe: Among these, what is the success story that you take pride in personally?
Hanna: While comparing the 2012 and 2014 Ethiopian years, in 2012 there were several administrative problems, especially in human resource management. When I joined the office, there was a lot of complaint and maltreatment reports. Many people came to me and cry from their deep disappointment. Despite all this, at the end of 2014, seeing the satisfaction and delight of the employees is the foremost achievement that I take pride in.
That’s the outcome of being able to create an environment people work and go happy. Though we can’t say there are zero complaints, we are making efforts to let people obtain what they deserve and have clarity about their duties.
Addis Zeybe: After all the reform, what were the feedbacks from clients, the government, and international partners?
Hanna: The overall feedback from our customers is interesting. According to the customer satisfaction survey we did, our clients are happy with our mail safety and speed key indicators. But there are areas we need to work in yet, such as customer experience.
With our other stakeholders, we directly report to the Public Enterprises Holding and Administration Agency which is under the Ministry of Finance. So both the Agency and the Ministry are happy about our current status. Since they knew the problems the postal service was in detail, it was quite incredible for them that we can pull out of the mess.
The other institution that we report globally is the Universal Postal Union (UPU). Given the remarkable progress jump we registered in our EMS instant mailing service, the Union invited us to Bern, Switzerland in October to let us share our success story with other member countries.
Addis Zeybe: We are in a digital age that is pacing tremendously. And it's obvious that the age-old postal service is struggling with the serious impact of the digital age and developed another identity enabling it to cope. How do you compare the Ethiopost’s status compared to the global trend?
Hanna: As I have told you earlier, our global ranking is at 68th place. UPU classifies member countries into 10 classes. And we are in the fifth class. If we consider what the countries in the above four classes are doing, we can realize the vast difference in the postal service sector growth between developing and developed countries. For instance, the Swiss Post of Switzerland is usually ranked 1st. Looking into their operational development based on the “relevance” measurement scale, which indicates the relevance of postal service to the people, in countries like Switzerland somebody wouldn’t stay even for a month without using the postal service.
This is because postal institutions provide various services beyond transferring posts and parcels. In this case, any governmental services such as payments to be made to the government are done via postal services including other deliveries similar to issuing passports. If the government wants to reach out to citizens with any service, a postal service would be the first partner. This is one of the reasons that differentiate developed countries.
Another factor we can mention here is “reach”. The number of postal offices in Ethiopia and other African countries is limited. For example, the 700 branches we have compared to our 120 million total population is few. Our reach is better in contrast to other African countries though. Thus, because African countries can’t establish this system of building a postal community, people don't have mailboxes at their homes. This can be well illustrated with France's postal service which has 17 thousand post offices in a country with a population lesser than ours. We have a far way to go to ensure “reach” through expanding outlets and diversifying delivery options.
Furthermore, the other challenge that we would face is financial services, even though it is not basically a postal service. Japan Post which is ranked 2nd and 3rd globally has its own big bank. Some countries render full-fledged banking services in their postal institutions. The postal service is ideal for providing financial services since we have the opportunity to reach people and places financial establishments can not.
Addis Zeybe: What does Ethiopost intend to work on to bridge these gaps?
Hanna: Among our upcoming plans in our three years strategy is extending our governmental services as a major sector. In this regard, for instance, we have started delivering issued passports on behalf of national immigration. People previously had to go to the immigration service to do so. We are also planning to further the national immigration’s services to home-to-home delivery. We are making preparations to undertake any governmental service in our network, especially bigger projects such as the National ID registration and distribution.
With respect to technology, the major income of postal services was mail transfer. But the relevance of mail is declining yearly, while the movement of packages and items is increasing such as e-commerce’s instant mailing. We are working to position ourselves in this area in cooperation with the UPU. So, we are resolving the issues we have with mail safety and speed to ensure having the competence e-commerce transactions require.
In general, we are striving to build our capacity so as to be ideally placed in the growing e-commerce market. This entails handling export, import, logistics, and transit e-commerce activities through the postal service. To this end, we are working on one project jointly with the World Bank. Thus, the next frontiers will be digital and financial readiness.
Addis Zeybe: What’s your advice on corporate leadership and reform?
Hanna: I’d like to highlight the importance of changing the culture to transform an institution. What I basically believe is essential in reforming institutions in our country is communication. Communication is often considered an afterthought. But it is very important to bring people on board and convince them. Besides, we need to show people the supposed hope and the possibility of doing it. We also must raise the bar high in our planning. Our aspirations shouldn’t focus on flinching an inch from where we are. To plan ambitiously motivates people. It’s a big thing to plan 100% and achieve 90% of it.
Addis Zeybe: Are you happy after all this?
Hanna: Yes I’m very happy! Because things may seem simple and obvious. But to achieve the transformation in Ethiopost within just two years is quite incredible and exceptional.