by Phil Marsh

Lifting the bonnet on Network Rail by their Chief Executive as they become subject to Freedom of Information legislation

Published: 20th March 2015

Full, frank and open discussions looming for Network Rail

The annual Bradshaw Lecture is a ‘must attend’ event at the Institute of Civil Engineers because the speaker is always one of the very top railway executives and the networking opportunities are second to none.

The 2015 event was hosted by former Transport Secretary Lord Adonis with Network Rail’s Chief Executive Mark Carne booked as the speaker - one year and a day after joining the company. His lecture was called ‘Lifting the Bonnet’ on Network Rail’ and it was just that.

He started by saying that he could have talked about the doubling of passenger numbers or about the £25billion worth of projects Network Rail (NR) will be delivering in the next 5 years including the Great Western electrification or amazing station projects like Birmingham New Street.

He also said he had considered talking about the Digital Railway, a recurring theme of his where he suggests that there will be a technical revolution in the next 15 years or so when we could lead the world in digital train control creating more capacity, reliability, speed and safety at lower cost and a smaller environmental footprint.

Instead Mr Carne said he wanted to talk about people and culture as there was nothing more important to the future success of the railway. He said that his first year in NR had been a rollercoaster ride and had been, most days, thrilling. He said that staff were amazing people who are hugely committed and that this could be seen in times of crisis but that there was more we could do.

If we didn’t do more, the inevitable result would be declining performance and despite many past achievements with more and more passengers, we have sometimes let them down which was not acceptable.

Continuous improvement

For him, continuously improving performance was non‐negotiable and that policy had worked in the oil and gas industry - his previous industry. He also wanted NR to become a caring and trusted organisation and to get rid of the impression that the company focusses on its own priorities while not caring sufficiently about our impact on other people.

Society wants to see an organisation that cares about passengers, neighbours communities it affects and that engineering competence is not enough.

Impressions of the company is sometimes disproportionately influenced by individual events that live on in their memory – a clear reference to the post-Christmas engineering works delays. Anecdotes promoting incompetence such as stale sandwiches, leaves on the line, the wrong kind of snow have become folklore over the last 30 years.

Reputational life under the microscope is the reality of life today so we have to respond by setting higher standards in everything we do. Care and trust must be the bywords that we live by.

Mark Carne then said that in a normal competitive world that if you didn’t deliver then customers would go elsewhere but the railways are different. And because they don’t really see how their dissatisfaction with NR translates into negative consequences for us [NR] they can start to distrust us. It is clear to me that a lot of the negative media coverage of the railways is driven by this desire to hold us accountable on the public’s behalf.

It matters…

No one likes getting poor media coverage, but it matters, especially for our people who see bad headlines again on their way into work, or even being ridiculed by friends and family. It matters in our quest to attract the best and brightest people to the company and becomes more difficult to make the case for the required sustained investment.

We are determined to win the public’s trust and if we are to stop being the company that people love to hate, the public needs to see a high performing organisation and crucially one that demonstrably cares about passengers, lineside neighbours, the communities it affects and its own employees and contractor partners.

Changing the underlying culture

In the first year in a new industry, you have to first understand the issues and then decide your strategic approach. This then leads to the correct organisational structure to make sure the right people are in the key leadership roles and can deliver the strategy.

I have just two central philosophies that guide my leadership of an organisation and underpin the culture of the company I want to lead. I see it as a moral and an ethical responsibility to keep people safe, whether that be passengers, the public or our workforce and I deeply believe that when we have a safe workforce we will keep passengers safe and we will keep the public safe. A genuinely safety-conscious workforce cannot run an unsafe railway.

Mr Carne went on to say that despite running the safest railway in Europe about 600 railway employees and contractors are injured a year and have to have time off work. The comparative figure in the oil and gas industry is about 10% of that. Punctuality was the measure that everyone worked to which gives out the wrong safety message. Once safety is improved, performance will follow by using motivated and competent staff doing things right first time.

Societal mental health issues and the railway

One in four people each year suffer from a mental health problem of some kind and Mark Carne wants his staff to feel they are working in a supportive environment where help is at hand.

He wants not only a supportive environment but a demanding one in NR holding people to account in a fair and transparent way where people understand the safety rules and the consequences of the decisions they take. This also applies to contractors and those at the top.

He said that many staff had told him that poor planning is a problem affecting industry performance and that poor planning was behind most safety incidents. History suggests that the root cause of accidents starts months and sometimes years beforehand in the design, budgeting, planning and contracting processes. This is why a safety conscious culture has to be led right through an organisation and the whole industry.

A caring railway?

Mr Carne said that we need to show our actions as leaders that we care and this is one reason why he had been so focused on what he called the ‘tidy railway’. Which is frankly a bit of a scrap heap. NR has a huge programme underway to collect tens of thousands of tons of scrap rail and sleepers plus we are cutting down hundreds of miles of buddleia along the railway.

This makes a safer and more attractive railway for passengers and staff alike and many may have noticed that the routes out of Euston and Kings Cross amongst others have been cleared of graffiti and lineside debris. This brings the message that NR cares about it passengers and lineside neighbours and our people.

Better every day?

Mr Carne’s second business philosophy is really very simple. We should have the ambition and desire to be better every day through structured continuous improvement, to deliver a better service every single day. And in a business where there was no competition, the responsibility falls to NR’s leaders to drive that ambition through the company.

He then drew a parallel with his previous oil and gas industry when over ten years ago he was responsible for the production of about 25% of the UK's energy supply from over a hundred offshore oil and gas fields. The employees had no fear of competition as they were in essence a profitable monopoly and had a license for years to come.

It is the same with NR and we need to inspire employee performance who are isolated from customer pressure and who feel that they have a job for life. Mr Carne then said he wanted a culture where everybody had the opportunity to deliver to their maximum potential. So we need transparent performance targets to focus people’s creativity and there must be clarity of accountability and a clear ‘line of sight’ reporting process.

After six months of corporate focus have started to bear fruit with a 30% reduction in temporary speed restrictions and some had been in place for years. The new approach to lineside vegetation has improved autumn adhesion issues and improved signal sighting.

Back to basics

Mark Carne said that this was basic stuff and that all too often these basics had been forgotten because of a new fad or initiative diverting resources. So the measured approach of getting the basics right and delivering better every day is not new to industry or in engineering.

This policy works best when a whole system approach is taken which includes building stronger relationships with suppliers. Profitable suppliers bring successful relationships that encourage innovation and new idea and MR Carne believed that our contracts should reward this. Squeezing margins from the supply chain in a race to the bottom was not sustainable as a long term relationship with suppliers gives them the chance to build improvement into their work.

They also don’t have to worry about chasing the next small contract and can recruit and invest in staff and training with confidence.

Unintelligible incentive scheme

The NR incentive scheme in the last five years was Mr Carne said, “Pretty incomprehensible” and he didn’t believe it acted as a true incentive as our employees couldn’t understand how they could directly impact it.

NR now has a transparent business performance scorecard published monthly informing employees and the public how we are performing and what has to be done. Being open with your staff and everyone else is an essential step to winning trust but today it feels painful as our scorecard shows so clearly where we are not yet delivering.

Freedom of Information looms

Being transparent and open will ultimately engender trust, which is why Mr. Carne welcomed Network Rail coming under the Freedom of Information legislation at the end of March.

He did not underestimate the challenges that this will bring but society has a right to know how we make decisions. Such as about capital allocation to improve safety at level crossings for example as society has the right to know the trade-offs NR has to consider.

Diversity and inclusion driving innovation and performance

Mark Carne said that a true diverse organisational culture is where people can be themselves and bring 100% of themselves to work and don’t have to act or pretend and this applies to all regardless of background or gender.

There is a proven correlation across multiple sectors and geographies between diversity and inclusion and innovation and high performance. This was demonstrated on the offshore oil and gas industry and as more women worked offshore in the North Sea 20 years ago the change they brought was profound.

Only 14% of NR’s workforce are women today which helps to explain the macho culture within the company. It will take another 65 years at the present rate to reach a 30% level of women staff which is seen at the tipping point for culture change.

NR is also taking big step to attract minority groups to the company to provide support and inspiration Mr Carne believes that if he can succeed in creating a high performance culture they can be trusted and become an industry the best want to join.

Conclusion

Network Rail has huge responsibilities and faces many challenges and our country needs us to succeed. And to regain the trust of passengers. Building the ambition to be better every day will be founded on focus and rigour, but also on inclusiveness, creativity, collaboration and teamwork.

Rail.co.uk says:

It was a fascinating speech and it truly lifted the bonnet on Network Rail in so far as what their faults were and their strengths may well be. So long as the politicians don’t interfere with their trainset, the strategy looks good.

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