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Decisions. Decisions. The life blood of any manager. Should I do this? Or that? What about the other? What will happen? Oh, I wasn’t expecting that…
Virgin decided to install entertainment systems on its Pendolino and Voyager multiple units when it introduced them in the early 2000s, just as passengers took to iPods and brought their own entertainment with them.
First Great Western put seat-back screens into its HSTs, just as passengers took to iPads and brought their own films with them.
Rail companies are still scrabbling to bring WiFi onto their trains, generally at the Government’s behest. Meanwhile more and more passengers are using 4G data from their mobile phones.
Government ordered electric trains before discovering their intended routes would not be wired in time. This led to it having to change its contract with the train builder to have diesel engines fitted.
If there’s a common theme in these examples, it’s that risks were not fully explored, understood or identified. These risks were not to safety or life, they were risks to investment - commercial risks. The risk of wasting money.
Of course, we can look back more easily than we can look forward. Hindsight is all-seeing. We are all prisoners of our experiences, but managers must look into the future. Sometimes (often?) that future is murky. What if the economy tanks? Or booms? What if my new trains don’t work?
RSSB publishes guidance, in the form of Taking Safe Decisions. Its title neatly summarises it. But change that title to Taking Good Decisions and substitute risks to life (safety) with risk to business/revenue/reputation (income), and it still delivers sound advice.
This crossover extends to standards. They are often blamed for increasing costs, but in reality they reduce costs when used properly. They drive standardisation, rather than bespoke solutions. They allow things to be repeated, rather than developed from scratch every time. The trick is to recognise when something is the same and when it is different.
Britain has a very safe railway. But managers and staff didn’t achieve this simply by applying standards left, right and centre - not least because applying a standard may not reduce a risk to as low as reasonably practicable (the legal test). They achieved it by looking for risks, thinking about them and mitigating them.
You can apply the same principles to projects. What are the risks involved in installing new points on the approaches to a major London terminal in four days over Christmas? What happens if it’s too windy for cranes? Or so cold that ballast freezes in wagons? Or a key piece of kit fails? Or engineering train drivers run out of hours?
As with safety, risk is a combination of a hazard’s probability and consequence. And the different risks may be linked. You might lose two hours of crane use from high winds. Does that raise or lower the probability of drivers running out of hours? Looking backwards can help decide on the probability of an event. Looking at previous incidents can give some idea of the consequences. You need both if you’re to assess risks and act to mitigate them. Of course, you can ladle on too much mitigation and too much contingency, pushing costs upwards, and that’s something many think Network Rail is guilty of.
Reviewing an event after its delivery provides the opportunity to analyse your plans and decisions. It’s the time to decide what worked well and what didn’t, the time to decide whether there was too much mitigation or too little. Properly recorded and readily accessible, this analysis will inform future managers.
What risks apply to franchises such as East Coast, which owner Stagecoach reports is not performing in line with expectations? What mitigations sit within (or outside) its franchise agreement with Government to protect it from a falling economy? Or Network Rail’s infrastructure being unable to support the new IEP trains it will use? Or those trains (ordered by Government) not being fit?
How has the Government assessed what risks face both itself and taxpayers? And there’s another franchising ‘what if’ that should concern the Government. What if it accepts another bid that brings an entirely new fleet of trains in place of one that’s not old enough to retire?
Explored in more detail in RailReview Q2-2017, is it prepared for the consequences of the rolling stock finance market pushing prices up, as it realises that trains now have shorter lives?
International Financing Review reported on Eversholt’s £400 million bond sale on July 29: “One fund manager said he was passing up the opportunity because he was worried that adding new train fleets will become a more important part of winning rail franchises than price, and the re-letting risk for older trains will increase along with credit metrics.”
There are unintended consequences aplenty in that scenario, and it demands thorough analysis and clear thinking from the Department for Transport.
Finding credible answers to these problems needs good managers with good training and education. It’s an area that is worrying some. At the National Skills Academy for Rail (NSAR), Chief Executive Neil Robertson reckons that fewer than half of rail managers working in management jobs have appropriate training. He notes that there is good training out there, but not enough.
His worries extend upwards to the skills of senior managers, particularly commercial skills. What seems absent is not the skills and experience needed to run a rail operation, but those needed to run a business - communications, people, governance, risk, marketing, productivity and commercialisation of assets.
Robertson is keen that managers think of rail in its economic place. How does rail fit into wider transport policy? How does rail fit into wider transport networks? How does a train fit into an end-to-end journey?
There’s scope, he thinks, for developing an executive masterclass programme for senior managers. This might look at financial models and financial engineering, which he suggests are core skills in other sectors. It could look at new technology and its implementation in what is normally a very conservative industry. It could look at how to make productivity improvements.
Robertson suggests that such a course would need at least 16 attendees to make it worthwhile, but with someone from each train operator and Network Rail Route that should not be hard to achieve.
There are shades of the old railway staff colleges in what he suggests, as well as shades of today’s military staff colleges, which mix training for specifics of an army, navy or air force officer’s career with education that encourages wider thinking beyond their service. The military also teach their people to understand the situation at least two levels above them when they’re planning their own activities. This is done specifically to allow them to seize opportunities that appear, because they know a course of action will match the wider picture.
Peter Hansford’s recent investment review for Network Rail looks at how to build confidence and reduce costs so that private money might be attracted into investing in rail infrastructure. He reports one view of the difference between working for Network Rail and for Highways England.
“A comparison was made by one consultee between dealing with Network Rail and Highways England on a specific project. The Highways England sponsor was described as consistent, empowered, motivated and supported by their organisation to effect progress. The road scheme in question was delivered by the private funder with its own contractor and to its own required timescale, and was accepted by Highways England based on an assurance package covering the standards applied and corresponding construction and test records. The rail connection by comparison, which was to be delivered by Network Rail, was beset with issues of inconsistent advice, rising costs and changing dates.”
