UK: network Rail invests in training

[Steve Appleton]

From Financial Times via Business Day, May 5 2010:

THE OPEN COLUMN, Stefan Stern

Network Rail invests in training to stay on track.

WHY should a classroom full of middle managers from Network Rail, the organisation that runs the UK’s railway infrastructure, need to learn about the work of Karl Weick, a psychology professor from the University of Michigan? How does sitting in a seminar room on a campus near Coventry, in the English midlands, help to get the trains to run on time?

These are not unreasonable questions. A recent trip to Westwood, Network Rail’s leadership development centre, in the company of Iain Coucher, CE, helped to provide some answers.

Britain may have been a pioneer of the modern railway but it did quite a good job of wrecking its own system in the 1990s. A dubious privatisation led to the creation of a new company, Railtrack, to run and manage the network, serving new train operating companies, which carried the passengers.

A series of fatal accidents in the 1990s provoked intense concern about the integrity of the system. After the last of these in October 2000, at Hatfield, north of London, severe speed restrictions were imposed. The rail network almost seized up. A year later the government put Railtrack into administration and its successor, the state-owned Network Rail, was born in October 2002.

“The two best decisions we ever took at Network Rail were, first, to take back direct control of maintenance of the track,” Coucher told me (Railtrack had been a notorious outsourcer of maintenance to engineering companies, losing both in-house expertise and control over costs). And the second key decision? “The investment in Westwood.”

The site was bought from Cable & Wireless in 2005 and Coucher says his company has spent about £25m acquiring and refurbishing it. Why did Network Rail make this investment?

“In 2002 (when the current CEO was MD under John Armitt, Network Rail’s first leader) we found that there was a generation of managers that had no formal development in leadership skills at all,” Coucher explained.

“One of the things that seemed to have slipped away when British Rail (the former state-owned railway) was privatised was the training schools. Railtrack did some training, but it was an early victim of cost-cutting. We looked at this and said we can either train people externally, we can recruit people with the right skills, or we can set about creating our own leadership centre, and that’s what we did.”

It is a handsome set-up. There is comfortable accommodation — “three star”, according to Coucher — sports facilities, restaurants and a bar. There are 38 modern classrooms and a 200-seat auditorium.

Courses are taught by faculty members from the nearby Warwick Business School. About 55000 training “slots” are offered each year, with an occupancy rate at Westwood of 92%. Graduate recruits get to spend six weeks onsite when they join the company.

Is it all paying off? Coucher thinks so. Today’s UK railway network is operating with a much higher volume of traffic, with greatly improved safety and punctuality. Better leadership is driving through change. There have been efficiency savings and new ways of working. There is still a lot to do, particularly in terms of modernising signalling, an issue that has caused tension with the unionised workforce. Threatened strike action has been averted, though, and now looks less likely.

Network Rail’s inheritance was grim — a near broken system. But Coucher thinks the hardest task is ahead. “Fixing a broken company and restoring it is relatively easy,” he told me. “It’s what you do when the company’s performing really well, when you need to move to the next level, that’s tougher. Then you’ve got to get people to think in a different way….

“Many businesses start to change when it’s too late. It’s got to change when you’re still on the up, otherwise you go over the top of the curve and…. We’re saying we need to change now.”

The Westwood centre, as I saw for myself, is proof that investing in leadership development makes sense. And the Karl Weick class? It was based on his 2001 publication (with Kathleen Sutcliffe), Managing the Unexpected, which looked at how to manage risk in “high reliability” situations. As the delegates learned how to develop a more sophisticated understanding of risk, and how to build resilience in a system, the CE (an engineer himself) stood at the side of the classroom, nodding silently. Financial Times