Complex Business Transformation Leading to a Customer-Centric Organisation. Tim Craddock Network Rail
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1 Complex Business Transformation Leading to a Customer-Centric Organisation Tim Craddock Network Rail
2 CIPD Organisation Development Conference & Workshop October 2017 Tim Craddock HR Director, Route Businesses Network Rail 4-Oct-17 / 2
3 Rail is a success and growing Drivers of growth Population +10m Urbanisation 250,000 houses/year Road congestion Better railways! 4-Oct-17 / 3
4 Network Rail who are we? Rail is vital to the UK s economic growth creating jobs and building houses 4.5 million passenger journeys per day We have the safest railway in Europe Network Rail employs 36,000 people across the UK And supports 89,000 full time jobs in our supply chain The railway and its supply chain support 216,000 jobs 4-Oct-17 / 4
5 Our investment strategy. 1. Be innovative and cut the cost of projects and deliver them efficiently. 2. Attract private investment from the people and places that will benefit from better railways. 3. Manage our portfolio of assets to reinvest in those things that passengers want the most. 4-Oct-17 / 5
6 As a consequence We are investing 100m every single week on improvements for passengers We are adding more capacity, which will allow more trains as well as enabling longer and faster trains through longer platforms and the electrification of key lines. 98% of our supply chain expenditure is with British companies More than half our suppliers are small medium enterprises (SME s) Some of Network Rail s major projects will deliver 4 for every 1 invested. Our work means that there will be 170,000 extra seats into London at Rush Hour 30% more seats into the great cities of the North We need to find innovative ways of squeezing more from the existing network. In many cities and towns there is simply no way to build new railways. This means we have to harness digital technology to deliver real benefits to passengers. 4-Oct-17 / 6
7 Our purpose 4-Oct-17 / 7
8 The transformation journey for Network Rail An Independent Company that acted like a Regulated, state, monopoly Transformed to A Public Sector organisation that acts like a Private Sector Business 4-Oct-17 / 8
9 Strong route businesses Devolved businesses Scotland Freight Separate regulation 2019 CP6 plan LNW Wales Western Wessex LNE & EM Anglia South East 4-Oct-17 / 9
10 What were the specific challenges? Create space for strategic leadership Enhance operational excellence intelligent customer to drive value and consistency Third party funding: to develop and grow Grow capacity through digital rail technology Enhance safety (including intelligent infrastructure) 4-Oct-17 / 10
11 Key OD Principles Sharpen accountabilities: make the matrix work Reduce spans of control Reduce layers from route managing director to frontline Blend a consistent framework with flexibility Enhance capability 4-Oct-17 / 11
12 Organisational Characteristics transforming Network Rail FROM Regulator Monopolistic Taxpayer credit card the 5Cs CUSTOMER FOCUSED COST COMPETITIVE COMMERCIAL TOC/FOC Devolution Cost conscious Better every day Private Capital Monochrome CULTURE Safe, caring and diverse A problem CAPACITY (Passenger growth) Rewarded Digital Railway /
13 NR Operating Model Customer focused route businesses with aligned incentives Central Support Central Support System Operator Technical Authority Corporate Core LNE LNW Wales S.E. England & Wales Anglia Western Wessex Freight &Nat. Pass. Scotland Optimise the overall use of the national network for the benefit of all users. Policies, standards, new technology, benchmarking, competency frameworks Corporate activities including Business Strategy, Functional Policy and Assurance. Routes & Route Services Route Services Route Services Digital Railway Infrastructure Projects Services agreed by the routes cost competitive and efficient Transformation of the railway through deployment of digital train control Develop, design and deliver large complex capital projects /
14 Route Transformation Programme Transforming out Route Businesses Workstream Objectives FOCUSED CUSTOMER COMPETITIVE COST CULTURE COMMERCIAL CAPACITY Route leadership Team Implement a Route Level 1 and Level 2 structure that produces the capability required to deliver a customer focused, commercial and competitive route led business. Freight Route & National Operator Route Boards Scorecards Develop a Freight & National Passenger Operator Route (FNPO) organisation that is aligned to its customer needs and can deliver commercial capability required to expand the freight business.. Create a new governance structure for the Route Led businesses that puts customers at the heart of their business and allows them to run their business autonomously but with an efficient and effective level of governance Continue the evolution of customer led scorecards so they continue to be aligned to customer needs and requirements Northern Route Create a framework for the North that is aligned with its customers and the political and economic geography and supported by institutional structures such as TfN. Deeper devolution Devolve a services to the Route based businesses so that accountability and capability is at the right place. Culture Create a culture that is safe, diverse and inclusive. Delegated Authority Increase in Route financial responsibilities and accountabilities. 4-Oct-17 / 14
15 What is the proposed route leadership structure? Increased focus and single point accountability for day to day operations Broader sponsorship skills and experience to enable more robust specification and management of enhancements Dedicated business development / commercial capability to identify and develop opportunities for 3 rd party investment (definition ongoing) Route Managing Director Broader RMD role to enable additional focus on strategy, business development, future outlook and key stakeholder engagement Single point of accountability for technical authority (includes reporting line change of HoRSHE into DRAM) Route communications and stakeholder engagement strengthened. Core capability devolved and accountable to the RMD Route Chief Operating Officer Route Project Sponsorship Director Route Business Development Director Route Asset Management & Safety Director Route Financial Director Route Head of Human Resources Route Head of Communicat ions Route Programme Director (Change) Route Head of Maintenance Delivery Route Head of Operations Delivery Route Head of Performance & Customer Relationship Management Route Head of Planning Route Programme Director (Works Delivery) Single (separate) points of accountability for operations and maintenance capability under operations ( COO role) Enhanced focus on performance & customer relationship management to enable more proactive customer engagement Single point of accountability for operations planning and performance management Key New Roles realigned under a single point of accountability for day to day operations Broad er Realign ed No change 4-Oct-17 / 15
16 The key elements of transformation strategy 2017 Devolution - decisions closer to passengers faster, more relevant Transformation Strategy Aligned incentives between track and train focused on passengers Low cost services market competitive Contestability in the delivery of projects (Hansford Review) New sources of funding economic growth, housing, jobs Inclusive, caring, safe and relentlessly continuously improving culture Planning railway investments as a system best return for taxpayers Ability to assist transformational change across industry Digital Railway 4-Oct-17 / 16
17 What will the expectations be for the future railway? Many more passengers 2. Improved reliability and instant information 3. Lower costs and better service quality 4. High safety expectations not tolerant of failings Key future 5. Driver for economic growth challenges 6. Embracing of new technologies and enablers The overall passenger experience is a lens through which many of these can be viewed 4-Oct-17 / 17
18 Transformation Oct-17 / 18
19 Within a national framework 19 4-Oct-17 / 19
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