Strategy
Keeping your change agenda on track
Rail organisations that manage change most effectively will be in the best position to transcend current pressures and shape the industry to their own strategic advantage. Liz Newson looks at how this can be achieved
I
n the last two years the industry has seemingly invested a huge amount of time and effort in creating a clear vision for how it intends to address the dichotomy in being recognised as both a key enabler for economic, social and environmental welfare and a significant drain on the public purse. The government commissioned ‘Rail
Value for Money’ informed both long- term thinking and immediate priorities as outlined in its paper ‘Reforming our Railways: Putting the Customer First’. Subsequently, government, Network Rail and the industry have developed more detailed plans for the period 2014 – 2019. In parallel the Rail Delivery Group (RDG) has gained significant momentum and profile as it seeks to bring industry leaders together to collaboratively address strategic challenges.
But has all of this hard work given the rail industry the necessary clarity to confidently align its business strategy and invest in internal change programmes that will transform its organisations and make them fit for purpose? Or has it been
completely undermined by last year’s West Coast franchising debacle? To help better understand how successful the UK transport industry has been at navigating complexity and uncertainty, transformation consultancy Moorhouse surveyed more than 130 board members and their direct reports from a cross-section of UK transport operators and infrastructure providers, overseeing a total transformation budget of £2.1billion. The research revealed that: • Less than a fifth of senior leaders in the rail industry (compared to a third across the transport industry as a whole) believed that the government’s vision for the future of the UK’s transport network was clear
• All rail respondents (compared to nine out of ten of the transport industry as a whole) indicated that government policy impacts their strategy and investment decisions. Only one felt lack of a clear vision had not negatively affected their organisation
• Just a quarter of those working in the rail industry (compared to a third
across transportation) believed their organisation was effective at working with government and influencing future transport strategy.
Let us hope that the Transport Secretary’s newly unveiled plans, including a revamped franchise programme, went some way to restoring confidence and providing the intended long-term certainty to the market. Either way, our survey results suggest that organisations can achieve strategic advantage by persisting with their collaboration with government. Those able to create effective working relationships had greater clarity on the transport vision for the UK, felt better able to select the right mix of projects to deliver their strategy and were more confident that change agendas would deliver intended benefits. Moorhouse’s Navigating Uncertainty research report outlines two further recommendations that should help organisations in the rail industry to achieve greater success in delivering strategic change.
Take a benefits-led approach to investment in change Unfortunately our research identified a lack of discipline in how organisations are managing their major investments in change, with about £1.65 billion being invested without a comprehensive business case, and around £1.5 billion without proper evaluation of return on investment (ROI). While a number of factors should be considered when selecting and prioritising strategic programmes, a benefits-led approach is key. The most successful organisations set a clear link between the outcomes of each change initiative and corporately set strategic priorities, such as reducing cancellations and significant lateness. This helps organisations make the initial decision to invest, adjust the mix and relative priority of initiatives over time, and stop programmes where business cases are no longer valid.
ROI cannot be quantified without May 2013 Page 61
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