“If your chief executive is not interested in HR, then your business is stuffed.”
So says Network Rail CEO Iain Coucher, a self-confessed ‘hands-on’ boss who likes to immerse himself in every aspect of his business, including people management.
“We’ve been following a very aggressive change programme for the past five years, and I see it as one of the crucial elements of my job to keep our 35,000 people fully engaged, even when that change makes them feel uncomfortable,” adds the 47-year-old engineer, who has spent the past 10 years in public transport, first at London Underground, now at ground level running the country’s railways.
Being on a mission is at the core of any job when you’re as senior as Coucher, but his end goal – to create a world-class rail network that uses less money and fewer staff – is critical and more visible than most CEOs have to contend with.
Coping with often change-averse dynasties of workers whose families have been in the job for generations is a key challenge, but there’s also the part-private, part-public status of his firm.
While Network Rail, the owner of Britain’s rail infrastructure, is run on commercial grounds, the several billion pounds it receives from taxpayers each year means it shoulders painful responsibility for the smooth running – or otherwise – of a vital public service.
“It’s a huge responsibility to ensure the safe movement of some three million people every day,” says Coucher, who wakes each morning to a call from the control centre and checks back with them every night before bed.
“It’s a job that requires constant awareness of what’s going on, and lets me in for an awful lot of flak. But it’s my job, not my life, and no, I don’t suffer from work-related insomnia,” he laughs.
Coucher is sitting in his airy sixth floor office, just a stone’s throw from King’s Cross station in central London. Above him flashes a constantly-updated screen that records 89% train punctuality that day; it has crept as high as 94%, but an attempted suicide has snarled things up.
Asked about his staff, he says there are three distinct cultural groups within Network Rail: “There are 17,000 or so maintenance staff in orange jackets who tend to read The Sun; 9,000 signal box and control room staff wearing Network Rail fleeces and jeans, who may be Telegraph readers; and the professional services people who wear business attire and may get their opinions from The Times.”
This may seem rather simplistic pigeon-holing, but Coucher insists it helps him communicate with his staff.
“I like to make sure we angle our recruitment campaigns for each of the three groups towards their interests, and I not only try and dress like them if we’re going to meet up, but I read each of their newspapers, as well as the FT, every day.”
Of the many people initiatives brought in by Coucher and his team since 2002, when Network Rail bought the ailing Railtrack for £500m, there are two he says he is most proud of.
The first was to bring all maintenance staff in-house, a move that not only significantly increased engagement levels, but also reduced the accident rate among this group of workers by two-thirds.
“The quickest, yet smoothest Tupe transaction I’ve ever seen,” is how Coucher describes it.
“We took 15,000 people from seven companies in less than nine months, and the worst complaint was from three people who didn’t get their fuel cards,” he says.
The second initiative was the creation of the Westwood leadership development centre in Coventry.
“When we took over, there was no coaching and no people development to speak of. Our decision to reverse the appalling neglect of management training has been a critical one in giving our people a sense of purpose and vision,” says Coucher.
Almost misty-eyed as he describes the success of Westwood, Coucher’s expression is notably more steely when we move onto the subject of the executive gravy train.
While bonuses for senior Network Rail staff were cut by 14% to a still mammoth £833,000 last year, Coucher will reportedly double his annual £500,000-plus salary this year, while those close to him will also receive large payouts.
“We’re one of the very few companies in the country that has a general bonus scheme of up to £800 for each employee, and we know that it incentivises all our people to provide a better service. What we certainly do not do is reward anyone for failure,” he says.
“While we expect all our bonuses to be cut by the remuneration committee this year, for the third year in a row, the truth is that we have massively outperformed our targets and are now looking at linking bonuses directly to passenger satisfaction as well as to our own regulatory targets.”
In conjunction with HR director Peter Bennett – one of the 10-strong executive committee that runs the railway day-to-day, though not one of the six-man board of directors – Coucher believes in leading from the top.
“In a heavily unionised business like Network Rail, where all but about 40 people are part of a collective bargaining group, you can only achieve your HR goals if recruitment and development policies are core to the senior team,” says Coucher. He does have some HR bugbears, however.
“My only problem with HR is that it’s sometimes an eclectic mix of responsibilities that don’t fit naturally together. Things like payroll and processing, training and development can be hard to mesh with the demands of good industrial relations, and I sometimes feel uneasy with the combination.”
Overall though, he is impressed with his own team.
“The HR operation is a very slick one and I work closely with Peter,” he says, pointing to the chair in his office where his HR director usually sits.
“But employee engagement remains a major challenge. It may be improving year-on-year, but certainly not fast enough for my liking.”
Despite agreeing that he’s a “convenient whipping-boy” when the trains go on the blink through leaves, snow or overrunning engineers on the line, Coucher remains bullish about Network Rail’s performance.
“Despite what you may read, we are already enjoying some significant successes, and HR has played a huge role in that,” he says.
“In the five years since we took over from Railtrack, we have achieved the highest ever punctuality record while taking billions of pounds out of the cost of running the railway.
“We have pushed passenger satisfaction to an all-time high and delivered a whole range of complicated engineering projects while carrying record numbers of travellers. We have undoubtedly transformed the railways, but despite being good, we’re not great yet, and that’s what the country expects from us.”
Network Rail is currently in expansion mode, building railways that will still meet demand 10, 20, even 50 years from now. The firm needs more engineers, but it also requires project managers and planners, quantity surveyors, technicians and an army of support people.
Graduate intake is now up to 200 per year, slightly behind the 240 Young Apprentices that the firm recruits annually, but overall, says Coucher, the mix of skills is improving.
“There used to be hostility between traditional railway workers and newcomers, but that has lessened over time. What we are after is a blend of new and traditional thinking; an appreciation of innovation and entrepreneurship balanced against the awesome responsibility of running a safe railway.”
In the long term though, Network Rail will become a leaner organisation, and staff will need to endure far more change.
“We are becoming more and more efficient and that means we need fewer numbers, but as long as they are flexible and prepared to be retrained, we can shift staff from routine work to perhaps the investment side and can minimise any compulsory redundancies,” explains Coucher.
“We have 200 years of history here and our people are very proud to be part of that legacy. But it’s important for all our stakeholders, not least our passengers, that we look forward and not back.”
“The engineering side is a daily minor miracle,” says Coucher.
“On a typical day, I have 25,000 to 30,000 people on the railway; either maintaining and renewing tracks or completing one of thousands of hugely complicated projects up and down the country, most of which are carried out seamlessly, with no passenger disruption. There may be a train on its way right now from Glasgow to Euston, and we may still have work to do on the track before it arrives. It sounds terrifying, but it’s at the heart of what we do day after day.”
“If people overstep the mark regarding safety procedure, despite all they have learned here about safety being the number one priority, then we may need to dismiss them. Sometimes we are taken to industrial tribunals for unfair dismissal and, like all big employers, sometimes we find it quicker and easier to settle out of court, but our poor performance-related dismissals are coming down each year.”
“We try and recruit minorities at the same rate as they apply, so if 10% of applicants are women, we try and convert that same proportion into job offers. We have made a lot of progress in terms of gender balance – women make up 30% of our executive committee and 17% of our professional services team – but where we continue to fall down is ethnic diversity. We are looking at the shortfall closely and want to find ways of tackling it.”