Building ownership to get a mega-franchise on track
The Govia Thameslink Railway (GTR) franchise was created to support the completion of the Thameslink Program: London’s ‘north-south Crossrail’. Berkeley were brought in to fulfil a full-time Integration Director role within the new executive team and build ownership that was critical to put this mega-franchise on track.
It’s said that taking on a rail franchise is like buying a new house by peering through the letterbox. Only when you get the keys and look around, do you find out what you actually bought. The Govia Thameslink Railway (GTR) franchise would become the UK’s largest, servicing 26% of national passenger journeys. As Berkeley began unpeeling the layers, the depth of the challenge came into clear focus.
For a start, the commercials that underpinned the merger of the two existing rail companies were a first for the industry, as the government had created GTR’s management contract with a view to removing competition, rather than on the traditional revenue-generating model. Additionally, the new executive team was up against a hard deadline and complex trade union backdrop.
Within that aggressive timeline, we needed to change the job descriptions and reporting lines for 1,200 people, including a 20% fall out and 10% arrival of fresh legs. Removing duplications is central to any merger, so we set about managing the vast contractual upheaval needed to bring both organizations under the same business.
Likewise, we had to align two totally different data systems and infrastructures, which underpinned the same day-to-day processes. This required building consensus, delivering multiple IT projects and up-skilling operators.
The new office move also brought its own challenges. These included the need to find, commission, fit out, reconfigure and migrate two HQs into new office space, as well as introduce modern flexible working standards. For old-school railway, which had no experience of drop down space, clear desk policies or hot desking, this proved a massive cultural shift.
Perhaps most crucially, we needed to create a brand-new culture that reflected the franchise’s own vision and values and we needed to do this at pace – on the front line as much as in HQ.
The key to bringing very different predecessor organizations together was strong leadership and clear engagement. We identified and assembled a senior management team that blended the right mix of existing talent – and there was absolutely talent in both organizations – with fresh experience from the outside world to make the business more innovative.
Together, we created a Target Operating Model that outlined GTR’s target state for organization, systems, process, facilities and governance. In effect, this would turn the strategy on paper into an integrated rail franchise that makes life and business easier for millions of Londoners and tourists every day.
That was the top-down approach. From the bottom up, we laid on open engagement exercises to articulate the new vision and values. Berkeley has enjoyed success with the rich picture technique in the past, as it helps people get their head round an idea far quicker. So we brought in some excellent business artists to sit with and capture the thoughts of small working groups. These were consolidated into a vision picture that illustrated the journey we would go on together.
If someone tells you to think something, you rarely do. By ensuring people were genuinely involved in both the top down and the bottom up work to shape what the franchise looked like, we fostered a real sense of ownership and pride in the new company right from the start.
They worked seamlessly alongside us providing leadership, drive and integration expertise while ensuring that we still felt in overall control. From the start, there was a strong emphasis on embedding ownership for the new operating model within the GTR team. It didn’t feel like working with consultants.”
The businesses were integrated successfully and on schedule without any significant operational issues. We achieved headcount efficiencies within every function of the integrated business, without any major employee or industrial relations incident. The process was seamless and invisible to the passenger.
The wrong way to tackle a massive integration like this would be to enter the boardroom with a ready-made answer. We had a new exec team, including some of the best people in the industry, who hadn’t been involved in the bid. We had two successful businesses, each with some exciting talent within. Had Berkeley arrived with a fanfare and said, “Here’s what we’re going to do, now get on with it” - that would have gone down extremely badly.
Instead, we said “Here’s what’s been bid - let’s work together to find something that works within these parameters. Let’s build something you can own, rather than something that you inherit.” While we referenced the terms of the bid, we didn’t just blindly implement them.
This was a Berkeley-shaped problem, because we are really good at bringing people on the journey. The most important thing for us is that the client has lasting ownership after we’ve gone – this new franchise needed to be GTR’s organization.
We could have been heavily directional and saved money in the short term, but that would have proved a false economy. The franchise would have gone through another large round of restructuring soon afterwards. As it was, we constructed something that still works. We helped to solve the questions, but we didn’t own the answer. The executive team are in control moving forward.
The Berkeley consultant team loved working on the GTR program for the same reasons, and we built some great relationships with clients and other suppliers along the way.
The new franchise required organizational and people change on a scale not previously seen in a UK train operator. What needed to happen?