Friday, 23 March 2018

Lessons for today from the Orderly Railway

The Orderly Railway 

Looking back at how railways developed can offer some important lessons that, even today, after almost two hundred years of railway operation, we still don't seem to have grasped. Since railway systems are expensive and have a long life, it is important that we understand how they developed and how we can make use of them in a changing world. Here I review how railway operations developed and how we got to where we are today.

From the earliest days of railway operation, it soon became evident that, if a railway was to work effectively as a business, it had to manage itself in an orderly manner, with trains operating in a regulated fashion, using equipment kept in a reliable condition and operated by staff who knew what they were supposed to do. The two principal reasons for these requirements were the guided nature of the railway vehicle’s motion and the relatively limited adhesion between wheel and rail.

A conventional railway operates with inside-flanged wheels on a fixed guideway or track formed of two steel rails laid to a fixed gauge on a supporting base constructed from sleepers, ballast, sub-ballast and track bed or a continuous concrete slab. The wheels of the railway vehicles remain on the fixed rails and thus provide a predictable path for the train. Deviation from the path is not permitted, nor should it be possible. There is no driver-controlled steering mechanism as found on a road vehicle, the wheel and rail combination of the railway providing the guidance. As a result, railways need special infrastructure components to allow passing and overtaking, what we call, S&C (switches and crossings).

Whilst providing a seemingly simple and predictable method of operation, trains have one disadvantage over road vehicles. The guideway is not flexible. If there is an obstacle on the track in front of a train, it has nowhere else to go since it cannot deviate from its line of route. It will either stop before reaching the obstruction or it will run into it. A train driver faced with this (as the author has), knows that trains cannot swerve out of the way. This restriction also introduces the other main reason behind the need for the orderly railway, the nature of the wheel-rail interface.

The Wheel-Rail Interface

The railway, as a means of transport, emerged over 200 years ago because of a growing need to move large quantities of materials, such as coal, corn and merchandise, over roads that varied widely in condition, depending on the time of year. Many roads in 18th Century Britain that were passable in the drier months of summer became impassable in winter and, as a result, the idea of a better form of guideway for wheeled vehicles developed gradually. Initially for use by conventional, horse drawn carts, 'railed ways' were installed for the wheels of the vehicles to run on. After early efforts with stone setts and wooden rails, iron and then steel were adopted. The great advantage of the new system was the low resistance to movement of the wheels on the rails, even when carrying heavy loads.

The use of the steel wheel on the steel rail provided a degree of efficiency of movement unheard of on a conventional road. It allowed a locomotive weighing 4  tons to move a load of 30  tons at 6  mph for 10 miles, something impossible using horses and carts on a road, even though the adhesion was considerably lower on the railway. As locomotive design and power developed, speeds and loads increased and trains very soon became increasingly efficient. At the same time, they became increasingly dangerous, since the low adhesion, although making traction more efficient, made stopping difficult.

For the new railways, the difficulty of stopping trains developed into a serious problem. Originally, locomotives did not have brakes, relying on limiting the operational speeds and compressing steam and air in the cylinders to slow down. Some of the vehicles that they hauled had crude, hand-operated brakes, requiring the use of ’brakesmen’ spread along the train. Continuous vacuum and air brakes, controlled by the driver, did not appear until the 1870s. In the meantime, collisions were becoming a serious problem and strict rules for railway safety were developed in an attempt to reduce them.

The Military Railway

The inadequacies of braking and the lack of obstacle avoidance capability of the fixed guidance system of the railway, required a disciplined approach to the management of trains if they were to operate effectively and safely. Locomotives and equipment were expensive and had to be designed carefully, maintained properly and operated sensibly if the railway was to remain in business. Not all railways achieved the necessary performance levels and breakdowns and accidents were common in the early years of operation. The better railways soon adopted a more disciplined approach and realised also that the modern military organisations of the time, such as the widely respected Prussian army, offered examples that they could adopt.

The military approach was simple: Provide trained men, suitable equipment, a schedule and rules. Keep the men and equipment in good order and enforce the schedule and the rules. Deviation could not be permitted without severe penalties. In wars, it had been proven over centuries of trial and error that this strict approach was essential if success was to be achieved under combat conditions. Experience had also shown that the officers responsible for the troops and equipment had to understand their business and be adaptable in times of crisis.

So it was for the railway. With expensive equipment, a large workforce, tight schedules and the need for strict rules, the parallels with the military were all in place, and military men had the ideal background for railway management. Frank McKenna, in his book 'Victorian Railway Workers' wrote, “The railway discipline stemmed partly from the needs of the work itself - obedience, literacy, and punctuality - and partly from the expectations of railway officials, many of whom were from the army and used to controlling large numbers of uniformed and obedient men”.

Officers and Men

Railways quickly adopted military style rules for operation and military style discipline for the conduct of staff. From the 1840s, uniforms were provided for almost all operating employees, with the exception of the most senior officials, who were expected to dress appropriately: stationmasters at larger stations, for example, often sported morning dress when on duty.

Military terminology was widespread. McKenna records that Victorian workers who joined the railway, 'joined the service' and this was still the case when the author joined the service in the early 1960s. When we arrived for work, we reported for duty and when we left, we were only allowed to go if we had been relieved, like a sentry on guard duty. We ate in mess rooms, we were granted 'leave', and, if we got through a promotion exam, we 'passed out' in our new grade. Some of these terms are still in use at the time of writing, most notably in the signalling discipline.

Railway artisans and operators were classified as men and senior managers as officers. This lasted into the 1980s, when I recall being informed that I, having being promoted to the grade of Executive Assistant, was now permitted to use the Officers’ Dining Room at the workshops where I was employed. Using the facility for the first time was a revealing experience, with its table service and restaurant quality food. On British Rail, these restaurants were called the 'Officers' Mess'.

In 1850, the railways employed about 60,000 people. By the end of the 19th century, this had increased to 600,000 (May, 2003). As railway companies grew, thanks to extensions to existing lines and amalgamations with other companies, they needed additional layers of supervision and management that were appropriate for their size. Staff were allocated grades, equivalent to ranks in the forces. 

Discipline was strict from the earliest days and, of course, it was in the military style. In the year to the end of July 1841, it is recorded that more than 10% of the total workforce had been dismissed. In the 1960s, the author recalls that men were still being 'charged' with offences related to breaches of rules and sent to disciplinary boards with a committee of three sitting in judgement as for a court martial. Staff regarded as having committed serious breaches were 'dismissed the service', losing their pension rights in the process, the railway equivalent of a military dishonourable discharge. Staff committing lesser offences were reduced in grade (analogous to the military expression reduced to the ranks) or 'suitably addressed' for minor offences. All offences were meticulously noted in staff records. In China, the railways had their own courts until 2012, which could hand down the death penalty for serious offences.

The Development of Rules

In parallel with the development of a military structure, railways developed rules and regulations. These were introduced initially to manage the single-track sections where only one train could be allowed to operate over the section at a given time, with any departure not in accordance with the prescribed time or sequence quickly leading to chaos. Later, time intervals were imposed for trains following each other, because of the low braking capabilities of trains and the possibility of trains breaking down between stations. This was supposed to reduce the risk of an end on collision if a train made an unscheduled stop. The unreliability of early locomotives and track led to the rapid collapse of this strategy and the resulting accidents and delays resulted in the adoption of so-called block working, with fixed lineside signalling.

Rules were introduced principally for operational safety. Over the early years of railway development, operating incidents and accidents led to new rules being introduced to prevent a recurrence. Often, new equipment was introduced together with a set of new rules for its operation. Early on, a Rule Book was developed by each railway company and every employee who had a role to play in the operation of the railway was required to learn, by rote in many cases, all the rules applicable to his position. Soon, knowledge testing of staff in operating positions became standard practice and this included testing in rule book knowledge. As a result, staff developed their knowledge, which enabled them to become specialists in their field of operation. They were also required to understand interfaces and interactions with other staff.

A feature of the railway rule book was the requirement that the rules be followed minutely and that any form of deviation was quickly suppressed by punishment. This was driven by the commercial requirement for on-time delivery of goods and passengers and the knowledge that, unless the schedule and rules were followed, trains would not run to time. In addition, if there was a breakdown, getting trains moving again promptly and safely was only possible if the rules were followed.

Lateral thinking was positively discouraged. If a train was to be diverted onto a route where it was not scheduled to run, it could only be done safely with the co-operation of a number of staff and supervisors. Rules included advice to facilitate this, “Staff must come to a complete understanding” was a popular phrase in rules. No one was allowed to think outside the box: it was too dangerous.

Learning the rules was not for the faint hearted. The British Railways Rule Book of 1950 contained 240 rules and was 274 pages long and this was only the basic rule book. Alongside it there were various 'sectional appendices', dealing with particular parts of the railway, and a range of books entitled 'Appendix to the Working Timetable', covering specific aspects of the operation like stations, ticket offices, goods depots, lines, routes or regions.

A stationmaster, for example, would have to learn and understand the rule book and all the appendices relating to his area of responsibility. In addition, he (or she) was also expected to know the work-arounds that were necessary when a rule did not cover all eventualities. These were rarely codified. Some senior stationmasters covered wide areas, with a number of routes and stations under their command. A large proportion of their learning was the result of on-the-job training and years of experience. This learning process led to the development of what we would refer to today as a corporate knowledgebase but much of the data was tacit rather than explicit. It was carried in the heads of the employees.

Staff Development

A feature of railway work, recorded by McKenna in his book, was the hierarchy of promotion and, if an employee chose to make use of it, the opportunity for personal development. In my view, this arose because of the lack of any specific training outside the industry for work within the industry. Even in disciplines like locomotive engineering, the original pioneers like Trevithick, Hackworth and Stephenson were learning their craft as they went along, solving problems and developing new ideas and then testing them on their machines.

In time, techniques in operations and engineering developed into sophisticated systems, led by technocrats and military-style officers and staffed by expert artisans and operators. The learning generated by staff experience was considered valuable by the railway companies, particularly as they did not pay for it directly but relied upon it for effective operations. With the expansion of railways and the need for people to staff them, came opportunities for those experienced in railway systems. Staff who had lived through the expansion, grew in experience and ability. They were given more and more senior posts and, in so doing, learned the value of their experience and training. A reliable, conscientious and able member of staff could get promotion through the ranks and, eventually reach officer level, as this author did.

Companies needed to retain staff. They realised that the skills and experience developed by staff in line with their length of service were valuable assets that were expensive to replace. Staff were encouraged to remain, not only by pay increments linked to length of service but by offering good prospects for promotion. In their pursuit of staff retention, many companies also built housing and social facilities for their staff.

Much of the early training process relied on a combination of the employee learning from more experienced colleagues, practicing under the eye of an informal tutor and learning the rules in his own time. Many companies eventually allowed staff to set up mutual improvement classes, where aspiring staff were taught the theoretical features of the steam engine, the rules of signalling or the braking systems of trains. These classes were originally paid for by staff themselves and took place in their own time. Some of the more enlightened companies arranged for special classes to be held under the management of local education committees.

Some railways, recognising the value of a more regulated and better defined approach to training, went further. Walter Paterson, a locomotive shed foreman on the Lancashire & Yorkshire railway, described how his “railway has provided an instruction car, fully equipped with sectional and other models, drawings, books, lantern-slides for lecturer’s use, etc. This car visits the sheds in rotation, and the men’s organisation of Mutual Improvement Societies arranges demonstrations and lectures.”

The ethos of staff retention within railway service led to the concept of a job for life. Unlike the arrangements that prevailed in agriculture, the principal source of paid work in the early 19th Century, few railway posts were subject to seasonal variations, although many railway staff started as part time or relief employees during the summer holiday period. They were often taken on full time, eventually, as vacancies became available. They were then reluctant to lose their security and stayed. The combination of company policy towards staff experience and retention and the desire of staff for job security benefitted both parties and, as a result, could positively influence the service to the railway’s customers.

The Corporate Knowledgebase

As they grew, the new Victorian railway companies quickly developed a wide and diverse knowledgebase. They loved paperwork and documented every process and business transaction from board meeting minutes to tickets; tickets for example, on collection at the ticket gates, would be sent to the Railway Clearing House for accounting purposes. Everything to do with the operation was written down. Notices were issued to train staff about changes to the timetable, lines, stations, signalling and rules. Time was allocated for train crews to read the noticeboard at each depot and a traffic notice, or similar document, was a common weekly publication.

The collective knowledgebase included both local and centralised knowledge. Staff were often stationed in one place for years at a time and they developed an intimate understanding of the area, its facilities and its vulnerabilities. In my own experience, typical examples included awareness that, during wet weather, one of the shed road pits at a particular depot would become unusable because of flooding or that a particular lever in a signal box would take longer to fully reverse because the point movement was slower than normal. Such detailed knowledge was passed on to new members of staff as they arrived and became part of the on-the-job training process, but much of this information was never recorded formally.

The railway corporate knowledgebase extended upwards through the management structure. With a large proportion of middle and senior managers being promoted from the ranks, the years of practical experience and their understanding of what to look for during problem solving or investigations became a valuable corporate tool. When problems arose, the right questions could be asked and, when new ideas were proposed, the home-grown managers had a better feel for what would work and, more importantly, what would not. Sadly, much evidence suggests that this is not the case today.

The same experience was used in planning and design across the organisation. Chief Officers would consult with their staff and with each other when preparing submissions to their board of directors for authority for improvements, changes to rules or obtaining new equipment requiring expenditure. If the advice from their staff was controversial or unusual, most officers had the experience and knowledge to refer back decisions or recommendations with suitable questions. Those who did not would be pushed into such questions by their colleagues. There was a demonstrable culture of corporate responsibility involving all departments and evidence of this can be found in the records kept and still available.

Privatisation

Beginning in the late 1970s, there was a gradual but important change in the way the railways in Britain were managed. Commercialism, having been removed almost completely by the 1940s as a result of firstly, the two world wars, and then nationalisation, began to be re-established as part of a Government-backed policy. With the privatisation of public utilities like telephones, gas and electricity, already in process, railways were being considered as possible candidates too.

The first stage of commercialisation was the development of the 'business railway', where the public interest was retained within policy but with increased pressure on the management to get 'business revenues'. The railway was moving towards commercial orientation, with talk of revenue surpluses and ways of cutting government subsidies. To promote this, in 1982 British Rail’s operations were reorganised from regions (basically the old post-grouping railway companies) into 'Sectors', like Intercity, Network SouthEast, Railfreight and Regional Railways, where business type directors were appointed and then judged on their financial performance.

'Sectorisation' as it became known internally, gradually led to a management shift from monitoring operating performance to a more financially orientated approach where assets were sweated; track maintenance was deferred to reduce expenditure and rolling stock was allocated on the basis of where it would produce the highest income, regardless of its suitability. At the same time, money was diverted to providing new and distinctive liveries and logos, in the pursuit of business orientation.

Regional areas were retained for infrastructure management for another 10 years until 'Organisation for Quality' (O 4 Q) was introduced in April 1992. This pretty much completed the devolvement of the regions into sectors and, it can be said, prepared the way for some form of privatisation.

The second stage of conversion to the commercial railway was privatisation, when the railways were supposed to become a 'profitable business'. Privatisation was written into law by the Railways Act of 1993 and, in 1994, work started on the final break-up of the British railway system into 13 separate infrastructure maintenance companies, three rolling stock leasing companies, 25 train operating companies and numerous other companies spun off from BR Research and similar internal non-core organisations. With this conversion to a 'profitable business', the railways moved from integration under their previous state as a 'social railway', through a state of differentiation under sectorisation to fragmentation under privatisation. The fragmentation was to have a profound effect on both the financial management of the railways and their knowledgebase.

Fragmentation

The fragmentation of the railway system following privatisation was widely held to be one of the reasons for the loss of the railway knowledgebase. Ian Bartle of the University of Bath, writing in 2004, said that, amongst other things, “Extensive fragmentation has also led to a severe loss of institutional and organisational memory unsatisfactorily replaced by a complex maze of contracts many of which are incompletely specified and very difficult to enforce”. This still seems to be the case.

This issue was also raised by Mercer Management Consulting in a review conducted on behalf of the Government in 2004 when they deduced that one of the four principal problems with the rail industry at that time was, “A failure to implement correctly the maintenance and renewal of the network, stemming from a loss of knowledge and expertise, compounded by historic under-investment.”

New Management

It could be argued that fragmentation in itself would not necessarily cause a loss of or even reduction in the corporate knowledgebase. After all, dividing an organisation into smaller parts might only move staff around or change their reporting lines. The knowledgebase could still be retained, even if the communication lines were more difficult. However, with privatisation came new management. One of the features of company takeovers, for that is really what privatisation was, is that the old management is removed and new management brought in. George Boyne, writing in 2004, describes the takeover process for a failing company as involving a combination of “the three Rs”, retrenchment, repositioning and reorganisation. Since the whole idea of railway privatisation had been based on the premise that railways were inefficient and needed 'turning round', it was inevitable that Boyne’s model, or something like it, would be applied.

In broad terms, Boyne says that retrenchment involves a reduction in staffing levels. This was quickly applied in the railway industry. In the five years from 1996 to 2001, the staffing levels in train operating companies dropped by 21% during an era when traffic levels were rising on all routes. Some operating companies cut back staffing to the point where they had to cancel trains. South West Trains, offering drivers redundancy packages to encourage them to retire early, lost so many that they were unable to run a full service and had to re-recruit some.

Another feature of the corporate takeover described by Boyne is repositioning. This was not so applicable in the railway industry, since most of the companies had a local monopoly and did not need to reposition themselves other than establishing branding to show that the routes were under new management. However, repositioning might also be said to include a new and improved marketing approach, and this was widely seen after privatisation.

The third of Boyne’s takeover tools is reorganisation. He says, “the form of reorganization that is cited most frequently in the literature on private sector turnaround is the replacement of the chief executive or the entire senior management team.” In the privatisation of the railways, this was common. Since the railway’s need to be turned round was already assumed in the political decision to privatise, management re-replacement was inevitable. In the railway’s post-privatisation reorganisations, managers, many with long service, high salaries and good pension conditions, the author included, were offered substantial incentives to take what was euphemistically called 'voluntary severance'. In effect, managers were told they didn’t have a job under the new order and were advised to leave without making a fuss. The cash incentives accompanying these diktats were carefully positioned to ensure compliance without recourse to law. Indeed, they were so attractive that, like the hourly paid staff, too many managers left and companies were soon struggling to manage their operations. Many severed managers were re-employed as consultants to assist.

Corporate Memory Loss

Railway managers taking 'voluntary severance' not only took large payments with them, they also took their expertise. The unrestrained culling of senior railway management that followed privatisation resulted in a corporate memory loss of enormous proportions. Only the three rolling stock leasing companies (known as ROSCOs) survived unscathed, largely because two of the three were set up as a result of management buyouts and all three retained most of their railway technology experts. The expertise stayed where it was needed and money was made. All ROSCOs were sold on to banks and investment companies within three years. The public outcry about how much money was made by some of the buy-out managers was such that a government enquiry was initiated.

The general lack of technical expertise in the rest of the railway industry after privatisation was to leave many of the operating and maintenance organisations floundering. The best known example is Railtrack, the original infrastructure management company set up by the Government. Railtrack was simply a management company, subcontracting maintenance and renewals to external companies like Amey, Jarvis and Balfour Beatty, most of whom had purchased the maintenance organisations that had been created out of parts of the former BR organisation. Few of these companies had any railway management expertise and some of them suffered as a result – the collapse of Jarvis in 2010, for example.

The process of corporate memory loss is characterised by Annie Brooking in her book, Intellectual Capital, as, “Every time we lose an employee, we lose a chunk of corporate memory”. For the British railway industry, the ultimate example of the consequences of the loss of corporate memory was the Hatfield accident of 17 October 2000, when a train travelling at 115mph derailed as a result of improperly maintained track. Four persons were killed and 70 injured. Railtrack went into panic mode and partially closed the system: wide and restrictive temporary speed limits were imposed over long section of track and this caused many train cancellations. Experienced railwaymen said afterwards that they would not have reacted in this way and it was said that Railtrack’s senior management were told they didn't need to do it. There followed several years of poor timekeeping, lower passenger numbers and hugely increased expenditure on track maintenance.

The Hatfield accident and the consequent destruction of effective railway services across the country was to lead to the collapse of Railtrack itself and the setting up of Network Rail. Network Rail was formed partly on the understanding that there was a need for railway experience at a high level in its organisation and it was therefore set up with 8 of the 12 members on its board having railway experience.

Understanding the Technology

The acknowledged loss of operational and technical understanding in the railway industry may not, in the authors’ view, be entirely due to the fragmentation of the industry and the loss of experienced staff. There have been other changes too. In parallel with the changes in organisation have come changes in technology – solid state power systems, plug-in hardware, optical cable transmission, mobile phone technology, software based control, satellite based mapping and new information technology are some of these. All have been developed in the last 25 or so years. These developments need new expertise and, in many cases, more, in depth technological understanding.

New technology is complex. Power electronics have replaced electro-mechanical systems, software has replaced levers and bell codes and microprocessors have replaced contactors and relays. The complexity of the new technology means that it is no longer possible for the artisan to understand and troubleshoot a whole system. He (or she) has to be a specialist in say, communications systems, train control software or computer operation. He can no longer be the 'signal lineman', who could deal with most mechanical and electric signalling problems equally competently. Now, specialists are needed for each system. This tends to fragment the knowledgebase and the fragmentation, combined with the parallel fragmentation of the organisation into separate companies, reduces the co-operation and cohesion needed to make the railway system work effectively.

What is missing is a systems approach. This requires an overall understanding that includes both operational and engineering systems used on the railway and the interfaces between the systems. It also requires an understanding of the background and development of the systems and the reasons why they developed in the form seen on today’s railway. The long-term nature of the assets – 30-40 years being the generally recognised norm – means that to gain a proper understanding of the railway system, a historical perspective has to be included in that understanding. 

Using History

In order for an understanding of the railway and its systems to be complete, a comprehensive historical record of the railway system needs to be developed. This would go a long way to recovering the corporate memory loss experienced in recent years. To make this corporate memory useful, it also needs to have a convenient data access system, available to all who need it. There is no reason, given the capabilities of modern technology, why this cannot be developed, given time and money, perhaps using modern data retrieval systems like cloud computing.

Also, there has to be a succession plan for railway companies that allows some senior people to be long service staff who have been brought through the organisation and who have, as a result, developed a wide understanding of the railway and its systems. Railway companies need again to provide the right sort of incentives to encourage staff retention and development.

What Next?

It is increasingly obvious that the history of assets and their development should be retained and consulted as part of the normal railway business process along with lessons learned being published and consulted as part of the normal business process, all the way up to board level. Risk analysis should include the lessons learned and formal project management should include the historical lessons learned as part of the system engineering process.

New staff should be inducted in the history and development of the railway and its technology, with emphasis on the discipline of the individual as appropriate and succession planning should include a strategy for long-term staff employment including promotion to senior positions for qualified staff.

It is essential for railway engineering and operations management to understand the way in which the development of technology and operations has progressed on their railway during its history and that railway business management needs to have this understanding embedded at all stages in their system standards and planning.

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