Customers drive inevitable rail change

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BBC_Radio_SussexSpeaking recently on BBC Radio Sussex, TimelessTime’s Sue Berry commented that “companies don’t want disputes, they want to effect change”. She argued that disputes cost firms dearly, both in direct financial loss, lost commitment from staff and degraded brand value with customers. Managers wants to implement the change but they also want to have the workforce with them when they do – that is unless belligerence gets in the way. There is no logic behind the assertion that management want confrontation.

Southern rail dispute

These comments were in response to questions about the Southern rail dispute, which has been rumbling on for months.

In that dispute, Southern want to implement change. They want to move to driver-only trains because technology now permits safe operation without a guard. The RMT union says this will be unsafe.

Customers drive inevitable rail changeThe talks between Southern and the RMT at the conciliation service, ACAS, did not resolve the dispute. RMT opted for a five-day strike. Without an outcome that meets the needs of both the business and the union, Southern will likely force change by changing the roles of the guards through change in employment contract. Either way, Southern will get its way – maybe not right now, but technology will prevail.

But the interesting issue is just how this dispute came about?

Change drivers

Change occurs because the firm elects that, to meet its corporate objectives, it needs to do things differently.

There are many drivers of change. Today, with increased customer expectation for high service with low fares, efficiency and cost reduction are two key drivers. Generally, efficiency enables a firm to do more with less and hence to be more competitive than others in the same market. If the savings are then invested, this may secure more customers or may lead to a better level of service and more choice for the same price.

Plain old cost reduction comes into play when the fortunes of a firm become challenged. Take for example a Sussex company who sought to introduce annualised hours to avoid redundancies. This was a strategy used to manage costs and level out effort and demand over a downturn. The firm’s strategy was met with derision by the workforce. The unions agreed with the company proposal, but the employees rejected it. Significant redundancies followed.

Another instance where unions were ‘reasonable’ but the workforce disagreed is in the current Junior Doctors dispute. The BMA (the body representing doctors) agreed to the proposed changes suggested by the employers. The Junior Doctors rejected the proposal. The two sides are still trying to thrash out a proposal that is acceptable. The employers are still communicating with staff via the unions. The aim is to introduce change by communicating with staff to help them understand the reasons for the change.

Anatomy of a dispute

In these three instances of industrial disharmony, management want to implement change. They have made their proposals, but the staff body in each case have rejected their proposals.

So what’s going on here? How do these disputes come about?

Technological advance has two parts; innovation and automation.

Disruptive technologyInnovation typically allows existing systems and employment practices to be done away with and the customer satisfied in a completely different way. A good example is keyhole surgery. Prior to the introduction of keyhole surgery, operations were invasive and patients took months to recover. Today, with keyhole, patients are back home and at work just days after major surgery. The number of nurses and support staff needed today is a fraction of those needed 10 years ago. Efficiency has rocketed and patients (customers) have benefitted hugely. And of course, none of us would argue against this change!

Automation is different. Take a call to your phone provider to get support for some problem. Twenty years ago, you’d make the call and a real live person would answer. Today, it’s “press 1 for service, press 2 for accounts”. Automation in search of low cost is everywhere. Just when customers get used to being served one way, the service is in some way automated. Here too, armies of call handlers were employed previously where today it’s a machine. Somehow this change is morally repugnant, with claims from activists that the service provider is just acting to maximise it’s shareholder returns.

Customers drive inevitable rail change

In the end it’s always customers who drive change. Customers expect service. And companies orientate themselves to provide this service, profitably. The more pressure from customers (or regulators, on their behalf), the more drive for technology to provide change. Technology allows people to be replaced with equipment. People are a cost and wherever they can be taken out of the service provision, the customer generally benefits. Technology allows improved quality and it allows firms to do things they couldn’t do previously, to their customers’ benefit.

So it’s a strange world. Firms offer service. Customers buy. And if costs and prices are correctly aligned profit results. Firms strive for sustained profits in the presence of customer pressure – and they use technology to achieve this, sometimes to the detriment of those employed.

In the case of the rail dispute, the new working practices that followed innovation allow train drivers to manage the process of closing the train doors and safely despatch the train from the rail station. Technology allows the use of CCTV cameras and with other safety features, they negate the need for guards.

But the guards’ role can be changed; it can be enriched and reassessed. The reassessment might lead to uplift in salary. And this is exactly what Southern are offering. No one will lose their job. No one will lose pay. No one will lose out in any way. In the Southern versus RMT dispute, technology will cause things to be done differently – but the other side of technological advance is coming into play: job quality can be improved! Surely no one would argue against this change?

So why is there still a dispute?

Poor communications

This scenario is the same for any firm implementing new technology and with it change. Change is uncomfortable and scary for most. In the UK, there is a general mistrust of management. There’s a huge history – rightly acquired or not – that management is not the worker’s friend. Wrong assumptions are often made by the workforce about the ultimate goal of management to reduce head count regardless of truth. No matter how robust the denials, mistrust and antipathy prevails.

BBC Broadcasting HouseThis situation can only be improved with good communication. As Sue Berry commented on the BBC, “it’s important to engage all stakeholders in the communications” regarding the proposed changes and the reasons why the changes are beneficial. It’s crucial to talk to staff, customers, regulators, shareholders and anyone who might somehow block or impede the change. When communications go sour it’s so very difficult to get them back on track. Southern know all about this!

The rail strike and the junior doctor’s dispute are good examples of this lack of communication. In both cases the employer is focusing on the rationale and benefits of the proposed changes. This logic is opposed by an emotional retort from unions and staff. Bizarrely, we’ve heard little in the press about this rationale. We’ve just heard how unfair it all is for staff. Communications are just not good enough. It’s then difficult to manage communications when emotions run high. Once emotion takes over, the employer has a difficult job to engage stakeholders further and the argument is all but lost.

Enforced contracts reinforces antipathy 

As a last resort, if management believe the changes are justified, the changes can of course be pushed through. Management can dismiss employees from their current roles and reappoint them in new ones. But things will never be the same again. Enforced contracts reinforces antipathy towards management and this acts to hinder further change in the years to come as the cycle for change sustains.

Employers want change but they definitely don’t want dispute. It is not good for any stakeholder and that includes customers, employees and investors. Employers just need to learn to communicate!

What are your thoughts on how such disputes should be managed?

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