CHANGING TRACK: THE FUTURE OF RAIL

Integrated, seamless and passenger-centric railways for the UK 2 CHANGING TRACK: THE FUTURE OF RAIL PREFACE: THE WORLD HAS CHANGED - AND SO MUST RAIL 3

The World has changed - and so must rail

Since we first published this report, the world has 2. Centre on customers. changed beyond all recognition. The COVID-19 outbreak COVID-19 has less of an impact on freight, but a rail CONTENTS and subsequent national lockdowns have transformed system without any passengers on it – as we’ve witnessed the way we travel and brought extraordinary commercial, in recent months – is a sad and soulless thing. And yet this operational and passenger implications. will be the future unless we can focus on what passengers want: making travel a frictionless, enjoyable experience In the UK, the franchises have all been effectively that’s safe and hygienic. FOREWORD: RAIL IN 2050 4 nationalised, with little certainty of how the future system will look. Internationally, the commercial model 3. Foster innovation and an experimental approach. CHANGING TRACK, TODAY 6 that underpins rail – that of high-volume shifting of The rail system has relied too much on itself to be the people for a relatively low cost – appears unsustainable only credible provider of some services – for example, the TRENDS SHAPING THE FUTURE 10 in the medium-term as fewer passengers travel. commuter lines into cities. This is no longer the case, with And the experience of passengers themselves will the wider adoption of remote working giving passengers FUTUREWORLDSTM FOR RAIL 14 be transformed, with stations and trains maintaining choice. So, we have an obligation to innovate – to experiment social distancing, passengers remaining anxious and provide services that customers love while becoming FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 22 about travel and likely to travel less, and an unstable adaptable enough to survive the next system shock. commuting market. 4. Drive decisions and value through data. 1. UNITE BEHIND A CLEAR, LONG-TERM VISION 24 While any future-gazing is difficult to detail, there are We know the rail system will be different post-COVID-19 and 2. CENTRE ON CUSTOMERS 26 three predictions we can make with some confidence: tough decisions will be required. Those decisions need to be grounded in fact so we can make them confidently. Rail needs • there will be more government intervention in the rail to invest significantly in its ability to access data quickly and 3. FOSTER INNOVATION AND AN EXPERIMENTAL APPROACH 30 market, not less. With falling demand, the rail system effectively to make decisions about operations, commercial will be unable to cover its costs without significant models and services to customers. And these decisions are 4. DRIVE DECISIONS AND VALUE THROUGH DATA 32 government support coming soon, so we need to build the culture of evidence- 5. ADOPT THE MINDSET TO ADAPT AND THRIVE 34 • passenger confidence will be at an all-time low. based decision making now. They’ll need significant reassurance to travel on 5. Adopt the mindset to adapt and thrive. public transport again, and the rail system will WHAT DOES THIS MEAN FOR INDUSTRY LEADERS TODAY? 36 While the future is still uncertain, we will likely face other need to move from a monopoly-provider mindset shocks. The rail system needs to recognise this as an to a consumer preference mentality opportunity, not a disaster. In doing so, it can set the vision for • other system shocks will arrive – and a key disadvantage change and then empower teams to respond. of the rail system is that its fixed infrastructure makes it CONTRIBUTORS 37 Throughout a tough period, rail has already demonstrated difficult to adapt and change quickly. its resilience and necessity, transporting key workers ABOUT THE REPORT 38 These three likely outcomes, when considered alongside and keeping the nation going. We should recognise our previous analysis of rail trends, make our five key and celebrate this response – while recognising an recommendations even more relevant: opportunity to change and prepare for a new future.

1. Unite behind a clear, long-term vision.

To rebuild passenger confidence, the rail industry needs to unite and demonstrate a viable way to travel DR STEVE CARDEN post-COVID-19. A fragmented response – or, worse, Global Head of Transport Innovation friction amongst stakeholders – will destroy confidence. Rail needs a vision that’s compelling and attractive, and must deliver it quickly. Governments have a key role to play here as their economic objectives remain tightly tied to infrastructure success. 4 CHANGING TRACK: THE FUTURE OF RAIL FOREWORD: RAIL IN 2050 5

Industry thinking in the UK has moved beyond simply Integration has gone beyond transport. It includes operating a railway or managing infrastructure. It thinks energy distribution, telecoms networks and managing about its customers and how it best integrates with other materials, with the circular economy thriving on modes of transport. The focus is on digital, automated, collaboration between industries. This integration makes data-driven, personalised transport services available it possible for customers to build and manage their FOREWORD: at the swipe of a screen. And how rail users think about lives in more accessible, affordable and empowered journeys – what we expect from them and how we make ways. Rail is designed into a transport system built to RAIL IN 2050 them – has transformed. meet passengers’ many diverse needs. Single modes of transport could no longer efficiently serve everyone, yet Passenger satisfaction isn’t about reliability, journey together, in this new world, they can. information or clean carriages. These are a given. Instead, satisfaction is about delivering different Transport providers have adapted to new markets and The year is 2050 and much has changed. People don’t outcomes for passengers with different needs, be it shifts in demand. It’s something passengers have come talk about ‘the railway’ anymore. Passengers and freight getting from A to B in a carbon neutral way or enabling to expect, particularly when they’re paying for a service, customers talk about transport in terms of its purpose – them to do what they need to do while travelling. not just a journey. This comes from a relentless focus on Journeys are no longer just a means to an end. On-board customers that is driven from the heart of organisations, moving people and goods seamlessly across the country experiences, seamless connections and personalised not just by front-line staff. Rapid technology evolution has in the most comfortable, efficient and sustainable way. services are the norm. From how the industry plans, brought about seismic shifts in customer expectations, designs and maintains infrastructure, through to how echoing what society witnessed with equally dramatic it sells journeys and offers services, this new mindset shifts across retail, financial services and other transport has become a catalyst for change. modes in previous years.

A new, responsive way of operating has unlocked large

organisations’ ability to meet society’s needs. Increasingly digitalised infrastructure allows us to be versatile, acting as a platform to introduce new ideas and technologies safely, quickly and successfully. Business models, corporate cultures and a new leadership agenda allow the industry to We’ve made transportation embrace new, innovative ideas. seamless, integrated and We’ve made transportation seamless, integrated and passenger-centric, as well passenger-centric, as well as clean, safe and enjoyable. And we’ve ensured rail continues to be at the heart of as clean, safe and enjoyable. these possibilities. 6 CHANGING TRACK: THE FUTURE OF RAIL CHANGING TRACK, TODAY 7

The scale of change will bring a number of challenges. Investment in infrastructure is fraught with tension over who foots the bill and where spend should be prioritised. This tension leads to inertia and frustration over projects The Williams Review that already last for decades; new infrastructure can last CHANGING TRACK, 20 to 50 years and take decades to show returns. This has The Williams Review is billed to deliver a “root led to cautious, cumbersome decision-making processes and branch review of Britain’s railway” and TODAY where progress stalls. represents a welcome step in the journey to a brighter future for rail in the UK.2 It’s an approach that jars with the pace of today’s opportunities and people’s expectations. PA research In line with our rallying cry from 2018, Keith of 500 business leaders revealed that one-sixth of Williams recently committed to “revolution not 3 The rail industry has the technology, experience and organisations will fail in the next five years if they fail to evolution”. We expect his recommendations to investment it needs to make this seamless, integrated and keep pace with change, so inertia is no longer an option.1 offer the whole industry an opportunity to work passenger-centric railway a reality. But delivering anything together to truly put passengers at the heart of Other industries, including transport modes like aviation, the railway. close to this means going beyond existing investment and maritime and road, have woken up to this fact and are review plans – past restructuring, digitisation and simpler taking steps to adapt and innovate at speed. Rail must do The short-term horizon of previous reviews has been unable to effect deep, long-term change. ticketing – and bringing about a rail revolution. the same in order to remain an integral force in the UK transport sector. We believe the industry must be bold, look This time, we need to work to a future vision – beyond short-term or isolated horizons, and ask itself: what to where we want to be in 2050 and beyond. do we want to be known for by 2050 and beyond? Rail leadership must use the opportunities of the Williams Review to work towards that vision Rail has the technology, of the future. experience and investment it We can reimagine our railways. This report sets out five key steps to change track, whatever the needs to make this seamless, future brings. integrated and passenger- centric railway a reality.

Rail performance today 65.1% 46% 660 of trains on time4 of rail passengers are trains cancelled satisfied with value for per day in 2018, money – unchanged on average6 from 20085 8 CHANGING TRACK: THE FUTURE OF RAIL CHANGING TRACK, TODAY 9

Five steps to a brighter future in rail 1 2 3 4 5

Rail is at a tipping point. Unite behind a clear, Centre on Foster innovation Drive decisions Adopt the One route leads to further long-term vision customers and an experimental and value mindset to stagnation and industry approach through data adapt and thrive decline. The other puts industry on track for a Industry must own a unified As well as meeting the immediate brighter future. We see five vision for the future, with aligned demands of passenger and freight Industry must empower people Industry has an opportunity to tap Leadership must shift its thinking steps to creating a railway incentives and accountability. This customers, rail has to pinpoint what to innovate and bring new into an extraordinary wealth of data, and adopt a responsive approach so vision must provide a common it wants in the future. It must move the railway adapts and thrives. Rail that’s ready, willing and able technologies onto the railway, both within rail and beyond sector purpose for the industry, allowing on from just on-time, affordable with enough pace to harness borders. Open-source data sets and must empower its people to be more to harness the opportunities the different players the freedom to services and understand how to rapidly advancing technologies. data partnerships with payments dynamic, collaborative and flexible. that come its way. retain and express their differences offer a seamless, personalised and Trials need to be possible in providers, telecoms and a range of This means building a workforce while pulling together behind a improved experience, in line with a safety-critical environment, other mass-consumer organisations that’ll power the future of the sector, unified purpose. shifting customer expectations. and regulations should allow will unlock opportunities to as well as delivering today – and for innovation or optimisation, deliver better customer and empowering them to bring in new supporting industry as it adapts operational outcomes. technologies faster without and transforms. affecting safety. 10 CHANGING TRACK: THE FUTURE OF RAIL TRENDS SHAPING THE FUTURE 11

Those in rail will recognise the feeling of firefighting, moving from one problem to the next just to keep things moving, rather than having the time and space to think about trends shaping the future. Instead of spearheading TRENDS SHAPING change, the railway is now on the receiving end of it. The trends (pages 12–13) identified from our cross-sector THE FUTURE experience and conversations with transport leaders mean rail requires a new leadership agenda. All too often, leaders have viewed these forces as threats to mitigate and control rather than as a chance to innovate. There are clear tensions over what rail wants from its future Yet it doesn’t have to be this way. With the ingenuity of and how to deliver it. A PA survey on the long-term future people and the power of technology, and by working better together, we can, and must, do better. of transport found that rail ranked lowest of all transport modes when considering the future. However, 75 per cent said the future of transport is an opportunity for them.7 12 CHANGING TRACK: THEFUTUREOFRAIL RESPONSES IMPLICATIONS TRENDS KEY STATS • • • • • • • • • • • • • • • • • • • • • • living inurbanareas, andrising populous nation by 2050, with83%already The UKisprojected to beEurope’s most 78.3 SOCIETY rapid career development workforce wants more flexibility and – customers andemployees expectation to beonlineanddigital changing commuter patterns both parents orpartners work more peoplemoving to citiesfor work declining carownership less timefor engineeringwork than fixed timetables more demandfor flexible rather to deliver capacity greater pressure oninfrastructure develop employer brand. future; launch new peoplepolicies; recruit andretain theworkforce ofthe interactions; provide WiFi develop websites andappsfor customer share data withselected third parties; offer flexible seasontickets andalternative options review ofpeakhours charging fares andticketing modification; attract talent from awiderrange ofbackgrounds development oflight rail –rural/urban improved connections to/from stations; predictive maintenance; simplified planning investment in robotics andrelated technologies; within franchises; rolling stock different franchise models,orservices improvements; timetable rationalisation digital railway; adhesion-related the status quo millennial values are becoming family unitsare changing ever-larger megacities on transport systems population growth places strain m 8 • • • • • • • • • • • • • • • • • • • • TECHNOLOGY saturated themarket electric road vehicles willhave — theyear National Gridbelieves 2040 travelling experiences passengers willwant enhanced new ways to train employees cross-industry collaboration willdrive data sharing opportunities to improve planningandforecasting served through airtravel rural areas may bemost cost-effectively pressure mounts to phaseoutolderaircraft increasingly important electric charging infrastructure increasing sustainability pressures to develop new experiences. partner withprovider organisations learning anddevelopment harness new technology to improve create common data architectures to enablesharing increase data sharingandopen-access data/cloud; capabilities; experiment andshare lessons invest inmonitoring equipment; enhance analytics prove viableandredirect funding be honest aboutlinesthat may not rural lineswithlow traffic volumes seek cost-effective opportunities to electrify stations; partnerwhere necessary mandate charging points at commuter support thecircular economy trains; renew engineeringtrains; actively decarbonise/support hydrogen more immersive experiences augmented reality) are providing far mixed realities (such asvirtualand how organisations work data andanalyticsare transforming emerging electric aircraft for regional journeys electric road vehicles are gainingtraction 9 • • • • • • • • • • • • • • • 6% • • • • a 9–5day in2018 projected to beworking of theUKworkforce ECONOMIC invest inprojects exploring MaaS. improved connections to/from stations; business casesat anearlystage work withstakeholders to shape methodologies deliver projects usingagile and freight rolling stock consider combining passenger be clearonrole ofrail review access charge regimes; invest inautomatic timetabling; with talent poolto develop talent-related policies;work refresh recruitment andother compelled to deliver positive responses flexibility builtinto franchises; operators multi-modal transportation single source to access aggregated, other forms oftransport increased integration with articulate thebenefits greater pressure to faster return oninvestment finished goodsthan raw materials logistics may focus onhigher-value may bedisrupted traditional freight paths similar flexibility railway workers willwant changing commuter needs ticketing must adaptto people pay for transport could transform theway Mobility asaService (MaaS) in therailway increased private investment hubs to move closerto ports technology isenablinglogistics including ‘zero-hour’ contracts employment ismore flexible, 10

• • • • • • • • • • • • • • • • • • • • ENVIRONMENT ZERO global warming by 2050 laws to enditscontribution to first majoreconomy to pass In 2019 theUKbecameworld’s make therailway asgreen aspossible. of non-railway assets assets andwith transportation explore opportunities withrailway and cycle racks at stations need to change;improve lockers rolling stock andpoliciesmay explore biofuelsopportunities embrace thecircular economy trains; renew engineeringtrains; actively supporthydrogen educate stakeholders onitsimportance enshrine sustainability inbusiness plans; design assets withgreater resilience reassess engineeringstandards; increase work to prevent inlandfloods continue to improve resilience oncoasts; risk ofpassenger journeys declining remanufacturing andrecycling new market opportunity in schemes ande-scooters focus onsupportfor cycling and adoptbiofuels opportunities to develop its dieselrolling stock to decarboniseanddecommission increasing pressure ontherailway is increasingly important conservation ofbiodiversity engineering challenges extreme heat/cold creates from severe andfrequent flooding coastal andinlandareas are at threat impact onsupplychains the circular economy hasaprofound concern, particularlyincities poor airquality isasignificant the UKcommits to decarbonisation serious disruption the climate crisisthreatens 11

BY 2050 % • • • • • • • • • • • • • • • • • • • • POLITICAL formalised regulation. new technologies ahead of be more flexible in introducing in shapingregulation solutions; actively participate work withother industries to find especially onfuture visions communicate withstakeholders, be clearonrail’s purpose; priorities regardless of political agendas identify common objectives and continue to devolve railway operations the remits ofHS2andCrossrail seek cleargovernment policy beyond and empower localdecision-making continue to devolve railway operations business casesat anearlystage work withstakeholders to shape by resulting delays tension may becreated the necessary expertise may berequired to access cross-industry regulation may reinforce status quo uncertainty aboutthefuture political agendas the railway issensitive to require substantial investment megacities outsideLondon and attract investment continues to grow and requirements widening range ofexpectations rail’s benefits greater pressure to articulate adoption ofnew technologies established regulatory regimes stall divided over privatisation political partiesare deeply aligned to London andsouth-east transport fundingremains closely greater accountability regional bodieshave far country inthefive years to 2016/17 and theSouthEast thantherest ofthe been almost twice ashighinLondon Growth intransport expenditure has X2 TRENDS SHAPINGTHEFUTURE13 12 14 CHANGING TRACK: THE FUTURE OF RAIL FUTUREWORLDS™ FOR RAIL 15

Based on this insight, we imagined four worlds:

• GREEN CARGO: a world of green freight transportation Imagining opportunities TM TM • EFFORTLESS EXPERIENCE: a world of ‘transport- with FutureWorlds FUTUREWORLDS as-a-service’ and seamless passenger mobility In a world of sweeping change, the future • B-ROAD: a smaller network serving FOR RAIL can seem daunting. It’s multidimensional, specialised requirements uncomfortable and open to various • STEEL ARTERY: a world of rapid intercity transit perceptions. At PA, we believe those who envision the most likely or desirable futures These worlds provided the stimulus for industry leaders We spent a year conducting in-depth analysis of these are better able to look to the long-term to home in on the most desirable vision for rail in 2050 opportunities. By shaping a clear vision, today’s trends, then added insight based on conversations with – Seamless, Integrated, Customer-Centric. This vision leaders can create a positive human future in a industry leaders from Network Rail, train operating illustrates a future where railways integrate with other technology-driven world. companies, freight operating companies and regulators. modes of transport to meet the different needs of different customers, with different services. To succeed, organisations need to create the imperative for innovation, spur interaction Rail forged a legacy of ingenuity between stakeholders and create a common platform to discuss the future. in a world of steel, machines Enter FutureWorldsTM. Its aim is provocation, and construction – and it not prediction. It does this by exploring must do so again in a world of probable, possible and preferred futures, as accelerated change. well as any wild-card options. From here, we pinpoint the most important uncertainties. These extremes map worlds that we present for This report calls out the actions we must take, in parallel provocation and discussion. with any wider reform, to deliver this world and make rail fit for tomorrow. We’re calling for a second wave Our trademarked approach presents the of major railway innovation and transformation in an future in a tangible way. It eliminates biases, industry once renowned for its engineering prowess and tests hypotheses and brings stakeholders and ingenuity. Rail changed our lives. It created new markets experts together to create a vision, develop and customers, linked communities and families, and a strategy and better manage risk in times led to the standardisation of time across the world. of uncertainty. Our research shows that It forged a legacy of ingenuity in a world of steel, organisations that use approaches such as machines and construction – and it must do so again in these have higher relative total shareholder a world of demanding customers, new technologies and returns compared with those that don’t. accelerated change. Decisions made today will set rail’s course for 2050 and beyond. Rail can keep doing what it’s always done, or transform itself, centre on the customer and become To find out how these trends will play out for the rail the leading, vital transport integrator across the UK. industry and what’s most desirable, let’s examine these The Williams Review promises to set rail on a path to FutureWorldsTM. overcoming these challenges – and there are already signs of progress as industry starts to reorganise around new priorities. 16 CHANGING TRACK: THE FUTURE OF RAIL FUTUREWORLDS™ FOR RAIL 17

Green cargo Effortless experience A world of green A world of ‘transport-as-a-service’ freight transportation and seamless passenger mobility

Rail has shifted its focus to freight Additional features How did we get here? Rail has adapted rapidly and Additional features How did we get here? because of lower demand for effectively to embrace both new passenger services caused by • urban and commuter passenger • Brexit (and more devolution in technologies and changes in how • the network is highly adaptable • rail attracted more investment changed business and work patterns, transportation is managed by the UK) was the trigger to find people live and work. The rail and can roll out or decommission over a number of years, including and successful competitors winning local transport authorities more effective ways to manage network is highly integrated, both assets and infrastructure to match from a wide ecosystem around customers through seamless, • rail is funded by investment the rapid distribution of freight physically and commercially, with the shifting demands of businesses integrated mobility services from major freight aggregators personalised transport services. • the growing impact of climate other modes of transport, and and citizens, as well as responding • not everything succeeded that combine the needs of seamless mobility services let people to outside pressures like the impacts A highly ‘greened’ and energy-efficient smaller logistics companies to change and the ‘green new immediately, but rapid innovation deal’ triggered a rapid shift to a and freight move freely. of climate change. The rail network cycles encouraged lots of freight network is integrated into and generate the volumes required green circular economy highly is more resilient to terrorism experimentation that led to new serves the needs of the UK’s circular • these models are supported by Fare structures and timetabling incentivised by government policy through better cyber security and business models and services economy, which has expanded rapidly technology, including blockchain, flex according to demand. other technological controls which creates a vibrant marketplace • rising social inequality, poorer • industry invested in capital to respond to climate change. Much Passengers glide friction-free for freight contracts. value for money and lack of • the supply chain has learned to equipment, training freight has moved from road to rail, through the network and between investment (compared with collaborate extensively to respond technology and facilities. and the network carries significant alternatives) drove a large section modes. Journey planning, ticketing to rapidly changing opportunities amounts of raw materials for localised of society away from the railway and billing are seamless and • the railway is an intelligent, digital manufacturing, as well as material for entirely automated through a • localised manufacturing and asset, running on its data. Industry decommissioning and recycling. the circular economy changed single application. and a network of partners harness freight requirements, and the the power of this intelligence rail freight industry capitalised to make decisions regarding by adapting swiftly. timetable planning, capacity management or maintenance • customer journeys are essential to commercial success – and so passengers are central to decision-making across rail. 18 CHANGING TRACK: THE FUTURE OF RAIL FUTUREWORLDS™ FOR RAIL 19

B-road Steel artery A smaller network serving A world of rapid specialised requirements intercity transit

Significant changes in passenger Additional features How did we get here? Rail focuses on delivering rapid, Additional features How did we get here? behaviour for work and leisure had high-speed, intercity passenger and a dramatic impact on a rail industry • new technologies like • peak oil and gas happened by 2030, freight transportation. It’s largely • pragmatic long-term planning • significant investment from that’s failed to anticipate them or and autonomous vehicles have set sending energy prices soaring with displaced planes for intercity has allowed rail to maintain an successive governments in rail as a adapt. Fifty to 60 per cent of the a new bar in technology innovation. devastating consequences for rail, travel. Alternative modes dominate integral role in the UK’s socio- ‘public good’ and more joined-up rail network has been converted Rail has struggled to keep up which didn’t adapt fast enough to commuter and shuttle services. economic wellbeing, for instance thinking, for example in coordinating for other uses, like autonomous renewables and alternative sources by coordinating road and rail rail with road planning and ensuring • some local transport bodies and Technology adoption has been vehicles and road trains. rural areas were still served. Rail devolved governments subsidise free • gradual deterioration in rail gradual, with slow transition from • rail is seen as a public good, with travel to alleviate urban congestion infrastructure made travel more significant central government provided fast and efficient transit Rail now operates in niches. manual approaches to digital or dangerous and expensive, with funding under an effectively between major population centres For instance, light rail focuses on • other government investment autonomous alternatives, such local patchwork improvements renationalised model aiming to • rail often found it challenging to urban connections, while other is limited to regeneration as signalling. There’s been some projects fuelled by better unable to keep up make rail the most affordable develop the skills needed to keep more personalised modes, such as resistance from workers, adding transport connections. • climate change concerns drove mode for long-distance journeys. pace with technological change autonomous vehicles, cover the rest to inertia. rapid shifts to alternative modes • friction with unions slowed the of the transport network. seen as ‘least polluting’ adoption of some new technologies • investment in autonomous and working practices, which technology made connected and meant the rail experience declined autonomous vehicles (CAVs) more compared to other modes popular, overtaking investment in rail. • progress towards connected and autonomous vehicles wasn’t as fast as some expected. 20 CHANGING TRACK: THE FUTURE OF RAIL FUTUREWORLDS™ FOR RAIL 21

Our vision A seamless, integrated, passenger-centric world

Building on and blending these four Customers make multi-modal Additional features How did we get here? worlds, we worked with rail leaders journeys so easily and seamlessly that to arrive at the world everyone felt the experience attracts many new • the railway is responsive to • rail has been adaptive and • instead of top-down decisions • radical culture change across industry should be our future. customers to the railway – passengers demand, with routes replanned and responsive to evolving customer on the future of local transport, meant new commercial drivers and and freight. The railway is integrated needs and the demand for a more communities decided on their incentives. It helped attract and hold Here, rail has become more than one improved to prevent disruption with our digital lives, ticket machines integrated transport network preferred method of travel on to the best people, increasing mode. The spine of the network is • data is shared across industries – rail, are in our pockets and the space they • different modes of transport became • data sharing across the rail ecosystem diversity, motivation and ingenuity the heart of the infrastructure, and transport and beyond. It enhances previously took at stations is filled with more integrated through joint was kick-started through initiatives • a clear and long-term integrated supporting that are lighter railways, passenger experiences and feeds the small, thriving businesses. algorithms that plan maintenance strategic planning and commercial like hackathons and by opening transport strategy offered a vision or even other modes of transport, models, as well as the technology data and info to entrepreneurs, for the future and how to get there. • rail is as important to economic that provide the best solution for of assets, infrastructure and data challenging them to innovate A new industry body was formed to value and national wellbeing each market. Customers make focus on delivering for customers and as ever, but this role is now • collaboration became routine • the arrival of digital twins (digital taking a multi-disciplinary approach multi-modal journeys more widely recognised. across the rail supply chain and replicas of physical assets, allowing between modes, and the industry for modelled simulations) gave a to solving transport problems. so easily and has learned to better identify its much-needed real-time picture seamlessly that the strengths and play to them of infrastructure and assets. This systemic overview and modelling experience attracts capability accelerated innovation new customers. and made it possible to commit to new initiatives and get value faster 22 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 23

It’s time for rail to change track and create a railway designed for everyone who uses it. Rail needs to transform itself in five ways:

Unite behind a clear, Drive decisions and long-term vision value through data

FIVE STEPS TO 1 4 TRANSFORM RAIL • start by engaging • make it easy to share data in • make a success of the anticipated controlled environments FOR TOMORROW Independent rail authority • find the right people and nurture them • reconsider change incentives • invest in technologies to capture • agree today’s actions to move towards as much data as possible tomorrow’s vision. • extract value from data. Railways have shaped lives, built the transportation network for countless nations and standardised time across the world. But, today, the time has come for greater change. Centre on Adopt the mindset Rather than looking back or to the next quick fix, we need to customers to adapt and thrive look to the future – to 2050 and beyond. 2 5 • build better relationships inside and outside rail • put 80 per cent of effort into culture • bring engineering decisions closer to the customer • be persistent and consistent • transform the market through MaaS • see measurement as an instrument of change • be truly responsive to demand • devolve ownership • think beyond moving people from A to B. • recognise that agility is the new normal.

Foster innovation and 3 an experimental approach • focus on the future • design innovation into organisations • create an innovation culture • build a network for innovation. 24 CHANGING TRACK: THE FUTURE OF RAIL 25

Unite behind a clear, How to do it Start by engaging long-term vision • engagement with stakeholders will be critical to set out the purpose of the railway to each of its markets, or continue to pull in different directions and how that will change to meet evolving needs • any vision must centre on customers and reflect the broad range of disruptors 1 and their impact on the industry. Make a success of the anticipated Independent rail authority Doha Metro: Making sure • industry needs strong leadership that can survive new lines are on track ministerial changes. Control may sit with the Department for Transport (DfT) or a SRA, but CASE STORY CASE to help make the 2022 needs to spread throughout the industry. At the same time, the SRA needs the teeth to resolve With the Williams Review setting the foundation for World Cup a success Rail needs to push for change industry’s most challenging and high-stakes issues transformation, the sector has a fantastic opportunity in • the SRA can also take the lead on coordinating the coming months to take positive action and leverage and work as one to achieve it. Across Doha, a massive infrastructure programme role working with other modes of transport the recommendations to drive change. Rail needs to push or national infrastructure to develop a is underway to prepare for the 2022 World Cup Many in rail believe franchise agreements create a short-term for change and work as one to achieve it. strategic approach to transport planning. and truly transform the city. Some of the most focus. This can deter future investment and take the focus critical developments are in transport, including the To make change last, we need everyone to be clear on Reconsider change incentives away from the most important stakeholder – the customer. construction of a new four-line metro system. With what they want the long-term future of rail to be and • many in the industry told us they expect an overhaul While Network Rail typically has a longer-term outlook, five- a 2018 deadline for completion, the joint venture how it will best manage the predicted trends. A single, of franchise agreements in the wake of the Williams year funding envelopes inhibit business cases. Much of the developing one of the lines asked us to assess the clearly articulated vision will achieve this. The vision must Review. Proposals like a bigger role for Network Rail supply chain also struggles with longer-term investments as project’s progress and to check compliance with reach beyond the next control period and look to 2050 in shaping the agreements appear long overdue. the likelihood of recovering costs hasn’t outweighed the risk. their financial and commercial protocols. and beyond. Similarly, franchise agreements that allow for longer- term investments in the railway and that support Uniting behind a long-term vision will also help communicate We put together a small team with expertise across While much of this report’s focus is on the need for agility Network Rail’s objectives will be a step forward the importance of the railway, the need for investment and construction, quality control and commercial and in responding to new technologies and digital solutions, • incentives have to be in line with what customers a commitment to change. Being clear about the railway’s finance management. They conducted detailed core railway assets will be with us for the foreseeable want. Anything else will make the current situation purpose and its role will also make it easier to integrate interviews with all the project management team, future. This means the rolling stock we order now, the worse. One option is different performance measures rail more with other modes of transport and related carrying out a detailed analysis of how they were signalling systems we renew and install, the power on commuter, intercity and rural routes. Respectively, infrastructure, like power supplies and logistics hubs. managing a highly complex environment with very systems, stations, track and civil infrastructure all have these could be throughput, on-time performance and cancellations. Freight would need something demanding deadlines. long lives. This makes a road map for how the railway This will take a significant amount of time and effort, and there will be obstacles and distractions along the way. that reflects the frequency of each service. It’ll take will look in future decades a valuable tool for shaping joined-up working to understand exactly what the We presented the board with a comprehensive Industry will need to celebrate the wins and strive to keep today’s decisions. incentives should be and how to segment the market. report, setting out the key issues and risks we had momentum, staying focussed on the vision at the most identified. These included some cases of where Once the vision is agreed, government must provide the Agree today’s actions to move difficult of times. That’s why the ingrained incentives are so protocols weren’t being followed, inefficiencies support and incentives to make it possible, and make towards tomorrow’s vision important to guide business-as-usual decision-making. and poor performance in parts of the project, it clear who’s accountable for what. In some cases, this • the lesson from other sectors is that senior as well as skills gaps. We provided a series of might mean an end to commercial structures created to commitment from key players and representation recommendations on the actions needed to address serve a purpose that no longer exists. from smaller but still-crucial parts of the supply chain will be needed to drive real change these challenges, as well as a new way for the • a collective industry response to the Williams management team to track future progress. Review will help move things forward and The project leadership had a robust and independent identify the most important actions. view of the state of the project and a clear way forward and we’ve helped them implement some of our recommendations. Our work brought everyone involved a relentless focus on delivering the new metro line on time and on budget. And on making sure it plays its full part in Doha’s future growth and development – and a successful World Cup. 26 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 27

Centre on customers or watch them walk away 2 Building better relationships

Network Rail recently included representatives from its supply chain in scoping workshops for projects in its research and development In recent years, many sectors have seen dramatic change Other transport modes – particularly roads, and air aviation portfolio. They’re also actively engaging diverse in the way they interact with their customers. In response, as it develops electric light aircraft for regional journeys – How to do it teams of experts to bring new ideas to life they’ve worked with customers to transform products and are in a race with rail to modernise. And the industry will also to support rail innovation. This early-stage Build better relationships inside and outside rail services. However, the complexity of the railway and the have to compete with the proliferation of global high-speed engagement has created a rich understanding of • alliances and joint ventures have tried to number of different parts within it means it has been slow internet access and the increased move to communicate by how to approach projects. achieve the benefits of joint working, but to respond to changing passenger needs. video rather than face to face. they’ve not always proven successful due to a With our research showing that only 18 per cent of transport There are real benefits to be gained from involving lack of collaboration. A more integrated way leaders believing that personalisation is a feature of the customers in designing services and processes. Better self- of working fostered by an overarching body would help to drive alliances forwards future of rail transport, it’s possible that rail may not achieve service options, flow through stations, on-board behaviour a passenger-centric way of operating without concerted and speed of loading improve things for passengers and • rail and road have collaborated to plan engineering focus.13 The lack of choice for those who depend on the also the efficiency of the railways as a whole. This means work. There are additional opportunities for Delivering smart railway is deeply frustrating. Compare this to other aspects involving customers in the conversation and co-creating the industry to consult outside of rail. ticketing of their lives, where products and services deliver seamless, services and solutions with them. Everyone, whether they Bring engineering decisions closer to the customer personalised experiences to help people achieve what interact with passengers or freight shippers or not, must • whether setting standards or tackling engineering they want, not just what they need. Take, for instance, see their decisions from the customers’ perspective – from issues, decisions can often be made without thinking Smart ticketing promises significant passenger the Mobility-as-a-Service provider Whim, which has front-line, track maintenance teams, to procurement teams about their impact on customers. Leaders should experience improvements, from simpler ticket revolutionised transport by doing more than taking people managing the contracts. consider social panels and community groups, purchase to easier transition across modes of from A to B. Instead, it provides a seamless, personalised among other techniques, to give customers a transport as well as better revenue protection Keith Williams has said “the only way we can rebuild public outcome transport – be it to see friends or have a meal voice. Network Rail’s programme of devolution has and capacity benefits. To make it effective, trust in the railway is by putting the customer at the centre seen more regional representation on decision- out – by combining multiple transport modes through a you must: of reform”.16 And this is starting to happen. Network Rail making boards. Filtering this down through the single device. asked passengers to speak to its 200+ leaders at a recent organisation to cover more minor decisions will be • put the customer first and make passenger The success of start-ups and alternative transport modes event. And London North Eastern Railway (LNER) has important in bringing in the customer perspective experience central to smart ticketing initiatives, to reduce the risk of fragmented demonstrates the increased level of competition. In its first demonstrated great returns on its efforts to continuously • the use of digital twins can help to create a more 14 months since launch, e-scooter company Bird expanded engage customers and capture feedback. coordinated transport network. This will let industry solutions and guarantee passenger uptake to 120 cities worldwide and took in £415 million in funding.14 model the impact of decisions on systems and Perhaps more than any other area, this is where rail needs a • act fast to reap the rewards. Citymapper, E-bike and e-scooter firm Lime announced this year that its customers more accurately and empower staff to deeper review and to build momentum. And any change will Uber and Zipcar have shifted passenger vehicles have completed 50 million trips since launching mid- make decisions based on better information. need to be ongoing, continually adapting to the needs expectations, and smart devices and 2017, having expanded to 100 cities across five continents.15 Transform the market through MaaS of customers, whether they pay fares or taxes. contactless payments have revolutionised • cost, complexity and lack of choice frustrate how customers plan and pay for journeys passengers. MaaS could solve these problems with a revolution in ticketing. But making MaaS • build to adapt because passenger needs work will need a better shared understanding and technologies continue to evolve fast. of how to distribute revenues fairly, and Successful smart ticketing initiatives allow effectively shared data across modes passenger experience to drive technology • rail companies need to think beyond the ticket The only way we can rebuild decisions, not the other way around. The office and about wider customer needs – getting ambition must always be to develop products from one destination to another, not from one public trust in the railway is that deliver a brilliant passenger experience in major intersection to another. A change in by putting the customer at transport organisations’ mindsets will create a everything you build, right from the start. the centre of reform platform for joint decision-making and sharing of data on passenger and freight flows. – Keith Williams 28 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 29

Veolia Water Technologies: Securing further success by seizing the opportunities in the digital world

CASE STORY CASE Veolia Water Technologies (VWT) is a global data science and analytics to help customers Be truly responsive to demand Think beyond moving people from A to B company specialising in water treatment solutions. make more effective use of data to optimise water • organisations that co-create products and services with • as we become more engrossed in our digital lives, demand It provides the complete range of services needed treatment processes. We helped VWT pilot these customers are likely to be successful. Rail tries to do this for WiFi connectivity will only increase. Industry has the to design, build, maintain and upgrade treatment services, getting valuable customer feedback. Having through focus groups but, unlike consumer industries with chance to give rail users improved services at stations facilities for industrial, commercial and municipal learned how to make the services most effective, their target markets, rail serves everyone. Rolling stock and on trains, and to generate revenue in the process. Rail customers. VWT were looking for new ways to deliver they’re now offering them to more customers. with more adaptable interiors – such as folding seats – can also learn from the integrated shopping experiences more value to their customers using digital solutions Using our think big, start small and scale fast strategy, and stations with wayfinding on a par with airports will that airlines provide, including groceries delivered to your and innovative business models. be a start. Season tickets are designed around the old home station for pickup when you arrive. An approach VWT now understands how to profit from the power model of a Monday to Friday commuter, but with new similar to platform banking, where train operators allow They asked us to help them develop and test digital of digital, and the skills they’ll need. They’re moving ways of working they will need to evolve and develop start-ups to provide additional services to customers services that would appeal to their customers. Our from just selling products to selling services, with the as part of one unified experience, could be key expert team brought a strong customer perspective, agility and capability to succeed in a fast-changing • timetables that adapt during a given day, with passengers updated through technology, could deliver less • data will create shorter cycles of experimentation combined with detailed knowledge both of the water digital world. overcrowding and better connectivity with other modes. as organisations adapt products and services to market and digital strategy and technology. We combined our insight with the expertise of VWT’s Machine learning and artificial intelligence (AI) will make changing needs. This tech-enabled approach will “PA’s domain knowledge in digital and technology for better decisions and a more responsive train service move from being a differentiator to an essential team to create a long list of ideas. development, coupled with their deep sector expertise condition for success, regardless of your industry • more dynamic planning, passenger demand data and We used our experience in the sector to identify was what really impressed us. They provided a team integration with other modes could see freight return to • investment in new technologies will make the railway their customers’ current and future needs and the with excellent, practical understanding of our markets passenger trains. Passenger airlines already ship significant more responsive to future operational needs beyond particular capabilities VWT would need to offer and our customers, helping us to think big about our amounts of freight, and passenger trains once had mail just rail; for example, by ensuring passengers on delayed attractive new digital services. This work informed a business and then start small to prove value quickly carriages. It would take rolling stock with more adaptable late-night flights won’t miss the last train from the review and analysis of the long list. VWT tested two both internally and with our customers.” interiors. But with railway stations often connecting busy airport but find extra services waiting for them instead. preferred options with customers – who liked both. hubs, delivery vans increasingly unwelcome and trains not MARTYN FISHER always running at full capacity, it seems within reach. One offers new ways to access Veolia’s engineering capability and this allows operators to manage CEO Northern Europe equipment more efficiently. The other uses advanced Veolia Water Technologies 30 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 31

Build a network for innovation • Network Rail is a founder member of Shift2Rail, the European technology, research and development • developing networks with new people and organisations programme. It opens up a vast amount of expertise – start-ups, digital natives and universities – will and learning from other European rail organisations. boost diversity on specific tasks. While it’s not a Regardless of how Brexit plays out, initiatives like replacement for a culture that attracts and retains the this must continue. Network Rail’s recent investment best people, it can enhance what you already have. into university programmes and innovation Foster innovation and And it will bring new ideas into your organisation research is another positive step forward and challenge any real or perceived obstacles an experimental approach • create innovation hubs, where specialist teams can innovate at speed without the restrictions or risk being left behind of business as usual. Innovation hubs let people explore new ideas under new sets of rules. They can also bring together different organisations and 3 increase collaboration across the supply chain.

Trying to squeeze more from existing technologies won’t Building this culture of innovation and avoiding unintegrated, be enough to meet the demands placed on rail. As other inflexible ‘bolt-ons’ will allow for much more effective industries or foreign railways adopt new technologies or spending and bring faster returns. Whether it is robotics One: Creating the first major ways of working, questions are being raised as to why the transforming maintenance, data overhauling operations UK railway hasn’t done the same. Whether it’s passengers or cleaner fuels boosting sustainability, innovation creates new mode of transport in more than a century experiencing something abroad, freight shippers comparing opportunities the railway has to take.

rail to other modes of transport, or governments questioning STORY CASE Imagine being able to travel from to Austin in We’ve also given Virgin Hyperloop One the expert value for money, the pressure to innovate is on. How to do it 20 minutes. Or Dubai to Abu Dhabi in 12 minutes. support to devise and set out a robust road map for Brunel famously said: “I am opposed to the laying down Virgin Hyperloop One is reinventing transport by achieving their vision. That road map articulates the Focus on the future of rules or conditions… lest the progress of improvement developing the world’s first Hyperloop. With speeds steps required along the journey to take this totally • all too often, day-to-day operations can take priority two to three times faster than high-speed rail and new technology and bring it to life. tomorrow might be embarrassed or shackled by recording over the future focus. Strategic management meetings an on-demand experience, Hyperloop can reduce a or registering as law the prejudices or errors of today.” shouldn’t be allowed to drift into operational firefighting, As members of Virgin Hyperloop One’s Partner 300 km commute to under 20 minutes — smashing Innovation requires a bold vision, ambitious goals and the and those focussed on innovation should be freed Advisory Board, we’re working closely with the today’s traditional transportation boundaries. A ability to fail in a controlled way in order to meet them. It from the burden of operational responsibilities company and other partners to get commercially pod, which can carry cargo or passengers, moves means taking calculated risks with the right expertise to • dedicating time and leadership focus on the operating Hyperloop up and running and ultimately through a tube built under- or over-ground. deliver a better, more ingenious outcome. Brunel’s mindset future will ensure greater discussion and debate, change the way we live, work and travel. Magnetic levitation guides and lifts the pod, and must be adopted by the next generation of rail leaders so and ultimately deliver a better outcome for all. that we too can innovate with the same mindset of ingenuity. Dissonance is better than disengagement and we vacuum pumps remove the air from the tube. It’s We need to think about the art of the possible rather than know we need a clear, shared vision to deliver on. fully autonomous, all-electric, zero-emissions, and is “Our partnership with PA is helping make Hyperloop cheaper to build than high-speed rail. a reality, fast. Our teams of experts have worked the permissible. Design innovation into organisations tirelessly together as we strive to get the first new • innovation should support an organisation’s core We’re helping Virgin Hyperloop One make the mass mode of transport in 100 years operational. purpose. Judging innovation activities against new system a reality. Our systems engineering and A coordinated approach to From delivering complex new technology systems the same business goals as any other decision enterprise architecture experts have been working on innovation based on collaboration and safety frameworks to shaping the long-term is an important start. Network Rail’s Putting the plans for the complex software and traffic control road map for our business, PA has been there every networks and systems thinking Passengers and Freight Users First programme is systems that will be needed. With our support, Virgin an existing opportunity to apply this approach step of the way – blazing a trail for the industry and Hyperloop One was able to accelerate delivering is essential. driving towards a brighter future for transport.” • organisations must challenge how they go the software systems requirements required for about innovation. It’s essential to apply systems Hyperloop by 30 per cent. JOSH GIEGEL Industry must empower people to innovate, collaborate thinking, considering how smaller, localised and bring new technologies to the railway. If trials are to be changes impact the unified system. Co-Founder and CTO possible in a safety-critical environment, then regulations Virgin Hyperloop One Create an innovation culture have to offer scope for innovation. There should also be commonality and interoperability where it helps achieve • innovation starts at the top and must be fostered by the efficiencies and maintain safety or network capability. More CEO. While CEOs don’t have a magic wand, they can people need to understand railway operations, constraints often cut through challenges and speed up solutions and the opportunities to make things better. Anything else • organisations have to reward in-demand innovators. will stifle innovation and in some cases create complexity, as Their natural curiosity could make them more likely different technologies struggle to work on a single network. to leave, so rewarding them well is crucial. That’s true even when innovation doesn’t succeed – even failures That’s why a coordinated approach to innovation based on hold valuable lessons for those who learn from them collaboration networks and systems thinking is essential. • diverse teams are better at generating new Our research shows that rail, almost double any other mode ideas and challenging routines. Leaders will of transport, believes the future will be shaped by innovation. need to focus on attracting and retaining new We believe that rail can power innovation within the industry generations of diverse thinkers who expect and should seize on the opportunity to do so with even purpose and empowerment in their careers. more vigour. 32 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 33

Highways England:

Invest in technologies to capture Reducing traffic as much data as possible

Drive decisions and STORY CASE congestion caused • prioritise the data needed to plan, model and control the railway, and design digital twins on by motorway value through data that basis. This blueprint will enable decisions or operate in the dark based on a more holistic view of the railway incidents using ‘dark • with vast data storage and processing power, and data’ insights the increased ease of storage, more is more when it comes to data. With the advent of machine 4 learning and AI, your historical data could prove Highways England’s traffic officers look after valuable in ways you’d never imagined possible motorways and major trunk roads, clearing accidents and breakdowns to keep traffic • technology isn’t an investment area unless it offers tangible business benefits. Be sure the tech you flowing smoothly. They wanted to improve the choose is targeted at solving a business challenge. number of times they cleared incidents in under one hour: a standard not achieved for nearly Extract value from data 7,000 incidents a year. To understand this issue Data has always been useful; now it’s essential – whether Giving teams the chance to explore data-related • machine learning offers opportunities to find patterns – and work out how to address it – we worked to tailor services to customers, weed out inefficiencies opportunities helps develop them and attract others with in data. Often these projects can run with small with Highways England to turn their ‘gut or forecast issues before they arise. For the railway, the the right skills. While it might be tempting to create a centre teams. Backed by the right leadership vision, it’s not instincts’ about the problems into powerful and potential for larger-scale, more accurate maintenance of excellence, the business can depend too much on this difficult to generate a lot of value in a short time tailored organisational insight. inspections through connected infrastructure could be central team, which either fails to meet demand or grows to • managing customer data in a secure and effective Working with Yorkshire and North East region, transformational. Similarly, the ability for operations to an unsustainable size. A more collaborative organisational way takes time and expertise, but it is essential if be continually optimised and planned in real time would structure is a better bet. you want to improve their experiences and tap into we found completely new ways to use their data. bring significant benefits. new customer-focussed opportunities. Make sure By focusing on their hypotheses, we initially you’re managing data correctly to achieve that goal confirmed long-held hunches on performance Third-party data is critical for an integrated transport system. How to do it variation. We established up to a 10 per cent • common data platforms and IT infrastructures Mobile phone data, payment data and biometrics offer a vast performance drop at specific times over a patrol Make it easy to share data in controlled environments can overcome barriers to collaboration. array of opportunities to develop services. For the travelling shift. We then established the root cause from • IT investments will inevitably be looking to cloud-based public, phone data could be used to track capacity issues data collected every day but not looked at before and develop on-demand rail services. Biometric signatures solutions for the wider benefits they bring. Beyond this, developing software through microservices will for this purpose. The problems stemmed from can monitor workers for fatigue and save lives. help make interfaces between systems or organisations travel times for traffic officers at specific times of more effective. Where opportunities do arise, a day. Using this insight, Highways England could Rail needs to tap into the wealth of common IT strategy across the industry would help optimise the way they deployed officers from data available to drive performance streamline the effort needed to collaborate new and existing base sites. – and act on the insight. • common data architectures will also be These changes cut clear-up times by up to 15 valuable. Network Rail is already exploring this minutes per incident, allowing over 100,000 through a research and development project, more hours for other key operational activities. which should bring significant benefits. has shown what data can do by digitising railway Nationally, patrols could hit the one-hour target ticketing. The fact it’s been so successful through being Find the right people and nurture them in up to 2.5 per cent more cases. What’s more, the easiest but not the cheapest option reveals a lot about • candidates with skills in manipulating and managing we estimate the time motorists would no longer consumer demand and priorities. It also says a lot about the data are entering the workforce. These skills spend in motorway tailbacks could be worth power of data to create a better customer experience. will be common to HR managers and engineers £17.3 million a year to the economy. We’re now With so much work underway to upgrade assets and alike. It’s vital organisations offer roles where working with other Highways England regions they can use and develop these capabilities infrastructure, rail needs to tap into the wealth of data to build on this success. available to drive performance – and act on the insight. • empowering people to explore, develop and share new ideas is equally important. Enabling people Making data available and having frameworks to explore “It was great how PA presented our data in a to easily engage in ideation or join innovation possibilities is one part of the equation. The other is way that hasn’t been done before, delivering collaboration. Without that, nothing will happen. hubs to share, develop and collaborate on ideas at speed is key to unlocking their capabilities. compelling insight in an engaging way. They’ve Migrating data to the cloud brings various benefits, including helped us really understand why we were unlimited storage and extra computing power. It also seeing performance variation and enabled us to promotes collaboration through virtual organisations that create tangible opportunities to improve.” share data with partners. RICHARD MARSHALL Regional Director Highways England 34 CHANGING TRACK: THE FUTURE OF RAIL FIVE STEPS TO TRANSFORM RAIL FOR TOMORROW 35

Adopt the mindset to adapt and thrive 5 or expect inertia, at best

How to do it

Railway processes are based on infrastructure that takes Breaking old habits is crucial. For some this may mean a Put 80 per cent of effort into culture See measurement as an instrument of change years to build and lasts for decades. In the modern, digital root-and-branch review of how their organisation operates. • agile transformation initiatives need to focus on • agile principles see businesses continuously assess world, an agile approach can introduce new technologies If this is too radical, creating teams with the freedom to work the culture, leadership and capabilities needed for efforts and outcomes. If the results aren’t up to scratch, without undermining safety. in more agile ways, away from corporate processes, might be real transformation, not just new processes. Agile they stop and switch to another approach. If the results the right compromise. organisations are places where the culture supports are encouraging, they can drive energy and investment This will be increasingly important as new competitors certain behaviours and ways of working. Without this, for more improvements. It needs skill and sensitivity to enter the sector. The success of Trainline shows how a new For bolder changes, decentralising and delayering are there’s a risk employees see being asked to work in agile design metrics that reflect and encourage new ways of market entrant can disrupt industry with a digital business important in empowering people to drive change. How the working, rather than reinforcing old prescriptive patterns ways as a demand to work harder, faster model. In recent PA research, the leaders of our largest centres of the respective organisations respond to these • failing fast is an intrinsic part of the learning cycle. But corporations revealed they’re now more concerned about new relationships is just as important as how each business • changing to an agile culture also means being passenger- centric. If industry understands why people make while business leaders will want to measure the return the ‘Amazonification’ of their sector than they are about unit responds. on investment in organisational agility, they should traditional sector rivals.17 journeys and how it can enhance their experience, it can Creating or restructuring teams will only bring benefits if be careful not to wield these metrics in a way that do far more than just get them there on time. discourages teams from experimenting and innovating. A further challenge comes in meeting the changing leadership sticks to the new approach. This is vital in creating expectations of governments and taxpayers, especially cultural change. If agile ways of working aren’t usual for Be persistent and consistent Devolve ownership around value for money, when other industries achieve an organisation, it’s even more important the people we • command-and-control is the opposite to agility. What’s • implementing change in a devolved way doesn’t similar change in less time with much lower overheads. expect to be agile know they have their leaders’ full support. needed is an embedded commitment to the principles of mean delegating decisions to people below traditional For an industry with such strong operational pressures, working in dynamic, cross-functional, empowered teams leadership levels. It means giving teams significant Decentralising and delayering are this must be more than just a temporary commitment. • make sure the initiative has a clear vision and responsibility to deliver on things they previously It must be a genuine change in mindset that develops impetus, is user-centric, transparent, creative, hadn’t been asked for their opinion on. Start small important in empowering people over time, continually strengthening the organisation’s integrated and empowering for all involved by giving your team a challenge and set a one-week approach to agility. deadline for them to come back with recommendations to drive change. • rail will need to look at how to attract the right and initial prototypes. Then step away talent – innovators, technologists and futurists. • trainers and coaches must support clients to transform from within – root and branch. Empower the organisation to own and lead the change themselves, across teams and functions, to make it feel authentic and make culture change stick. Recognise that agility is the new normal • organisational agility is an ongoing process. By applying agile ways of working to different parts of the business, the success stories become exemplars for others to follow. The industry must identify these exemplar projects and build awareness around them • as well as challenging the ‘wrong’ behaviours, it’s about turning off old ways of working. For example, if you’re introducing a new style of investment paper, refusing 2/3 60% to authorise papers in the old format is an easy step. of business leaders agree that organisational agility of organisations cited ‘complex is about shifting culture rather than implementing organisational structures with too process. While this is a comfortable majority, many layers of management’ as a it’s a concern that one-third still think otherwise barrier to agility18 36 CHANGING TRACK: THE FUTURE OF RAIL 37

WHAT DOES THIS MEAN FOR INDUSTRY LEADERS TODAY? CONTRIBUTOR

The rail industry in the UK has become slow to adapt. Rather than embracing evolving customer expectations and technology innovations as drivers and opportunities to propel the railway into the future, the Steve leads PA’s work on transport innovation, with a status quo has been preserved. specific focus on new transport modes and technologies. This is why we see daily headlines criticising the railways for delays – Steve has over 20 years’ experience in research and both in services and infrastructure development. And inertia continues analysis of new technologies and products. A systems to prevail in spite of growing pressure, ongoing challenges and engineer, Steve has worked with Virgin Hyperloop One to increasingly attractive competitors. define the systems engineering at the heart of the system; with Network Rail to create the underlying business cases While there are genuine reasons for concern, there’s never been a for adoption of new technologies; with the UK Department better time to change this story. By combining human creativity, strong for Transport to roll out smart ticketing on the lines stewardship and the mindset to adapt at pace, rail can change track. into London; and with Highways England to define the We have the power to harness new technology, deploy data, place technology strategy for 2050. customer needs at the centre of our vision and use agile approaches to make these changes happen.

As rail leaders, the future of the industry lies in our hands. With such a long and illustrious history, and a powerful legacy of innovation, the DR STEVE CARDEN time has come for the railway to act. It must seize the opportunity to Global Head of Transport Innovation reimagine its future with bold, decisive leadership that puts people – customers and employees – first.

By combining human creativity, strong stewardship and the mindset to adapt at pace, rail can change track. Get in touch

To deliver the future of rail, today, leaders must look to create a positive human future in a technology-driven world. We can deliver a [email protected] seamless, integrated, passenger-centric railway that remains central to powering our connected, sustainable and constantly changing society. 38 CHANGING TRACK: THE FUTURE OF RAIL ABOUT THE REPORT | ENDNOTES 39

ENDNOTES

1 The evolution of the agile organisation: old dogs. Ingenious new tricks, PA Consulting, October 2018 2 The Williams Rail Review, gov.uk, last updated July 2019 3 Digital rail future is a must, event hears, ABOUT THE REPORT politics.co.uk, March 2018 4 Railway performance, Network Rail, accessed 17 October 2019 Throughout 2019, we spoke with a range of rail leaders from 5 National Rail passenger survey: main report Network Rail, train operating companies, freight operating spring 2019, National Rail, spring 2019 companies and regulators, and several of our own cross- 6 448 years lost to significant train delays in 2018, Which? reveals, Which?, May 2019 travel and FutureWorldsTM experts. 7 Integrated, intelligent and ingenious: what will transport Our aim was to stimulate discussion by presenting a series of provocative really look like in tomorrow’s world, PA, 2018 future worlds that created a common platform to discuss the future. 8 UK natural capital: urban accounts, Office We asked these leaders to reflect on rail’s history, consider the challenges for National Statistics, August 2019 of today and tomorrow, and to set out a vision for the future – to 2050 and beyond. Our thanks go to all who contributed to our research and 9 Future energy scenarios, National Grid, July 2018 informed our report. 10 Over nine in ten not working the usual 9–5 week, YouGov, August 2018 11 UK becomes first major economy to pass net zero emissions law, Department for Business, Energy & Industrial Strategy, June 2019 12 PA analysis of Public expenditure: statistical analyses 2018, HM Treasury, July 2018

13 Integrated, intelligent and ingenious: what will transport really look like in tomorrow’s world, PA, 2018 14 14 months, 120 cities, $2 billion: there’s never been a company like Bird. Is the world ready?, Inc., Winter 2018/19 15 E-scooters aren’t going anywhere – in fact, their numbers are still growing, MashableUK, April 2019 16 Speech by Keith Williams at Accelerate Rail 2019, gov.uk, March 2019

17 The evolution of the agile organisation: old dogs. Ingenious new tricks, PA, October 2018 18 Ibid PA. BringingIngenuity to Life. the UK,US,Europe, andthe Nordics. We operate globally from offices across scientists, engineers andtechnologists. designers, consultants, digitalexperts, people are strategists, innovators, manufacturing, andtransport. Our government, healthandlife sciences, energy andutilities,financialservices, in consumer, defence and security, consultancy, we are over specialists 3,200 An innovation andtransformation and together we achieve enduringresults. faster. Ourclients adaptandtransform, use oftechnologies to progress further, innovative thinkingandbreakthrough Our diverse teams ofexperts combine opportunity from complexity. and innovation collide, we create As strategies, technologies in atechnology-driven world. to buildapositive humanfuture We believe inthepower ofingenuity About PA

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