Young Bus Managers’ Conference
The County Hotel, Newcastle-upon-Tyne
Neatly timed to coincide with the announcement of the QCS Board findings, the latest meeting of the Young Bus Managers Network (YBMN) was held last week at The County Hotel, Newcastle-upon-Tyne. Supported by the Chris Moyes Scholarship Trust, the organisation is a not-for-profit organisation helping the industry breed and encourage the next generation of managers. Roger French and James Freeman are the Trust’s patrons, working alongside a committee of five young managers representing the plc groups and independent operators.
The format of each YBMN event is that proceedings begin with a presentation followed by dinner and the chance to network. Everyone then reconvenes the following morning at 09.00 for a series of presentations either side of lunch concluding mid afternoon.
Kicking off the speeches after everyone had taken the opportunity to get drinks from the bar was Martin Griffiths, CEO of Stagecoach Group. Martin became Group Finance Officer of Stagecoach when he was 32, the company was struggling and had £1.8bn debt. He came close to not getting the job because the night before he had taken a call from the then MD telling him the city thought he was too young and inexperienced and wouldn’t be appointed. Something changed, he believes because Brian Souter stood by the board’s decision, which taught Keith that, from a Stagecoach point of view, ‘sometimes you have to take a little bit of a risk, particularly on people. To get on in life, we have to challenge our people and put them in the position where we give them the responsibility and accountability, which is all right as long as we give them the support. You all had to learn together and if you made mistakes learn from them and move on.’
As a manager, at some stage it was likely that you would have to deal with the fallout of comments made by those above you said Martin, recounting some of the more colourful comments made by Brian Souter over the years. Among them was his description of the Tyne & Wear PTA as ‘a bunch of unreconstructed Stalinists,’ adding, ‘I’ll take poison before I let Nexus take away our buses. I’d rather close all my garages and dump the buses in the River Tyne.’
He recounted how Stagecoach had started in 1980 with two buses bought with Brian Souter and Ann Gloag’s father’s £20,000 redundancy money and today employed 39,000 people, had 12,000 buses and carried four million people every day on its trains, trams and buses, generating turnover of £4bn.
He was proud the company had delivered 10% dividend growth year in, year out for the last 15 years, with a market valuation of around £2bn. In the last seven years it had also returned the whole of its market capitalisation to shareholders, who were important people. In 2013, in terms of shareholder return, Stagecoach was the eighth highest ranked business in the FTSE 250 over the previous ten years and the other seven above had all been taken over.
He said Stagecoach had always been about value and sometimes you had to know when to get out of markets. There was a difference between being entrepreneurs and being Emperors who just wanted to acquire more and more. ‘Ultimately we have to drive value,’ he said. An example was the sale of the London operations to MacQuarrie for £260m. It wasn’t sold because Stagecoach didn’t want to be in London but because they were offering more than the board thought it was worth. They subsequently bought it back for £52m in a much worse condition because ‘running a public transport business isn’t as easy as some people think.’
He admitted that Stagecoach had not always been good at ‘the soft cuddly bit’ but added, ‘sometimes when we mess up we just need to say sorry and here’s what we’re going to do about it.’
There was much more that Martin said than there is room to cover in this article but his comments on politics were interesting. He thought politics was fascinating at the moment noting that the official policy of the opposition is to renationalise the railways and re-regulate the bus industry – ‘and we’ve not had that for a long time.’ On devolution he said, ‘you can understand the desire to rebalance the economy and get away from the London-centric bit, I support that, but the impact on some of our businesses worries me.’
On the Nexus decision he observed, ‘What Nexus tried to do in Tyne & Wear was about ideology, not passengers. They never wanted to sell their toys and won’t rest until they get them back. It’s all about control.’ Though ‘on every count that mattered we won,’ we had only won a bit of a battle and the debate would go on.
On the threat of Uber and others, the good news was that they were starting with 4m passengers, though hitherto the industry had been ‘hopeless at relationships.’ ‘It’s going to be all about choice. We have to frame our product to the demands.’ The macro factors for public transport were fantastic, ‘if we don’t capitalise on this over the next ten years we’ll have failed.’
Martin concluded, ‘You guys have got all the opportunity. We have to give you the right training. We hope you get the bug and you get the passion because you won’t achieve anything without the passion.’ For his part, he ‘remained very positive and excited.’
Some had networked rather more energetically than others in the intervening hours before we restarted the following morning for a presentation by James Freeman, MD of First West of England. Twelve months ago he left Reading Buses after seven successful years and took on ‘the biggest challenge of my career’ because ‘I’m 59 and I wanted another go.’ Outlining the utterly unique career path he has pursued (missing out running a preserved railway) he shared valuable insights into the realities of working in the bus industry and also described the Bristol and Bath scene together with what he is trying to achieve there.
He contended, ‘It’s not about running buses, it’s about running people, it’s a people industry. There’s so much you can do with a group of people if you inspire them.’ He advised, ‘if you want to change a business, start with the people in the business. Talking to people and taking note of what they say is really important. The detail really matters and big groups are really bad at it.’
One of the things he had inherited was a new fares policy because customers wanted fares that were fairer and cheaper. Fares for 70% of people were reduced and passenger journeys were up 70,000 a week as a result. Over two years, passenger growth was up about 25%. There were so many more people that the buses went slower and 25 more had had to be put in to maintain the service.
There was a new Smartcard in Bath, a move to M-ticketing from 11 January had really taken off, there were more new buses, branded buses, faster routes, later services and all night services, indeed these carried some of the heaviest loads.
Respect and getting people to think respectfully about each other was number one on James’ list. ‘If I respect you and you respect me we have a relationship,’ he said.
With 73% employment locally, sourcing drivers is difficult and staff turnover has been high (400 in 18 moths) with the company 150 below complement. Last week drivers’ wages went up to £11.05 (a 15% rise for new drivers). James concluded by saying that ‘if you treat drivers right, drivers treat the passengers right and the relationship with the community starts to change.
Marketing consultant, Chloe Leach O’Connell, formerly of Arriva, spoke on the art of marketing buses for growth. She said it wasn’t all about buzzwords, it was about offering a consistent product, you needed a sustained marketing focus throughout a depot or business to lead passenger growth.
There was no quick fix or miracle campaign. What came easy wouldn’t last and what lasts wouldn’t come easy.
It was important that all staff understood and bought in to your objectives because employees provided the first touch point for customers. She advised managers to create a story around your objectives, engage your colleagues in the vision for the campaign with simple narrative and be a promoter of two way communications. People were turned on by stories, not data, so make your story impactful and memorable and make sure your employees at all levels know their part in the story. Finally, she advised ‘put your personality into it.’
David Martin, Chief Executive of Arriva, described the growth of the Group from the formation of Cowie as a motorcycle dealership in Sunderland in 1938, the growth of its car dealing and leasing side, the purchase of the George Ewer Group in 1980 followed by two London Buses subsidiaries and County Bus and then the British Bus purchase in 1996 with the change of name to Arriva the following year. In 1999 David, who led the MBO at Midland Fox which then joined Drawlane and became part of British Bus, went off around the world looking for potential acquisitions making the first in Denmark in 1999. Others followed in both the bus and rail sectors, with acquisitions in Sweden, Spain, the Netherlands, Portugal, Poland, Italy, Mallorca, Germany, Hungary and Slovakia before Arriva reluctantly sold out to Deutsche Bahn in 2010 after a bidding contest between DB and SNCF. It had continued to grow since with turnover doubled from £3bn to £6bn despite the sell off of £1bn worth of German work. David claimed that when buying he had been more interested in investing in the right people than anything else.
He advised delegates never to forget the frontline troops. Stay visible and listen because the more you listen the more you learn, he said. He embraced trade unions but he wanted officials with strength.
He loved the job and said, ‘I don’t want to get up in the morning and not have fun. If it isn’t fun, get another job.’ Not everything he’d tried had been a success. You needed to learn from your mistakes and not make the same mistake three times.
On the challenges of the future he thought Uber was struggling financially, though he thought it was here to stay though not necessarily on the same scale and it had been banned in Spain and Italy. If it makes economic sense let’s partner, he suggested. Arriva already ran a 400 vehicle electric car sharing scheme in Sweden as part of an integrated transport ticketing scheme. He believed that increasingly, politicians were going to have to look at integrated transport.
The final speaker of the day was Kevin Carr, MD of Go North East who began working for the company as an apprentice electrician back in 1975. Apart from saying that you needed to treat people the way that you would like to be treated yourself, he had lots of sage advice to offer the young managers. ‘Always set yourself a career development plan. You have to be selfish and deliver it.’ He also advised ensuring you undertook academic development as well as gaining experience on the job.
Concluding his presentation with reference to the QCS, he said that had not met the public interest test. Pointing out that the forthcoming Buses Bill would have a franchising element and a partnership element he outlined the extensive partnership package that had already been offered and said that a partnership and all of its benefits could be delivered now with no additional risk to the taxpayer. Anything other than a partnership could not be delivered before 2017.
Kevin’s presentation was kept short to enable the group time for a whistle-stop visit to the new Gateshead depot facility which opened at the beginning of 2014. I had been there for the opening and I still found it fascinating.