Successful businesses are built on trust. Supermarkets are among the sectors most trusted by the British public, yet the horsemeat scandal has shown how quickly that trust can fade, dragging the wider record of business back into the spotlight again.
Our sector is, of course, no stranger to intense scrutiny. Many organisations and stakeholders, as well as the media, seek to hold it to account. So, should rail professionals be any more concerned now about how far train companies are trusted – even when passenger numbers and satisfaction are at record highs?
Yes, we should. The pressure to regulate banks and utilities reflects the low level of trust in which they are held by the public and politicians. As manifesto writers prepare to sharpen their pledges, any failure to demonstrate our trustworthiness will only play into the hands of those who feel – wrongly – that more intervention in rail must be the order of the day.
Trust, we know, is based on many factors. Just as there is no single magic formula by which all businesses can earn trust, so it is with train companies serving different markets, be they commuter, leisure, long distance or regional. But there are some obvious elements which are common to all.
People want to know they are getting value in terms of quality and price. Management needs to be seen to be dealing fairly and openly with their customers and staff. The contribution made by firms to the national economy, their local communities and the environment is also important.
Senior rail managers are already alive to this and tools such as balanced business scorecards add to the attention they pay across these areas. Individual operators pride themselves on their record on particular elements and, across the sector as a whole, we have strong reasons to be trusted.
The quality of our product, in terms of safety and punctuality, has improved dramatically in the last decade. Train companies have responded to customers’ pursuit of value by offering a range of fares to match different expectations of comfort, speed and flexibility. Customers have in turn positively voted with their feet in record numbers.
Half the population – far more than those who regularly take a train – recognise that the rail network is important for the country’s economy. Government has shown its own confidence in rail by sustaining high levels of public investment in the network in the face of the current era of austerity.
And yet there are at least three reasons why it would be complacent to believe that collectively we have done enough to earn the trust of our customers and the wider public.
The first relates to money. Passengers do not fully understand rail finances or why our prices are the way they are. It is not their fault: ours is a particularly complex sector. But what people do not understand, they will not trust.
So, voters who now get that government fares policy since 2004 has aimed to reduce taxpayers’ share of railway costs do not necessarily understand why that is the right policy, let alone get asked whether they agree with it.
And for those who do not yet realise that fares are subject to significant regulation, it is perhaps not surprising that many believe that above-inflation increases in season tickets mistakenly equal increases in train company profits. When asked, people say operators make margins of more than 20 per cent; in fact, Toc profits account for just three pence in every pound of income received.
We all have a job to do to rectify this. Ministers could make a useful start in the fares review due in May by explaining why the long-standing goal of taxpayers paying for 25 per cent of industry costs makes sense, economically rational as it might seem to you or me.
The second challenge relates to the ‘deal’. Customers’ confidence is easily undermined if they feel what they have bought comes with hidden conditions attached, or if they get the book thrown at them when they make a genuine mistake.
Here again, we are making progress. Official surveys show the proportion of customers who partially or fully understand the different types of tickets increased significantly in the last three years. Operators have recently improved the arrangements for Advance ticket holders who board a service for which they have not booked. We have further developments to come, ranging from enhanced information about ticket conditions to improving awareness about how to claim in the event of delay.
If we do fall short, one reason is that we take too long to crank through these issues. We can often explain this away as the result of having to deal with a dense, arcane, pre-privatisation, pre-internet, legacy. Fair enough, but as leaders we need to put our shoulders to the wheel and push on through better to meet the needs of today’s customers.
The third challenge is all about transparency. Part of the problem is that it is difficult to know what ‘good’ in this area looks like. Rail actually has a positive story to tell. We are scrutinised heavily; we are working with the regulator to produce more information on the industry’s finances; and a large amount of data is publicly available about our industry. It would be nice to see some of the same coming through from our competitor modes like road and domestic air.
The difficulty is that expectation in this field keeps growing. Not necessarily from the public themselves, or for the most well-considered of reasons; but even to question the detail of a proposal for greater transparency itself suggests the industry has something to hide.
There needs to be a way in which greater transparency can be encouraged but where the industry can raise genuine concerns without being cast as a pariah. The whole agenda is tactical and without strategic vision. Between industry, government and stakeholders, we have yet to find the sweet spot which ultimately best meets the needs of passengers and taxpayers.
The bottom line, then, is that we do much to engender trust among our customers and more widely, but we can never rest on our laurels. That may sound pat, but just think of how one British model of corporate trust has had itself to move with the times and refresh its promise of ‘never knowingly undersold’, and with success.
Did you think our business was simply to move people from A to B? If it was not already obvious, your business is the same as that of any other successful sector. It is the business of trust.