Eurostar has been the sole UK-based Channel Tunnel operator for 20 years. The operation has gone through massive change, and the next challenge is to be ready to take on all comers, as tenders for competition are invited. Jason Spiller interviews Marc Noaro, Service and People Director.
Marc, give us an idea about your early career and how you got into HR.
After I left school, I got a job in the airline industry at Gatwick, working for a ground handling company, looking after check-in and customer service for different airlines, and I ended up in a management role which involved allocating people to different zones, desks and boarding gates in ‘real time’, which was effectively where I learnt my first HR skills. It was a real challenge to resource the operation effectively and keep both the people and the airline customers happy at the same time. It was a really testing environment in which to experience the sharp end of people management, because this was a full-on, non-stop 24/7 operation, requiring constant planning, from the very short-term, even minute-by-minute activity, right through to longer range resource forecasting, without any management training at all.
Summers were particularly tough, and the business was run on the very tightest of margins, and I remember the steep learning curve that it presented over about 18 months, although it seemed a lot longer. This time for me was definitely my HR boot camp, although I never really realised it. Now under these pressured conditions, as a manager, you can either focus on the operation and not consider the people, or you can treat the people with respect, win their trust, and use that goodwill to work for you. The former always ends in bad outcomes, and I saw that and learnt quickly about the values of treating people as individuals, understanding what makes each person tick, and how to get the very best out of them. Gatwick Handling was a small, young business, and you were promoted very quickly and, by and large, you did your own development. By the time I left, I was looking after a department of around 40 people.
About this time I was looking for my next career step, when I read about the plans and development for Eurostar, which at this time was building up for launch of services. I made some enquiries about the opportunities that were available, and what was on my CV must have chimed with the type of operation that Eurostar would be, and I came in as a station controller at Waterloo, exactly two weeks before the first commercial service departed for Paris in November 1994. This was a brand new business, a collaboration between the old British Rail, and the state railways of France and Belgium. It was really unchartered waters, in terms of an international rail business and opened to tremendous excitement when the tunnel was finally ready to transport passengers between London and the capitals of France and Belgium. However, it was an operational struggle at first, and a loss-making business by some margin. So as the pressure started to build, the opening of the first section of high speed line in the UK couldn’t come soon enough.
Finally, in our 9th year, in 2003, the first section opened, effectively between the M25 and the Channel Tunnel, wiping 25 minutes off the journey times, on a dedicated line, free from slow commuter trains, and so transforming the customer experience overnight. This was really the turning point for the business and as punctuality and convenience for customers improved, we started to really grow the business and attract passengers from the airlines. Between 1999 and 2003, I was getting drawn into increasingly more senior roles around the operation, running Waterloo International station and then the on-board services department. About this time I decided it might be time to move on, and when a couple of interesting roles came up, I resigned and thought I was turning my back on the transport industry. However, fate intervened, and following a few fairly interesting and intense conversations with the CEO, I was offered a role on Eurostar’s management board and I became the HR Director.
What do you think the defining moments were in terms of the business being turned around?
There were two defining moments, the biggest, unquestionably was moving the operation onto the second section of high speed line in the UK, and at the same time from Waterloo to St Pancras. As the crow flies, the stations are only a couple of miles apart, but physically, psychologically and culturally, it was a gargantuan task, a move from the south of the Thames to the north of it and, at the same time, the maintenance facilities moved from west to east, from White City to Stratford. So all in all, a potentially disruptive, and fundamental change overnight. The move presented two very different yet absorbing challenges; the physical station and maintenance depot move and then the internal processes and change management that was involved in moving all of our people across London overnight. The latter was actually the easier part. The people changes were actually more challenging than the infrastructure builds, and we made a huge investment in time and resources, helping to tell the story internally and ensuring that all of our people came with us, both physically and emotionally.
St Pancras station is really impressive. When everything was ready to roll that must have filled the organisation's lungs with oxygen.
We created headlines around the new service, the beauty of the renovated Victorian station, and the journey time reductions. Finally, we were running on a high speed line all the way to Paris and Brussels, through Kent at 186 mph, some 50 percent faster than normal UK domestic rail services, shrinking the journey time to Brussels to one hour and 50 minutes. The business gained further confidence, and passenger numbers continued to grow. The second key step change was when Eurostar went from being an unincorporated joint venture to a fully integrated business, with one set of accounts and commercial contracts with all of our partners on the Continent. From an HR perspective, it meant recruiting and selecting line managers and front line teams in France and Belgium, with a consequent headcount increase of 20 percent. The challenges of integrating all of the performance management and employee relations processes, to be as consistent as possible was a significant task, especially considering the necessity to respect the different cultures, and ways of working in the different countries. The integration of the business really helped to bring the different cultures within Eurostar closer together, with teams across the business having much greater visibility of how things are managed in the three countries, being able to learn from each other’s experiences, whether it’s how we work in the stations, on board or in the offices.
In an operation like this, a business that never sleeps, I can imagine the last thing you can do is stand back and admire your handy work.
True, because the challenges are constantly changing, and also because at Eurostar we took a decision to merge the HR team with the customer service team, when the business became a standalone private company back in 2010. The department is now Service and People, which is a pretty unique proposition, but made real sense as Eurostar is a service-business and its people are the key to success. Many businesses talk about this, but it’s not backed up by organisational design, and so the HR function is often seen as remote from the customer facing teams and consequently isn’t able to deliver the value that it is capable of. I cannot emphasise the strategic advantages this brings, the service part of the business is often involved in HR policy and initiatives at an early stage, often trialling new ways of working before rolling them out across the business, and vice-versa, with HR at the table when we talk about how we look after our customers.
The two departments now sit in the same ‘super department’, the largest in the business, and it has improved traction significantly, and managed to create a much stronger bond between HR and the rest of the business. It was a very brave thing to do, but looking back, it was one of the most symbolic things that we did, as part of Eurostar’s integration into a single entity. I remember that it was quite a shock for the people team at the time! There are just so many areas of overlap, with recruitment, L&D, performance management, the language school and the service academy to name but a few. Now, the HR teams have such a closer understanding of customer needs and expectations, and the service teams feel much more closely supported by HR as a consequence.
What makes Eurostar tick?
The Eurostar brand is very strong, and we are a high profile transport operator, and consequently, people are always surprised by how very small this business is. We only have 1600 employees, and one small fleet of trains, yet we have had to go through tremendous change over the last few years. We are often faced with the challenge of delivering large scale projects, but without the internal support network of a bigger business. So we have to find ways of doing things that are a little more creative than the norm, and it’s important to continue to ‘think big, act small’ to stay agile and keep growing and improving the business.
So what is the next stage for the business, and how is the looming prospect of competition shaping and tempering the ongoing strategy?
The world is moving fast, and we could face the prospect of a competitor at any time. We need to be ready and that means we need to continue to improve how we look after our customers. So far, we’ve unified and simplified the business, we have a new fleet of Siemens trains on order, that will enter service at the end of next year, and we are refurbishing the remainder of our existing fleet. The new trains will really transform the customer experience, with greater levels of comfort, modern, bright cabins designed by Pininfarina, WiFi, and infotainment portals to make both business and leisure travel easier than ever before. We’ve also introduced a new uniform, which will complement the look and feel of the new trains as they are introduced next year. Beneath that, we also needed to take a look at the organisational structure of the business. It had grown into a shape that wasn’t ideal, in terms of spans of control and management layers, and so we have been working on getting the right structure to enable us to be as agile as possible, before competition arrives.
With such huge change and scale, it can be easy to forget the human issues, especially in a non-stop world. How have you managed to maintain that human level?
It’s one of the benefits of having the service and HR departments together, and I suppose the biggest challenge in the last few months was getting the new uniforms right first time. This was a really important project, and emotions always run high when uniforms change, so we worked tremendously hard with the wearers for the best part of two years getting the style, the cut, and the fabrics just right. There is such a strong link between people’s confidence and comfort in their uniform and environment and the level of service that they deliver to the customer.
How would you compare the workforce of today to 1994?
It’s so different, the business is now very successful and is more mature in virtually every aspect. We are far more sophisticated in how we operate, from recruiting to on-boarding and career management. We are still growing, and will launch new direct services to Provence next year and 2016 will see the launch of a London-Amsterdam route. So, for those who are ambitious, there are great opportunities to progress – in my 20 years I have had nine different roles.
If you were to blue sky gaze, how do you think the business may look in ten years’ time?
International rail will continue to grow, as European airspace becomes ever more congested. I suspect that we will be serving more routes, and as and when competition arrives, I suspect that even more new routes will open up to tempt customers to switch from air to rail. Customers will demand increasingly more from transport providers, and mobile technology will play a bigger and bigger part in what we do, from reservation and distribution systems, through to how we communicate with customers during their journey.
What needs to be done now, in the face of the incoming potential of competition?
Winning new customers and looking after our existing ones. The key differentiator, in a competitive world, will be about how our people look after our customers. The stations will be the same, the journey times will be comparable and so we will be judged on service, pure and simple. So the future is about ensuring we have the right people, managers and strategy to create an emotional bond with our customers. We have cultural diversity on our side, Eurostar is neither British nor French. It is truly European, and we continue to celebrate the cultural differences from all of the countries with which we operate, using this to differentiate ourselves from more traditional transport businesses.
Your career has been about being thrown in at the deep end, and fighting to the surface. Is that a recommended recipe for success?
Well, it has certainly never been a case of taking an easy job for a bit of a rest. There is always a balance to be found when moving around within a business. The learning curve needs to be steep enough to be stretching, but equally there needs to be support and proper internal structures so that people can grow in roles, without the fear of drowning. We are a small business, so creating the career paths for our talented managers is not always easy, but we have found that the most successful managers are usually those who have moved across departments during their careers, learning new skills and competencies quite quickly and then putting this diverse experience to good effect, as their career progresses into more senior roles.
Eurostar facts & figures
At launch, Eurostar was owned by SNCF, SNCB and British Rail. Before UK rail privatisation, a subsidiary called European Passenger Services (EPS) was created. It included British Rail’s interest in Eurostar and was sold to London & Continental Railways (LCR) in June 1996. In October of that year, LCR changed the name to Eurostar UK Ltd (EUKL). At that time, EUKL, SNCF and SNCB were each responsible for running Eurostar services in their own territory.
In September 1999, Eurostar Group was established. It was a unified management structure, created to drive some of the commercial direction and strategy of the business. On 31 December 2009, Eurostar (U.K.) Ltd changed its name to Eurostar International Ltd and on 1 September 2010, completed the legal transformation to become one unified business owned by three shareholders: SNCF (55 percent), SNCB (five percent) and LCR (40 percent).
Fleet today consists of 27 trains running between the UK and France and Belgium, as well as three used on domestic services in France. All Eurostar trains are 400 metres long, with 18 coaches and 2 power cars. Each train has 750 seats – that’s about the same as two Boeing 747s, and there are 544 seats in Standard class and 206 in Business Premier and Standard Premier.
Eurostar has invested £700 million in creating a new fleet of trains and current trains are getting a makeover, with refurbishment, due to be complete in 2015. Ten new trains have been ordered from Siemens, and due to arrive around the same time. Both the refurbished and new trains are based on a design created by Pininfarina, the world-famous Italian design house that creates Ferrari’s unique style. The brand new trains will have 20 percent more seats – a total of 900, and will be the ultimate in design, comfort and service. The trains are already undergoing trials at a dedicated test centre in Wildenrath, Germany, before they progress to the full on-track testing, certification and approvals stage.
Eurostar and Eurotunnel are two completely different companies. Eurostar operates the Channel Tunnel and “Le Shuttle” rail link between the UK and is Eurotunnel’s biggest customer.