British Train Operator – Financial Responsibility

The Client

This is a story about a normal challenge faced by businesses all over the world. It’s about simple numbers and complex financials, and a group of people who are all given responsibility to manage budgets. The problem was that employees just didn’t know what the business was asking them to do – and from their perspective, it’s extremely difficult to ask a sensible question if they don’t know the basics. On top of that, there’s simple human nature that people don’t want to feel a fool in front of others, especially ‘authority’ figures.  

There were two fundamental problems: that one wrong  financial turn in the business could easily manifest in budgets being out by hundreds of thousands of pounds, and that there was a subtle but troubling communication barrier between the employees and ‘head office’. 

It was only going to get worse if action wasn’t taken. As the Financial Planning and Analysis Manager summarised, “I don’t want to find the budget is £2m out because of lack of knowledge or someone was too worried to pick up the phone to ask our team a simple question.”  

The clash: day job vs financial responsibility

The Group operates trains over the UK’s busiest rail network. It transports approximately 180,000 people every day and billions of pounds were being invested to transform the network with new and longer trains, better stations and new journey opportunities. The company had 2200 employees, and approximately 100 Cost Centre Managers. 

These Cost Centre Managers (CCMs) have a ‘day job’, perhaps in technology, engineering, HR or health and safety. Their role as a CCM sees them authorising payments, managing budgets and creating financial business cases for head office. 

As with any company in the rail industry they run a tight ship in its overhead structure and if the CCMs don’t have the right skills, overall budgets can be considerably out. One major engineering invoice, forgotten in the system, could cause an understandable problem. The client adds, “Our business management software is not straightforward to use, so unsurprisingly, some of our people couldn’t read financial reports, let alone create them.  We needed to make sure the CCMs felt comfortable with this part of their role. Too many negative financial surprises and too many varying degrees of skills created a large problem.” 

The business needed to:

• Offer relevant, practical training to individuals, not just at that moment in time, but at any time in the future, as new CCMs are appointed to the role
• Make finance ‘human’ to CCMs
• Help CCMs truly understand their role and responsibilities and what they mean to the business
• Enable each to have good quality conversations about finances
• Create good business cases for wise spending. 

OnTrack Solution

Seeing the business perspective for the first time

A financial learning course with a difference was designed. It not only would create far superior understanding of their responsibilities, but also help the finance operation to:

• Function more efficiently across the business
• Keep learning costs as low as possible
• Provide the finance team with new skills 
• Dramatically reduce the chance of error or misjudgement.

The course was designed by OnTrack and included a business simulation exercise with the company’s specially created tool, then the opportunity to apply their learning to the organisation’s precise situation.  

The OnTrack Principal Consultant explains, “Our business simulation tool for finance is quite unique. It helps people to understand the financial connections between the different functions of a business, practice financial planning required for success and make key commercial decisions that impact the overall organisation. It takes people from understanding financial terminology and then on a journey out of their smaller roles to let them see why decisions are made and how financials make a large impact on the organisation. The tool is adaptable for different uses, so also helps people to improve their knowledge of customer service or negotiations, for instance.”

As the client explained “The teamwork element is interesting to watch. The teams either get quite competitive or do the opposite by collaborating and sharing knowledge for maximum output. There are no rules on that, they just need to do what is best for their business.”

OnTrack Measured Results

Solidifying newfound knowledge

“Overall, we learned some key things. The most overwhelming thing is that powerful communication between Finance and other functions in the business makes such a difference. People feel a great sense of relief when they find out, if they don’t know something, they can pick up the phone and speak to one of us – someone they know and feel comfortable with. 

“On the flip side, sometimes things just don’t go to plan, and rather than worrying about nasty shocks, they call us and together we’ll find a way around the problem.  The new people were probably thinking that if they do something wrong, then they’d get into trouble, but that just isn’t the case.  

“We are a company-wide finance team now.”

On top of this, the client’s finance team saw the following improvements;  

• Far more relevant queries. The basic ones which showed lack of understanding have been eliminated
• Know people are not scared to pick up the phone. If they see people at head office, it’s friendly and welcoming. The human side of things has greatly improved; the ‘Ivory Tower’ perspective has gone
• Seeing definitive improvements on timings through the procurement system
• Budget meetings are less fractious because people know what is needed and check their output
• Far better written business cases, with better analysis and less meaningless words. The wider business understand what is required to get a case to go through. 

Our client sums up: “We repeatedly see the pennies drop when individuals learn why the finance team needs to know certain things, or what certain spreadsheets are for.  It’s quite brilliant to see people in the process of realising the importance of their actions and the rationale of the data. And to have far, far better communication between us all is invaluable.”