Case 7.

1
The British Rail case study: learning from the past?
Patrick Dawson

(Source: Dawson, 2003: 202–7)

In 1971, British Rail (BR) decided to invest £13 million (1971 prices) in a new computer system to
improve the performance of its freight operations. Having considered a variety of options, including
the possibility of developing a system ‘in-house’, BR decided to purchase software already devel-
oped and proven in railway freight operations in North America. The system in question was known
as ‘TOPS’ (Total Operations Processing System).

The decision to computerize was based on two factors:

1. The severe economic crisis facing British Rail’s freight business due to competition from road
haulage and the decline of the industries that traditionally were the railway’s principal source of
freight revenue (coal, iron and steel).
2. The identification of inefficiencies in the day-to-day supervision of freight operations stemming
from inaccurate and out-of-date information about the whereabouts of freight resources – empty
wagons, locomotives and freight trains.

Prior to computerization, information on the disposition of freight resources and the operating situ-
ation was reported through a hierarchical structure, consisting of supervisors in local marshalling
yards, who reported to divisional control rooms who in turn reported to regional control rooms. A
central control room at BR Headquarters in London oversaw operations as a whole. The principal
methods of communicating information were ‘manual’, involving either telephone or telex reports of
such things as the numbers of empty wagons ‘on hand’ in a marshalling yard or the ‘consist’ of a
freight train on route. Much of this information was inaccurate, not least because of the manipulation
of information by marshalling yard supervisors. For example, empty wagons were frequently in short
supply and in order to satisfy the daily requirements of local customers, supervisors under-reported
the number of wagons ‘on-hand’ and over-reported the number of ‘empties’ required.
This resulted in a gross oversupply and under utilization of resources. In 1971 there were well over
half a million wagons on the BR network, only 80 per cent of which were accounted for in daily reports
from supervisors. Similar problems were involved with locomotives, and these along with empty
wagons, were frequently ‘hidden’ in remote sidings by supervisors in order that they could respond
to unexpected changes in local requirements. As a result, although a vast amount of information was
being passed day-to-day on the disposition of freight resources, very little of this bore any relation to
the reality of the operating situation at ‘ground’ level. Moreover, there were inevitable delays in pass-
ing information on by ‘manual’ methods. In the context of ‘time-sensitive’ railway operations much of
this information on the whereabouts of resources was invalid by the time it reached its destination.
As a result senior operations management were simply unaware of much of what was happening
and spent most of their time in a ‘reactive’ role attempting to establish what had happened and why.

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The economic circumstances of the freight business meant that a solution to the problem of
supervising freight operations had to be found if rail freight was to remain competitive and in busi-
ness. The TOPS system offered a potential solution. Each local marshalling yard was to be equipped
with an online terminal linked to a mainframe computer at BR Headquarters. Marshalling yard staff
would be required to provide information to ‘TOPS clerks’ who would input information via the local
terminals. This information provided a ‘real-time’ picture of the operating situation in any particular
area. Because the information was communicated by electronic means direct to a central com-
puter and could be easily accessed the ‘inbuilt’ delays and inaccuracies inherent in the old ‘manual’
reporting system could be avoided. Further, because the TOPS system kept tabs on each individual
wagon, locomotive and train, it was impossible to ‘hide’ resources as had previously been practised.
Moreover, because the system could cross-check reports from local terminals almost instantane-
ously any attempt to input misleading information was rejected by the computer.
The decision to computerize the control of freight operations involved considerable uncertainty
and risk. There was no guarantee that the system would arrest the decline of the freight business
and every possibility that the implementation of the system would run into difficulties, with the risk of
delays and the escalation of the costs of the project. Despite the advantages of buying-in an already
proven technological innovation, successful adoption of the new technology still depended on solv-
ing a number of technical, personnel, industrial relations, and managerial problems. The situation
was summed up in 1981 by one senior freight operations manager in BR who described TOPS as
BR’s most speculative investment since the the 1960s.
Given the critical economic position of the freight business, there was considerable concern at
Board level that computerization should be completed within a four-year timescale and within budget.
The scale of the project was enormous. In technical terms it meant adapting the TOPS software to
suit BR’s operations, providing a network of computer terminals in 150 locations around the country,
installing a new mainframe computer centre, and upgrading BR’s existing telecommunications sys-
tem. In personnel terms, there was a major task of educating all levels of freight operations staff, from
shunters to headquarters management, in the capabilities and use of the system, and in providing
specialist training for the staff who would make day-to-day use of the system. In industrial relations
terms it meant gaining the acceptance of the new technology by the rail unions in a climate that had
previously proved resistant to rapid change. Finally, there was the question of how the introduction
of the new technology should be managed. Should traditional practice be followed, where each
specialist department was allocated responsibility for the aspects of the project that concerned them
(e.g. computing to Management Services, retraining to Personnel etc.) and each BR Region was
given the responsibility for the management of change in its own local areas – or – should a new
approach be tried?
It was the risk of delay through interdepartmental rivalries and Regional/Headquarters conflict
which was most feared by management. Despite nationalization, geographical identities remained
strongly rooted in the organizational culture, and at corporate level functional specialisms jeal-
ously guarded their areas of expertise. There was every possibility that the whole project would
founder on the rocks of intermanagement squabbles. However, the BR chief executive gave the
project high-level support and appointed a senior operations manager to head up an implementa-
tion team. Given the high stakes involved, other departments made no effort to take responsibility

270 ChANGE AND INNOVATION IN ORGANIzATIONS

for the various aspects of implementation, and in the ensuing vacuum the project manager was
able to assemble a ‘task force’ in the form of a cross-functional team that assumed complete
control of the entire project. Computing, telecommunications and operations specialists were sec-
onded from their departments, whilst the training function and Regions were virtually by-passed
altogether. Instead, a number of operations staff and a year’s intake of graduate trainees were
co-opted to form a team that would act as a mobile training force, travelling around the country
to retrain staff. The ‘task force’ was presented to the rest of the organization as a ‘fait accompli’
and, with the support of the Chief Executive, set about bending normal rules and procedures and
upsetting the traditional customs of the organizational culture with a view to the introduction of the
TOPS system without delay.
The two principal non-technical tasks facing the ‘task force’ were in gaining the acceptance of the
new technology by staff and management, and convincing the unions of the need for rapid change.
In relation to the first task, the initial step was to create within the implementation team itself an almost
unbounded enthusiasm for and identification with the achievement of change. The team was run on
almost militaristic lines and a number of devices, including a special ‘TOPS logo’, a ‘TOPS tie’. a
‘TOPS Newsletter’, and a package of training graphics featuring a character called ‘TOPS Cat’ were
employed to foster a ‘corporate identity’ for the project. In the words of one of the ‘task force’ mem-
bers, ‘if you weren’t fired with enthusiasm for the project you were fired from the project’. Faced with
such commitment backed by high-level management support, local personnel saw little opportunity
or point in resisting change. Where they did, the project team ignored any protestations and carried
on regardless. The use of the mobile team proved a masterstroke in providing a training package
that could combine classroom theory with ‘hands-on’ experience on the job. Any resistance to the
new reporting procedures required for computerization by the staff – many of whom had spent years
working by traditional methods – was more readily overcome.
In terms of the trade unions there was no opposition in principle to the computerization, not only
because the introduction of TOPS promised to save the jobs that would be lost if the freight business
went to the wall, but also, because it involved the creation of new jobs, at least in the short term.
Whilst consulting with the rail unions from a very early stage, management studiously avoided enter-
ing into any time-consuming national negotiations over extra payments for using the new technology.
Further, no attempt was made by management to develop the potential use of the TOPS systems for
keeping tabs on train crews. It was certain that the ‘Big Brother’ connotations of such a use would
have brought vigorous union opposition, in particular from the train drivers’ union, ASLEF. As a result,
union leaders were ‘won over’ to the system and were happy to cooperate in its speedy introduction.
Indeed, national officers of the unions were instrumental in resolving some of the small localized dis-
putes that did occur during the implementation programme. In retrospect, the view of many national
officials was that if management had introduced such a system sooner much of the market which
had already been lost might have been saved.
The TOPS computerization project was completed on time and within budget in October 1975. A
far more efficient utilization of freight resources was achieved and operational control considerably
improved. In particular, it became clear that management for the first time had an opportunity to play
a ‘proactive’ role in the planning and control of freight operations. As one operations manager put it,
‘we now had a production line we could control’.

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Questions

1. What would you identify as the critical factors that contributed to the successful implementation of
the TOPS system?
2. What were the advantages and disadvantages of the ‘task force’ approach?
3. How important are context and culture in understanding change?
4. Are there any general lessons that can be learnt from this case study on the process of organizational
change?

JOHN KOTTER: LEADING AND MANAGING SUCCESSFUL CHANGE

Kotter calls for managers to embrace the future and to learn how to successfully
manage effective change (1996: 185–6). He argues that it is not simply about the
leadership of change but in forming a powerful guiding coalition that can together
drive change forward in engaging others in a vision for change. Kotter points out
that, behind the figurehead of change leadership, there may be a coalition of lead-
ership roles at various organizational levels and that these may in turn change
and shift over time. As Senior (2002: 258) concludes in her chapter on leadership
and change:

Leadership theories vary from those which maintain that there are a set
of characteristics which leaders must have if they are to gain success in
what they do to those which argue that no single leader can be successful
regardless of their own preferences and the situation they find them-
selves in. Regardless of which set of theories gain attention at any time,
agreement is becoming evident that leading change requires more than
the command and control behaviours fashionable in times when organi-
sations operated in stable predictable environments. The replacement
of repetitive work with machines, the increasing emphasis on knowl-
edge and the need to innovate to survive and prosper have brought a
recognition that, for people to be creative, while working in situations of
uncertainty, requires leaders who are able to harness the skills of others
through working in collaborative rather than hierarchical ways.

Kotter’s (1996) eight-step model on leading change was first published in the
Harvard Business Review in 1995 (Kotter, 1995). The model highlights the
importance of forming a powerful coalition – a change team – with a mixture of
management and leadership skills in order to successfully drive change in organi-
zations. His well-known model, briefly outlined in Chapter 3, advocates the need
to follow eight key steps that comprise:

272 ChANGE AND INNOVATION IN ORGANIzATIONS