Quinn’s Post
From April to September 1915, Quinn’s Post was one of the most dangerous places on earth, a precarious salient at the end of the ANZAC trench line, within 20 metres of the Turkish trenches and continually enfiladed from three elevated positions by Turkish machine guns and grenades. It had to be held, since its loss would imperil the whole Anzac line and Corps. Through immense effort, courage and innovation over these months, led by some inspiring officers at battalion and company level, the N.Z. and A. Division held on. “Looking back, it is a marvel that the place ever held at all.” (Fred Waite, 1919).
97 years later, another Quinn’s Post brings a different strategic challenge of national significance – not life and death for men but for a national transport mode. Jim Quinn is tasked to save the railway system.
The Situation Overview facing CEO Quinn is as bleak as that which confronted General Godley and his brigade commanders, Monash and Russell.
- The required KiwiRail strategic intent is to hold, survive and turn around, becoming a sustainable business making a real contribution to NZ’s economy. This renaissance, from a long history of losses and few international examples of success, is anticipated to take 30 years.
- The environmental weaknesses include a wet and unstable, mountainous, rivered topography; a thin and thinly populated country in two islands; and a society content to pay for trucking’s environmental costs in roading, diesel and traffic.
- The economic weaknesses include a highly competitive market already offering fast, responsive, competitive line haul freight services, in trucking, air and maritime modes; a rail mode with a higher fixed cost and breakeven point than its competitors; and a 20-40 year backlog of infrastructure repair and replacement.
- The political weakness is common to all SOEs. KiwiRail must schizophrenically satisfy conflicting goals of commercial return, political acceptability and NZ Inc./social good – such as support for Metro passenger and tourism services, and maintenance of unprofitable lines to serve regional industry.
- The battle is arduous and resources scarce, with cash for turnaround limited to $750m equity and $4,000m total freight network spend, within a 10 year period. Operating cashflows are negative, medium term.
- Recent battlefield reports are all disheartening, with news of line mothballing, under-achieved revenue and bottom-line budgets, workshop closures, job losses, purchase quality setbacks and asset writeoffs. This in an economy where the major trucking firms are trading remarkably well.
- Media seem gleeful in their reporting of every setback. This has not changed in 97 years – Keith Murdoch’s reporting got a couple of Gallipoli generals fired.
- Perhaps most damaging, the leak and subsequent release of the KiwiRail Infrastructure and Engineering Business Plan 2013-2015 informed competitors, freight owners, media and voters of the planned downsizing and delayed maintenance forced upon KiwiRail by its cash limits.
(see http://www.kiwirail.co.nz/uploads/Publications/Infrastructure%20and%20Engineering%20Business%20Plan%2 02013-2015.pdf ).
Points that emerge in studying it:
- It portrays tough-minded “triage” thinking, ranking lines in Groups 1-6 so that their maintenance spend fits within the cash available, and realistically describing the impact of delayed maintenance on staffing and service levels.
- While survival of loss-making or economically irreparable lines is ultimately the Minister’s prerogative, clearly the weakest lines have no future. There is no free cash to salvage a flood-, earthquake-or slipruined marginal line.
- It projects revenue growth levels without which the turnaround founders. Because it is an I & E plan, there are only peripheral mentions of new revenues, new services, new ways to gain market share to support these growth projections.
- It is a coherent, detailed, hardnosed Operational Plan which recommends how CEO Quinn, his board and management should concentrate KiwiRail resources to continue the long battle.
We have learned a lot in recent weeks of the dire situation at Quinn’s Post.
Kia kaha, Jim!