Communication Change in Eurostar

CONTENTS

1. Introduction

2. Environment
2.1 Pest analysis

3. Changes need to be done
3.1 Swot analysis

4. Leadership
4.1 Theories

5. Changes obstacles

6. Conclusion

7. References

Leadership and Change Management are influential for organizations. The changes within a company allow it to be in a different position to face the competition and leaders participate in the process. The change here presented involves the communication structure of the railway company Eurostar and how the board of directors, specially the company’s CEO, took part in this process.

December is a very busy period for passenger transportation companies when flights and trains are normally overbooked. Unfortunately last December was especially chaotic for Eurostar.

The company is well known for the high-speed train service that connects the UK to other European mainland countries, whose most important destinations are Paris and Brussels. According to the company’s annual figures, Eurostar reported record breaking tickets sales in 2009 hitting £675.7 million in revenue and 9.2 million passengers.

On 18th December 2009, when the trains were operating at full capacity of passengers, who were travelling either on business purposes or on vacation owing to the Christmas Holidays, a sad event occurred: while travelling under severe weather conditions and snow, five trains stopped inside the Channel Tunnel. It was estimated that 2,000 passengers were inside the trains when the disruption occurred, stuck in unpleasant conditions for 16 hours.

At that time the company faced one of the most delicate periods of its 15 year history. The rail staff was not properly prepared for a crisis of that proportion; there were not enough water, food or toilet paper supplies for the passengers’ wellbeing and even worse, there was a serious communication breakdown among train staff, operators and most importantly the passengers.

Eurostar board of directors faced a dramatic situation which required urgent measures as lives were in danger. After that, the disruption promoted a huge delay affecting all the other trains, whose schedules were far behind. In order to respond accordingly, the company started an independent investigation promising to point out the cause of the incidents. Major changes needed to be made in the company’s technical and operational procedures as well as in the management structure.

The changing process in the communication structure faced by the company impacted on how the correct and clear messages were sent out. In order to be well positioned in the market, a company can no longer wait to communicate with the stakeholders. It has to send the right information and it has to communicate as fast as the public and media. Eurostar had to adapt its means of communication to the fast-paced market environment.

2. Environment

Eurostar has been a very important company for the transportation of passengers since the business was started in November 1994, changing the way how people travelled between London, Paris and Brussels for always. 100 million travellers have already used the fast train services of the company over its first 15 years of existence. Facing a competitive European railway market, Eurostar has always met high standards towards punctuality and reliability, therefore nothing less would be satisfactory from this remarkable and leading transportation service company (Eurostar, 2010).

Eurostar was founded after the British Rail privatization in 1993, and since then it has always followed the government’s requirements. Although the line operated by the company is a single railway one, according to the law, the Tunnel where it operates is half British and half French, having its border in the middle and both ends follow the same rules and regulations.

Until this year the company’s shareholders are SNCF (French National Railways), LCR (London & Continental Railways) and SNCB (National Railway Company of Belgium). It is fully regulatedby the United Kingdom and the French Republic governmentallaws and tax policies. Therefore its services, which link these very important European countries, are allowed in the Channel Tunnel (Eurostar, 2010).

2.1 Pest analysis

Political:

The company is integrated with the current political pressure on environmental regulations, thus the responsibility for following environmental policies. An independent research conducted by the company has stated that travelling by air emits 10 times more carbon dioxide than travelling with Eurostar. Having already reduced the emission of carbon by 25% for each passenger travelling on its trains, the new direction is to reduce another 10% by the year 2012. The new target now is to recycle all the possible resources through numerous methods.

Economic:

The economic growth of the company has been visible as now it has over 65% of the market share. It is one of the most trusted and respected companies when it comes to railway passengers. Even the big airline companies are behind Eurostar when the journey is between the company’s capitals destinations. Also, the company’s personnel are unionized according to each country’s laws.

Eurostar has been awarded many prizes and it has shown to be a leading industry in the following categories: Architecture, Environmental, Marketing, People and Service. Furthermore, their business cycle has been in continues growth.

Social:

In the social scope, the company has a customer satisfaction focus and has proven to be reliable concerning high quality services, punctuality and safety. The industry standards are high due to its continuous moves to provide outstanding services to the travellers. Eurostar has definitely changed the lifestyle of many passengers who travel from one city centre to the other. It was one of the first railway companies to introduce the business class lounge and the fidelity program. Out of the 750 seats available in each train, 206 are aimed at business travellers. On the other hand, the company also focuses on providing reasonable fares for those customers who are at the bottom of the economic pyramid and have a lower spending capacity. With this mentality, the company started offering reasonable ticket prices to promote its main destinations trying to reach a wider range of passengers. The campaign was called “Little Break, Big Difference” and was the first step for the company to start communicating with the travellers on a website experience (Eurostar, 2010).

Technological:

The technological infrastructure of the trains and the Channel Tunnel are at the leading edge of the railway industry worldwide and safety is one of the main concerns for its managers and staff. The life cycle of each train and train materials is under continuous supervision by the company’s technicians and all the rules and regulations are rigorously followed. Although the events that occurred last December were very negative, the company has been investing in fireproofing structure and materials that meet the French and British government requirements over the years.

3. Changes need to be done

Since the trains disruption occurred last December, one of the main concerns of the Board of Directors, managers and staff was the lack of communication experienced by the company during such a crucial period. Being already the leader in the market, the position of Eurostar appeared to be secure and investing in new areas as communication, for instance, was not one of the main concerns at that moment, only in the future. According to Robin Grant (2009), managing director from We Are Social, the social media agency that works for Eurostar, the situation has already been previously discussed and the company’s position was “to start small”. Their only campaign in social media so far has been the one called “Little Break, Big Difference” promoting short weekends trips to the company’s main destinations. The campaign has been using the company’s website, Facebook and Twitter.

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Strengths:

Eurostar has always been up to date with the policies from the railway industry, that is why some of the problems occurred in the past, including fire in the Channel Tunnel, did not affect the passengers’ loyalty, which guaranteed that the tickets sales went very well at end of the year. Eurostar has a strong reputation in the industry and this has been one of its strengths.

Weaknesses:

Even though the communication skills of the market are growing incredibly fast, the speed the information reaches customers should be always revised. The competitors are improving their means of communication, for example, airline companies communicating directly with the passengers via e-mails or mobile text messages. Nonetheless, Eurostar has proven to be weak in this area, therefore the need for some changes. Real time information is a must for today’s passengers.

Opportunities:

The company faced a controversial period, moving quickly from a position where it was well-known and reputable to another where it could not provide or send precise information to the passengers, staff or general public/media during a crisis. The opportunity for the company is now to improve the travellers overall experience and to tap into the situation that it went through. Learn from the previous insecurity on facing innovative communication channels, setting real and approachable contact with the people that are seeking for the necessary information.

Threats:

The threat that now surrounds Eurostar is the image of a company linked to the chaotic situation experienced by the passengers during the trains breakdown. Many passengers that were on the trains that day have reported their bad experience to the media online via their mobile phones, while trapped in that uncomfortable situation. Much more effort and strategic planning will be required to rescue the image the company had been successfully carrying for so many years.

On 12th February 2010 Eurostar announced its independent review, requested by the company’s board of directors, shareholders and both French and British governments. The findings and recommendations presented by the reviewers concerned three different areas of the company: technical and engineering, security and rescue plan, customer care and communication.

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