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Aurizon chief Lance Hockridge not done shaking up rail giant
HE has been called a “toe cutter” because of his unflaggingly tough approach to restructuring troubled businesses. But Lance Hockridge, the chief executive of rail giant Aurizon, prefers the title “change manager” to describe a career that has seen its fair share of cutting and slashing.
It is hard to imagine anyone less likely to remove someone’s toes than the mild-mannered Hockridge but it masks an obviously steely business mind.
When Hockridge took over a 145-year-old state-owned railway business, then known as QR National five years ago, the lumbering organisation was set for a radical shake-up. Hockridge, who in his previous job at steel maker BHP had earned the ‘toe cutter’ moniker because of his no-nonsense approach to slashing costs, was seen as the perfect man to restructure and lead the company through what would be the biggest initial public offering in a decade.
Aurizon is now a top-50 Australian public company, with earnings of $851 million and ambitions to expand its rail network around Australia. It is one of the world’s largest rail transporters of coal, hauling on average nearly 600,000 tonnes a day. Its freight business also ships a range of products from agricultural commodities to containerised freight.
Laying new tracks for Aurizon in central Queensland. Picture: Supplied
But Hockridge, 60, is the first to admit the transformation of a state-owned company into the more streamlined Aurizon has not been without cost. Hockridge has slashed 2000 jobs and earned the ire of unions. In the circumstances, it would be easy to typecast Hockridge as a conservative more at home with the cigar chomping, private school set at the Queensland or Melbourne Club than the average railway employee. He is in fact a working class boy from country NSW whose state school education set him on the road to high achievement, who continues to hold a genuine affection for old-style union leaders and who is committed to affirmative action in the workplace.
He is without doubt a moderniser and reformer whose corporate career has been built on radically restructuring businesses. Hockridge oversaw the closure of the iconic BHP Steelworks in Newcastle where 2500 employees lost their jobs.
Hockridge argues the hard decisions had to be made at both Aurizon and BHP.
“If we had not done these things, the organisation would not have been capable of competing or even surviving in it current form,” he says.
“When I came to QR National the place was slow, bureaucratic, non-commercial, overly responsive to political stimulus, over governed, over regulated and over influenced by the unions. On the other hand, all the raw material was there – we had great people and great assets.”
Aurizon workers. Picture: Supplied
He notes that restructuring a business may be powerful but can eventually result in a stronger and more resilient organisation.
“When we closed down the Newcastle steel works the result of that was the creation of the business that is now Arrium steel,” he says.
Hockridge has plans to make Aurizon an even leaner organisation as he implements further cost savings this year. It is expected several senior management roles would be abolished as a result. The company would, by the end of 2016, achieve overall savings in corporate support and operational areas of $350 million.
He says his biggest achievements at Aurizon has not been slashing costs or boosting profitability but making it a safer place to work. Lost time to injury has plummeted at Aurizon over the past five year as a safety culture was instilled in the workforce.
“There used to be a whole floor filled with pieces of paper on processes related to safety,” he says. “The view was that if you followed the processes you would end up with a safe work environment. But safety is fundamentally about behaviour and culture.”
Given his track-record it is not surprising that Hockridge is a great believer in transformation, both organisational and personal. At tiny school in country New South Wales, he crossed paths with a gifted teacher, Ivan Eichorn, who was to change his life.
“There were only six of us in the class so the teacher was able to give us a lot of attention,” Hockridge remembers.
It was Eichorn who first sparked his interest in the world of economics and industrial relations. “Mr Eichorn had the ability to turn what was otherwise a pretty dry topic to life,” he says. “He did it through examples and little things like encouraging us to read newspapers.
“In a country town there was not this great culture of reading newspapers. The Courier Mail for example would not arrive until after lunch each day.”
Industrial relations was to become a Hockridge speciality both in university and corporate life. His first job as an industrial officer for BHP. Politics was another early interest for Hockridge and it would have been easy for a bright young man such as Hockridge to forge a parliamentary career. He once ran as an independent council candidate in the Labor stronghold of Marrickville in Sydney, but conceded he was no match for the ruthlessness of the ALP machine.
He has no regrets about pursuing a corporate career, rather than a political one, but is not shy about expressing his view that the current political scene is racked with short-termism.
“We have to return to debating policies and debate the things that matter,” he says. “We can no longer expect to get a dividend that comes from sitting on top of a quarry and where the world pays over the odds for the stuff we dig out of the ground.”
Aurizon workers laying tracks in central Queensland Picture: Supplied.
He said such short termism was evident in business too. “Even our long-term shareholders are looking at a five year threshold whereas I am running a company where we are looking at 30 years ahead,” he notes.
As well as improving Aurizon’s bottom line, Hockridge has been set on moderating the blokey and masculine culture that has been part of railways for centuries. He has set a target to have 30 per cent female employees by 2019.
“Part of the resistance for people like train drivers is that these jobs are multi-generational in that son follows the father,” Hockridge says. “But when you ask them why they don’t want their daughter to follow them, they say they have never thought about it.”
Hockridge said that boosting the number of women operational staff was not only the right thing to do from a social justice point of view but a good business decision.
“All the data shows that the organisation with the more diverse workforce are the more successful ones, “he said
For a man who has attracted a lot of ire from unions, Hockridge has a surprisingly positive view of the role of unions in modern society.
“There will always be a role for unions as a voice for those who would not otherwise have a voice,” he notes. “When I started out there were these great characters like Charlie Fitzgibbon and Pat Geraghty. It was their integrity and passion for looking after the rights of their members that I admired. Now at certain level there has been a politicisation of parts of the union movement.”
This article first appeared on www.couriermail.com.au
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