Ignacio Garat joined as Group Chief Executive Officer on 1 November 2020 from Federal Express where he led the transformation of a multi-billion-dollar part of their business with operations in 22 countries and 22,000 staff, positioning it for strong international growth. Ignacio has demonstrated strong operational, M&A and strategic leadership, with a particular emphasis on safety and using technology to drive service excellence and efficiency.
What attracted you to National Express?
I have a simple belief – that public transport can transform lives. It is an absolutely critical service if we are to tackle the challenges of reducing pollution and enhancing social mobility. National Express is well placed to lead this charge, and I was impressed by the focus on safety, excellence, and customer service. I was also attracted by the well diversified international portfolio of businesses with market-leading positions. They are well balanced across B2B and B2C, with a high degree of revenue protection and a number of exciting growth opportunities.
What will you bring to the Group CEO role?
Despite being new to public transport, there are many parallels I can draw from my time at Federal Express, with many of the operational challenges very familiar and requiring the same level of rigour and process optimisation. So, I will be looking to extend the operational excellence that National Express is already well known for, and to further leverage technology by accelerating the digital transformation. I also favour a disciplined approach to capital allocation to maximise returns and reduce asset intensity. Finally, and most importantly for me, is the power that comes from engaging the workforce directly with our vision and purpose, so they genuinely feel ownership for our strategy.
How have you approached your first few months in the business?
Having joined during a global pandemic, my priority was to ensure that we continued to protect the safety and welfare of both our customers and employees. Early engagement with colleagues has also been key, and I have conducted nearly 200 one-to-one meetings with management and connected directly with over 2,000 employees at all levels in each of our businesses. This has given me great insights and I have been continually impressed by the passion and dedication of my new colleagues. I have also spoken with our largest shareholders, and several key customers and government officials, all of whom have provided valuable perspective on their priorities and expectations. To ensure that we rebound quickly, the senior leadership team has identified additional divisional ‘big deltas’, all of which will drive performance improvement in 2021.
What are your first impressions of National Express?
Your first impression is always of people, and at National Express their passion and commitment really stands out, highlighted by the way they have pulled together through such challenging times. Even in these first few months I have been struck by the depth and strength of the relationships we have across multiple stakeholder groups in the communities we serve. It is clear that they have been instrumental in helping us navigate the pandemic. There is an unrelenting focus on customer satisfaction and industryleading safety credentials, and it is inspiring to be leading a company which is so focused on continually improving delivery to our customers and other stakeholders.
Will you be undertaking a strategic review?
My initial approach is more about accelerating what is working well and deprioritising what is not. The strategy in place and the performance it has delivered in recent years means a full strategic review (in the form of a complete transformation) is not a priority. However, I have initiated a business review (specifically including a review of digital strategy) which will enable us to be crisper, on where to grow and how to do so profitably, the level of operational efficiencies we can extract from the business, and which investments will yield the greatest returns.
Do you think Covid-19 will fundamentally impact the business in the longer term?
No, as the core of our business is non-discretionary. School transportation and urban buses are essential for social mobility. Children need to get to school, and free bus provision is enshrined in law in North America. In our urban bus businesses in the UK, Spain, and Morocco, most of our passengers cannot work from home and need us to get them to work. Our paratransit operations in North America and new accessible transport business in the UK provide crucial services to vulnerable members of society. There is also latent demand for our more discretionary coach businesses in the UK and Spain, and volumes have returned rapidly whenever restrictions are lifted, with people traveling to see family and friends and get away on holidays. We are well placed to scale up our services to meet that demand, and it is worth remembering that coach travel is the lowest emission way to meet those needs.
What are your priorities in your first year?
My first priority, together with my leadership team, is to restore the performance of this business to pre-pandemic levels and to lock in the plans that will return this business to sustainably growing revenue and profit. We are working hard now with a collective sense of urgency to ensure this business is in the best possible position to compete to win as soon as restrictions are lifted. The senior management team are focused on a small number of ‘big deltas’ that are critical to restoring performance in 2021 and we will be executing rigorously on those. For example, in North America, we have initiated the ‘Driving Excellence’ programme to optimise operating processes in every depot – this will both boost revenue and release cost from the business. In ALSA, we have initiated a transformational plan to reduce central costs and the mobilisation of Rabat and Casablanca are key drivers of revenue growth. In the UK the priority is to dynamically bring the Coach network back up in the most efficient way possible. Finally, as I noted above, we will complete a business review to define the next evolution of this business by ensuring that we are maximising the return on our investment, optimising the choices of where we compete; what we offer; and how we operate.
How do you think about ESG?
As I said earlier, I have a simple belief that public transport can transform lives, and it is clear that the team here is passionate about making a difference. Our purpose is to drive a modal shift away from single occupancy vehicles to high quality public transport. If we are going to hold on to the clean air gains made during the lockdown periods, we cannot revert to these single occupancy vehicles. I was particularly impressed that the company pioneered linking executive pay to emissions reduction, underlining its commitment in this area. There are some exciting developments underway for zero emission vehicles in which National Express is a key partner. But it is not just about the environment. Safety is at the heart of everything we do, we are a pioneer real Living Wage employer, and have ambitious plans for people and talent development. I feel very passionately about this entire agenda and you will be hearing more about the great things happening here in due course.
How would you describe your leadership style?
My approach is always to be open and honest, and to bring the right people together to collaborate, harnessing the talents and experience across the whole business. We are one Group, and it is important to tap into our collective knowledge, and that is best achieved by having a compelling vision, a competitive strategy, and a culture of relentless execution that engages the entire organisation. As Group CEO, it is my job to lead and role-model the culture we want for this business. I like to get people aligned behind a single, unifying performance goal and plan so that everyone is clear what we are aiming for and how they can play their part. It is also incredibly important to me that people have fun and ‘enjoy the journey’. I look for people who are excited about leaving a legacy and have found it in many of my colleagues I have met so far.
So corporate culture is an important area of focus for you?
For a people focused organisation such as ours, it is absolutely vital. It is our values in action and without it we couldn’t possibly hope to execute efficiently on our strategic plan. It requires our leaders to be strong and consistent, leading from the front and showing pride in the organisation. It is also about humility, working with an owner’s mindset and treating the company as if it was your own. A successful culture to me is one that is meritocratic and adaptable, with a collective sense of responsibility and ownership of the plan. For an organisation such as ours it requires an international mindset, one that is always looking to take the best ideas from around the network and applying them locally. Finally, it should encourage long-term thinking, I am always looking 5-7 years forward, and believe in a rolling 1,000-day plan to instil the required amount of urgency to keep us on track.
Why are you so optimistic about the future?
This is a great business that was performing strongly ahead of the pandemic. We have acted swiftly and decisively and as a result are well positioned to emerge strongly as the impact recedes. None of the macro trends in favour of public transport have been changed by Covid-19, and there are three fundamental reasons for this optimism. Firstly, well run, quality public transport can change lives. We enable people to travel to work, school, and leisure activities by providing safe, reliable, and great value services in a way that helps them reduce their carbon footprint. Secondly, governments are looking for ways to retain the gains made in air quality in 2020. This will continue to drive policy commitments around clean air and public transportation funding. Thirdly, we continue to see opportunities for further diversification, either filling the spaces in our current markets with services we offer elsewhere, or expanding into new, proximate markets such as Portugal and France. It is encouraging to see that when restrictions are lifted, demand for our services quickly returns and I am confident of a full recovery, with many of the actions we have taken in the past year resulting in a more efficient business. Finally, it is clear to me after these first few months that I have a great team to lead us forward at all levels of the organisation.