Canadian National Case Studies

Canadian National Case Studies

Jana Schilder's Communications Strategy At Canadian National

The problem

In late 1995, freight railway Canadian National was a 70-year old Crown Corporation that had a new lease on life as a corporation owned by shareholders rather than the federal government. A Board of directors, corporate governance, quarterly financial disclosure, railway analysts, and annual meetings of shareholders were all new to CN.
In 1995, CN was losing money. It took Canadian National $1.07 to make $1 of revenue (the "Operating Ratio"). If key changes were not made soon, CN would have declared bankruptcy or been shorn up by taxpayer dollars.
CN boasted many "CN Families" where generations of extended families proudly worked for the railway, especially in western Canada. Because of this, long-standing Canadian National employees took the 1993-94 layoffs that hit CN after the last major recession (in 1991-92), particularly hard, thinking they had "escaped the downsizing axe."
At a railway, the vast majority of CN’s 21,000 employees literally work "on the [railway] line," so the only way to reach employees regularly was with hardcopy publications sent via Canada Post to the employee’s home. Only 2,000 CN employees had computers on their desks and 1,600 of them were located at Montreal’s head office.

The strategy

Unlike many employee publications, the mission of CN Magazine was not "To inform, educate or raise awareness" of CN’s employees. As the centerpiece of CN’s employee communications strategy, the mission I articulated for the employee publication was: "To foster initiative, creativity and a sense of urgency."
Where did this mission come from? The broad concept came from Paul Tellier himself. I was lucky to catch Paul going up the elevator one morning and popped the $64,000 question: "What are the three things that you’d like the employee communications strategy to focus on?"
After many months of studying CN’s numbers and performance, Paul had the answer, which I crafted into "foster initiative, creativity and a sense of urgency," and placed in every issue of the magazine. I now had the strategy for employee communications that would lay the foundation for change in CN’s turnaround strategy.

How did the magazine’s mission translate into copy? We wrote articles about employees, (including executives) that showed initiative, creativity and a sense of urgency. If an article didn’t meet at least one of these three criteria, it had a slim chance of getting published. Of course, we also published financial results, performance numbers and business goals.

The tactics

A front cover that grabbed employees and shouted: "Read me now!"
A Table of Contents that was, in fact, a synopsis of the entire magazine’s contents. If employees read only the Table of Contents, they would understand 80 percent of the publication.
A short editorial from Paul Tellier that encouraged employees to take initiative, be creative and have a sense of urgency.
Letters to the Editor: we frequently published letters that criticized the magazine’s content and even management. You can’t get people to take ownership and have initiative if they fear reprisal. The Letters to the Editor said: "It is O.K. to have a different view."
Railway indices: the Operating Ratio; the customer satisfaction index; on-time train arrivals; bills of lading received electronically [a measure of automation]; freight loss and damage; and claim settlement. It turned out that these indices were readily available in both Operations and Marketing, but no one had ever thought to share them with employees.

We spent a lot of time planning the photography and graphics for each issue. We wanted lots of "railway beauty shots." We wanted lots of pictures of CN employees. We wanted down-to-earth shots of CN executives. And we wanted shots of both employees and executives to be of the same quality. We did not want historical photos. This was a brand new railway with brand new attitudes.
And every picture had to exude initiative, creativity, and a sense of urgency.
We published detailed results of employee attitude surveys and followed up with action plans.
We published a lot of charts and graphs, together with explanations on what these indices were and how to read them.
We published a lot of Q&A-type interviews. These were highly successful.
Employee opinion round-up: employees from all across CN were asked their views on a variety of questions for each issue of CN Magazine.
We custom designed an ad, for Marketing or Human Resources programs, for example, for the back cover of each issue.

The Customer Satisfaction Issue

At CN, an old joke used to go like this: "Marketing over-promises. And Operations under-delivers." So, I decided to tackle this issue in CN Magazine. What were some of the things that Marketing employees could do? What were some of the things Operations people could do? And what did both organizations have to do together?

The front cover became Operations and Marketing working hand-in-hand to deliver on the promise to customers. The man on the left was the VP of Marketing; the man on the right was the VP of Operations. Why did they agree to be on the front cover of the employee magazine in overalls and hard hats? Because I asked them. Because the employee message of working together was important. And they had a great time getting their pictures taken (it only took 45 minutes, honest! Pre-planning makes everything go smoothly.).

We published a detailed story on the results of the latest customer satisfaction survey.
We published a round-up story on what some of CN’s biggest customers wanted from a freight railway.
Customer profiles became a regular feature of CN Magazine.
We started a new feature, "Industry on Parade," about how as a freight railway, CN adds to Canada’s economic prosperity.

CN 1998
Business Plan

Sharing the annual business plan with employees was relatively new at CN, but quickly becoming standard procedure. The 1998 Business Plan reiterated CN’s 4-prong strategy of: profitable top-line growth; aggressive asset utilization; continued cost containment; delivering on customer commitments; and, of course, improving safety.

Employees also received the results of key performance indices as well as targets for the coming fiscal year.

The Communication Issue

After we launched the Employee Communications strategy, we got to work on implementing it. The strategy was presented to CN executives and CN line managers, but we didn’t make a whole lot of hoopla about it. Why not? Because employees were cynical. And we wanted to start actually doing it rather than just talking about it.

Eighteen months after we had embarked on the employee communications strategy, we decided to talk about the process of communication at CN—and all that it implied—in a special issue of the magazine.

The big difference, however, is that this was a retrospective on the communication tools and tactics that were already in place rather than things we were going to do. This was the difference between the positives of "positioning" and the scam of "spin."

Content of the communication issue of CN Magazine:

An interview with communication guru Roger D’Aprix (who was with William Mercer at the time) on the keys to better communication in the workplace.
A synopsis of the six regular communication tools that employees were already receiving from CN.
An interview with Paul Tellier on the role of communication in the change process.
Interviews with VPs and line managers who were good communicators, as perceived by employees.
An interview with the VP of HR on interpersonal internal communication courses such as Conflict Management, Building Business Connections, Interacting with Influence and Meetings on the Fly.

Unfolding the Future of CN (1996 Business Plan)

A poster folded down to approximate magazine size was sent to all CN employees about five months after CN’s privatization. Anyone working for a railway just loves posters of the railway system; where do all those railway lines go, anyway? On the other side of the poster was:

Domestic, U.S. and international traffic flows.
The percentages that CN’s six business groups contributed to revenues.
A list of CN’s top 12 customers.
A recap of CN’s financial highlights from 1991 to 1995.
What seven CN employees thought of the privatization and what CN should do going forward.
Charts of five key indices that compared CN’s performance with that of other North American railroads.
An interview with the VP of Investor Relations on what it means to be owned by shareholders.
A corporate governance primer: explanations of the Board of directors, annual report, continuous disclosure, annual general meeting, and the insider trading policy.

1997 Employee Annual Review

After two years of implementing the employee communications strategy, we thought it was appropriate to celebrate some of the performance improvements that CN had made.

The theme of the 1997 Employee Annual Review was: "The anatomy of delivering a customer’s shipment." The publication documented what happens from the time a customer calls, "Hello, CN? I have a freight shipment that must get to..." to the time the customer received the bill and all points in between. It was a celebration, in first-person, of what both frontline and behind-the-scenes employees do to expedite customer shipments.

The publication also acknowledged and celebrated The President’s Award for Excellence winners (12 individuals and teams) who had demonstrably reduced costs, increased safety, made operational breakthroughs, and protected the environment.

The publication boasted beautiful photography of employees and had very high production values. Employees who posed for fine photographs received prints to frame.

The publication was so successful that Paul Tellier wanted all CN shareholders to receive a copy along with the 1997 CN Annual Report. So, a second press run was ordered.

Anti-drinking and drugs campaign

Because CN is self-insured, any damage to or loss of customers’ goods comes directly off the bottom line. A locomotive costs $2 million, ballpark. A container of high value goods, like fine wine or stereo components, if damaged or lost can really add up. Of course, employee safety and well-being were equally important.

So, it made sense to mount a campaign against drinking and drugs with employees. The concepts for this hard-hitting campaign ("Squealer, snitch, rat, spy, informer.") of oversize posters, magazine ads and direct mail brochures had been done years earlier, but it had gone no where.

I convinced management that now was the time to mount the campaign and finish the job. The campaign was backed by all of CN’s unions, too. The campaign encouraged employees to seek help themselves for drug and alcohol problems and at the same time, to look out for their friends and colleagues.