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Plain Sailing - Steering a Company into Calmer Waters.

19 Jan 2017

Martin Dorchester outlines how a belief in lifelong learning and developing directors helped steer a ferry company into calmer waters. By Rob Beswick 
The power and effectiveness of lifelong learning and director development for building better businesses is a message Martin Dorchester is only too happy to promote – but the fact that so many of his fellow directors ignore this maxim, is one he laments.

You can never afford to stop developing your skills – no matter how senior you are, believes Martin, Group Chief Executive of David MacBrayne Ltd and the man at the helm of CalMac, which runs ferry services to ports across Scotland’s west coast.

But while business leaders may insist on training programmes for employees, too often they neglect their own development: “Course they do,” he says, “hugely; there are too many directors who reach the boardroom and think they are at the summit so can stop developing their own skills. It’s the wrong approach.”

His belief in the need for lifelong learning has led him to be a keen advocate of the IoD and its suite of development programmes. “When I came to CalMac in 2012 one of the first things I did was to sign board members up with the IoD in Scotland;  it gave the team access to a host of personal development options – and different development at that. My board members all have a learning portfolio. Directors can get into a machismo zone of ‘I’m a director, I’ve done everything I need, I’m at the top of the tree.’ That’s wrong.” But it’s important that the drive to develop directors and senior managers comes from the very top: “It has to be led by the MD, the CEO – and they have to embrace the concept, too.”

At CalMac we look to take people out of their comfort zones to learn new skills, says Martin. “Too often businesses default to their line training when really what they need to do is ask ‘how can I change how I see the world’. We need to change methods of thinking and our approach, and believe that there are other ways of thinking.”

His own leadership style has evolved over a wide-ranging career which has seen him take on a host of challenging roles. Despite the stresses his various roles have brought, he retains a belief in collegiate, consensus leadership – though spiced with a dash of firm decision-making when required. It was a style that worked well when he took on the role at Caledonian MacBrayne – or CalMac, as it’s better known to the world.

He arrived with the company at a difficult cross roads. The loss of the Northlink contract on the Northern Isles routes to Orkney and Shetland was a significant disappointment to the workforce and also accounted for a loss of a third of the company’s revenue. With the Clyde and Hebrides Ferry Services coming up for tender imminently, immediate action was required. 

There were other challenges too. “CalMac was an old, traditional business and it had some dated infrastructure and systems in place. Added to that were problems with connectivity in a digital age, a situation not helped by the remoteness of some of the routes and destinations involved.”

How did he approach what was a potentially fraught situation?

“The first thing was to build up morale. We picked staff up, celebrating success and championing our positives. We engaged with our people on what they are good at and delivered well and started to talk about customers, not just the operation.”

The good thing was that, despite the problems, there were a lot of positives to champion. “CalMac was well known for delivering good customer service and we built on that. The important thing was to not look inward all the time but to look out from the business, to talk to our customers and the communities we serve.”

CalMac’s unique offer to its customers was a crucial part of this conversation. “Our services are a lifeline to fragile and remote communities throughout the Hebrides and Clyde. We engaged with them, built on our reputation and on our own capability to improve.”

Martin reinvigorated the senior team by bringing in fresh talent from outside the business and pressed the need for the organisation as a whole to innovate. “We were a lifeline service but if we just focused on that, in time our routes would continue diminishing. Instead we looked at our assets and asked whether we could use them better and open up new routes. Despite the problems we couldn’t be scared of growing.”

The company bench-tested its capability by entering new competitive tendering bids and exposing itself to new ideas, while trying to become more flexible in its service delivery.

Martin was also keen to tap into CalMac’s strong links with its customer. “We talked to the communities and asked what they needed to grow. We wanted to be more than just a ferry operator. We bought into the local communities: as much as possible we use local services and buy local produce. We weaved the company into the fabric of the communities we serve, which has helped to build long-term sustainability.”

Allied to this work at the customer coalface was a strong emphasis on developing the workforce. “We created a learning organisation to give our managers the skills to modernise the business, went out to see what other organisations were doing and accessed best practice on technology and ticketing, which brought us up to date.
“If you do this, you gradually turn your whole organisation into a learning organisation, one that is looking outward as much as it does inward.”

Despite successes, the pressure to improve never lets up. “We invest relentlessly in our people – good training, good careers. If you improve the quality of the people you employ you get a better business through better decision making.”

This focus has reaped huge benefits in terms of innovation from within, with employees feeling empowered to act independently. “Innovation is dispersed throughout the organisation. A lot of our teams work in remote areas with little office support, and we support them to make their own decisions and take charge of their duties. It gives them greater confidence when they know we trust them.”

The company’s focus on new digital connectivity helps here too, with remote workers establishing links with colleagues through which they can share ideas and practices. There is also a budget for local operations to encourage our people to try new ideas – “we are not trying to impose a homogenous treatment on our customers or on the island communities.”

The investment in training goes further: CalMac is the Merchant Navy Training Board’s top shipping company for numbers of modern apprentices, and it reaches out to schools and colleges to encourage young people to consider a future within the business.

“We provide a number of modern apprenticeships every year; we’re looking at developing our people from ‘cradle to grave’, so to speak, and create a good career path.”

There is also an acknowledgement that CalMac needs to change its fairly traditional demographic make-up at the customer-focused end. “We encourage young people – particularly women – into considering STEMs courses at college and putting young women through engineering courses. One of our chief engineers is female and she acts as a brilliant role model for girls to follow into this industry sector, going around colleges and schools and talking about her role with us.

“We do have an ageing demographic and need to encourage young people to think about CalMac and how you can find a good career in the maritime sector.”

Any jobs created by the company are nearly always taken up by people who live within its own route network. “80 per cent of our workforce come from the communities we serve; in some islands we are one of the biggest employers.”

It all funnels back to the thought of CalMac being more than just a ferry company. “We are probably the biggest procurer of marketing/advertising campaigns for the west coast, which brings in visitors; we buy local produce for our onboard restaurants and port facilities and have an extensive back office facility. There are just under 1,500 on the payroll; we are a key part of island life.”

The ferry company’s recent successful bid to run the Clyde and Hebrides Ferry Services for the next eight years gives CalMac confidence going forward, as does its somewhat lengthier contract to operate the Marchwood Military port in Southampton for the next 35 years. But these won’t be the only contracts on the slate if Martin has any say in it. “We are thinking about future growth. We missed out on a contract to run services in Sweden between Stockholm and Gotland recently – effectively, we were runners up – but it still hurts as I was convinced it was a winning bid. We are looking at similar proposals at the moment.

CalMac may be a public sector operation but Martin insists it is run on a commercial basis – and stresses that people are wrong if they think that there are large differences between running a public sector body and a private one. 

“I’ve worked in both public and private sector, and I think that sometimes, people become too fixated on differences between the two. There is more commonality between the two sectors than many people realise. The reality is, if you run a good business, you run a good business.”

The presence of the Scottish Government as major stakeholder doesn’t alarm Martin, for whom, public sector or not, running CalMac as commercially as possible is always the goal. “I still strive to operate at a profit; the only difference is, instead of turning it over to shareholders, I can look to invest it into services.”

There is, however, a rather unique financial tension between the target of profit and the requirement to maintain loss-making routes which are the very definition of lifeline. “I look at our profitability in the round rather than at individual routes, which simply wouldn’t work – the Government would expect nothing less.”

There’s clearly a compromise then, between profit and service. One area where no concession is made lies in safety, however. “We never compromise on safety. We know only too well that if we get it wrong once it could be catastrophic.”

Indeed, such is the importance placed on keeping the service safe that every meeting – including board meetings – begins with “a safety moment, where we look at key issues. We also have weekly executive team safety meetings and local safety committees in the islands we serve.”

This emphasis on safety is supported by the empowerment principles Martin outlined earlier. “We have an initiative called ‘Stop the job’, where staff can take that big decision if they feel something isn’t right. It’s a tough call, particularly if you’re trying to get hundreds of people home on the last boat, but it’s one we support.”

To reinforce this need to empower your team, Martin says it’s vital you get good people in and let them do the jobs they’re paid to do. “As CEO, it’s your job to get the business into the shape you want, get your parameters working well and create the right foundations for a business to flourish – and then let it. One of the worst facets of modern management is when CEOs and MDs don’t let their people get on with the job in hand.”

Director development proves invaluable in this regard. “Throughout my career I have embraced lifelong learning. I promote learning across the organisation and make sure I do it myself. We have board evaluations and training, we have away days where we discuss building effective teams and promoting leaders, and this translates into personal objectives for all board members, which then trickle down through their teams and creates consistency through the business.”

The use of external evaluators can be a painful experience for any organisation but is a vital measure, says Martin – while a robust appraisal system keeps everything on track.

It also helps eradicate management mistakes - though will never get them off the page altogether, as Martin freely admits to making “too many errors to recall.”

His worst? “My first general management appointment was down in London, a struggling business with a difficult workforce. It was obvious what the problems were but to get rid of the problems I would have had to confront the workforce, and I decided to work around it rather than confront it. 

“Six months later, with the business in even more distress, I had to confront it, and predictably it was harder.
“I chickened out of the big decision. It needed hard, firm decisive action. I should have done it at the outset. It was a big learning curve, as it would have been the right thing to do at the right time. Sometimes you just have to be brave.”

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