How management thinking can hurt sometimes!

Increasingly there is a recognition that management education may cause more harm then good. Harvard Business School is the favourite punching bag here, where the problems on the Wall Street are balmed on the Harvard style educated manager (HBR, PBS, Debate). Blaming ills of Wall Steet is however frequently attributed to personal greed, rather than management education. Based on my own personalm experience I propose to identify specific aspects where I can trace problems to what we had educated managers with in the management schools. The cases and instances that I identify (below, and seek tio build repository of the same overtime) converge into a central idea — missing the goal post — the ambiguity around the objective of any exercise or actvity! If there is a confusiion or lack of calrity about what we want to fundamentally achieve, management education will guide us to make a choice and decide on our objective, which could possibly be an incorrect choice as there is no broad guiding principle.

Take the case of cleaning a city. The city of Indore achieved a remarkable feat and ranked first in the national cleanliness survey for seven years in a row. A lot of hard work by public managers, citizen participation, alignment of politics and bureaucracy, and innumerable otehr factors contribute to this high achivement and its sustenance. After the intiiual bouts of success, the focus moved to sustenance. The initial efforts undertaken on misison mode, now required a management approach. And multiple efforts in this context were initiated. Cleanliness was a result of at soucre seggregation, door to door collection, effective transportation, waste processing, and a centralized coordination of the whole of the system. Soon, someone came up with the idea of optimizing the trasnportation as the city was running up huge diesel bills and as coverage increased, shortage of transport vehicles was felt. The management solution lay in optimizing the transport system in multiple ways. I enumerate a few below

a) Route optimizing and rationalization: This was aimed at increasing coverage and reducing distance travelled. Whiloe optimizing this, garbage was not collected when convenient to the public, but when the truck would reach your house as per the rationalized routing.

b) Vehicle capacity rationalization: To carry more garbage and reduce number of trips, the city decided to purchase trucks of larger size. 1.5 ton trucks were substituted with 3 and 5 ton capacity trucks. This would bring about operational effeciency, but it compromised the primary garbage collection objective. Putting garbage into larger trucks was now more difficult for the citizens, and it often spilled out. These trucks blocked streets and lanes, and garbage trucks which people used to welcoime before were now resented as they would block all movement.

c) Airport Facilities: The Indian airport sector has woken up to this perspective, though a little late. In the last 2 decades Indian Airports in a bid to improve and upgrade, had lost their way. Non-Aeronautical revenue which was aimed at making the airport viable for upgradation took central space, and the airports moved their focus from being a transport terminal to a shopping archade, and painfully the shopping archade principles took precedence over the transport utility. In a bid to fix this, in the year 2023, led by the Civil Aviation minister the balance was restored, when he openly identified six agenda items for airports to adopt, with one of them being — Move away from shopping mall structure and bring back passenger mobility to the front. The parking at the Indore Airport is an example which is still to be fixed. The road access side of the airports moves double the number of people who pass through the airport (for every passenger, there is a driver of the vehicle which dropped or picked him/her up), however scant attention is paid to this aspect. At Indore parking fees collection has been given precedence over smooth flow of traffic and convenience of passengers. The circulation area needs a complete redesign to smoothen out vehicle flow, rather than force vehicles to stand on the road waiting or wasting precious fuel moving around to save getting into the parking lot.

d) MORE INSTANCES to follow

So what is the issue… A typical management arena problem. A big task broken down into smaller parts (Adam Smith’s all pin manufcature story), and then we put it all together, in the hope that we would achieve cooperation (incentive) and coordination (rationality). But, departmenal or functional optimization results in a sub-optimization levels, compromizing the overall objective level. When does it happen? When there is a lack of clarity around the higehr level objectives or missing identfications of how the sublevel goals would contribute and align with the overall objectives- a common problem in public management systems, where multiple objectives exist simultaneously, and functional alignment is hard to achieve.

Clean India Campaign

This is not the first time that I have seen the top man going after cleanliness……

  • One such case: One of the few and strong dictates of Ashwani Lohani when he took over as CME of northern railway was to ask for cleanliness….. he used to have a focus group meeting every Wednesday, in compliance to which people would be required to boast how many trucks of scrap they have sent to stores….

What is it about cleanliness, that it attracts big people to it like a bee to honey? And what comes next, after the initial pomp and show of cleanliness drive is lost…… some reflections

For myself, I have been attempting to follow them close to their heels and have always walked into dark corners (having learnt from these great souls) and ask for people make their surroundings clean….

  • In my earlier posting at Lucknow forced a week long cleanliness drive at the office and got tons of scrap paper removed, cob webs removed, tables and chairs repainted, almirahs redone…….  What followed next was a renovation plan for the office and it is good to see that it finally paid off.
  • On landing up at Jamalpur, have so far got the office and store cleaned up. Have also got cleanliness drives launched in the hostels and got store rooms specially cleaned out. The next step involves a renovations plan, which surprisingly suffers on account of lack of will, rather then because of lack of money.

So what should one expect after the launch of the Clean India campaign

  • A massive and comprehensive garbage disposal plan
  • Every small unit to identify what small and big changes it requires to sustain this campaign
  • A massive TV campaign on personal hygiene, cleanliness,
  • A mass availability of inhouse/ portable/ temporary/ self sustaining toilets (I am sure not being a socialist or communist, MODI would not make them free for anyone, but would only encourage their availability and next look upon people to but their own toilets, or NGO’s to sponsor them for those who cannot afford)… THIS ONE STEP IS CLOSE TO MY HEART….
  • AND, ofcourse a route we have not taken so far, but needs to be carefully walked….
    • A quantum change in personal hygiene standards……
      • How to leave a toilet once you have used it……. flush toilet, wipe seat, wipe off  the water from the floor and the sink, etc (we need a new list prepared)
      • Wash and rub your hands, like how your dadi asked you to…. you have to wash your hands for 30 secs.
      • Leave your shoes outside….

Ideas for railway management –3 …… recasting the accounts to enhance accountability

The railway accounting has often been criticized and a need for shifting it to company accounting and double entry accounting has been debated upon. However, I feel that nothing has been done so far as no business case has been built for it… So here is a business case….

We need some kind of a profit center accounting… everyone should be aware of what things cost and it need be ensured that there are no hidden costs of any kind (other then legacy costs like costs of passes, pensions… which also be need to be converted to current contributions for future liabilities and charged to units)

It is proposed that we introduce a new layer over and above the current system.. the current system is only a classification of expenditure, and somehow overtime the different abstracts have got allocated to different branches, and each of them lost connection with their deliverable….

The current classification system is summarized in the table below:

CLASSIFICATION OF REVENUE EXPENDITURE APP. I

Sr.No. Group   No Demand  
Name of demand  
I. Policy Formulation and Services Common to all Railways 1. (A) Railway Board
2. Miscellaneous Expenditure (General)
II. General Superintendence and Services on Railways 3. General Superintendence and Services on Railways.
III. Repairs and Maintenance 4.  (B) Repairs and Maintenance of Permanent Way and Works.
5.  (C) Repairs and Maintenance of Motive Power.
6. (D) Repairs and Maintenance of Carriages and Wagons.
7. (E) Repairs and Maintenance of plant and Equipment
IV. Operation 8.  (F) Operating Expenses-Rolling Stock and Equipment.
9. (G) Operating Expenses-Traffic.
10.  (H) Operating Expenses-Fuel.
V. Staff Welfare, Retirement Benefits and Miscellaneous 11.  (J) Staff Welfare and Amenities.
12. (K) Miscellaneous Working Expenses.
13.  (L) Provident Fund, Pension and other Retirement Benefits.
VI. Railway Funds and payment to General Revenues. 14. (M) Appropriation to Funds.
15. (O) Dividend to General Revenues, Repayment of lones taken from General Revenues and Amortization of over Capitalisation.

And of course demand 16 — which is for new asset acquisition and for new works.

The problem with this system being sacrosanct is

a) It breeds departmental-ism as each grant gets managed by one department

b) With time a total disconnect with the real world happens, as the linkage between deliverable and their costs gets lost.

c) With no changes being possible at working level, their are large pockets of inefficiency as budget allotments get politically motivated rather than being driven by deliverable.

What steps need to be taken……

i) Computerization of this base level, much exists that on the fly statements are required.,

ii) Recasting over and above this layer of the different units

iii) Designate profit centers and make profit center incharges

iv) Remove all limitations on individual profit center incharges in re-allocation of funds within their own profit center head.

v) Parliament should only make two approvals — new assets and total of expenses…. with railway administration being given a 5 year complete leway to move funds around as and where felt, till some order is obtained in the railway working.

What could be these profit centers be? Some examples could lie in……

a) All “A” and “B” class stations

b) All workshops and production units

c) Track stretched between junctions – (Pway, S&T, Electrical in one combined form)

d) Profit centers for operating and commercial to be at railway level only.. measurement only in terms of throughput and loading for the two departments individually.

e) A system of transfer pricing of assets maintenance schedules

Any such rework of the system is going to add managerial information costs(it has to be acceptable and can give much larger returns) over those above incurred, but the IT technology can help us in ensuring that

a) These additional costs are minimal

b) Need to be fine tuned over time and also changed and continuously adapted over time to address issues raised and the addressed as gaps emerge.

SOMETHINGS SHAKE YOU TO THE CORE!

The unfolding story of how Shri Mahesh Kumar(MS/RB) lobbied for ML’s post through bribe is one, which overtime is going to be identified, either, as a nail in the coffin of railways or the turning point (more probability of the earlier). This single incident is going to have very large ramifications on railway working, image of the railways, image of the railway men, morale of the railway men, funds made available to the railway men, and above all my career with the railways. This incident is hurting my insides so bad, that I have got shaken to the core and have lost orientation.

My school friends had always asked  — When will you become a Member of the Railway Board?(ofcourse jokingly). There were keen on knowing WHEN, but never asked WHY?  Now they know the WHY also?. As far as I am concerned, I now know why I donot want to become one!!

 It is necessary for me to pen down WHY I feel so strongly about this incident, if nothing else then to unburden myself!!

a) Railway ministry is politically jinxed: At the political level nothing seems to be happening correct for the railways. First, for 10 years the ministry is with allied partners, secondly, when someone with courage takes over (Mr Diwedi) and tries something long required he is unceremoniously discharged, thirdly, when a supposedly Mainline minister comes in and with loud claims of being a clean guy, he is taken down by his ACE card of claim to position — Honesty.

Leadership!! There goes our wish of a competent and well meaning political boss. 

b) Financial crisis: The biggest problem with railways is finances and we go to the government every year with a begging bowl, asking for money to fund our development. We never got it till now, and now we have lost the moral right to even ask for it……. So Indian Railways wants more money for its infrastructure projects so that it can squander it away…..

Development!! There goes our wish of having more money for development.

c) Honesty: We have been a relatively clean government department, and we used to be proud of it! With 15 lacs railway employees, every family in the country has a railway men in his near family or neighbours. We railway men (with the exception of the Railway TTE), were seen as hard working, honest people, who kept the wheels of the rail moving 24X7X365 without regard to self or family. Mr Mahesh Kumar just given a motive to our selfless service to the nation– Corruption

Honesty!! There goes our wish of being recognized as an honorable Indian.

Having lost confidence in leadership, development, and honesty, there is little that the organization has to offer now!!

For me, I have no opinion/view/fact/information about whether Rajiv Gandhi was or was not a beneficiary in the Bofors case. BUT for me it is a turning point, and it has harmed the country as none other. When I was haggling with a Rickshaw wala and cajoling him to take the correct fare from me over 20 years back, he had simply remarked that there is nothing correct in our country, as even the PM is dishonest. I had no defense for his argument and had simply paid him whatever he asked for and moved on.

Corruption that day for me had penetrated the arteries and veins of the Indian Society. On this day, corruption has entered the vein and artery of Indian Railways. Atleast each one of us will be perceived as being corrupt by the common men (truth, reality, personality, individual not withstanding). Our heads are hanging in shame!