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Laloo

School of Common Sense Management

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"Hum bhi dariya hai, apnaa hunar hamemaloom hai, jis taraph bhi chal padenge,

rastaa ban jayega."

Suceeded with the The Common SenseManagement Principles (TCSMP)

Look at the result of TCSMP.Indian Railways from a loss-making operation to a

public sector unit that stunned everyone by earninga profit of Rs 15,000 crore (Rs 150 billion) in2005-06

-IR was considered to be heading towards

bankruptcy, as per the report of Expert Group onIndian Railways

The fund balance at the end of 1999-00 hadreached a low of Rs 149 crores, improving to Rs5228 crores by 2003-04 and over Rs 12,000 crores

by the end of 2005-06

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Principle no-1 Catch the bull by the horn

My mother always told me not to handle a buffaloby its tail, but always catch it by its horns. And Ihave used that lesson in everything in my life,including the Railways." Lalu Prasad Yadav

When some Board members expressed

apprehensions in increasing wagon loads, adecision which alone generated Rs 7,200 crore (Rs72 billion), Prasad said: "Wagon is the bread-earning horse of the Railways. Load it adequately.Make it run and don't stable it.

Direct Action: To build alignment for execution,the MR(Ministry of Railway) communicated to the

GMs, setting and reinforcing priorities. Forexample, on March 27, 2006, a letter urged afreight loading target of 800 mt and internalgeneration (fund balance) of Rs 20,000 crore.

A letter was sent to the GMs which included sharpactionable statements in the areas of freight,

passenger, and parcel and catering.

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Principle no. 2 Sweat the Assets

"If you do not milk the cow fully, it fallssick," which he is practicing while runningthe Railways. He is achieving his targetsnot by increasing fares or downsizing, butby increasing traffic

open up container train wagons to privateplayers

air-conditioned 'Garib Raths' with lowfares retaining his pro-poor image.

-running 24-coach trains

-deploying additional coaches in well-patronised trains and even additionaltrains.

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Principle no. 2 Sweat the Assets-2

"If you do not milk the cow fully, it fallssick," which he is practicing while runningthe Railways.

freezing freight rate increases

rationalising the commodity classificationto benefit the high value goods and chargemore from the low rated commodities.

The tatkal scheme, targeted at the 'lastminute' passenger was extended one dayto three days and then five days. Thisoffered a window of opportunity toincrease earnings through differentialpricing, based on time of booking

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Principle no-3-Employee WelfareKaamgaaro ki lagan se, hai tarakki sabki, hausla

inka badhao, ki yeh kuchh aur baddhe

Given the financial performance of theIR, the unions wanted a doubling of thecontribution to the staff welfare fund. MrLaloo Prasad offered them nine timesfrom Rs 26/- per employee to 222 peremployee. more.

When he saw that gangmen who had towalk on the stone ballast were notprovided footwear, he ensured the same.

Whenever concerns were raised about

downsizing , he maintained: "Downsizingmay make IR thinner, but not necessarilyhealthier

Only Laloo Prasad can think ofconstructing 100 community halls for nongazetted employees for occassions like

marriages and other family functions.

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Principle no-4- Delegation andNon interference

Mr Laloo Prasad is anon-interfering, yet

aware, He sets the goalsand expects results

The current Board

Members function as acohesive entity, due tothe force of expectationon legitimate initiatives

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Principle no.5-Customer Servicemun me bhav seva ka, hotho par muskan, Behtar seva wazib

daam, rail ki hogi yeh pehchan."

Some of the best customer service camefrom the Railways

-ETickets-avoiding the long quue for

reservation

-Auto upgradation- reducing thecorruption and the malpractices of the TT.

-Launching of airconditioned garib rath

-The improvement of the railway stations

-Simplification of the Railwayreservation form

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Principle no.5-Image Building: Media

Given his penchant for wit and oneliners, Mr Lalu Prasad was sought after

by the media. Whenever there was anopportunity to highlight an initiative or anachievement, advertisements werereleased.

In recognition of his initiatives, Mr LaluPrasad has also been ranked as the second

best minister in the current cabinet [India

Today, May 29, 2006].

(This ppt has drawn material from Mr. Laloo Prasad'srailway budget speech and the study done by IIM-A Prof GRaghuram on Indian Railways turnaround)

With GE worldwide head

With Harvard Business

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