Rail Business Culture Transformation

Context

• The Class I rail industry’s historical and cultural dynamics and recently adopted business strategies have contributed to a post-2006 market share and volume decline.
• Focusing on short-term profitability, cost-cutting, and an outdated corporate culture has negatively impacted customer success and satisfaction, employee morale, expertise retention, and innovation.

Goals

• Transform the railroad business culture to support a more vital contribution to supply chain efficiency and satisfaction, success, and safety for all stakeholders.

Questions

Core Question:

• What reorientation would transform the rail business culture to balance the interests of investors with the professional and personal interests of key stakeholders?

Existing Railroad Culture

1. What railroad management and investor dynamics create a risk-averse decision-making culture that stifles growth and modernization?
2. What cultural drivers have led railroad boards and investors to focus on stock buybacks and shorter payback windows at the expense of long-term investments for market share growth?
3. How has the rail business culture led to:
   • • • Lower respect and adoption of staff ideas?
       • Staff frustration and poor retention?
4. How has the culture of hierarchical authority for decision-making impacted:
   • • • Reliability of first-mile and last-mile services?
       • Ability to advance customer-centric market opportunities?
       • Safety of freight train operations?
       • Quality of professional and personal life for train, yard, and engine staff?
       • In-the-field operating authorities by experienced train, yard, and engine crews reacting to real-time local conditions?
5. What skill sets are in short supply in railroad organizations that could be developed to meet the needs of customers, communities, and employees?

A New Future for Railroad Culture

1. What do we want rail business culture to lead to?
2. What cultural shifts need to occur such that employees, especially in-the-field operating employees, are viewed as collaborative partners with management in creating organizations that meet the needs of all stakeholders?
3. What work and lifestyle experience among rail management do we want the business culture to support?
4. How can senior management and the board of directors better collaborate with company staff to re-establish a meaningful and satisfying growth and improvement culture?
5. What cultural shifts need to occur:
   • • • To best retain railroad subject matter expertise?
       • For customers and trucking partners to trust that rail operating decisions, services, and rates are respectful of their needs and investments?
       • For communities and other public entities to view railroads as creating a safer, less congested, environmentally sustainable option for moving freight?