Transformation of a major national railway
Strategy& was retained by a ministry of transport in order to define and implement a comprehensive transformation plan for the national railway company. The railway was unprofitable, lacked investments, had poor customer service levels, and needed an overhaul of its safety management system. The assignment’s challenges included returning the railway to profitability, improving the safety record, devising a massive investment program covering infrastructure as well as rolling stock, increasing the efficiency of the organization structure, and improving customer service, all in line with the goals of the government.
Strategy& developed a detailed transformation plan and 10-year business plan. The plans were endorsed by the government, and the firm was then tasked with driving plan implementation. These efforts included setting up 17 teams to put into place the different value-creating initiatives (for example, launching revenue-increasing programs, implementing a new safety structure at the ministry and railways, and initiating the assets upgrade program). In addition, Strategy& was involved in defining and negotiating the compensation required by the railways for operating non–commercially profitable services, as well as negotiating concessions for specific socioeconomic groups (students, for example) and negotiating with the ministry of finance and other relevant government agencies. A further focus was to define a new organization structure enabling the railway to improve the efficiency and customer focus of its services as well as to improve the corporate governance structure. This entailed migrating the existing production-driven structure toward a structure focusing on the three main business units (long-distance passenger, short-distance passenger, and freight) as well as an infrastructure business unit.
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