By M.E. Singer
The recent revelation in Railway Age, “Amtrak Thinning Non-Agreement Ranks” (27 Oct) gives credence to the postulation how Amtrak thinks and operates–that when in doubt,it chooses to re-organize by disgorging management.
How many times has Amtrak endured the pain, time, and expense of re-organizing and downsizing since 2005, under Downes, Warrington, and Boardman? What did Amtrak achieve in the end, other than its infamous tagline of a “glide-path towards financial self-sufficiency,” the over built/under performing Acela (“Cochon” in French), and the mail/express business line diverting limited resources to serve Janesville and Louisville? No wonder in “Reorganizing? Think Again” (Harvard Business Review, October, 2011), it was stated how re-organizing “are surface-level, counterfeit solutions, and they do more harm than good. And yet when it comes to reorganization, they’re the norm. According to one McKinsey study, the success rate for organizational redesign efforts is less than 25%. It’s much more common for reorg efforts to run out of steam before completion or fail to yield improvements once they’ve been implemented.”
With this background, we are to asked to blindly accept the following statement to non-agreement employees picked up in Railway Age by Amtrak’s EVP Administration DJ Stadtler: “We will be reorganizing to meet our goals for 2018 and beyond. We need to improve our safety culture, we need to be obsessed with giving our customers a better experience-and we must lower our operating costs. We must make changes in how we are organized to get this job done. Right now, our non-agreement team is too big. We must deliver more results with fewer people.” Frankly, this statement only gives further credence to why the ancient Greeks looked at the entrails of birds to predict the future; probably with better results.
What’s wrong with this Pravda-esque statement is what continues to be oblivious to Amtrak’s executive management and Board, but clearly stated by the noted professor and author of numerous management books, Peter Drucker: “so much of what we call management consists of making it difficult for people to work.” Drucker added, “I’ve seen a great many people who are exceedingly good at execution, but exceedingly poor at picking the important things. They are magnificent at getting the unimportant things done. They have an impressive record of achievement on trivial matters.”
Given how executive and senior management at Amtrak has been historically grown in a petri dish created by the Board of Directors, Their failures are tolerated and ‘baked in’ as a reward for their fealty to the Board. Why does this line of management continue to remain above the absolute level of accountability, not even to be viewed in a rear view mirror, instead of middle and lower managers taking the bullet-again? Remember Penn Station; loss of commuter contracts? The Board’s persistent failure in its stewardship, and toleration of a line of management of ‘bakers who cannot bake,’ casts a gloomy shadow on Drucker’s reflection that “long-range planning does not deal with the future decisions, but with the future of present decisions.” As such, we shall continue to witness the managed decline of Amtrak.
Amtrak HQ continues to perpetuate the antithesis of what are today’s stated goals by Stadtler, given how so few of the over-staffed members of executive /senior management bother to even ride the trains to learn the customer experience, as well as how to support the employees on the line. To what extent would the customer experience improve if the Board understood their own position, and traded in several EVPs and VPs for Train Chiefs to provide consistent organization and control on the long distance trains? Perhaps such change management philosophy is simply buried now, as it would be opposite to how the long distance routes have been willfully pillaged to support the Northeast Corridor. When it comes to a safety culture, Amtrak must overcome the nine years of Boardman’s reign that simply sabotaged a joint labor/management coalition to embrace safety. And why have the unions become oblivious and not involved to prevent drugs from interfering with performance? To what extent would costs be controlled if Amtrak worked with Congress to lease new motive power and equipment for its national network west of the Potomac? Although significantly newer than Superliners, the Acela is undergoing a second rendition, along with new electric motors for the Corridor.
When the American Army initially failed in North Africa in its first campaign of WWII, Eisenhower relieved the commander, General Fredendall; but he did not shoot the lieutenants and captains. Although it is quite apparent that as long as the EVPs and VPs willingly oblige the Board’s desire for a narrow focus on the Northeast Corridor, they continue to give new meaning to the definition of “lifer.” However, this perpetual cover-up, at the expense of middle and lower managers, for non-accountability as engineered by Amtrak’s Board and executive/senior line of management can only be seen as ‘whistling past the graveyard.’
In the rush of those who continue to survive the purges to successfully grab a chair when the music stops-again- is the failure to appreciate what was clarified in The Key to Successful Corporate Reorganization (Forbes 07/30/10): “corporate reorganizations are risky investments of time, energy, and resources, and many do little to improve the business. Chrysler restructured its organization three times in the three years preceding its bankruptcy and eventual combination with Fiat. None of those reorgs had much effect. A recent Bain & Company study of 57 major reorganizations found that fewer than one third produced any meaningful improvement in performance. Some actually destroyed value.” In essence, we already know the outcome.