You may have read that we just dodged the bullet of what would have been a crippling railroad strike last Friday. More than a third of long-distance American freight travels by rail and a shutdown would have exacerbated our global supply chain problems. It could have derailed 7,000 trains daily and cost the economy more than $2 billion a day. It seems disaster was narrowly avoided. How did we get to this cliff in the midst of every other challenge we face? Finite-mindedness.
A few years ago the rail industry adopted “P.S.R.” or, “Precision Scheduled Railroading” to improve their operating ratio. This in and of itself is not a bad thing and PSR improved efficiency dramatically. The problem is, eliminating 30% of the work force allowed NO room for error. Or sickness. Or contingency. The result was that the smaller workforce could not be afforded emergency sick time to visit the doctor or handle family emergencies. Instead of set days off, workers who just completed a run would be placed at the bottom of a now-shortened call list that might require a return to work the very next day. Chaos and disengagement ensued as workers were fired for not showing up for scheduled work to go to the doctor or take an “unapproved” day off.
So why cut 30% resulting in such a small pool of available engineers and conductors? To improve this quarter’s P/E ratio—to benefit the finite. Even with the strike averted (which required expenditures that will cut into the improved bottom line PSR brought) the resultant employee disengagement will take years to overcome.
What if instead of finite, “here-and-now” earnings, the leadership had sought a 25% instead of 30% cut and invested the savings to engage workers? The immediate quarter would have seen a smaller improvement but the improvement would have benefited both workers and management and been felt for years—maybe decades. This would have been an infinite-minded step in the right direction.
Finite-mindedness (thinking in quarters or semesters) often results in a solution that also contains an even bigger problem (e.g. the cut improved ratios but eventually required concessions to avoid a strike). Infinite-mindedness does not think in quarters; it thinks in generations.
Are you infinite minded?
I love this quote Robert Quinn:
…to survive, organizations need leaders who take risks and who care enough to die for the organization. Most organizations have few such people. When these leaders emerge, they usually have a vision, and their behavior reflects a transformational paradigm. They are self-authorizing and often follow unconventional methods that are based on moral principles rather than organizational pressures.
Are your decisions based on moral principles or organizational pressures?
Have a great week!
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