Wednesday, 26 February 2014

SMRT and Edwards Deming's 5 deadly sins of management

"We were alerted of a track circuit failure on the south bound between Yew Tee and Kranji MRT stations this morning. As a result, our trains were travelling at slower speeds to ensure the safety of our passengers until the problem was rectified at 8.32am. Passengers were asked to allow for longer travelling times while engineers accessed the track, and free bus services were activated between Admiralty and Ang Mo Kio MRT stations, while additional trains were deployed to ease congestion. There was no service disruption although trains ran at a slower speed. We apologize for the inconvenience caused."
 ~SMRT's press statement in response to the track circuit failure on 24 Feb 2014 

 It is utterly embarrassing. The mistake is glaringly obvious especially when there are students missing their exams because of the breakdown. The explanation contradicts itself line by line, word for word, and the non-apology have Singaporeans' blood boiling. It is backtracking, it is unrepentant, it is counter-productive, it is the classical PR fiasco. The press statement has drawn so much angry responses from Singaporeans that Yahoo dedicated a story to it. And right on the second day after the much-spat-on press statement, another breakdown occurred. It used to be rare to see train breakdowns, now it is becoming like an everyday thing. How did things went so wrong for SMRT?

It is a management problem.

Going by world renowned business consultant Edwards Deming's 5 deadly sins of management, SMRT plunged into all pitfalls of a failed management:

1) Lack of constancy of purpose
The train company is diversified into retail business, advertising business, taxi business, bus business and overseas engineering and consultancy projects. Long gone are the days when SMRT was incepted for only one purpose: that is to provide a reliable, safe and sustainable train system for Singaporeans. Presently, there is no plan announced how breakdowns could be put to a stop, except of making contingency and ad-hoc responses. There is no sense of responsibility undertaken by the SMRT management. No heads roll, nothing.

2) Emphasis on short term profits
Dividends. SMRT has committed a payout of 60% of PATMI (Profit after tax and minority interests). The management has clearly a vested interest to put profit above service. Anecdotally, we could see how train ridership is maximized when more chairs are removed to make more standing space, or how trains are specifically timed at the right intervals so each train could be fully packed. Remember how was the SMRT maintenance budget kept the same for 10 years despite rising revenues? All these measures are testimonial their eyes are all for reaping big profits and generating fat dividends.

3) Evaluation of performance
Rewarding of result instead of process management. SMRT management is motivated by profits, not how processes and practices could be better done, anticipated and planned for. This has a lot to do with the remunerations of the SMRT management where too large a component of their package relies on the company's financial performance. The yardstick of performance for the train monopoly should be on the quality of ridership, and not the number of ridership as so proudly boasted in all of its annual reports. The SMRT management should be largely assessed on the train ability to provide comfortable and pleasant commuting experience, and not so much on the amount of revenue.

4) Mobility of management
When Saw Phaik Hwa could not perform as the CEO, a SAF general cum chief of army was parachuted into the million dollar position to save the day. In all honesty, Saw Phaik Hwa was not given an opportunity to redeem herself by putting a stop to all these breakdowns. Today, we have Desmond Kuek, the Brigadier General whose leadership have seen by far the most number of breakdowns in SMRT history. The choice of CEO was a mistake. Desmond Kuek was not equipped with the experience, management skills and engineering knowledge to manage a train company, and it looks like Singaporeans are paying a heavy price for his OJT (On-Job-Training) today. SMRT should use a new CEO, someone from the ranks and files of the train company who possess the operations experience. Someone who is in for the long haul and not so much on sporting a red hairdo and in the position to milk as many millions as much while they are still CEO.

5) Use of visible figures only for management, with little or no consideration of figures that are unknown 
Like salesmen, the management have only profit in mind. Couple that with a CEO who knows nuts about the train business, it is impossible for the SMRT management to be accurately assessed on the right measurement. Unfortunately for SMRT, the management has no regard for known measurements, let alone the unknown figures. There is a known measurement of commuter experience, it is clearly stated by the number of people packed into each train. There is also a known measurement of commuters' responses to price hike, the feedback are all over on the internet. There is also a known measurement of train performance, the number of breakdowns that occur in the month. Known measurements have always been ignored and cast as unrealistic expectations that from the public. This explains the disconnect between the SMRT management's view of performance and that of the commuters'.

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