Development of Competency of Strategic Orientation : Key to Making Railroads Innovative

Railroads are important for development and economic growth of a region. They are also heavily regulated and struggle to get timely public investment and clearances for consolidation and improving revenue generation when attempting to achieving economies of scale and scope. Where the state (government) runs the railroads, the effort is to direct them to serve the larger aspirations of the citizens. In both the cases, governmental support in form of grants or subsidies has become a bone of contention. Further, strategic orientation leading to capacity creation in advance and adaptation to changing customer preferences have been lacking universally in all railroads. Result is that universally railroads have failed to invest in capacity ahead of demand, have only partially adapted to changing customer needs and are struggling to meet varied aspirations of the citizens as part of development and inclusive growth. This paper takes the view that regulation of rail road has only focused on price impact on public through emphasis on efficiency as they were working under a stable and slow changing business environment where growth was assured. With their business environment becoming more complex and dynamic and emphasis on conservation of environment and fossil fuels increasing, the changed goal of achieving effective services at least resource cost to society must be done through focus on revenue maximization by striking a fine balance between explorative and exploitative activities — ensure effectiveness and efficiency thereafter. This would be achieved by developing the core competency of strategic orientation which facilitates development of innovativeness as a competency. The transformation of the standard data based training system to a competency based training system would enable generation of this core competency continuously over time. This would enable railroads to serve the public better by continuously adapting to changing technologies and customer preferences using innovation as the core driver of business logic. This key message is articulated by the use of the case of Indian railways