NPM
NPM is a management methodology that was initially introduced during the Thatcher era. During this time, there were major drives to privatize public industries. Due to the history of the entities that were being sold into private hands, issues relating to customer orientation, efficiency and innovation arose that contributed largely to a public service mentality. NPM was, in effect, an attempt to drive changes in these entities which would allow a competitive mentality.
Disruptiveness of the railway industry
- Provided corridor for telegraph lines
- Railway timetables required unified times, leading to GMT and time zones
- furthered long-distance communication
- furthered centralization and standardization in governments
- allowed winter warfare
- backbone of national economics
- drove industrial revolution
Outsourcing
There are four promising opportunities which are offered by outsourcing:
- focus
- scale without mass
- disruptive innovation
- repositioning
Practical economic advantages of outsourcing
- Control of capital cost:
The conversion of fixed overhead costs into variable costs in order to release capital for revenue earning activities. - Increase efficiency:
The ability to concentrate purely on revenue intensive activities allows both the outsourcing firm and the specialized contractor to produce with maximum efficiency.
- Reduce labor costs
Labour can be matched fluidly to demand and there are little if any obligations to ensure a constant availability of work to individual employees. - Rapid start of new projects
The ability to buy in allows new projects to be launched without the need to develop internal project organizations or invest in specific execution assets.
Main problems of railways
- Reputation of laziness, inefficiency and of perceiving themselves as too big to fail regardless of level or quality of customer offerings.
- Lack of innovation, especially in the eastern parts of Germany led to a tech and management philosophy gap between DB and DRB.
- Outsourcing means company employees have to accept external companies working on our systems.
- Focus is on doing our business, which only we understand, instead of the customer.
- Heavy unionization in the West (Beamte cannot be fired regardless of performance) and planned economy in the East.
The importance of inputs and their catagrozation
Inputs matter, but they have to be looked at holistically. Attempting to oversimplify inputs without accepting link and feedback between them must be avoided to achieve congruence through the change process. The common thread for all inputs is culture, internal/external; and history is culture. A common pitfall is focusing on only external inputs and thus blending out internal ones.
