To address today's opportunities and unconventional challenges, railroads need to focus on creating high-performing teams that draw on a wealth of institutional knowledge, while adding new leaders who can embrace innovation and new technology. By combining the two, they can improve their agility, react more quickly to new opportunities, and drive continuous success.
Historically, technology and innovation for railroads have been predominately aimed at increases in efficiency and safety, not to alter the business model, customer experience or ways of moving freight. However, digitization can unlock capacity, boost performance and enhance the end-user experience. Today, nearly every industry faces the prospect of digitization, which can be viewed as either a threat or opportunity.
Railroads are investing heavily in new technologies to enable growth, efficiency and creativity. As a result, rail executives are increasingly being asked to innovate, improve capacity and add freight to their tracks. They’re expected to be strategic and creative while embracing their historical legacy as the country's transportation backbone.
How do railroaders begin to tell if a railway is ready for innovation and digitization?
- Define success. What does your internal and external customer ultimately need? If the customer won't benefit or pay for the service or innovation, don't do it. Make sure you have the right people listening to your customer.
- Champion innovation at the top. Do you have the right executive and board leadership? Do you have the right partners and alliances?
- Establish supporting culture. Does your culture reward creativity and risk-taking?
- Confirm organizational structure. Does your organization have robust career paths, job design, and rewards to ensure implementation and adoption?
- Fill talent gaps. Do you have the right talent to fill critical roles, behaviors, and skills?
As companies’ priorities change, the skills they need often change, too. According to Korn Ferry’s research, the most admired companies value expertise 14% more than the rest. In addition, when looking at the drivers and competencies of more than 500 successful digital leaders, the profile that emerged was consistent and intuitive. It boiled down to four traits:
- Curiosity and a “pioneer” mentality. This must be accompanied by the ability to measure risk without diminishing the willingness to commit to new ideas and make bold choices.
- High emotional intelligence, with the ability to engage and inspire employees. Leaders must build enterprise-wide support for the change agenda.
- Comfort with ambiguity. Leaders are open to tackling the extraordinary challenges that defy a traditional approach to problem solving.
- Willingness to alter structured decision-making patterns. Leaders are open to stepping back from direct lines of accountability, and are energized by working in unstructured environments.
Outlook
For railroads, the key to unlocking proficiency is embracing talent that can manage assets while also looking beyond asset-based innovations and pursuing a new vision. Technology fluency and logistics acumen are vital to the strategic leadership team. To drive sustainable growth, railroads must be adept at deploying technology to drive business transformation. At the same time, they have to tap into dynamic talent with a true transformation heritage.
Meredith Moot is Senior Client Partner with Korn Ferry.
