• Laloo School of Common Sense

Management
• "Hum bhi dariya hai, apnaa hunar hame maloom hai, jis
taraph bhi chal padenge, rastaa ban jayega."

• Suceeded with the The Common Sense Management

Principles (TCSMP)
Look at the result of TCSMP.
Indian Railways from a loss-making operation to a public
sector unit that stunned everyone by earning a profit of
Rs 15,000 crore (Rs 150 billion) in 2005-06
• -IR was considered to be heading towards bankruptcy,
as per the report of Expert Group on Indian Railways The
fund balance at the end of 1999-00 had reached a low of
Rs 149 crores, improving to Rs 5228 crores by 2003-04
and over Rs 12,000 crores by the end of 2005-06

•
• Principle no-1 Catch the bull by the horn

• My mother always told me not to handle a buffalo by its tail, but

always catch it by its horns. And I have used that lesson in
everything in my life, including the Railways." –Lalu Prasad
Yadav
• When some Board members expressed apprehensions in
increasing wagon loads, a decision which alone generated Rs
7,200 crore (Rs 72 billion), Prasad said: "Wagon is the bread-
earning horse of the Railways. Load it adequately. Make it run
and don't stable it."
• Direct Action: To build alignment for execution, the MR(Ministry of
Railway) communicated to the GMs, setting and reinforcing
priorities. For example, on March 27, 2006, a letter urged a freight
loading target of 800 mt and internal generation (fund balance) of
Rs 20,000 crore.
• A letter was sent to the GMs which included sharp actionable
statements in the areas of freight, passenger, and parcel and
catering.
• Principle no. 2 Sweat the Assets

• "If you do not milk the cow fully, it falls sick," which
he is practicing while running the Railways. He is
achieving his targets not by increasing fares or
downsizing, but by increasing traffic
• open up container train wagons to private players
• air-conditioned 'Garib Raths' with low fares
retaining his pro-poor image.
• -running 24-coach trains
• -deploying additional coaches in well-patronised
trains and even additional trains.
• Principle no. 2 Sweat the Assets-2

• "If you do not milk the cow fully, it falls sick," which he is
practicing while running the Railways.
• freezing freight rate increases
• rationalising the commodity classification to benefit the
high value goods and charge more from the low rated
commodities.
• The tatkal scheme, targeted at the 'last minute'
passenger was extended one day to three days and
then five days. This offered a window of opportunity to
increase earnings through differential pricing, based on
time of booking
• Principle no-3-Employee Welfare Kaamgaaro ki lagan se,
hai tarakki sabki, hausla inka badhao, ki yeh kuchh aur
baddhe

• Given the financial performance of the IR, the unions

wanted a doubling of the contribution to the staff welfare
fund. Mr Laloo Prasad offered them nine times from Rs
26/- per employee to 222 per employee. more.
• When he saw that gangmen who had to walk on the
stone ballast were not provided footwear, he ensured the
same.
• Whenever concerns were raised about downsizing , he
maintained: "Downsizing may make IR thinner, but not
necessarily healthier
• Only Laloo Prasad can think of constructing 100
community halls for non gazetted employees for
occassions like marriages and other family functions.
•
• Principle no-4- Delegation and Non interferencePrinciple
no-4- Delegation and Non interference
• Mr Laloo Prasad is a non-interfering, yet aware,
He sets the goals and expects results The current Board
Members function as a cohesive entity, due to the force of
expectation on legitimate initiatives

• Mr Laloo Prasad is a non-interfering, yet aware,

He sets the goals and expects results The current Board
Members function as a cohesive entity, due to the force of
expectation on legitimate initiatives
• Principle no.5-Customer Service mun me bhav
seva ka, hotho par muskan, Behtar seva wazib
daam, rail ki hogi yeh pehchan."
• Some of the best customer service came from
the Railways
• -ETickets-avoiding the long quue for reservation
• -Auto upgradation- reducing the corruption and
the malpractices of the TT.
• -Launching of airconditioned –garib rath
• -The improvement of the railway stations
• -Simplification of the Railway reservation form
• Principle no.5-Image Building: Media
• Given his penchant for wit and one liners, Mr
Lalu Prasad was sought after by the media.
Whenever there was an opportunity to highlight
an initiative or an achievement, advertisements
were released.
• “In recognition of his initiatives, Mr Lalu Prasad
has also been ranked as the second best
minister in the current cabinet [India Today,
May 29, 2006].
• (This ppt has drawn material from Mr. Laloo
Prasad's railway budget speech and the study
done by IIM-A Prof G Raghuram on Indian
Railways turnaround)