PT KERETA API INDONESIA (Persero)CHANGE MANAGEMENT

Clelie AlbertFath Ade SuryaIskandar MudaIvan Immanuel

Kresna SatriaObaja Kurniawan

Rikardo Siahaan

COMPANY PROFILE

PT KAI is the state owned company which are in the transportation industry, namely train. PT KAI now serves the wider community both in terms of local transportation (in a particular city) or inter-city.

VISION

To become the best railways service provider focusing in customer service and to fulfil stakeholder’s expectations

MISSIONConducts the business of railways and its supporting business, through its business

practice and best organization models to provide the added value to its stakeholders and environment based on 4 main pillars : Safety, On Time, Service, and Convenience

External Environment2005 -2010

LOW COST CARRIER AIRLINES LOW CUSTOMER TRUS & SATISFACTION

• The only one railways provider in Indonesia

• Opportunities to become favorable transportation is high

• Lots of investor willing to invest in railways industry

Internal Condition of PT. KAI2005 -2010

2008 20090

10

20

30

40

50

60

70

80

90

32 %

31%

81%78%

ON TIME PERFORMANCE

ARRIVAL ON TIME (PERCENTAGE)

DEPARTURE ON TIME (PERCENTAGE)

OPERATIONAL CONDITION

2005-2010

2005 2006 2007 2008 2009

ACCIDENT NUM-BER

102 116 159 147 90

VICTIM NUMBER 36 50 31 45 57

105090

130170

NUM

BER

0% 2% 2%

38%

27%

31%

Employee’s Education Background

S3/Post Graduate

S2/Graduate

S1/Under Graduate

D3/Diploma

SLTA/High School

SLTP/Secondary School

SD/Elementary School

12%24%

24%

41%

Employee's Age Composition

<30

31-40

31-50

51-56

HUMAN RESOURCES

CONDITION 2005-2010

Other Condition 2005-2010

• The construction of double-rail in Jabodetabek hasn’t finished

• Just serve Java and Sumatera island

•haven’t met the company’s vision and mission

• No barrier between regulator and operator in

railways industry in Indonesia

Key Internal Problems

8 Stage of Leading Change

Establishing a Sense of Urgency

Creating Guiding Coalition

Developing Vision & Strategy

Communicating The Change Vision

Empowering Broad Based Action

Generating Short Term Wins

Consolidating Gains and Producing More Change

Anchoring New Approaches in The Culture

1 2 3 4 5 6 7 8

Establishing Sense of Urgency

Ways to Raise Sense of Urgency Implementation Sample PIC1. Show the critical condition faced

to the top managementShow the data about the deterioration and shortage which should be improved

Accident data On-time

performance data Infrastructure and

facility data Financial data

CEO

2. Set high target that should be achieved

Set profit target, productivity target, safety target, and customer satisfaction target

On time performance increase to 95%

Accident level decrease by 70%

CEO

3. Stop performace measurements based on functional goal

Set the KPI based on company’s business performance

Use KPI based according to Balanced Score Card

Director of Human

Resources

1 2 3 4 5 6 7 8

Establishing Sense of Urgency

Ways to Raise Sense of Urgency Implementation Sample PIC4. Show customer satisfaction data

and company’s image to all stakeholders

Use small group to respond available data

Use Quality Control Circle (QCQ)

Director of Marketing

5. Make discussion forum about the company’s weakness, avoid adorn the news

Top management should facilitate monthly discussion about the company’s current condition

Monthly discussion forum

Coalition Team

6. Inform all employee with information about opportunities and profit in the future if they change

Explain about opportunities in the future on routine discussion

Utilize the monthly discussion forum

CEO and Director of Human Resources

1 2 3 4 5 6 7 8

Establishing Sense of Urgency con’t

The Parties that should be involved in creating the coalition :

• CEO• BOD (Board of Director)• Senior area manager with ability to articulate vision and have experience

and ability to spread change• Expert, professional and other parties (Dirjen Perhubungan, Employee

Representative)• Customer Representative

STEP CREATING GUIDING COALITION

• Finding right person who have position power, expertize, credibility, leadership.

• Build trust• Develop goals

1 2 3 4 5 6 7 8

Creating the Guiding Coalition

STILL USING their Vision

VISION : “To become the best railways service provider focusing in customer service and to fulfil stakeholder’s expectations.”

Strategy

Improvement in 4 pillars : Safety, On Time, Service, and Convenience

1 2 3 4 5 6 7 8

Developing Vision and Strategy

1 2 3 4 5 6 7 8Communicating the Change Vision

Source: Choosing Strategy for Change. by John Kotter and Leonard A. Schlesinger.

Harvard Business Review 2008

Vision StructureFocusing on customer service In reality, PT.KAI put its focus on railways

operationFulfill the stakeholder’s expectation But, low productivity resulting in high cost.

This is caused by high operational expense of the company

GAP : VISION and STRUCTURE

IMPLEMENTATION

Providing Training NeedsTo perform improvement, training is needed. Synchronizing System with Visionthe role of Human Resource Development which is brave and assertive in providing leadership needed to change the system to become congruent with PT.KAI’s company vision.

1 2 3 4 5 6 7 8

Empowering Broad-Based Action

Generating Short Term Wins

• Accident rate of train decrease by 70% in 1 year

• Human factor as the main cause of the accident decrease

to 10% from 33%

• On Time performance increase to 95% in 1 year

•Employee composition who aged more than 50 decrease by 30%

in 1 year

•Employee who have D3 educational level, increase by 15% in 1 year

•Net Income growth 200% from the previous period in 1 year

•Giving bonus to best employee every month in 1 year ahead

•Customer satisfaction increase to 90% in 1 year

1 2 3 4 5 6 7 8

Generating Short-Term Win

Quick wins are only the beginnings of what it is needed to be done to achieve long-term change. So put in place a Human Resources change project in Pt KAI needs quick wins, but not only : the management will have to build on these first success and improve continuously its human resources management.

1 2 3 4 5 6 7 8

Generating Short-Term Win

1 2 3 4 5 6 7 8

Consolidating Gains and Producing more Change

IMPLEMENTATION

• It will be necessary to put in place regular meetings to take stock of the situation and develop new projects on this basis: on areas which still need to be changed or on improvement areas identified

• Put in place employees' surveys : launch an employees' survey. Moreover, the management and change actors will have to come to meet the employees for informal discussion and interview.

NEW CULTURE

“CUSTOMER ORIENTED CULTURE”Customer satisfaction is the main factor we should

pay attention to

“EMPLOYEE DISCIPLINE CULTURE”The whole employee obey the rule and also obey to

give maximum service to the customer

1 2 3 4 5 6 7 8

Anchoring New Approaches in New Culture

THANK YOU