The Forum for Partners in Iran's Marketplace

September 2004 / No. 31

Q & A

Raja Roars On

Raja has been recognized as the most responsive company and has received the special plaque and statue for having the best public relations department throughout the country.

After nearly a decade of dedicated hard work and untiring efforts, Dr. M. Pour Seyed Aqaei, Managing Director of Raja Passenger Trains Company seeks to outline in the following interview what he has accomplished in his years at the helm of Raja, how its has benefited from various management and quality models and where the company intends to go from here.

Dr. M. Pour Seyed Aqaei, Managing Director of Raja Passenger Trains Co.

The excellence model is being implemented for the first time in Iran. How did Raja Company come to know the model?

Raja Company is relatively young and was founded in 1996 and its management gave priority to the establishment of a productivity committee as its first move. In fact, Raja is among the first state-run companies to have determined productivity indexes, from out of 50 defined indexes only about 8 are measured constantly, the committee has managed to organize many activities within the company.

What activities?

One of them was the issue of a proposal system, which was launched in 2000 as good grounds for boosting participation of employees in company management and was notified in 2001 as an approval of board of directors. Of course, governmental companies face many problems for the implementation of the system.

What were the results of the system?

The board of directors of Raja Company assumed responsibility for budgetary affairs of the project. We received 2,000 proposals some of which were very important economically and others pertaining to the improvement of relations between management and staff.

Another activity was drawing up bylaws for improving services. State-run companies pay less attention to these issues. However, the new managing director implemented new mottoes (about being customer-oriented) and Raja is the first company to make up for losses incurred to customers. For example, if the ventilation system in a wagon does not work, we will refund 50% of the fare. In return for train’s delay we will refund 50% of the fare in addition to one free meal. One of the issues compiled and notified by the board of directors in 2000 was a system for promoting personnel during which special attention was paid to education, presentation of papers as well as exchange of experiences. The personnel also took the plan seriously to help them boost their working status. Therefore, the level of educational courses related to expert and managerial training has been elevated.

Raja was selected as an exemplary company in 2002 and was awarded a plaque of honor at the Shahid Rajaei Festival. In addition, the company was among 15 top companies of Iran in 2003.

Has anything else been done in line with the excellence model?

Another activity done in this regard was creating a network for selling tickets. Until eight years ago, long lines were formed for buying train tickets, but they are now being sold through 300 offices across the country. We have also used various magazines and internal brochures for dissemination of needed information.

What about EFQM model?

Raja Company came to know the EFQM (European Foundation for Quality Management) Excellence Model in 2001. We held preliminary training courses until March 2002 and assessment was done at the end of the same year. The assessment was carried out by directors of Raja Company in the form of a workshop. In that workshop, nine needed fields were included in a single frame.

What positive effect has the EFQM model had on your company?

The best advantage of EFQM model for self-assessment of the company was improving separate activities and gathering them into a single framework. During the assessment, we found our weaknesses and tried to eliminate them. When it was decided to award gifts for the implementation of the system and EFQM was considered as the basic model for self-assessment, the process of self-assessment persisted. We reached an agreement with the Management and Planning Organization to establish an independent management in the company that would work as an excellence group. Before that group was set up, excellence activities were being supervised by the company management, but it is now carried out by a productivity secretariat.

What are Raja’s future activities aimed at achieving organizational excellence?

We have negotiated with other top companies and we can make a benchmark for self-assessment in cooperation with other companies. In this way, we will know why other countries are better than us. Naturally, Raja will be assessed in comparison with other companies according to the same criteria.

What about inside of the company?

We have launched a general movement through the whole company. Any new idea was previously considered to be that of the managing director. But after establishment of the new system, the responsibility is shared in the company and ideas are not attributed to the managing director alone, and they are also implemented by directors of other companies.

You speak about a common responsibility. But every new system will face resistance when introduced into a company. How has the new model penetrated among employees and what is its position among company staff?

Since the company is young, resistance has not been serious. Various levels of the company management are educated, most of them from creditable universities. But penetration of the new system into the company was a result of creating motives for personnel to get a higher rank for subsequent awards. Since the company’s rank in this regard was low, we encouraged a public determination inside the country and all directors and other personnel were following the same goal. Therefore, from the beginning our goal was to produce impeccable financial reports for three straight fiscal years; so that the State Audit Organization will not find any fault in our dealings. This was realized in two years. So implementing the EFQM system will greatly help any company in the course of their planning.

Raja has been selected among the country’s top 16 companies. What is the reason?

There are internal and external causes for this success. Among internal causes one can refer to a specialized management as well as empathy and cooperation within the company; so that, outside observers will believe that there is no difference between the management and staff and if there are mild differences, they are due to the natural pressures of work. In addition, promoting the level of services and abiding by religious principles in Raja Company are other reasons for the company’s success. The company’s regulations have considered harsh punishments for complaints raised by passengers.

To what extent do company directors enjoy power in their respective fields?

Any director has full power in his field and only in one or two instances are the powers of director generals inferior to that of the managing director.

What are those instances?

For example employing new staff. Nobody is employed by Raja Company before being interviewed by the managing director in person, or before having their documents and work record investigated by the managing director. These are among the managing director’s powers. However, directors act independently with regard to financial matters and they can sign any contract within their jurisdiction. I believe that this form of power delegation is a reason for the success of the company.

To what extent do you believe in the private sector’s potentials?

It is widely believed in Raja Company that the private sector can do the job better than us. Undoubtedly, the private sector can do many things by relying on its potentials. This approach has enabled Raja Company to break new grounds with the help of the private sector. At present, attending to passengers in trains has been given to the private sector. We believe that the private sector can answer people’s needs best because generating more revenues will motivate the sector. At the same time, a private company will do its best to offer optimal services because in case of violation, its contract will be terminated by Raja Company.

Please explain the external factors contributing to Raja’s success?

A new attitude toward transportation among officials has increased the level of services provided by the company. The officials were ignorant about the advantages of public transport. Therefore, a major interaction was started between the government and Majlis and organization outside the system with the result being the creation of a general atmosphere with regard to public transport in the country. This change of attitude in various management levels of the company has added to the budget allocated to the passengers transport sector; so that, turnover of rail passengers was bout 8 billion tomans in 1997, which increased to about 89 billion tomans in 2004, increasing 11 times. Meanwhile, the company received equivalent to about 150 billion tomans in foreign currency which will greatly help improve operations of the company.

You talked about Raja Company's reasons for success. What best practices have you designed in your company?

The best practice of Raja Company was initiated by the company itself in cooperation of benchmarking with foreign companies. On this basis, company services enjoy several characteristics. Firstly, they will make people understand that the company will never renege on its commitments due to its monopoly in the field. This will be to the benefit of the company too. At the same time, we always heed criticism about our weaknesses, but if it assumed a financial aspect, it would have become clearer. For example, if a fine is doubled, some parts of the company will not do their job correctly. Raja Company allocates various fines to various units to highlight the weakness of every unit and I believe this has been effective in the company’s success.

Have your successful experiences been based on copying successful models of the world or has your model been domestic?

All success is the result of studying successes of similar organizations, a large part of which comes from beyond the borders. For example, it was German railroads that considered fines for delay in services for the first time. This approach helped Raja Company to find a correct model based on the behavior of foreign railroad companies. Competition is also an issue. Since the Iranian economy is state-run, there are many problems that cannot be solved by using models offered by foreign private companies. This has always given enough excuse to state-run companies to complain about lack of a successful foreign model for providing services to people, which has led to a wide gap between supply and demand. Governmental sectors have always had more customers due to lower tariffs, but Raja Company set a minimum standard in this regard for providing maximum services. This is a great achievement.

What projects have been defined on the basis of self-assessment in Raja Company?

We detected weak points of the company according to the self-assessment system in 2002 and tried to eliminate them. Lack of documentation on company procedures was a weakness. At the same time, related committees were established in various fields within the company for self-assessment. Another commission has been set up to attend to cultural issues and a committee has assumed responsibility for contacting private sector audience to attract more capital and interact with them. In addition, the productivity committee, which was established earlier, has become more organized.

What are the weaknesses of Raja Company and how can they be corrected?

A major weakness was lack of written benchmarking with other organizations. We are currently running a benchmarking project for passenger services in Iranian and Indian railroads. It includes such details as type of services, wagons, number of passengers and so on. Next month a group of engineers from Raja Company will go to India to study various types of trains and services. We will focus on how that country manages its railroad system. The Indian railroad system transports as many passengers in a day as its Iranian counterpart does in an entire year.

What have you done to eliminate the company’s weaknesses?

A major weakness was absence of long-term planning. After self-assessment we focused on compiling a six-year plan from 2003 to 2009 and it was later ratified by the Management and Planning Organization. The company now enjoys a comprehensive plan and all operations of our fleet will be designed and documented from 2003. We also reorganized the company to make it customer-oriented.

What systems are currently being used by the company?

Based on EFQM experience and after identifying weaknesses, various systems were employed in various parts of the company. A major weakness of the company was that its management viewed activities in terms of processes. But we came to realize that such an approach is quite different from seasonal methods used in technical fields. Therefore, we signed a contract with a technical advisor and the whole procurement process was handed over to the technical department. The answer to your question is that the company is currently implementing the MIS system. Easy access to information and office automation systems have been facilitated through the said system and it has greatly enhanced the process of decision-making as well as exchange of messages among directors. In addition, a proposals system is being devised in the company, which has had many good results. The ISO system is being pursued within the company. After establishing the ISO system, all company units will have to document their activities and many problems will be solved. For example, to get ISO certificates for services provided inside trains, determining minimum services is required. Therefore, if a train lacks a sufficient number of stewards it will not be allowed to move. Such services have been fully outlined and if a trained lacks the minimum level of services, it would not be allowed to move.

Please explain about national achievements of Raja Company.

As a result of all the abovementioned measures, Raja Company was selected as an exemplary company in 2002 and was awarded a plaque of honor at the Shahid Rajaei Festival. In addition, the company was among 15 top companies of Iran in 2003 and received a certificate of “perseverance for excellence” from the first round of Iran’s National Quality Awards as well as a certificate of “organizational excellence”, both of which were based on assessments in accordance with the EFQM standard award. The company has been recognized as the most responsive company and has received the special plaque and statue for having the best public relations department throughout the country. Receiving favorable financial reports from State Audit Organization for three consecutive years was another achievement of the company, which indicated transparency of its financial affairs.


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  Sep.  2004 / No. 31