The CEO of the state railway talks about trains and serving the customer
By Mary R.
Silaban
For years Indonesians have had a love-hate relationship with their
state-owned rail system. Shoddy infrastructure, bad service and delays were all
part and parcel of what is still an essential transport service for a huge
chunk of the population.
But that started to change in 2009 when Ignasius Jonan became head of Kereta
Api Indonesia (KAI), with many saying he brought a breath of fresh air to
Indonesian trains.
When he joined the state-owned rail company, Jonan was faced with 27,000 employees with low expectations
in terms of work quality, a financial deficit (in 2008 it lost Rp 82.6
billion), and a high percentage of substandard or broken locomotives, diesel
trains, freight cars and crumbling stations.
Yet in only five years, the former Citigroup
Managing Director and Head of Investment Banking for Indonesia (2006-2008)
has overseen a thorough facelift of the company’s structure and services,
restoring the population’s faith in trains as a reliable mode of transport,
once more feeling happy to let the train take the strain of their transport
needs.
Jonan, who is now KAI’s longest serving CEO, shared the story of his
success with AmCham Indonesia.
AmCham Indonesia: In only a short
period of time, you have changed the image and mindset of the company. What did
you do?
Ignasius Jonan: I changed the mindset from a “product oriented” company
to a “customer oriented” company, which translates into changing the
organization structure. This company exists for the consumers, so divisions
that are not customer oriented have been removed. This company used to care
least of all about the customer.
When the Cipularang toll road opened, people of course opted for car
travel because it’s faster. As result, the Jakarta-Bandung train route
experienced huge losses, and my employees told me it was because of the new
toll road. I told them not to blame the toll road. There’s nothing we can do
about the toll road. Are we going to close the toll road to win customers back?
We improved the services and now the Jakarta-Bandung route occupancy has
rebounded to 80 percent from previously 30 percent. As a matter of fact, almost
all of our passenger routes show a high occupancy rate.
I also introduced the concept of reward and punishment. Before I came in
to the company, the head of Gambir Station received take home pay of Rp 2.75
million; today he receives Rp 20 million. Now everybody can see how good the
Gambir station is.
I clearly state the rules and the expectations of this company,
including zero tolerance for those who practice corruption – they will be fired
right away – and I advised people who cannot accept the new management style to
resign. During my five years here, 1,300 employees have resigned, that’s 5
percent of the total workforce. But I am glad that it’s only 5 percent out of
27,000 employees. If it was more than 10 percent, that means this company is
hopeless.
It’s interesting that you, with
little knowledge of the train business, have changed the company. What’s your
secret?
I believe that train management is a universal business and the rest is
technical knowledge. Banking and the train industry are both customer focused -
I didn’t feel inferior when I came to this company, because I knew many people
who had worked for this company for decades and didn’t even know how to run the
company properly.
You improved everything at the same
time; from employees’ remuneration and the fixing and refurbishment of assets
to passenger services. Where did the money come from?
The money comes from the consumers. We have to believe that when we make
improvements people will pay for the service. And improving the service is a
business, not a hobby. Every little change you make should be calculated in
numbers ‑ how much will this affect the ticket price?
What is your view of public transport
policy in Indonesia?
I cannot comment on public transportation, whether it is good or not.
What I can say is that the implementation of the policy in many cases is not
synchronized.
Let me give you some examples. For years I was proposing a single ticket
system between the TransJakarta Busway and the trains without getting any
positive feedback. But now the proposal has been approved by [Jakarta Governor
and President-elect] Jokowi, so Jakarta will adopt this system soon.
In the case of port transportation, many people have asked me why the
trains can’t get into the Tanjung Priok Port to speed up the transport of
cargo. I have talked to people at the port and they always say that they
support the idea, but the fact is, up until now I can’t get the trains in. And
I know it is because some of the people there own trucking businesses.
Recently, there was an idea to build a Jakarta-Bandung high-speed
railway funded by loans. I’m against the idea and I think the money would be
better spent building a trans-Sumatra or trans-Sulawesi railway. I know
opponents of my idea say that building railways for those areas is nonsense as
the market is not there, therefore the usage rate is low. But loans, which would
be repaid by our state budget, should be used to build the economies of other
regions to bring prosperity to the people. You can’t just use the state budget
to cater to the affluent.
The quality of public transportation is another issue, it goes up and down.
You know that all ships and planes coming into Indonesian territory must be
certified. The problem with certification is that the certification bureaucrats
only have a slight understanding of how the industry works. I think it would be
better if an international certification bureau does the job.
I believe if we can change these basic things, it would significantly
change the face of Indonesian public transportation.
Is the train business attractive to
investors?
The law accommodates private/foreign investment in trains, but I think
it’s not attractive due to low commercial returns, especially for passenger
trains. PT KAI has achieved a profit - last year it was 7 percent of sales -
but it hasn’t achieved a commercial return, which should be at least 10
percent. In this type of exchange rate and inflation regime, commercial profit
should be double the deposit rate, or about 16 percent. But no passenger
railway company in the world can achieve that because it is public
transportation.
You’ve achieved success in a big
state-owned company in such a short period of time. What’s your take on the
management of state-owned enterprises (SOEs) in Indonesia?
SOEs belong to the people of Indonesia, therefore the appointment of the
CEO should be based on competency. The preference should not be based on
ethnicity, political affiliation or gender. This company now has a female
stationmaster for the first time ever in its 150-year history. This is part of
a new spirit that has changed the company culture. I am glad that now the
appointment of SOE directors has also gone in that direction.
In a company like KAI, which is a customer oriented business, the
employees must realize that everything they do is for the comfort of the
customers. I know that in many companies, employees care most about pleasing
their bosses, not the customers.
Source : Amcham Indonesia, 02.10.14.
JaKaRTa: Dalam bekerja, selalu aja kisah suka dan duka.
Tapi apa ya perlu dibuka-buka kalo lagi berduka alias bersedih ? Anggap aja itu
pelipur lara. Tak selamanya orang hidup, senaaaaaanang terus. Begitu juga di
ranah pekerjaan. Ada enak, adakalanya be-te he he he.
Lantas, yang terakhir perlu buat disimak karena gak semua orang tahu dan mau
tahu (demen tempe sih xi xi xi), yakni kiprah tim IT yang menyelenggarakan
pendalaman materi, saat membangun ERP-system di jaringan besar milik PT
Kereta Api Indonesia (Persero) nantinya. Menyamakan persepsi,
menciptakan biz process angkutan kontainer bersama-sama. Apapun sistem software
yang dibangun, nantinya harus bisa matching dengan induk. 
Setiap aktifitas, besar ato kecil, lingkupnya pribadi ato perusahaan, harus
bisa berkolaborasi satu sama lain. Hubungan bisnis tak melulu mengatur
pekerjaan, tapi persahabatan ato sosialita juga memberi warna terhadap karakter
perusahaan, melebur dalam budaya perusahaan.
