Reference no: EM132129437

Culture Transformation at America Latina Logistica

For many, a steam-engine locomotive's stocky profile, billowing exhaust, and hiss evoke nostalgia for a bygone era. For the managers at Americana Latna Logistica (ALL), which had just acquired the southern frieght lines of the Brazilian Rail Network (RFFSA), such antiquated locomotives represented the difficulties they faced in fixing their ailing railroad system, of which RFFSA was just a piece. At the time of this acquisition, ALL was losing money, struggling from decades of underinvestment, and encumbered by bureaucratic management . Half the network bridges required repairs, over three-quarters of its rails were undersized for supporting standard-sized loads, and the system still relied on 20 steam-engine locomotives to move industrial customers' cargo. CEO Alexandre Behring's priority was to transform ALL into a performance-oriented organization with the strong cost discipline necessary to support an overdue modernization program. He decided that this would require a complete cultural transformationfor the company. His first step was to recruit a new management team ad fire the dozens of political appointees previously administering the railroad. In his first 10 days, he andhis COO interviewed the top -150 managers to evaluate their suitability. They selected 30 for additional responsibilitity and removed those who did not embrace the new direction. The company established a trainee program, and in four years hired 500 recent college graduates. In Behring's first year, he introduced a performance-based bonus program; in his second year, the company began comparing performance on operational indicators like car utilization and on-time delivery between divisions. The top managers also took symbolic steps to demonstrate their commitment to the new culture and to reinforce the personnel and process changes they implemented. They sold cars previously reserved for officers' use and fired the chauffeurs retained to drive them. Behring became certified as a train conductor and spent a week each month working in the field, wearing the conductor uniform. For the first time, managers visited injured workers at home. The company created the "Diesel Cup" to recognize conductors who most effectively reduced fuel consumption. Behring's new direction energized the company's middle managers and line employees, who had been demoralized after years of political interference and ineffectual leadership. In three years Behring transformed a company that hadn't made a ire in over a decade into one of the most desirable employers in Brazil, attracting 9,000 applications for 18 trainee positions. In 2000ALL finally achieved profitability , enabled by the company's cultural transformation. ALL merged with Rumo Logistics in 2014 to create Latin America's largest railway and logistcs company.

Question:

What elements were put in place to transform the culture at ALL?