IN recent months, Malaysia’s corporate landscape has
witnessed shake-ups in a
few troubled government-linked companies (GLCs) that have come on the radar of the Malaysian Anti-Corruption Commission. It hurts to read about the bad press surrounding them. We do have good GLCs that have managed to strike a delicate balance between fulfilling their mandate to help the rakyat and being sustainable at the same time. GLCs and government agencies have an important role to play. They help shape the economy and assist the rakyat in specific identified areas. To do so, they must remain sustainable.
As a former corporate leader mandated to transform a few non-performing GLCs into high-performing entities, I was constantly asked about the transformation programmes I had to embark on. What does it take to make the transformation initiative in a government setting successful?
No one solution would fit all. Each entity has its own DNA. The approach would be different depending on the role, mandate, capabilities, capacity and the targeted outcome.
The fundamental of any transformation exercise is for the leader to truly understand the organisation. What makes it tick? It’s the human side of the transformation journey. It’s important to go down to the ground and meet every stakeholder. Have honest and open communication. Engaging the stakeholders provides key information on a workable transformation plan.
I used this powerful tool when I began my transformation journey in Tabung Haji Properties (THP). Talking to stakeholders had enabled me to appreciate how this subsidiary company fulfils the needs of haj pilgrims.
When I was tasked with transforming the National Heart Institute (IJN) in 2003, meeting all staff from the highest to the lowest level was my priority. I even followed the clinicians and surgeons to understand how they provided treatment and communicated with patients. In a span of four years, we managed to uplift the service level via many quality accreditations. The culmination was international recognition by the Joint Commission International in 2010.
We also looked at better patient care that led to the development of a new wing. Patient numbers increased, and IJN improved its financial performance. To support less privileged patients, IJN contributed a portion of its profits to the IJN Foundation. The money was channelled to chronic patients who needed financial support.
The profits made by IJN and contributions to the IJN Foundation were also used to support clinical research and development to uplift the capacities of its medical professionals. It was our concerted effort to produce more top heart surgeons in the country and to retain the best.
SME Bank had a totally different challenge. There was negative perception by its customers and the business fraternity, resulting in low morale among staff. The conscious engagement activities held with stakeholders, including the staff, had enabled me to understand the different sets of expectations, ranging from the bank’s mandate in supporting SMEs, the economy to its sustainability. So, we improved our product offerings and enhanced our service and developmental role to turn things around.
Upon completion of the fact-finding mission, putting the plan into a structural form is crucial as it will be the point of reference for everyone involved. But a successful transformation plan has to be built based on the inner value of the individual at the working level — not at the macro level of the organisation. Intrinsic values held by every individual, such as integrity, passion, commitment, empathy and good judgment, should be reflected in the organisation’s chosen value system. This will ensure total buy-in by the staff, regardless of rank.
Achieving financial stability can only be possible if employees are fairly rewarded based on performance as this will contribute towards enhancing the performance of the organisation.
I applied this strategy in IJN by introducing the concept of incentive sharing. We managed to increase productivity, maximise the use of facilities, increase the number of patients, reduce waiting time and ultimately improve service levels on a par with international best practices.
Meeting shareholders’ expectations is not easy. As a leader, you must always ensure employees are on the right track. The spirit of check and balance must always be in place. You also need to be quick in making adjustments based on current market trends.
You can come up with the best plan, but executing it is never easy. That’s why it’s important to drive innovation that leads to out-of-the-box solutions. The innovative approach in SME Bank was the adaptation of digital technology to improve service delivery. In THP, innovative methods in land sales were used to turn around a development project, Enstek, into a profit-making entity in 18 months.
As a concerned Malaysian, I follow closely the development of companies that are uniquely Malaysian. In the case of Felda Global Ventures (FGV) and Malaysia Airlines (MAS), I think the cost optimisation efforts should not be at the expense of value creation. I take pride that MAS is now looking at enhancing the value of Malaysian hospitality and food excellence that is already synonymous with MAS.
As for FGV, its current share price is not reflective of the fact that it is a profitable organisation. I believe the current team would look at ways of correlating the real value of the stock to the value of the organisation.
Overall, transformation is about balancing doing good and doing well. The desired outcome must be in line with the mandate and be sustainable. Transformation must only be about extracting maximum value from GLCs to fulfil the government’s needs to serve the rakyat.
Datuk Mohd Radzif Mohd Yunus dubbed the ‘Transformation Man’, the writer has an illustrious career spanning 30 years. His ability to transform SME Bank earned him the Outstanding CEO Award 2016 from the Association of Development Financing Institutions in Asia and the Pacific