Fri, 01 Dec 2006
© Duncan Graham 2006

A major private bank in Indonesia has just abandoned one of its public relations activities.

Since 2002 the bank has been sending welcome letters and useful information to selected top-end customers. This is considered good management practice overseas, a proven way to generate client loyalty.

But not in Indonesia. Here the bank’s clients want their financial dealings kept secret – even from spouses and families. Mail from a bank can reveal the existence of Dad’s private accounts. Customers complained – so the bank is dumping its program.

Management books are big sellers in Indonesia. Most are US texts, but the philosophies and techniques they offer don’t always translate well. That’s because they ignore the culture factor. Here are some examples:

Mark McCormack’s Never Wrestle With a Pig (Penguin), a top seller by the man who wrote What They Don’t Teach You at Harvard Business School, is brimful with smart business suggestions.

His tips include resisting the urge to dominate at meetings, ending the day on time and encouraging staff to be creative.

Fine in the US and Europe – but ridiculous in Indonesia. In Javanese culture a boss who doesn’t control everything is considered weak.

The widely accepted overseas ritual of asking down-the-line workers to contribute ideas can be counterproductive in Indonesia. Lower level staff reason:

‘If the big man is asking us, it means he doesn’t know. If he doesn’t know he’s not fit to run this show and doesn’t deserve our respect.’

There’s a standard joke among business expats in Jakarta. It runs like this:

How do you pick the staffer with most initiative? Call a meeting and seek advice. It’s the one who’s last to reply: ‘Up to you, Boss’.

And why end the day on time? Although labour laws require overtime to be paid this rule is widely flouted. Staying late at the office, even if it’s just to discuss golf handicaps, indicates importance. In Indonesia underlings don’t have the right to after-hours private lives – they can leave only after the boss shouts for his driver.

It’s not in the employment contract. It is in the culture.

Foreign management texts are also based on the belief that most workers are ambitious. Not in Indonesia.

The Batak manager of a five-star hotel in Surabaya once told me how frustrated he’d become because his Javanese staff didn’t seek promotion. Head office had reshaped all sections and created new positions.

The manager explained this carefully to the workers and insisted none would be sacked. Instead they’d be able to get promotion and higher salaries if they could demonstrate aptitude.

A few weeks later he’d received no applications so made inquiries. Although the pay boost was attractive, employees said they were happy with the old system. They didn’t want to become supervisors because this might distance them from their colleagues who were also their friends.

Built to Last by James Collins and Jerry Porras (Harper) is a guide to the ‘successful habits of visionary companies’. Collins is the author of Good to Great (Harper) and claims to have sold one million copies. This tries to show why some enterprises succeed and others fail.

Both books are valuable for any executive provided they work elsewhere. Don’t expect them to offer templates for success in the archipelago.

For starters much emphasis is placed on publicly listed US companies, while in Indonesia the pattern is for firms to be held by families. So Collins’ ideas on testing leadership skills and the right way to pick a successor don’t apply when the son is going to become CEO whether he likes it or not.

Likewise management gurus’ advice to trust staff and give them space to be creative runs counter to Indonesian business culture.

Count the number of shops you know where the staff are allowed to open the till. If they can they’re probably part of the family.

Watching adult employees sell a product and then hand the money to a child who uses the cash register sends a clear message to the workers: We don’t trust you!

For advisers like Jim Collins this would be a recipe for business failure. In Indonesia maintaining suspicion seems to be the key to success.

The other theme running through all foreign texts is the need to select quality staff – and keep them. That’s certainly good advice in economies where skilled workers are highly mobile, and where labor laws on discrimination, gender equality, workplace harassment, dismissal procedures and compensation are enforced.

Similar rules exist in Indonesia. But it would be a brave worker who tried to insist contract conditions apply unless they belong to a powerful and incorruptible union that employs tough street-smart lawyers.

Management advisors recommend executives maintain good morale and boost productivity by complimenting staff on their work. The fact that this rarely happens in Indonesia means workers are one up on their overseas counterparts.

They have no false ideas of their value. They know there’s an estimated 20 million unemployed and a similar number underemployed across the archipelago.

If those with jobs want to exercise their rights and be treated as equals then they risk being shown the door. Outside is a queue of desperate hopefuls who’ll be happy with less money and will promise to never complain.

Indonesia is a bosses’ market – and they don’t need American textbooks to tell them how to make money.

(First published in The Jakarta Post 29 November 06)

Fri, 01 Dec 2006
From: JakChat
Comment by dormouse
Interesting article. It isn’t just Indonesia that struggles.

We have moved to management by textbook. My last manager had recently moved into IT from some other management stream. He would call us all together on Mondays, and lecture us on what he had read up on over the weekend. He insisted on “counselling sessions”. He would learn the “buzz words”, and the management terminology.

What he didn’t do was lead.

This is where it is all fucked up. Management is a learned methodology. Span of control rations, financial reporting, productivity rates, timelines and deadlines, customer relations.

Leadership is a learned skill. Leadership, and not management, gets the workforce at their desks on time. Management just reports the times.

Leadership is banging the desk and saying “We WILL do this, and we WILL do it right. Management is reporting how right or wrong it was afterwards.

Leadership is saying “I have made a decision. I want you to do implement it”. And havig the charisma, the personality, and the drive, to make it happen.

The books and styles mentioned in the article were about management. We don’t need any more fucking management, we don’t need more pointless reports and meaningless statistics.

We need Leadership.

And right now, its in very short supply!


Fri, 01 Dec 2006
From: JakChat
Comment by dormouse

Collaborative Leadership: Shall we have another beer guys?

Situational Leadership: Hey, our glasses are empty!

Machiavellian leadership: what time does this bar close?

Authoritarian Leadership: I want a Fucking Beer!

Charismatic Leadership: Hey boss, do you want a beer?

Management: We have each drunk 4 beers in the last 3 hours. Given our budget and average consumption we can carry on drinking until 2am, unless the bar closes or we collapse.

Notice the difference?

Fri, 01 Dec 2006
From: JakChat
Comment by chewwyUK
"If those with jobs want to exercise their rights and be treated as equals then they risk being shown the door. Outside is a queue of desperate hopefuls who’ll be happy with less money and will promise to never complain.

Indonesia is a bosses’ market – and they don’t need American textbooks to tell them how to make money."

what a load of bollocks! There may be loads of unskilled workers available in Indonesia but at management level there is a massive shortage of talent and companies find it difficult to replace people when they leave

Fri, 01 Dec 2006
From: JakChat
Comment by KuKuKaChu
Originally posted by: chewwyUK
what a load of bollocks! There may be loads of unskilled workers available in Indonesia but at management level there is a massive shortage of talent and companies find it difficult to replace people when they leave

i agree. indonesians who can manage and lead are incredibly difficult to find. and keep. which explains why there are so many foreigners here in management roles.

Fri, 01 Dec 2006
From: JakChat
Comment by dormouse
The other day Kuku and I were discussing the point that a majority of Bules in JKT were oxygen thieves. They simply don’t perform at the level expected. They are brought in as Bules to over perform, and mentor and lead the locals. Instead many spend their time getting pissed and laid whilst they stagnate technically, apply decades old ideas, technology and management practices.

In the meantime I am staggered at the number of bright educated Indonesians (especially Chinese Indonesians) I find studying here in Sydney. They go straight from a undergrade to an MBA, collecting a CPA at the same time. One guy in my building casually mentioned the other day that he starts his internship at PWC next week. He intends to return to JKT late next year……

All of which leads to the question: How long can these Bules stay in Indonesia, and what will happen in the future? Perhaps the gravy train is finally leaving town, and a lot of guys are not on it…….

Yes, managment is hard in Indonesia. that’s why they get the expat perks. Arriving thinking its like management in the West will lead to trouble. Motivation of a workforce is a key part of management.

In the West it is less of a problem. Work ethic, high unemployment, career and lifestyle expectations, have all persuaded Western workforces to put in the required effort. Those that don’t make the effort live on the dole and you don’t come across them in the workplace. There is no dole in Indonesia, so you see workers who in the first world would live on benefits.

This means a different management style is required. Sadly it is lacking in many expats, who are too busy shagging and drinking to care about performance. And when head office questions the poor levels of efficiency – these bules shrug their shoulders and say “Hey, This is Indonesia. The workers are lazy here”

In short - it is a managers job to motivate the workforce. Saying "hey these are un-motivatable" doesn’t work. its simply an admission that he cannot do the job he is paid to do.

News Search/Filter
Transaction Rates
20 Mar 18
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
JPY 100

Okusi Associates: Indonesian Business & Management Services