Transformation brings positive results<\/p>\n
Ari Darmawan and Sudibyo M. Wiradji, Contributor, Jakarta<\/p>\n
In the minds of many people the image of state-owned companies
\nhas yet to improve significantly. The companies are often seen as
\nthe cash cows of those in power, full of corrupt practices and
\nineffective bureaucracy.<\/p>\n
However, a large number of state-owned corporations (BUMNs)
\nsuch as PT Indosat, PT Telkom, PT Antam and PT Semen Gresik have
\nmade vast improvements, particularly thanks to their
\nprivatization programs.<\/p>\n
Such positive transformations are generally focussed on
\ndiscarding old, encumbering values and corporate cultures and
\nreplacing them with new effective values reflecting
\nprofessionalism, transparency and competency.<\/p>\n
Some of the BUMNs which have not joined the privatization
\nprogram have also shown an encouraging improvement in their
\noperations. PT Perkebunan Nusantara (PTPN) XIII, for example, has
\noperated as efficiently as well-managed private companies, thanks
\nto the good corporate governance principles it has adopted.<\/p>\n
The company that oversees oil palm and rubber plantations on
\nthe entire island of Kalimantan has taken a major leap. The
\ncompany has even published a book, Leaping to the Next Curve, on
\nthe transformation process it started in 1996.<\/p>\n
\"This book is a positive contribution from us at PTPN XIII to
\nother state-owned enterprises in their efforts to transform their
\nbusinesses,\" said H. Akmaluddin Hasibuan, PTPN XIII's former
\ndirector who was appointed director of PTPN III in North Sumatra
\nin August 2003.<\/p>\n
Besides stressing the importance of the total transformation
\nthat PTPN XIII had undergone, Akmaluddin also pointed out that
\nbetter performance and productivity had resulted. He said that
\nsuch changes were inevitable given the tough global competition.
\nThe results have turned the company into a potentially lucrative
\ninvestment should one day the company decide to go public.<\/p>\n
During the consolidation period the management realized that
\noverall performance depended on several factors, one of which was
\nwork ethic or corporate culture. In order to improve creativity
\nand initiative among the employees, the whole working process had
\nto be revamped.<\/p>\n
To overcome any resistance or rejection, there should be a
\nconsistent perception of the targeted values -- starting
\ninitially at the highest level with the company's directors and
\ncommissioners. Consultants are invited to discuss the relevant
\nvalues to face the future. A future which will undoubtedly be
\nmore competitive. It is imperative for the top management of the
\ncompany to make drastic changes in attitudes or mind-sets.<\/p>\n
Professionalism, entrepreneurship and innovation are only some
\nof the prerequisites for company survival. Once these are agreed
\nupon they should be implemented throughout the entire company.<\/p>\n
Giving one example of an old unusable value, Akmaluddin
\nmentioned that seniority used to be one of the parameters in the
\npromotion of employees. However, since the company's
\ntransformation, promotion is now based on competency. Thus
\nperformance is guaranteed.<\/p>\n
Some of the vital factors in creating a better work culture
\nand atmosphere in state-owned enterprises are: Work ethics or
\nsystem, competent human resources, and the availability of
\ninformation.<\/p>\n
The work ethics or system should be developed based on the new
\nvalues agreed upon and well understood by everyone for the
\nbetterment of the company, as well as for the employees' welfare.
\nCompetency, in its fullest sense, should be enhanced in every
\ndepartment of the company. The latest information technology (IT)
\nmust be used so that communications, or the lack thereof, do not
\nimpede the company's progress in today's globalized business. At
\nPTPN XIII, using sophisticated IT equipment, communication with
\nthe remotest plantation is no longer a problem.<\/p>\n
The first result of transformation was the elimination of
\noutdated bureaucracy. Employees are more at ease with senior
\nmanagers and directors. In meetings suggestions, and even
\ncriticism, flowed from employees at every level.<\/p>\n
Other tangible results were reflected in the overall
\nperformance, productivity and revenue of the company. Its total
\nassets, Rp 500 billion in 1996, increased to Rp 1.2 trillion in
\n2002. Sales also went up, from Rp 238 billion in 1996 to Rp 850
\nbillion in 2002. Within six years profits also skyrocketed from
\nRp 4 billion in 1996 to Rp 70 billion in 2002. Productivity,
\nlikewise, was also part of the success story. In 1996 the company
\nproduced 10 tons of palm oil, while today it produces more than
\n17 tons. Its dry rubber production, which in 1996 was only 500
\nkilograms per hectare, is now 1,020 kilograms per hectare.<\/p>\n
Like PTPN XIII, PT Semen Gresik has also paid serious
\nattention to managing the company based on the principles of
\nhonesty, transparency, accountability and responsibility.<\/p>\n
This commitment is reflected by the company's strong
\ncommitment to a seamless implementation of good corporate
\ngovernance principles. A number of actions on the adaptation of
\nthe GCG principles have been made and they have even been
\nreviewed by an independent consultant, Deloitte Touche Tohmatsu.<\/p>\n
One of the company's important efforts in implementing the GCG
\nprinciples was the appointment of an independent commissioner
\nduring an extraordinary meeting in February, last year.<\/p>\n
The board of commissioners has also established an audit
\ncommittee to ensure that all the activities are carried out under
\nhonesty, transparency and accountability principles. The
\ncommittee consists of four members with the independent
\ncommissioner as the chairman, while other members represent
\npeople from external and independent sides.<\/p>\n
Satriyo said that the implementation of GCG principles started
\nwhen the company became a publicly listed firm in 1995. However,
\nhe said, the idea of transparency and good management began in
\nthe early 1990s when the company adopted the Japanese management
\nstandard Total Quality Control (TQC).<\/p>\n
\"All levels of employees were required to attend training
\ncourses on TQC so that they had the same perception on the
\ncompany's vision,\" he said.<\/p>\n
By adopting the TQC, the company can operate more efficiently
\nbecause almost all levels of workers have been made aware of
\nefficiency principles.<\/p>\n
In addition, the company has also established a tradition of
\nconducting benchmarking with other local and overseas cement
\nproducers so that the management can periodically monitor the
\nquality position of the company's cement products.<\/p>\n
Semen Gresik which is 25.5 percent owned by Cemex S.A. de
\nC.V., a Mexico-based global cement company, 23.5 percent by the
\npublic and 51 percent by the government continues to improve the
\nGCG principles within the company.<\/p>\n
The entry of the Mexican cement giant as a strategic investor
\nin 1998 was a driving force for the employees to perform better
\nand to adopt more internationally accepted standardization,
\neither in production activities or in the general management as a
\nwhole.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/transformation-brings-positive-results-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}