Redesigning Indonesia's corporate jungle

Redesigning Indonesia's corporate jungle

By Michael Sinjorgo

This is the second of two articles on coping with the
challenges facing Indonesian companies during the economic
crisis.

JAKARTA (JP): Until last year everybody was so busy making
money nobody took time to look after their company's system
design, the big design, the ultimate customer. We got lost in the
woods.

Now that the crisis has hit, every organization is going
through immense cost-cutting measures and in the process laying
off personnel in whom much training has been invested.

Unless the workload and the systems are revised as well, these
layoffs will reduce short-term expenses but do nothing for the
underlying problem and long-term competitiveness of the company.
It is this competitiveness which will eventually determine
whether a company survives.

There is no better time to re-engineer then when one's back is
against the wall and the creditors are at the door, because most
employees will understand the necessity of the process, hopefully
support it or at least not attempt to sabotage it.

Suggested steps:
1. Re-engineering has to come from the absolute top of the
company. It is the leadership which has to give the impetus and
support to the far-reaching changes that the process will create.
This is strictly a leadership program and if it does not come
with the authority of those at the top, it is a waste of time and
not worth starting.
2. Those at the top have to be totally committed to re-
engineering. This is not one of the fads going around, but a
total commitment to putting the systems in place in order to
produce the desired results in the most effective and productive
manner.

This means that at every step the system itself has to be put
into question. We all work on the assumption that the way things
are being done is the only way or the best way. Unless there is
total commitment from the top, no organization will question this
assumption in a meaningful manner. This is like parachuting; one
can't do it half-way.
3. The vision and the deadline have to be formulated by the top.
The team in charge of executing the re-engineering process has to
know where to go and when to get there. The timeframe should be
short, one year maximum, in order to create the urgency needed
for the program. Moreover most companies in Indonesia do not have
a lot of time right now.

Maybe one way of formulating the vision would be to start with
the question: if we had to start this company today, how would we
go about it?
4. Before starting, make sure you have a thorough understanding
of what re-engineering is.

Since a lot of companies in other parts of the world have been
through the process, there is plenty of literature, research
material, data, experience, support and whatever else you need to
make it a success.

Questions like who should be on the team, what authority
should they have, should we use outsiders, how do we get all the
employees involved and on our side, what are the necessary steps
to implement the changes, what are reasonable expectations, what
are milestones, what are the problems we will run into, what are
the pitfalls, how will the accountability work, are but some of
the issues that have to be resolved in advance.
5. Don't waste your time analyzing the current process. One way
of guaranteeing failure is to spend a lot of time, meetings and
energy on studying the current structure. We know it does not
work properly, that is why it has to be re-engineered.

Most people in the current structure are interested in the
status quo, in the way things were, in maintaining their current
points of reference, in keeping their jobs, protecting their turf
and authority. Getting them into meetings and preparing reports
on how things work today will only waste their time, convince
them how well the system works and increase their resistance for
change.

We have to smash the box in which we have immersed ourselves
in order to create a better one. This is not about fixing the old
box, this is about building a new one.
6. No department and no position can be off limits. Everything in
the company's organization should be allowed to be put into
question if you want any kind of hope of implementing the
changes.

If transportation is an issue, the team should be allowed to
ask: does the president need a Mercedes, what does this car bring
to the production process, why do people make business trips?

A director cannot exclude his or her department from the scope
of the team. Remember, this is a structural process and therefore
involves all kinds of departments and people. This is a
particularly important point in Indonesia, where the traditional
culture is very much in favor of pleasing the boss and certainly
not challenging him or her. Look where that got our last
president.

If the management of the company is not committed to this
point, don't start. Save your money.

Re-engineering is not for the fainthearted. It will
fundamentally change for ever the way your business operates, how
people are compensated, promoted and evaluated. It will deeply
change the way employees relate to one another and the
management. It will fundamentally alter the way clients see the
company and deal with it. What your employees will be doing and
how they will complete their daily tasks may have little
resemblance to what is happening today. All this change will
create tremendous opportunities and anxieties.

Indonesia's culture and values will play their own role in
this process. There is no use just copying what has been done
elsewhere in the world. The fact that it works in the United
States does not mean it will work here in Indonesia. In fact it
should not.

Re-engineering is all about exploring the great unknown, the
uncharted waters, about inventing, about creativity and has
nothing to do with copycatting what someone else accomplished.

The unfortunate truth is that governments seldom lead, but
most of the time follow through on what is perceived to be
popular with the public. Making unpopular tough decisions is
something most politicians will avoid like the plague.

For business people to wait for the government to put the
right structures in place for them to start re-engineering is the
same as asking for a spot on the waiting list for a soon-to-be-
defunct company.

Leadership and vision is what companies need that will be part
of the new corporate Indonesia. If the economy is to rise again
to greater growth than before, it will have to be better
structured, more competitive and transparent.

However, don't wait for the government to build the railroad,
you still will be waiting when the train eventually leaves the
station.

Re-engineering is a well-worn tool, used in many parts of the
world by thousands of companies when they had their backs against
the wall. This time it is Indonesia's turn to sink its teeth into
it and in the process make the methodology a unique asset to its
culture, its people and its economy.

Michael Sinjorgo, CLU, CHFC is a senior financial advisor.