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.