The savior of Bank Mandiri, Garuda

The savior of Bank Mandiri, Garuda

Fitri Wulandari, The Jakarta Post, Jakarta

The name Robby Djohan seems to be lost in the euphoria of the
initial public offering of Bank Mandiri, the largest bank in
Southeast Asia.

The launching of his book The art of a turnaround: Kiat-kiat
Restrukturisasi (tips on restructuring) at QB Bookstore in
Kemang, South Jakarta in June was a modest one.

No media uproar. Only family, close friends and colleagues
attended. It could have been mistaken as a family reunion.

Perhaps not many remember that Mandiri was hodgepodge of four
ailing state-owned banks -- Bank Bumi Daya, Bank Dagang Negara,
Bank Ekspor-Impor Indonesia and Bapindo -- which were crippled by
the economic crisis in 1997.

It was Robby who was given the mammoth task of merging the
four banks that made up 30 percent of Indonesia's total banking
industry with 740 branch offices nationwide, 16 overseas offices
and 26,609 employees.

The four banks had become insolvent with non-performing loan
(NPL) at 60 percent and losses totaling Rp 103.1 trillion.

Despite it all, Robby managed to restructure the banks within
6 months, 18 months faster than the timeframe set by the
International Monetary Fund (IMF) which was overseeing the
country's economy and bank restructuring.

Flag-carrier Garuda Airlines is another state-owned enterprise
that was restructured by Robby.

Prior to taking a job to create Bank Mandiri, Robby was
approached by the then state enterprise minister Tanri Abeng to
save Garuda.

In the wake of the economic crisis in 1997, the flag-carrier
turned from the second biggest airline in Asia to a bankrupt one
with US$1.2 billion of debt.

Doomsayers said the carrier would have to cease operations as
the liabilities were way higher than assets.

A seasoned banker who managed to turn tiny, unpopular Bank
Niaga into the second largest private bank in the country, Robby
saw that it was not the end for Garuda.

Garuda was saved from the axe of liquidation and underwent
major restructuring.

"I only wanted to create value and to privatize Garuda. I
never had the intention to manage it because I don't know
anything about airlines," he said.

In eight months, Robby worked to fix Garuda's cash flow,
restructure its debt, stop its losses, revamp its human
resources, cut the unprofitable routes, trim the fleet and
improve services to passengers.

He relentlessly talked with foreign creditors and airplane
companies into restructuring its debt and to cut back on the
number of leased planes.

As a result, Garuda managed to get back on track as a leaner,
more professional company.

What was his secret for successful turnarounds?

"I didn't have any tips or strategy about restructuring. I
just listed the problems and worked them out one by one," Robby
said.

"I was actually a lazy person. I just simply made the plan and
let my staff get to work on it," Robby chuckled.

Spending his childhood in Medan, North Sumatra, which is full
of what Robby called "arrogant youngsters, thuggery and egoism"
had contributed to his strong character.

Having a father who was a mid-level employee of the customs
office did not allow Robby, who was born in Semarang on Aug. 1,
1938, to live in luxury. His story could make a book of its own.

Robby left his parents to continue his study at a junior high
school in Jakarta. Being far away from family, he developed good
survival skills and independence.

That goes a long way to explaining his unconventional behavior
and what some people may find hard to accept: his straightforward
approach to problems.

But it is this quality that made Tanri Abeng to put Robby at
the top of the list when he had to restructure Garuda and then
Bank Mandiri.

Robby's strong and straightforward leadership as well as his
ability to make hard decisions in the nick of time was big help
when he had to make many unpopular decisions. For instance,
laying off workers.

Robby faced opposition from workers when he had to restructure
Garuda and Mandiri. He had to cut almost half of the 26,609 Bank
Mandiri's employees and downsize Garuda's workers from 12,981
workers to 7,000.

Robby had the courage to personally tell the protesting
employees that those who did not pass a re-selection process
would be given the boot and never be welcomed back because they
were not part of the solution. "You have no future in this
company again because you are part of the problem," Robby said to
them.

But his dominating character did not go without a protest.

Peter B. Stok, Director of Bank Niaga said Robby's dominance
in the work had made employees too dependent on him.

"He did not do it on purpose. It happened because he took on
massive responsibility. Often, Robby would take responsibility
for his employee's mistake," Peter said, in Robby's book.

"Honestly, it makes us feel safe under his leadership. But it
did not make us grow," he added.

Inside his tough exterior, Robby is a down-to-earth person.

Robby humbly stepped down as Bank Mandiri CEO when then
President Abdurahman Wahid pressured him to leave. It did not
stop him from grumbling, though, as the decision was more about
politics than was professional.

From the beginning, Robby was destined to be a banker. He was
the first Indonesian to be taken in the prestigious Citibank
Executive Development Program (EDP) in the 1960's.

It was in the EDP that Robby learnt about modern banking and
good corporate governance decades before most people started to
talk about it here.

Bank Niaga was the beneficiary of his knowledge gained from
the program. He moved to the bank in 1976, after working almost
10 years with Citibank.

Robby believes that a company should be run with
professionalism and very little or no interference from the state
let alone its collusive government officials and their family
members.

At every company Robby has led, he paid more attention to
training programs than most other companies because he believes
employees are a company's most valuable asset.

"Human resources are the most important assets. They are the
most significant stakeholders," he remarked

Peter recalled how Robby was always involved in the
recruitment process and training in Bank Niaga although it would
have been easy for him to let others do the job.

Many people who had once worked under him now lead many other
prestigious financial institutions.

These include Director of Bank Bumiputra Winny E. Hassan and
former Garuda finance director Emirsyah Sattar.

But there are also people who criticized him for his dominant
character, which they claim bordered on authoritarian and that he
refused to listen to others' opinions.

Now 64, Robby lives with his wife Nanan Hadiretna, three
daughters and a grandson.

Robby now runs his own company and also teaches at the
postgraduate program of the University of Indonesia. When asked
which is more fun, being a banker or a teacher? He said firmly,
"a teacher."

"When I teach, I feel I am in a deep trance. It is so
exciting," Robby laughed heartily, a signature of his.