Dear YCM Members,
For the YCM CEO Series 42, we have the privilege of hosting Tengku Farith Rithauddeen is the Group CEO and Co-Founder of SKALI.
Writing Credits: Jason Tan Jing Shen, YCM Convenor 2012
Date: Tuesday, 10th July 2012
Time: 8.00pm -10.00pm
Dress Code: Your work attire
Venue: Intercontinental Hotel KL (formerly Nikko Hotel),Jalan Ampang, Kuala Lumpur
Tengku Farith Rithauddeen is the Group CEO and Co-Founder of SKALI.
Prior to joining SKALI as its President, Farith led a team to turn around a local manufacturing company involved in the building materials industry. In his four-year stint as CEO of this company, he earned valuable experience in managing the day-to-day and hands-on operations of two factories employing 160 employees.
At SKALI, he is also instrumental in the establishment of SKALI’s new division and program called SNAP or SKALI Netpreneurs Acceleration Program. SNAP is an initiative for Asian Netpreneurs to leverage the pool of SKALI’s experience, expertise, resources and business networking. SNAP creates and adds further value for investors, Netpreneurs and communities in general by sharing an in-depth knowledge base and widening the reach of Internet opportunities.
In 2002, Farith was selected as one of the 100 Global Leaders for Tomorrow (GLT) by the World Economic Forum, Davos of Switzerland. In 2004, he was the first recipient of the Young Entrepreneur award by the Malay Chamber of Commerce, Malaysia and in 2006 was awarded the prestigious Eisenhower Fellowship for 2007 by the Eisenhower Foundation, USA.
Farith was the President of TeAM, Technopreneurs Association of Malaysia from 2004 to 2007. TeAM has been formed by a group of Malaysia Technopreneurs and to assist in the development of the Digital Economy in Malaysia.
He is also a co-founder and current advisor of the New Entrepreneur Forum (NEF) which among other established to promote the development of Bumiputera ICT entrepreneurs or Technopreneurs. He sits on other advisory boards both in the public and private sectors which focus mainly on Industry and Netpreneur development in Malaysia.
Farith obtained his Bachelor of Arts in Economics from Carleton University in Ottawa, Canada in 1992.
The YCM Series 42 opened with a welcome address and introduction of the speaker’s background by Ms. Farisya Shukor the Master of Ceremony, followed by a brief introduction of YCM by Director Dimishtra Sittampalam. The MC then invited the speaker, Tengku Farith Ritahuddeen, CEO and Co-Founder of SKALI to deliver his presentation.
Tengku Farith started by conducting a very brief background check of the audiences and expressed his hope that the audiences will go home with substance after hearing his presentation.
“How will the future be like”?
He started his presentation by showing a slide featuring the world’s most innovative companies in year 2011 and highlighted that the ranking of companies has changed in just a matter of 12 months since year 2010. He continued by saying that this imply that competition is intense and will continue to be highly intense. Malaysia will be extremely challenged within the ASEAN countries and by China, and also by the deterioration of income of the traditional markets (i.e. US and Europe) which we sell our goods to. He emphasized that this will consequently impact the level of our personal income. He raised the question, “How do we become a high income nation when the countries that we are selling to can’t really afford our goods anymore?”. In addition to that, he stressed that what used to be the core competencies of Malaysia is no longer competitive as other countries can deliver the same services/products in a more efficient and cost effective manner. His observations of the efficiency of other countries make him worry about whether Malaysia will be able to achieve its goal of becoming a high income nation. He highlighted that developing new generation of leaders that can compete globally is the key to achieve the goal. Malaysians are in the comfort zone and we will be challenged by our way of life. Through his interactions with the youths in other ASEAN countries, he thinks that the Malaysian youths are not hungry enough for success; a shock in the system is needed to wake us up.
“Where’s Malaysia’s wealth?”
56% of Malaysia’s GDP comes from services, 28% comes from manufacturing, and 7% comes from agriculture. These three industries are facing tough industry specific challenges due to the challenges post by the change in the global economy. The government has been pumping money into the economy to make sure things stay afloat, however, this is not a sustainable solution.
“Should we be worry? What do we need?”
Looking at the current scenario, he thinks that Malaysians should be worry and we have reached a point where we need to ask ourselves where we need to go from here. Malaysia fell into the middle income trap where we are stuck in between, we can’t compete based on cost advantage and we are yet to be able to become a highly innovation driven country.
He believes that the right and positive attitude is what the country needs. He shared his experiences on interviewing young people and highlighted that he realized people nowadays switched job/choose a job because of higher pay. He emphasized that one must focus on value creation and make sure that he/she is worth the value that are being paid before asking for a higher salary. To further elaborate his point on the importance of attitude, Tengku Farith shared the experience of SKALI with the audiences. The first big customer of SKALI, Bank Nagara Malaysia subscribed to SKALI at a subscription fee of RM 38 per month for a simple hosting service at the very beginning and SKALI’s sales people had to travel to Bank Negara’s offices several times to provide services. In addition to that, the cost of parking that time was RM 6 an hour, hence, it was obvious that the deal was not a very profitable one for SKALI. However, with a highly positive attitude, SKALI still delivered excellent services to Bank Negara. As a result, Bank Negara was happy with SKALI’s services and after 3 or 4 months, they switched the hosting of their entire main website to SEKALI’s data center where SKALI could charge a higher fee. Eventually, SKALI managed to secure contract worth millions of ringgits with Bank Negara. He said if SKALI was dealing with Bank Negara Malaysia with a lousy attitude at the beginning because of the low subscription fee, they would have lost this important customer. Using this story as an example, he once again stressed the importance of value creation before one ask for money from customers/ before one ask for increase in pay from his/her employer.
“Escaping the comfort zone!”
He advised the young people to push themselves, challenge their own boundaries and escape the comfort zone. He believes one will never know what he/she can achieve if he/she don’t stretch and challenge him/herself. He asked if the young have the courage to challenge themselves and strive for their dream. He started SKALI not because he was being forced. He started the company because he was tired with his old job and could not see the value on the things he was doing in his job. With the aim to have a more fulfilling career and to leverage on the rise of IT industry at that time, Tengku Farith left his job which pay him good salary and started SKALI with no knowledge about IT. He managed most of the word processing of SKALI during its early days using the typing skills he acquired from his old job. He was not afraid of doing new things. He thinks that young people nowadays are scared of failure and are not versatile enough. He said, in SKALI, staffs who have taken the extra step to learn new things (i.e. sales, programming) are probably management leaders now because of the versatility that they have demonstrated. Failure is a process, we have to fail to learn and we must not be afraid to fail and make mistakes.
“What is your value? Do you know it? Where Will we be?”
Tengku Farith believes that understanding one’s own value will allow one to understand his/her competitive edge. He shared his experiences of travelling to Vietnam for work and how these experiences made him realized how highly competitive the people and companies in Vietnam are. He highlighted the point that some countries which were the top economies in ASEAN during 1940s have fallen behind Malaysia. He asked where Malaysia will be in the next 20 years if we do not react and change now looking at the current progress and development of other countries in ASEAN.
What do we have?
He believes Malaysia has a relatively stable government, versatile and open community, big savings and relatively good infrastructure. We must realize about the values and advantages that we have and make sure we fully utilize them.
To close his presentation, he emphasized again that Malaysia is at a very critical period, things are going to be increasingly challenging. We have a lot of qualities and advantages that we have to realize. We have neighboring countries that need our expertise, our knowledge, our experience, and the lessons that we learnt from our mistakes. We must go there to create and share our values for them, because if we don’t, other countries will. We have lost lots of opportunities because we were too slow. He encouraged everyone to not to be scared, instead we must go out to the neighboring countries to build network and gain experiences.
1) What is SKALI?
SKALI help organization to use the web more effectively. It buillds solutions for organizations, so that they can manage their processes more efficiently, increase their revenues, and decrease their cost of operations. SKALI believe in open source technology, it has the platform and infrastructure for organizations to build their web based solutions and it has also recently introduced the “cloud” which is growing very fast for the company.
2) How did SKALI procure government’s contract during its startup stage?
SKALI did not get its’ first business from the government. Instead, it was a search engine portal. It ran “AltaVista” for Asia, the world’s most popular search engine before the emergence of Yahoo and Google. Examples of SKALI’s clients were Intel and Motorola. During that time, there was no content management system to run portals. SKALI went to companies like Microsoft and IBM to buy a content management system, but the quotation given by Microsoft and IBM that time was RM 20 million and RM 4 million respectively. The cheapest CMS that they could find was RM 4 million. Tengku Farith met two entrepreneurs, who had the skill to produce a CMS platform. He proposed a 50-50 profit sharing mechanism where SKALI would do the marketing and the two entrepreneurs would develop the CMS platform. The deal was sealed very quickly as it was mutually beneficial for both parties. There was tender by EPF, during that time, EPF’s the counters were always flooded with people who were there to settle small matters (e.g. checking for status updates). EPF was looking for an online platform to allow people to check and update their EPS status and records. SKALI submitted their proposal for the tender and was shortlisted. The price that SKALI quoted was around RM4 million and their closest competitor was RM28 million. However, the government was not very convinced and requested SKALI to develop the platform for them first before paying them. If they are satisfy with the platform, they will pay for it, otherwise, no money will be paid. SKALI agreed to the request and eventually managed to secure the contract due to the value it was able to create for the government at a very low cost.
3) Could you give us a brief overview of the IT industry?
The IT industry changes all the time. For instance, SKALI once experienced investing in a technology and that technology became absolute after one year. Being in the IT industry, it is important to be ready to change all the time, catch the next big wave, must and leverage on the infrastructure of the ASEAN countries.
4) How much the government should be involved in businesses?
Tengku Farith believes in government sector and initiatives in stimulating the economy and developing industries. For instance, he supports and believes in government’s provision of training for graduates and Human Resource Development Funds to develop talents. However, he admitted that there are certain times where the government’s involvement created competition for the local companies. There were cases of competition between the government and local companies in terms of man power. SKALI has lost some talents to GLCs. Hence, he thinks sometimes too much government involvement would diminish the competitive strengths of local companies. He thinks government needs to know when and when not to intervene, so that the local companies will not be negatively impacted.
5) How to innovate?
Innovation is not something fancy, it is not rocket science. He used the example of how a burger seller in Ampang managed to achieve success by just doing some simple innovation. He believes innovation is simple; it’s all about creating value for customers. For SKALI, it was simple, it took open source technology to eliminate the cost from getting licensing, and charged its customers services fees for providing the solutions. This strategy allows SKALI to give its customers world class and price competitive solutions.
6) How did you lead the business from a start up from what it was to what it is today? What is required? What did you do?
Work backwards and begin with the end in mind. Think about how to create and add values for the customers. He recalled when SKALI’s customers’ websites were attacked by hackers, they hired extra security team to look after their customers’ website without paying much attention on how much this would cost them. They just want to make sure that their customers are happy. He advised the audiences not to focus on money, not to just focus on thinking about how to make billions of dollars, but think about one customer at a time, and think about how to create values for the customers.
7) Experience of travelling to other countries? How fast would the rising ASEAN countries catch up with Malaysia?
Malaysia has the competitive advantage over other ASEAN countries in terms of organization structure and culture. Some of the export oriented companies in ASEAN companies are very dynamic and versatile. Countries like Indonesia, Vietnam, and Thailand has massive domestic market which allows them to generate huge amount of revenues by marketing and selling their products to the local people. If an organization is complacent, there will not be innovation. Right amount of competition can create innovation. At SKALI, competitions from giants such as Microsoft and IBM keeps Tengku Fariths awake every night to think about strategies to win the competition and forced him to be innovative.
8 ) How can we help Malaysians to move up the value chain to increase their competency? What should we do to motivate our people to rise up to that level?
Tengku Farith believes talent development starts from teaching children. Most universities today teach students by memorization and spoonfeeding. Instead of spoon-feeding, he believes the journey to find information is the best learning experience for students. To develop talents, we need to change how we educate our future generation. On the organization level, he realized some companies are rewarding all their staffs without considering the discrepancies in performance among the staffs. Reward based on performance is the key in motivating talents. Don’t reward wrong behaviors because it would demotivate the good performers.
9) Advice for technopreneurs?
Specialize and stay focus, entrepreneur tends to get excited for lots of things. For instance, SKALI lost focus several times and went off tangent to build some other things. His advice for entrepreneurs is to stay focus and make sure they specialize and be the best in whatever they are doing.
The wonderful night finished with the presentation of token of appreciation by Tengku Nor Azah.
For our milestone 40th CEO Series, we have the privilege of hosting Nor Azah Razali,
the Managing Director of The Boston Consulting Group Kuala Lumpur
About the Speaker BCG in Kuala Lumpur is one of four offices in Southeast Asia, and Kuala Lumpur-based
consultants work on projects throughout the region. These consultants gain exposure to the breadth
of the region’s economy through hands-on experience with a diverse mix of clients.
Kuala Lumpur’s client base includes leading firms in consumer goods, energy, financial services,
healthcare, media, technology, telecommunications, and utilities.
The team supports assignments ranging from general strategy and market entry to organizational strategy and operational improvement.
The client portfolio includes a mix of top local companies, state-owned enterprises, and multinational corporations.
BCG in Kuala Lumpur has helped its clients put in place structural changes that have played a key role in the development of the Malaysian economy
YCM CEO Series 40 ft Nor Azah Razali, Managing Partner of The Boston Consulting Group Kuala Lumpur
Writing credits: Aimran Hamid
This is a live blogging of the YCM CEO Series 40. For full details, please view our event video.
The presentation was titled:
“BCG 2012 Southeast Asia Challengers: Companies Piloting a Soaring Region”.
A version of the presentation may be found here (insert link: https://www.bcgperspectives.com/content/articles/globalization_growth_companies_piloting_soaring_region_2012_southeast_asia_challengers/)
- The speaker starts by introducing herself.
- A lot of the work is mainly with public sector and the government of Malaysia mainly on financial backgrounds.
- Focus on her topic and stressed on the South East Asia especially on the potential of the region.
- Reminded on the economic crises in 97
- Shows on what BCG done. Came up with the report every year since 2006. Last year done report mainly on South East Asia.
- Show’s comparison of SEA with China, India, Brazil and Russia.
- It shows if the SEA was a country it could be at par with the rest of the countries.
- Shows comparison in terms of GDP, percentage of population etc.
- Shows that in 2015, 96 Million of people in ASEAN will be in the middle class with
- household income of more than 5k USD per month.
- 87% of palm oil from the region with 80% of rubber from the region as well.
- Also shows the competitiveness of the labour pool in ASEAN.
- Eg; call centres in Philippines generates revenue of USD 6 B per year.
- Government taking lots of incentives to reduce the tariffs and duty with the SEA region.
- Starts to see companies that became emerging challengers.
- When talking on Europe, the economic crisis is what all the investors talk about compared to what this region is offering.
- Double digit growth for investors in SEA
- Show’s some of the companies that will be a major players in few years time within the region in which majority are unknown at this point of time.
- Majority of the companies are in consumer business.
- Shows SEA challengers outperform global players in terms of growth and EBITDA numbers. As well as create significant shareholder value.
- A lot of the companies become very strong due to mergers and acquisitions. 9% of increase in revenues in the last 10 years.
- Common characteristics for the companies- Early advantages, Ambition, Strategy and business model as well as capability development.
- The companies are broken into 4 groups.
a) Monetizing SEA’s resource abundance in which majority of the companies fall in this
b) Building regional dominance taking advantage on the growing middle class
c) Growing with large RDE’s and companies in China n India. Very good understanding in the middle class markets as well as very flexible
d) dominating global niches where they dominate in very specific market.
- Shows 2 companies to give example:
1) Indorama from Thailand
2) Mayora from Indonesia.
- Talk on range of macro issues need to be addressed to improve growth in SEA.
- Talent shortage, Infrastructure Bottlenecks, Lack of innovation, Political Instability and remaining trading barriers
- She summarized by separating key items into 4 categories; for SEA challengers, for other SEA companies, for Multinational companies and for other governments.
Q&A with Audience
1) 3 big aspects which is the economic, social and political. Will there be an ASEAN youth council in relation to the growth in economy in few years time.
If there is no economic growth there will be a lot of tensions and uprising issues. Growth is there and which is very important to increase the growth of the next generation. She do not specifically is there any council for ASEAN youth but in fact a lot of other organisation other which represent the youth such as one in World Economic Forum
2) Personal experiences from the speaker that created impact on the colleagues
Majority of the work is done with the private sector and the speakers do find that the work she does created an impact
3) Low bottle neck in Malaysia
Actions is taken in Malaysia to overcome the bottleneck and the government is more supportive compared to other SEA countries
4) Position of Malaysia in the BCG Index
Should be in the Star range. Have strong institution compared to other ASEAN countries.
5) If China’s economic slows down will it affect the SEA region
Says that the economic might slow down but it won’t affect the growth and lead to low growth. Give example when she visited China and Peking University in which the people are very highly competitive so slow growth is not really expected.
6) Strategy to identify business and complete the work
Come with hypothesis when coming into a business. Really focus in hypothesis and very focus and straight forward into the problem. Focusing on staying longer with the client and assisting the client in way that can be beneficial to the client.
7) Ways to close the gap between the differences between the countries in ASEAN
Government plays a lot of role in closing the gap. Need to have a good understanding and adaptive and to response to the different markets. Need to have good mix of talents between local and foreign.
Are there any opportunities in Malaysia in terms of social enterprise and how is the perspective of the Malaysian companies looking into social enterprise.
It is at very early stage. Not much players in Malaysia.
9) Hurdles BCG came across when coming into Malaysian PLC’s
A lot of the companies and they are variety of hurdles or resources that they have depending on the companies. The range is very broad. Talent is always an issue in majority of the companies.
10) What do you think on political risk and protectionism in the region that will affect the growth in the region?
Opportunity is still there in the region despite the risk and the protectionism issues. A lot of strategies and plans that can be put up to cater the risk involved.
11) Juggling personal and work commitments.
No time for friends. It’s not easy. But it’s not about the juggling but more towards the passion on what you do.
12) If the leverage stops will the growth stops.
Malaysian bank have pretty strong balance sheets and pretty strong financial system. There is not such a huge risk and despite the leverage stops, she believes the growth won’t.
Group MD and CEO of Hong Leong Bank Berhad
Wednesday, 28th March 2012
Intercontinental Hotel Kuala Lumpur
Click Here for Photos
About the speaker
Ms. Yvonne Chia has been the Group Managing Director and Chief Executive Officer of Hong Leong Bank BHD since November 10, 2003. Ms. Chia started her banking career with Bank of America and held an experience of 18 years, Kuala Lumpur and held various positions in Hong Kong, Manila and Kuala Lumpur from 1976 to 1993 and served as its Vice President and Country Head for Marketing. Ms. Chia served as General Manager of RHB Bank Berhad since March 1994 and served as its Chief Executive Officer and Managing Director until March 2002. Ms. Chia has been a Director of Hong Leong Financial Group Berhad since January 9, 2004. She has been a Non-Independent Executive Director of Hong Leong Bank Bhd since March 17, 2003. She serves as a Director of Malaysian External Trade Development Corp. Berhad (MATRADE). She also serves as a Director of RHB Capital Berhad, Malaysian Electronic Payment System (1997) Sdn Bhd, HLISB, Hong Leong Tokio Marine Takaful Bhd, RHB Insurance Berhad, RHB Bank (L) Ltd., RHB Delta Finance Berhad and Cagamas Holdings Berhad. Ms. Chia serves as a member of the BCC of Hong Leong Bank Berhad. She served as a Non-Independent Non-Executive Director of RHB Investment Bank Bhd since December 19, 1995. She was made a Fellow of Institute of Bankers Malaysia in April 2002. In August 2005, Ms. Chia was appointed to Wharton Fellows of the University of Pennsylvania. She is also a Certified Risk Professional (CRP) with BAI. Ms. Chia holds a Bachelor of Economics (Honors) in Analytical Economics from University of Malaya in 1976.
(Source: Bloomberg Businessweek)
CEO of 1Malaysia Development Berhad (1MDB)
Wednesday, 8h February 2012
Intercontinental Hotel Kuala Lumpur
Click Here for Photos
About the speaker Shahrol is an expert in value creation in multiple sectors. He was instrumental in growing Accenture Malaysia’s public service practice, helping government agencies to add value in their services to the people and businesses.Shahrol has over 13 years of experience in IT Transformation, IT Integration, Service Oriented Architecture and complex system implementations involving large government-linked entities, government agencies as well as local, regional and global financial institutions. Shahrol joined Accenture in 1995 and built his career in business consulting through projects in various industries such as Government, Financial Services and Oil & Gas. He has led key projects in Malaysia, including a multi-year transformation programme at the Employees Provident Fund as well as planning and executing the merger of Sime Darby, Guthrie and Golden Hope to form Synergy Drive, the world’s biggest plantation company. Prior to joining 1MDB, Shahrol was the Executive Partner of Accenture and Managing Director of the Public Service Group of Accenture Malaysia Sdn Bhd. Shahrol graduated from Stanford University in the United States of America.
Young Corporate Malaysians (YCM)
K3 Taman Tunku, Bukit Tunku 50480 Kuala Lumpur
THE 3rd ANNUAL YOUNG CORPORATE MALAYSIANS (YCM) SUMMIT
Saturday 17th December 2011 Intercontinental Hotel, Kuala Lumpur
DATE: SATURDAY, 17th DECEMBER
8.00 am Registration of participants
9.00 am Start of event
9.05 am Welcoming note by Chairman of Young Corporate Malaysians
9.10 am Opening Keynote speech by YBhg Datuk Rohana Mahmood
(Chairman, Kuala Lumpur Business Club)
10.00 am Session 1 on China by Hugo Restall (Editor of Wall Street Journal
Hong Kong) and Jude Blanchette (Beijing Representative, Atlas Foundation)
11.30 am Session 2 on India by Nechal Khanna (Managing Director, Morgan
Stanley Singapore) and Mohit Satyanand (Chairman, Liberty Institute New Delhi)
1.00 pm Lunch and Zuhur break
2.00 pm Session 3 on Scomi’s Mumbai Monorail Experience by En Shah
Hakim Zain (CEO of Scomi Group) and En Kanesan Vellupillai (Scomi India)
3.00 pm Session 4 on Proton’s Experience in China and India by Dato Seri
Syed Zainal Abidin Bin Syed Mohd Tahir (Managing Director of Proton Berhad)
4.00 pm Closing Keynote Speech by Dato Seri Johan Raslan (Executive
Chairman of PricewaterhouseCoopers Malaysia)
5.00 pm End of Summit
YCM CEO Series 37 Pn Hamidah Naziadin, Head of Group Corporate Resources for CIMB Group
Friday, 2nd December 2011
Intercontinental Hotel Kuala Lumpur
YCM CEO Series 36 Mohd Khairil Kevin Partner, Bain & Company
Partner, Bain & Company
Wednesday, 2nd November 2011
Intercontinental Hotel Kuala Lumpur
YCM CEO SPECIAL SERIES Great Ladies@Work Chin Suit Fang, Senior Executive Director, PricewaterhouseCoopers(PwC)
Senior Executive Director, PricewaterhouseCoppers (PwC)
Wednesday, 5th October 2011
Intercontinental Hotel Kuala Lumpur
Write-up: CEO Series 34: Mohd Nur Ismal, Chief Executive Officer of the Land Public Transport Commission
YCM CEO Series 34: Mohd Nur Ismal, Chief Executive Officer of the Land Public Transport Commission
22nd June 2011
Writing credits: Farhana Roslan
The below is the live-blog write-up on the CEO Series 34 session with Mr Mohd Nor Ismal, Chief Executive Officer of the Land Public Transport Commission (SPAD).
Mr Mohd Nor (MN) started off with outlining the three main items he was asked to come speak to YCM about; the journey of his career, SPAD and of course, the MRT.
When he graduated from university in the US, he took the path every graduate wanted to during the time, which was to become an investment banker. He decided Wall Street was too competitive, and so decided on Chicago. He started his career in CNA Financial Corporation, in an investment-banking job and spent 10 years of his career there, though he claims he made the mistake of staying in the place for too long. He did miss Malaysia and had the idea of returning home at the back of his mind, but he knew if he did, the hit on the compensation was going to be too much.
He decided the best way to go about this problem was to go back to business school. He went to Kellogg for his MBA. Upon leaving business school, there was a shift in the trend from investment banking to management consulting. So he went on from what he called a steady desk job to a career of talking to clients. MN claims this was a challenging experience, but a very fulfilling one; where people “look at you, pour their hearts out and expect you to solve their problems”. He calls it satisfying.
MN knew he had to return to Malaysia, so he did. Upon finding out that AT Kearney, the top tier management consulting firm he works for was expanding into Asia, he took the job offer without even thinking. He spent 3 years in Singapore serving a variety of clients from the Financial Services sector and even microelectronics. Most of the time he was in Singapore and Bangkok, too much so that the apartment in Bangsar that he had, was only stayed in 12 days in a year.
After sometime, MN resigned, and took 1 year off. He spent 6 months in Las Vegas, spending his time deciding whether he wants to return to Malaysia. Las Vegas didn’t work out, and so he returned home. He did not know what to do after, and so joined Accenture, only because they were the ones with most contracts in Malaysia at the time. Malaysia was going through a difficult time, and so he had had to travel, as far as even South Korea.
This was when several leaders on the DRB Hicom board asked MN to come on board. He claims this was the first time; he was playing a “defense” type role, joining a GLC corporation. He also joked that his experience was usually the “offence” player, but now he is playing defense for the government. This was when MN realized that he is already making good money, lived a comfortable life, and could afford to buy anything he wanted, but wanted something more out of his career.
Datuk Seri Mustapa Mohamed, who was then the Minister of Higher Education, asked MN to join him. He jokes “What did I know about education!?” But at the point of time, they were releasing a strategic plan for higher education. MN highlighted that he thought the contents of the master plan was less than what Malaysians deserve. He convinced the ministry to redo the whole plan, but also became extremely unpopular within the ministry along the way. The revised plan didn’t work out either. The minister than asked him to redo it again. That was when, with him on board, the MOHE came up with the National Action Plan for universities, which involved doing away with egalitarianism amongst universities and release institutions to chart their own paths.
MN then joined the team of Ministry of Transport, under Datuk Seri Ong Tee Kiat, where he claimed he “jumped into” the role. Again, he jokes, “What do I know about transport?” That was also when Datuk Seri Idris Jala was transferred onto his role at PEMANDU, and MN again was sourced into the team for 5 short months, to work on the urban transportation NKRA. Datuk Seri Idris Jala offered him a position in PEMANDU but MN was made to understand that that was against the PM’s wishes. He jokes “Oh, so the PM really does hate me that much.” It turns out that the PM had another job waiting for him. A job he claims, that “no one else wants.” MN knew from the start that this was going to be an impossible mission; there is little chance that everyone will be satisfied.
MN decided, whatever it is that is to happen during the period of his contract as SPAD chief, he told himself he wouldn’t care, as long as he can make at least a little change. This was when he admitted it was his colleague Annafi telling him that the commission was in need of manpower and personnel that he was here talking to YCM tonight. He says he thinks this is a good idea, standing in front of the brightest young Malaysians, sharing his story in hope that some of them would be moved by SPAD’s efforts and would want to find “higher meaning” to their career. He jokes, “so this is the end of my sales speech for today.”
MN started off rekindling how popular public transport was back in the 1980’s, before Malaysia started going through fantastic economic growth. People earned more and hence were able to afford their own cars. There were investments in the LRT, monorail, and the Intrakota buses (now Rapid KL). But, nothing has really changed since the 1990’s. We were back to the problem (inaccessibility) and dread blocks, which MN claims was starting to impair economic growth in the affected areas and the city. MN showed that the modal share of people using public transport declined significantly, with 34% usage in 1985, 20% in 1997 and 10-12% in 2008.
Because things were really bad, our beloved PM saw an opportunity, and agreed to include land public transport and MRT as one of the NKRA under the ETP, where the target modal share of users is 25% by 2012. MN was glad that we are on track with 17% modal share achieved last year.
MN highlights the current issues we face. If we are lucky enough to live near the LRT rail network, we could use it. It was made better slightly with the 4 train car sets introduced. KTM, he points out, is still a problem, but expects this to be better when the new longer train car sets are delivered. Buses, are highly unpredictable, taxis are “as you know…” he claims. Networks are unplanned, ad hoc and driven mainly by suppliers and players. The root cause; the way we govern public transport. MN claims that public transport has always been merely an afterthought. DBKL was much more concerned about structural planning, while the MOT did not have much jurisdiction over local councils. We need a holistic approach to address this; this was how the idea of a single authority to address all this issues, came about (SPAD). For those who might be swayed, MN tells the crowd how he only hear one of two things every time he meets people; either “I feel sorry for you I don’t envy you,” or “Great! You are in the hottest team in the government.”
Public transport is a key NKRA. ETP has a few mega projects under it, and the MRT is evidently at the center stage. Even though they were relatively new kids on the block, people tend to listen to them. Although, MN claims that they did not get much power until January this year, although they were formed more than a year ago. SPAD is to act as a centre of planning, enforcing, regulating. They didn’t have as much power as their Singaporean counterpart; because of the constitution, SPAD does not have jurisdiction over local governments. However, the minister in charge is the PM himself, and so SPAD ten to have a lot of influence. MN shares some of the SPAD’s job scope; from broad planning and drawing up the NPT policy framework and the public transport masterplan, enforcement on operators, “boring stuff” like standard setting, and operating call centers for consumer relations purposes, to the project management of the MRT itself. SPAD, he says, is data driven, and builds up its research capabilities as together with the public transport associations. MN disclaims that he does not want to sound too ambitious. Their biggest issue is they are still fighting for next year’s budget, resulting in them having to narrow down their targets next year. Safety, he notes, is a key area that SPAD needs to show major improvement in.
MN assures us that he knows our careers may have involved us having some very low days. He shares that, in his time since SPAD, when it was low, it was really low. He notes the recent NST article blaming the SPAD for the return of taxi touts, as another very low point in his time as CEO. However, the highs are also very high, he claims.
MN moves on talking about how the MRT is the biggest infrastructure project since Malaysian independence. With lesser intensity, is the public transport outside the city. They are playing this down a bit, since this part revolves about of money. He notes that the SPAD wants to be lead by data. They will not be moved, until the data tells them to. Also, they want to publish the data, so the public knows what they are doing. The SPAD also absorbed two government agencies; the department of railway from the MOT and the commercial vehicle licensing board. In terms of number, the SPAD dwarfs them. Now the SPAD is trying to operationalize their operations under it. Other aspects of include, the national framework, investments and allocation of them so that it would be an equitable manner. Right now, the main focus of SPAD is the Klang Valley, and then they will go region by region, starting from Johor, Penang and then Perak.
SPAD is also about to release the Urban Railway Transformation Plan, then taxis, buses, and terminals and networks. They are targeting to release all this by September 2012. MRT will be their centerpiece. MN shows a picture of the current situation of traffic in Malaysia. Part of the map shows read areas, which represents 300minutes of travel time to get into the city centre. If we do not do anything, the situation will reach a point where the whole map turns red (MN shows another photo of what it will be like in few years time).
But Why Is MRT So Exciting?
This is for what it is going to do to the economy. MN highlights Greater KL as the largest NKEA in the ETP; expected to contribute to GNI by US$12billion. What is central to the Greater KL in turn is the issue of mobility. If the picture is as the 2nd scenario (he refers to second photo, where the map turns all red), this US$12billion is not going to happen for Malaysia.
On its own merit, the MRT alone is expected to contribute US$3 to 4 billion in GNI in 10 years, creating 130,000 new jobs, and will multiply via multiplier effect into US$8 to 12billion in a year. The second major advantage is the effects it will have on property price appreciation. Increase in GDV is expected at RM300million a year. MN thinks even this is understated. A third advantage and the most exciting is the 20billion in time savings it will create, which will translate into a total of RM21billion a year that it will create in productivity, according to PEMANDU estimates. MN adds that we are banking on the success of ETP to generate knowledge workers. This is the point where he shows that 1 MRT coach is to carry enough people that 3 buses or 177 cars will carry, to illustrate the tremendous help the MRT will create.
MN takes a step back and disclaims that it is not that they are just too obsessed with the MRT. It is because of sheer distance and the capacity required. He claims that we need the biggest capacity, of more than 25000 people per hour per day (PPHPD). Secondary transport plans include the Bus rapid Transit (BRT).
MN explains that the MRT is expected to carry 1.2million people within the city centre, with daily ridership of 400,000. The alignment will be as long as 51.0km, with 9.5km of it is underground. There will be 35 stations, of which 8 is underground. There will also be park n’ rides, which will consist of 13 floor car parks. The first of 3 lines will be completed in 2016, and commissioned in 2017. He adds that the status of the alignment is sitting on the PM’s desk as he speaks and pending discussions with him, for the PM to make his final decisions, especially in areas where MN claims “people are very loud.” The details of these will be announced end of June 2011, and further details can be obtained at the SPAD website.
MN then went on to explain the people involved. They have been entrusted as the agency to supervise. Syarikat Prasarana Negara will be the asset owner, and will be doing the heavy lifting. He highlights that SPAD is the one with the ultimate authority, and to put simply, he jokes “If the government knocks my head 1st, and if I am alive after that, I will knock on Prasarana’s head.”
He then shares what they are doing; parking space will be ample, during construction traffic management will also be managed, it will not be hassle free he admits, but it will be minimized. Touch n’ Go will be like Oyster and Octopus and can be used across modes of transports and across operators. They will be developing a fantastic feeder service, to take people to the MRT stations, so that people who really need it will use the parking space. All in all, he assures that there is comprehensive effort to make sure that this is going to be a success.
MN then exhibits a slide on the stakeholders; MoF will be the funding co, there will be value management consultants but notes they will be using as little public money as possible on them, independent checking engineers. Meanwhile, SPAD will play the role of supervising agency, while Prasarana is the infrastructure co. Project Development Partners, the term coined to describe MMC-Garuda partnership that went under public scrutiny, is explained to be chosen for their experience in project management, track record, and financial capacity, above just execution. They will be made responsible for and incentivized to deliver earlier than expected or cheaper than budgeted. SPAD has also compared this project to the likes of Crossrail London, ODA Olympics, the Qatar Civil Aviation Centre, and the Korean High Speed Rail project.
MN notes that in the past, the government has tended to have a narrow view of just cost. If they could afford it, they went ahead with it. Now, they are looking at other aspects such as whether the project will present opportunities to further create value. They focus not only on rail but also property. They have looked at Hong Kong and predicted the values in dollar terms receivable from the project. The appreciation of the land will pay for the shortfall in development costs. There is a 5- 38% chance of increased value, when there are MRT facilities nearby. Because the lives are not initially interconnected, when they are, it will create tremendous values, he notes.
MN points out that these values are being looked at to offset the cost of development. He gives the example of how the Docklands Railway Network, and the Kowloon Station created value for the Canary Wharf development and Hong Kong Kowloon district respectively. MN finishes by suggesting the use of these values, to compensate the public money, and not just benefit the private developers, riding on these value creations.
For our YCM CEO Series 33, as part of our Great Women at Work series, we have the privilege to host Shahnaz Al-Sadat, Executive Director of Khazanah Nasional Berhad.
Among the topics Shahnaz will be speaking about is one which many of us are passionate about, that of education. Be sure to come to ask your questions and learn what is being done to address education issues of the nation.
You’re cordially invited to attend our CEO series. Do remember to show your support by liking our Facebook Page and by joining our group.
Date: Tuesday, 14th June 2011
Time: 8.00pm – 9.30pm
Dress Code: Your work attire
Venue: Intercontinental Hotel (formerly Nikko),
Jalan Ampang, Kuala Lumpur
Fee: Free of charge
As with all YCM events, this event is FOC. Light food and beverages will be provided, also FOC!
Ps- if you are unable to RSVP via Facebook, fill up your details here.
Shahnaz Al-Sadat Abdul Mohsein joined Khazanah in August 2004 as Director and Chief Financial Officer. She was appointed Executive Director, Strategic Human Capital Management in January 2009.
She began her career at Arthur Andersen in Audit, Corporate Finance and Process Risk Consulting. Thereafter, she joined Malaysian Airline System Bhd where she was the General Manager, Internal Audit and a member of the Management Committee.
She holds a LLB (Hons.) degree from the University of Nottingham, United Kingdom and a Masters in Business Administration (MBA) from IMD, Lausanne, Switzerland. She is also a member of the Malaysian Institute of Certified Public Accountants (MICPA).
Live blogging of event, done in point form:
- Sajith started by stating that Google started in a garage. YCM is not that different because its CEO Series started with humble beginnings in an old bungalow.
- Sajith stated that YCM, like Google was and is still worth doing as “It is better to be part of something than be a bystander”
- The presentation revolved around Google’s Mission statement, and the emphasis of its words. Google’s Mission statement is “To organize the world’s information and make it universally accessible and useful”
- Eric Schmidt, Google’s former CEO and current Chairman, said that this is a 300 year goal
- Sajith showed a 2D map of the world, showing volume of Google searches in 2000. Key areas were US, Europe and Japan
- Through Google’s 20 pc time, a Google Engineer developed a tool that showed it in 3D
- Sajith demonstrated Google Instinct, where by playing the Beatles’ Hey Jude, as playing and typing the lyrics, Google search is able to predict what you are looking for
- Sajith demonstrated the integration of Google Maps with Google Streetview and stated that this is among the things Google Malaysia is planning to bring to Malaysia
- Sajith demonstrated Streetview at New York, and even Antartica!
- He then demonstrated Google Art Project, Google is bringing Streetview into museums, as he demonstrated Vincent van Gogh’s painting zoomed to the tiniest details
- Sajith then spoke of Google’s book scanning project. They estimated that there are (arguably) 129 million books in the world, of which Google has scanned 5.2 million books. That is equivalent to 500 billion words!
- Sajith then spoke of the uses of having scanned 500 billion words. Sajith demonstrated Googles Books Ngram Viewer (accessible here: http://ngrams.googlelabs.com/), able to scan particular words in books from any time.
- He asked, in the books from 1800 to 2000, what is the pattern of mentions of “Men” versus “Women”? Results showed more men than women, but mentions of men declined starting 1920 and women mentions overtook men mid-1980s.
Are the words “money”, “love” or “power” more popular? Unfortunately, its Power.
- Sajith demonstrated the pattern of SMS at New Year where the spikes of one day, are tremendous
- Information is one thing, how and what is Useful? His context is a question: What time of the year do most men propose to their girlfriends?
- You only search for something when you have a need. He demonstrated Google Insights for Search (accessible here: http://www.google.com/insights/search/#) and searched, “engagement rings”. It shows the pattern when people search for the word. It shows that the spike is in December. And unsurprisingly, the search for “wedding dresses” spike in January. How is this useful? As a business, why not have a marketing campaign for a ring near December?
- Next question: When is the highest peak for movie goers? Its December. The highest grossing film of all time is first Avatar then Titanic, both launch in December and both released by James Cameron!
- Question: When do people care about their weight? The spike is in the 1st week of January.
- Question: Consumer insights for laptop purchases. Do people want long battery laptop or light weight laptop? Searches reveal that people search for long battery laptop. This information is useful as manufacturers can know what laptop to design for.
- What can we do to make information universally accessible?
- Sajith demonstrated a Google graph of mobile penetration. In Y2000, China has 10 million phones, a single digit percentage of its population. Past 2000, it boomed to 50% penetration with 600 milion phones in 2008, a tremendous growth. Its an indicator how fast business change.
- In Google’s opinion, Indonesia will have more queries on mobile than PC. More people are searching Google on mobile.
- The kind of person Google is looking for is one who is able to adjust to the fast pace of change.
- Sajith noted that the new generation is introduced to the internet first through mobile than through desktop. Mobile searches actually spike during weekends, when we are not in office.
- More and more media content, TV content, are available online. How much media is uploaded on YouTube every minute? Every minute, 35 hours worth of content is uploaded on YouTube! People do not consume TV content anymore, they consume Internet media.
- He demonstrated a YouTube video Double Rainbow, which someone then made a reply and made a song out of it. Go YouTube Double Rainbow Song!
- Original video: (link: http://www.youtube.com/watch?v=OQSNhk5ICTI)
- Double Rainbow song: (link: http://www.youtube.com/watch?v=MX0D4oZwCsA)
- How is this information useful? Windows Live Photo’s advert was out of the Double Rainbow! (link: http://www.youtube.com/watch?v=8jXz7NrfzsI)
- Overall Malaysian searches in Google:
- Queries on mobile phones went up 10 times the last 5 years.
- Queries on financial and insurance information went up 6-7 times the last 5 years.
- Queries on travel went up 3-4 times the last 5 years.
Vishal (Question 1): Does Google earn financially with such projects like the Art Project?
Sajith: Google’s philosophy is that if the product is good and user uses it, revenue will come in. As a company, they allow customers to define how applicable and how useful a product is. Google wants to make a difference in people’s lives.
Helmy (Question2): What is Google going to do about Facebook? Is it seen as a rival or a partner?
Sajith: We want more and more companies to encourage people to surf online. Such moves enrich the ecosystem. It is not a zero sum game. The more companies encourage people online, everybody benefits.
Sajith hopes that in 5 years time, there will be 3 local internet companies in Malaysia.
Question 3: When is a movie about Google gonna come out?
Sajith: Let’s ask James Cameron.
Brendan (Question 4): What kind of person are you looking for?
Sajith: We are looking for people with the X-factor, beyond just good grades. People who have demonstrated they can do something else. With all that has been shown (the product demonstration), you need to have more than just good grades.
Question 5: Why did Google hire you Sajith?
Sajith: It helped that I had a couple of Masters. It helped I played sport, I played cricket for Singapore. I debated, I have worked in 4 different industries. It helps I speak 3 languages. Do you do something at work over and above the usual call? We are not looking for someone with just online experience.
Eric (Question 6): Why does Google set up an office in Malaysia?
Sajith: Hey, are you Malaysian? With 30 million people, more and more people choosing to be connected online. Malaysia has the highest number of average friends on Facebook. Malaysia is the first Google office in 3 years in Asia Pacific.
Guru (Question 7): What is Google +1?
Sajith: The second largest search engine is YouTube, owned too by Google. When we search, there is a social element that we have missed. Such as the question of “How does Siti feel about this event when she speaks to Alia?”. Google +1 adds an additional layer of social signal to make searches more meaningful.
Guru (Question 8): How do you determine 20% time in the 80:20 time concept? How do you quantify?
Sajith: Trust is implicit in all we do at Google. We don’t have timesheets. What Google is most interested in is the outcome. You are intelligent enough to be trusted with what you do with the time. You are surrounded by intelligent and driven people so we don’t need to answer how to ensure people to work 80% of the time. They just do. It’s a desire to make a difference and we hope it would inspire people.
YCM CEO SERIES 31: NATASHA KAMALUDDIN, MANAGING PARTNER OF ETHOS & Co
Writing Credits: Farhana Roslan
The below is the write up from the session with Natasha Kamaluddin, Managing Partner of Ethos and Company.
Natasha began the session assuring the crowd that she had only a maximum of 15 slides.
Natasha then informed the crowd that she has decided to talk about Malaysia, making a slight comment of her favourite topic; political economy. She joked that most of us in the room at the time were either too young or were not even born yet, to really understand the NEP and its justifications. She did not discount the fact that she was standing where she is today, as a result of the NEP.
Back when the NEP was originated, 60% of Malaysians were in poverty. Up to the year 2000, the NEP was largely successful. Economic growth was ranging between 5 to 10%. It was only after 2000 that we have come to realize and find that our growth prospects weakened considerably. Natasha notes that this was probably attributed to the two major economic recessions Malaysia suffered from (Late 90’s and 2008). She asserts that the cost was too high (cost of recovering the economy), for an economy like Malaysia (to sustain incredible growth we enjoyed in the past).
Then Natasha went on with the stimulus packages that Malaysia has had. Malaysian government debt grew (CAGR) more than 12% (federal government debt as a % of GDP). She informed the crowd that we are now at an (alarming) 74% level. However, she notes that this is true if we use national income as denominator. Arguably, the experienced economist that Natasha is, she would prefer using government income instead, which would bring the debt level to 26%. In both cases, she notes that the government debt is still considered very high.
Natasha went on to explain a chart showing that Malaysia is still very much a resource based economy; with crude oil only is making up 73% of our GDP. But, Natasha points out that investment and consumption (private investment as a share of GDP) is very low. This will one way or another translate into very low productivity growth in Malaysia, suggesting that fundamentals is very concerning.
Because productivity growth is a problem, Natasha points out that the aim for Malaysia to be a high income nation is going to be a tough pursuit. She pointed out that the middle and bottom 40% income is stagnated. Talent in Malaysia is so scarce, that there is so much room for the slightly skilled labour force to demand higher wage levels. Natasha supports with some statistics that only 5% of the Malaysian labour force earns more than RM5,000 per month. She jokingly congratulates any members of the audience earning RM 5,000 or more per month, saying they would be the top 5% of Malaysia’s income earners. Referring to these arguments, we are, she says, in deep trouble (as an economy).
REASON NUMBER 1: Execution
Natasha proposes that the ONE single most important reason this is, is execution problems.
She recollects 1970’s Malaysia, where we started off with a commodity-based economy, however most of the plantation estates and mines were still majority owned by the British colonial masters. She highlights government initiatives, citing the example of PNB, as some of the organistaions who made a considerable effort to acquire back these assets so that Malaysians will start to actually own these resources ourselves.
But then we went on to still having Multi National Companies (MNCs) develop and establish their presence in Malaysia. She poses a question to the crowd, asking us what sort of MNC-type of companies were based in Malaysia; mostly resource-based organizations and hence, there really weren’t much competition.
She supports this with another alarming statistic; 28% Foreign Direct Investment (FDI) into South East Asia went into Malaysia in the 1970’s. Now it is 11%. Natasha began explaining why this is.
Most value chains of services start with R&D then component and ingredient and manufacturing, assembly, final assembly, and then marketing.
Essentially, however thriving with FDI Malaysia was back then (being the electronics hub), we were sadly but true, only mainly the final assembly hub. The FDIs were resource seeking (namely cheap cost of semi skilled labour) and not as many value or technological know-how and substances were actually imparted onto us. This translates to only 15% value-add.
So essentially, Natasha claims that our failure was to develop ENOUGH backward linkages in the value chain of services and products. So that we had all these FDI come in and go with not enough knowledge transfer onto us.
She provided the example of Palm Oil. Palm Oil was THE Malaysian thing; most major FDIs were coming in under the pretext of Palm Oil development. This was when the government imposed rules on how each FDI must operate in the form of JV with Malaysian home-grown partners in the ratio of 50:50. This saw the establishment of major Malaysian based Palm Oil developers. Natasha uses the example of P&G, Felda, Cognaise, Golden Hope.
Natasha claims that this is quite counterproductive, because the FDI sides were the ones to design their processes so as to ensure minimal transfer of technology.
What we could have done instead, was to collaborate with MPOB/ PORIM, do collaborative research products, and impose the Malaysian ownership of the end legal entity since we had a hand in the development of the end product.
As a result, Malaysians high end technical skills were not created, which brings to exactly why now, there is no reason for any FDI to come into Malaysia and establish value-added services in Malaysia!
REASON NUMBER 2: Privatization of Government Linked Conglomerates
Natasha recalled the era of this privatization of conglomerates back in the 80’s to 90’s period. She explains that this was the time when the experimentation of the creation of mega entrepreneurs such as the likes of Tan Sri Halim Saad and Tan Sri Tajuddin Ramli.
The government had these major entrepreneurs buy these entities in order to privatize them. But, Natasha points out again, that because of breakdown (between government ran organizations and privatization, corporate governance and ability to establish economic relevance as a private company), almost all these organizations had to had the government come back in to re-nationalize those assets.
Natasha however, does not discount how Khazanah Nasional, for example, had done a successful transformation to some of these assets. This brings us to today, where we allow entrepreneurs to manage these assets again.
Natasha then digresses, stating that she acknowledges that the intention to rejuvenate corporate Malaysia was not wrong; it was again back to the execution issue.
Natasha said that the government of Malaysia actually does care about Malaysia a lot, proposing a less cliché outlook than what is probably on most of the Gen-Y minds sitting in this room today. This brought grins amongst the audience.
She simplifies this concern of our government with a few illustrations:
Foreigners taking our resources
Foreigners steal our jobs
Infant industries not getting a level playing field to grow
Consumers’ rights are not protected
These were all fears which justified the protectionist policies that the government establishes.
Hence, Natasha says, these brought about the forced JVs (that the government imposed on FDIs), control of expatriates, and the need for JPPD to sign off assuring the job given to this expatriate employee absolutely cannot be done by any Malaysian, as well as trade barriers, citing the case of Proton as the typical example.
This, she says, is where the government “failed”.
These coupled with of course, the usual inconsistency, corruption, lack of financial discipline, Natasha mentions briefly.
Tun Razak, she says, was the era where the government was deemed to know best and where government protectionist policies were needed to protect the rakyat. Through time, the private sector capabilities become better, leaving the government policies being left in the hands of people with comparatively (arguably) less capabilities.
Natasha compared (simplistically) that the Singapore approach was simple and effective- “Hey, actually we just want to create growth, an environment that supports (incoming and creation of) talent, and an environment for businesses to thrive.”
This is in contrast with the Malaysian approach; we take the approach of jump starting a few industries which we think is the next big bet. She lists down a few examples of our previous attempts and big investment themes; steel, Proton, Information and Communication Technology (ICT), Biotechnology, and then of course, there was the Halal industry.
By the way, Natasha does not discount that these could (individually) have been right, but we (Malaysia) just wanted to kill too many birds with one stone.
What should we have done instead?
(1) Use top-down approach
But be efficient, minimum level is only this size. She illustrates by giving an analogy; If, for example, we need only 3 why create 13? (referring to capital expenditure (CAPEX) orders of National Oil Integrated producer, Petronas). This is why as a result; Petronas gives licenses to about 300 companies, when only 30 are needed.
The Innovation Ecosystem in Malaysia is very very weak, Natasha argues. This means that only very projects translate into executable projects from idea generation stage. And this is referring to the best government projects funded!
Natasha points out another statistic; Only 10% of the ideas made it to commercialization stage and only 3% managed to reach profit-generation stage.
She then rhetorically asks the audience: What do we need to create a conducive environment for innovation?
She names deal flow as one of it. She uses the example of the U.S. where high quality scientists are able to come up with a solid market value adding product to sell. More importantly, they have a strong fund management expertise, which can really tell the value of a firm and its projects.
This makes it easy to consummate a deal.
In our case, Natasha says, we have very poor quality deal flow. (One reason is probably the fact that) only 8% of entrepreneurs have degrees in Malaysia.
(On the asset management side), the major institutional players in Malaysia are really only essentially the involvement of pension funds. She points out that of course, these funds generally like the dividend story, not so private equity and “growth-type” stories.
Furthermore, Natasha informs us that in Malaysia one would struggle to get a 10- to 20 times return on your investment (ROI), whereas other countries can churn out more than 1000 times returns for investors. Again, she explains, this is why there is no reason (for FDIs) to want to come to Malaysia, for her lack of scale and ability to generate these kind of (return) multiples.
Natasha points out that specialization needs scale and generalists cannot really come up with a value proposition. Malaysia lacks content, depth, competitiveness have traditionally been anchored on cost. As liberalization of prices and markets intensifies, it is going to be even harder for Malaysian industries to compete. She also notes that although our trade deficit is still positive, it is declining.
There is Good News!
Since 2004, Natasha notes that there has been a concerted effort to transform Malaysia (by various parties).
Phase 1, she notes, was the revamping of GLCTs, with names like Khalid and Wahid Omar taking leadership. These leadership positions also, she says with subtle hint of gladness, are contract-based. This means that these top positions are well governed with KPIs, paid well but possibility of being replaced is always there in case of non performance. She quotes that between 2004 and 2006, most senior management positions (in corporate Malaysia) were converted to contractual based positions.
These makes salaries become more adjusted to the market. Also, because of this move, it is (more likely) that these companies have the right people (at helm) which allowed the company-level sort of transformation (that Malaysia so badly needs to complement industry and country level transformation plans). This is done through proper rationalization and execution of strategy.
This then allows for the not only domestic but also international growth of these companies! Why? Natasha says that this because economies of scale in these growth sectors have been exhausted, so now it’s about finding economies elsewhere, which brings Malaysian companies to the strategy of expansion abroad.
Now, Natasha points out, it’s about the government using legislation to actually force rationalization and liberalization. This PM, she assures, has made some efforts to address key enablers which did not happen before.
She points out the NEM reform initiatives which included Talent Corp. Natasha says in all seriousness, there has been a demonstration of some form of success. We have seen a number of sectors which have undergone and seen industry consolidation, enabling building blocks for this industry to move forward.
Essentially what we were doing, Natasha says, that a few years ago we compared ourself against giants like Singapore, Japan and the west. Now we are struggling to compare (our competitiveness) against the likes of Vietnam.
Natasha speaks about her the subscale fabrication industry, which happen to be a subject she’s passionate about.
First it’s the labs. Then move forward. When it is more rational to consolidate, Malaysia says OK, we consolidate.
But she says there are no economies of scale. For example, how do we consolidate one north plant and another one down south? She points out the problem with merging 2 players with similar capabilities is that it is hard to extract consolidation benefits and economies of scale when these assets were not in the first place created strategically and holistically looked at in the country wide perspective.
Also, Natasha highlights the fragmented delivery system, on the government side. She asks rhetorically how it is possible for the government, when the delivery system is so fragmented, say want to support a company. She points out (based on experience) one to go through 22 different government agencies to coordinate across just to set up a business in Malaysia. This does not only apply to foreign ventures, but also for Malaysian initiatives.
The problem with government bodies is that nobody wants to give up their power for all these processes. So the idea of a one stop centre cannot happen.
What in the NEP started off with pure objectives, Natasha points out, over time became a Bumiputera agenda. She acknowledges that however this may be debated; she does not believe that this is the true spirit of the NEP. She claims that (arguably) the NEP now has been widely misunderstood. (Unfortunately), some members of the citizen have tended to believe they are entitled to different privileges just because they are Bumiputeras.
Natasha recalls that when we had the 30% equity allocation for bumiputera ruling, it started from the intention of transferring ownership from foreigners to locals. Now, these resources are owned in joint by Malaysians, so that the transfer now can only go from non bumiputeras to bumiputeras (which were not the intention).
Natasha then touched on the topic of the Malaysian education system. The difference is that we are so content driven (that we have forgone method of gaining the knowledge itself). She asserts that the point (of education) is not to cram content into a few years of education).
She cites the example of a British example, where only 2 things are meant to be achieved at the end of a 2-year learning period. (She recollects her experience undergoing her A-Levels in the UK).
These two are the aims to impart students with the knowledge of how to learn by themselves, and the love or learning.
She rekindles her deciding to take a History paper in her A-Levels (she was the only Malaysian to, as pointed out by her course advisor).
To illustrate how she as a Malaysian has been taught to concentrate too much on content and text; she recalls an examination question: The Wars of the Roses between the York and Lancasterians. The question was “Why did the duke of York become king of England?” She laughed while telling the audience how she tried looking for the answers to that question frantically.
She couldn’t find the answers.
Upon realizing that the answers really are not there, she then points out that the British system is a system that forces you to find the answer for yourself, instead of memorizing.
Natasha explains that only 0.4% students are sponsored to study abroad every year. This translates to only a few of the currently High-performing Bumiputeras (who earn RM20,000 to RM40,000 a month). These, she pointed out are foreign graduates (which makes it unfortunate, given the earlier statistic).
The sad thing is that such a small minority gets a foreign education. She recalls recruiting for clients, a national cause that attracted 900 resumes (all local grads), and they only made 1 hire for the client.
Natasha then claims that we are only improving because we are an open economy. This means, we improve as the world improves. In 15 years time, which country will be comparing ourselves to?
When I was in Accenture there were a bunch of women managers, the sad thing is that, I was kind of the only one left. All decided to part time, then not to work at all, but work in an environment and consciously allowed their careers to plateau. 8 years later there are still managers, so my journey is very relevant to all of you here. (That’s why I want to share with you my story).
Only 13% of women in Malaysia are in professional and managerial positions.
Where I am, it is lonely. They are all men. I even find that the women at my level, do not have kids.
I went to boarding school, got a Petronas scholarship to study at Millhill High Barnet for 2 years. I learned absolutely nothing but it was good fun. Got into Cambridge, and learned a lot of things.
In 3rd year in Cambridge, I decided that they wanted to further mankind’s knowledge and have PhD and work for World Bank. I missed the application deadline.
Accenture, which was then Anderson tracked me down and had an offer. I spent my time in Accenture for 8 years. I was fortunate that was the time when people were willing to pay a premium for Accenture–type skills.
Now there is Tatas and the other IT consultant Indian companies (which costs much less). On top of that, the lack of competition afforded new people like me, time. What now is sold for 3 months, was sold for a year.
American firms are good at documenting their knowledge capital. Most companies were at the time to automate a lot of things, so consultants get a good overview of how the company works. Nowadays, we’re only working for very specific solutions you don’t get the end-to-end picture.
Because I am the type to put myself into what I’m doing passionately, I got my PhD plan canceled.
After a while I got bored, I met the partners of the then start-up Ethos. It had lovely red carper in 900 sq feet office. I liked the people, they had a journey in mind, not a destination. I knew after a few minutes into the conversation that they could not afford me. I proposed to them ok, I didn’t mind being paid 5000 a month but compensate me when you land big deals.
Ethos itself has been an interesting journey. We were struggling to find meaningful work.
In the GLC transformation phase, we were lucky to get our big break, Nor Yaakob awarded contracts to start up Malaysian consultants: Bina Fikir took MAS, and Ethos was given the MAB contract.
That’s how we built the firm. We were ambitious, in 2006 we wanted to venture into finance and started Ethos Capital. Since then, were happy that it has come to a point that the same clients employing BCG and mc Kinsey giving us the same work. We’re now at time where even companies would want to buy us. Our aspirations grew us by 5 fold in 5 years, and it was all through hard honest work which was fulfilling.
Back to life story- 2006 had my 2nd child boy in the middle of project. In 2009-while we were working on PEMANDU and EQUINAS, my 3rd child is born so now I have a 13 year old, 4 year old and 1 year old. My advice:
Have kids early, get married early (you meet no one)
Always do what you’re over qualified for
To succeed as a woman:
1) Emulate male behavior
2) Be a woman, use charm and influence and getting your way all the time
Always realize the male ego is most important- must be willing to use that to your advantage
Always have options, always be prepared to walk away (career and relationships)
Financially independent, so I can move out of my marriage. I know I am there for the right reasons. It’s because I love my husband and my family, and not because I am there for the financial support.