Monday, September 12, 2005

Something to ponder .... Warning : some serious sh#&%

A few days ago, a friend of mine asked me about my view on the new CEO and MD appointment in Malaysian Airline System. Let's look into the matter a bit. Malaysian Airline System, or fondly known as MAS, a Government-link company, the 1st airline company of Malaysia, has been at the losing end lately, to be exact, RM280 Million in their 1st financial quarter. That translate to about RM 90 million a month. Phew!! The previous MD quit after sitting in the office for less than a year.
Then, there was this big BRU-HA-HA about their largest investment arm, in this case, Khazanah (another government owned investment company) who intended to lure big foreign names in the airline industries into MAS, in order to turn it around. The idea was quickly critized by the so called nationalistic and patriotic politicians. "Hellooo!!!, we should be able to find suitable candidates for the job, locally!!!!" That idea was quickly flushed into the toilet and thrown out of the window.

They found the candidate allright. A local guy which previously held a management position in an international Oil and Gas company. Hmmmm???? Do I think he can turn the company around? Dunno. Coz if you asked anybody that's been in a management position they will probably say that they could do the job better. I really wish him luck. He needs it.

I believe he will follow the basic management principle.
Management principles 101, when going into financially troubled company
1) Quickly find ways to cut cost
2) Find areas where it can be run in a more efficient manner
3) Find ways to increase market share
4) Get good people to be around you .... hint.... your buddies

1,2 and 4 are easy. Concentrate on areas where it's in your "circle of influence". 3 is the tricky part. The person needs to understand the industry. He needs to have the creativity, the "think out-of-the box" mentality, as the leader, to come up with vision and various ideas to move the company to a new height. And that's probably the reason why I felt that the initial idea of getting a big-gun of industry-specific foreigner to head MAS is the right thing to do. I am not un-patriotic or un-nasionalistic. It's just about getting the right person to do the job. Before handing the CONTRACTUAL job to the foreigner, proper KPI needs to be agreed between the employer and employee. A local should shadow the guy, so as , there'll be business acumen and creativity transfer.

But again maybe I'm wrong. Maybe it's just bad karma to be the pioneer of anything in Malaysia. Just look at the pioneer Malaysian airline and auto company. Both are not in healthy financial position. And yet, another BUDGET Malaysian airline company and another Malaysian AUTO company has been raking in the profit. Both are lead by locals. So, What gives???

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