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Should GLC’s adopt MNC’s Culture and Work Ethic

KUALA LUMPUR (Bernama) — Why can’t government-linked companies (GLCs) be as successful as multi-national corporations (MNCs)? This was the question on my mind as I surfed the Internet to find out more about this topic.

My mind was bombarded with other related questions. Why is the management style in an MNC so dynamic? Why is the culture of an MNC so cohesive and encouraging? What makes the MNC environment so inviting and customer-centric? Why is the leadership style of an MNC so dynamic and participative?

Whilst surfing the Net, I was extremely surprised to find that hardly anyone has actually done a study or considered this subject as a topic for their dissertation programme.

On the other hand, why are most of the GLCs still dependent on government funding? Why are so few of them successful? How come none can claim that they are a formidable brand although Malaysia Airlines Berhad (MAS) came close to it before losing its steam? Sime Darby Bhd and Petroliam Nasional Bhd (Petronas) are among the GLCs that have done well.

Recently, I stayed at the Thistle Johor Bahru. When I checked in, the lobby was filled with people checking out. I found myself being welcomed by the hotel general manager himself who told me he has roped in his IT, Finance and Engineering staff to help out with housekeeping as the hotel has been running at 100 per cent occupancy for the past one week.

He said he too was rolling up his sleeves and assisting the housekeeping chambermaids to clean and prepare the rooms for the new check-ins. I was pleasantly surprised by this Irish GM who was not only suave when meeting me at the hotel entrance but was also willing to help with the housekeeping chores.

This is a hotel managed by an MNC. The service is immaculate. The overall cleanliness is fantastic. The front desk staff are polite and polished.

Some of my friends who have worked in GLCs and MNCs identified the following factors which differentiate an MNC from a GLC:

The customer is the king. They make or break a business. Take McDonald’s or Kentucky Fried Chicken as an example. How come the MNCs have understood customers from all over the world, be it in Asia or Europe? I am aware of a few Malaysian restaurant chains that have spread their wings to other countries. Are there any GLCs making waves in this area? Petronas has made it to the Fortune 500 companies but can they push the mark to get to the top 100?

Listening to the voice of employees. The Thistle hotel example is simply great. The GM mobilises his staff from all departments and they are all willing to roll up their sleeves and work together. How did this happen? Simply because the staff have been continuously inspired, motivated and trained to provide customer satisfaction.

In most MNCs, such as Motorola where I used to work, it is compulsory for every employee to carry a training booklet which clearly spells out the training programme that they must attend and have attended.

The GM of Motorola or the head of Human Resources would conduct random checks by referring to the training booklet, which is also a notebook.

How many GLCs have even thought of this practice let alone attempted to implement it?

Employees are the backbone of the company. How many GLC employees join and retire from the same company and are known or remembered for their dynamism? I know of several GLCs whose employee turnover is far greater than their financial turnover.

Listening to the voice of processes. By adopting a mindset of continuous improvements, companies must ensure that the key customer-related processes meet customer needs and expectations. If only our ‘Satay Malaysia’ franchise had been well-studied and executed, I am sure we would have given McDonald’s and KFC a run for their money. GLCs must be proactive and ensure that customer demands are carefully studied and executed.

We may be great in coming up with policies or even campaigns, but we severely lack the power of the research and development culture to sustain or even exceed the demands of customers.

International companies like Walmart, Sinopec, Toyota, Microsoft, Samsung, Volkswagen, Acer, Disney and Coca Cola spend almost a third of their income on R&D, thus staying on top as a leading and formidable product or service provider.

I was made to understand that the palm oil extraction costs per hectare by Malaysian government-linked plantation companies are much higher than that of private sector plantation companies. This is a major factor hampering the GLCs’ profitability.

Trust and empowering people. Our GLCs are excellent when it comes to setting Key Performer Indicators, but they stop at that point. They hesitate to trust and empower the management and staff to explore and execute projects. If we hire right and fire the rotten, we can certainly empower the best.

The MNCs empower their staff and ensure the deliverables are met. If the deliverables are not met, the staff are shown the door. This may be too much to handle within our context, but Malaysians working in MNCs are very accustomed to this practice.

Micromanagement in GLCs is another common trait. There are GLC chief executive officers who spend time deciding on which photo to use in a brochure or what the storyline for the corporate video should be, and they rehearse several times day and night for a presentation or event.

They should perhaps focus their efforts on empowering the management team to excel in achieving the bigger picture of the company, as well as placing more emphasis on developing and grooming leaders as part of their succession planning.

Reward the best, remove the worst. It is equally important to ensure that the remuneration programme is well planned and a proper career path is put in place for every employee.

In the interest of building a greater nation, the GLCs have a cogent responsibility to build, nurture and sustain the best brains and deliver a holistic Malaysia Incorporated. We must stop appointing the CEOs and board members based on political affiliations.

Our GLCs should study and adopt MNC cultures and practices and prove to the nation that the ‘proof of the pudding is in the eating’. I am sure our GLCs can adopt the best practices of MNCs without reinventing the wheel.

Cut the bureaucracy. MNCs are anti-bureaucracy while GLCs are notoriously known for bureaucracy at every level. If you want to raise a purchase requisition or repair a company car which has had an accident, it will take you series and series of papers and various levels of approvals.

Transparent open tender system. GLCs must emulate the MNC method of procurement to avoid the wasteful misallocation of government funds that have happened in the past. There must be periodic and transparent reporting on the performance of the GLCs, similar to what the MNCs do every quarterly to the board members.

Reduce government involvement. The government must reduce direct participation in the equity ownership of the companies to allow the private sector to play a bigger role. This practice of liquidating government ownership would help stimulate private sector investment by reducing the crowding out effect caused by government investment.

This will create a healthy corporate sector ambiance and financial management as opposed to the grants mindset among GLCs. The reduction of government involvement will also reduce the number of political parasites sitting on the board and management of GLCs.

The nation’s GLCs must be shaped to meet the rising new challenges. We don’t need archaic and bureaucratic methods to restrict our institutions. We want new, inclusive and modern management with robust individuals leading GLCs that emulate best practices of the industry.

While we can keep adhering to our cultural values and beliefs, we should not allow GLCs to become a cost centre relying totally on government grants and support system.

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