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What is the top ten? I would say a failing education system, state-endorsed or institutionalised racism, abuse of power, corruption, wastage of public funds, lack of transparency and accountability, attitude problem, no civility or courtesy, serious crime problem, and arrogance, though not necessarily in that order. NO HOLDS BARRED Raja Petra Kamarudin
Malaysia has launched many slogans in the past. Does anyone remember Malaysia Inc., Look East Policy, Buy British Last, and whatnot? Well, today I want to talk about Malaysia Inc., which is basically Malaysia Incorporated or about turning the country and government into a business ‘machine’. Now, in a business, when it is failing or is suffering continuous losses over many years or the company is in disarray or the staff suffers from a low moral problem or the management lacks direction and innovation, etc., you call in the turnaround managers to assess the company as to what is wrong with it. There may be many things wrong with the company. And the problem may be a combination of many things. And some problems are brought on or aggravated by other problems. But you can’t or need not solve all the problems. You just identify the top three, top four, or top five issues that contribute to about 80% of the problem. Most companies suffer losses because of various reasons. First could be the product or service the company is dabbling in may be outdated or overpriced or the competition is just too great or the competitors are price-cutting and whatnot. So you first evaluate the business of the company and see if it is still viable. The company may have been the leading horse-and-carriage business more than 150 years ago. Today, however, no one buys horses and carriages any more so this means your business is no longer viable in this day and age. Electronic calculators were another rave, say 30 years ago. Today, however, people use computers to do their work and not electronic calculators and certainly not mechanical adding machines like in the 50s and 60s. So, companies need to move on and keep up with the times. A business may have been great 50 years or 100 years ago. But unless it innovates and keeps up with technology and consumer demands it is going to be left behind. And the same goes for countries, governments and political parties that do not understand the market and the demands of the consumers. They too will be left behind. And voters are ‘consumers’ just like any other consumers of perishables, clothes and whatnot. They want the latest and if you can’t offer the latest then the consumer goes elsewhere. Assuming that the company has got its act together and is actually marketing a great product or service but it still loses money. You then search elsewhere for the problem. It is apparent it costs the company more money to operate than its income can cover. So it is a problem of cost being higher than revenue. And if you can’t increase the sales, or profit on the sales, you will have to reduce the operating cost instead. You then look at the top three, four or five cost items, which would most likely come to about 80% of the company’s total cost. Say, the top cost is salaries and number two is bank interest while number three is rental, electricity and telephone charges while number four is travelling and entertainment. And these four items come to about 80% of the company’s total cost. So you attack these four items and try to reduce the cost. Can you reduce bank borrowings by reducing your inventory and work on a JIT (just in time) basis? Say your sales are about RM1 million a month and you carry RM7 million in stocks. This means you have a seven months inventory, which is way too high. And that is why your bank interest is high. A JIT system means your stocks come in just in time to be delivered to the buyer and you carry maybe at the most 45 days worth of stocks. So your sales people must be on the ball and able to forecast what they need just before they need it and they must move the stocks as soon as they come in. But you need a sales team that knows what it is doing and knows the market trend plus the buying habits of their customers. Lazy or stupid salesmen would not bother and this will end up with the company ordering and stocking items it actually does not need. Salaries, again, need to be looked into to see whether you are overstaffed or you have three people doing the job of one person or you could automate certain things and reduce the need for all that manpower. Does the company own assets it does not need or could actually get by with leasing assets such as cars, machinery, equipment, etc? And can some assets be sold to reduce the bank loans so that bank interest can be reduced? Does the company own the office, warehouse, factory, etc., and if they were sold they could actually wipe off the bank borrowings? Sometimes, renting is cheaper than owning as the bank interest alone can come to as much as the rental cost. So you are actually not saving money by owning but instead tie up idle assets, which could be turned into cash. That is why many multinationals rather rent than own, especially in ‘unstable’ countries like Malaysia, Indonesia, etc. Are your people travelling and entertaining too much but they bring back very little business in return? Sometimes the claims are higher than salaries so the staff may actually be living on overtime and claims. Yes, these are the issues we need to look into in a turnaround exercise. We need to get our finger on the pulse and see how the company ticks and where it is not ticking properly. If we can do that the company can be turned around and brought back to viability. And Malaysia Inc. is no different. It is a dying company. It is bleeding profusely and losing tons of money. The management is in disarray and lacks direction and innovation. The management is also milking the company. The moral of the staff is very low. And the market no longer believes in the product/service the company is selling, not to mention the product is so outdated and was only relevant during the time of Merdeka and is no longer relevant today. But what does the management do? It keeps trying to flog a dead horse. And instead of attacking the top three, four or five cost items that contributes to 80% of the total cost, it sacks the tea lady, it abolishes the free coffee during coffee break, it terminates the contract to supply fresh flowers once a week every Monday, and all those other trivia that hardly come to 1% of the total cost. And it leaves the top three, four or five cost items that contribute to 80% of the total cost untouched. And that is how the management is running Malaysia Inc. Worse still; it actually increases the cost in areas that are unnecessary. And the ‘independent directors of the board’, the opposition Members of Parliament, get sucked along. And they too demand that the tea lady get sacked and the free coffee and fresh flowers get abolished. Unfortunately, this is how some Members of Parliament and State Assemblypersons from the opposition are acting. They want to make Malaysia Inc. viable by controlling the sale of condoms and beer and by banning ‘sexy’ performers from coming to Malaysia. That is just the tea lady, coffee and flowers. That is not going to save Malaysia Inc. We need to address the bigger issues. We need to attack the top three, four of five items that suck 80% of the cost and is causing Malaysia Inc. to go down the drain. This, neither the management nor the ‘independent board members’ seem to understand. List down the top ten problems this country is facing. List down the top ten cost centres. And then attack the top three. Attack the top five if possible. But do not, I repeat, do not attack number 65 on the list. Number 65 can wait. In fact, number 65 may even disappear by itself once we attack the top three, four or five. What is the top ten? I would say a failing education system, state-endorsed or institutionalised racism, abuse of power, corruption, wastage of public funds, lack of transparency and accountability, attitude problem, no civility or courtesy, serious crime problem, and arrogance, though not necessarily in that order. Now, if we can attack those top ten items, in particular the top five or six, 80% of the country’s problems will be solved. And many of the other problems will also automatically solve themselves. Can you see that condoms and beer is not amongst my list of top ten problems? I did not say they are not problems. I am saying they are not in the list of top ten. So people like the Member of Parliament for Kulim and all the others of his ilk better wise up. The market, meaning the voters, are no longer like the voters of 1957. The market has changed. What you are trying to sell, the buyers no longer want. And, unless you keep up with the times, the buyers are going to go elsewhere and you are going to be left behind.
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As for that YB 'No to Condom & Beer' is barking for populist issues, not the most important issues that bedevil Malaysia ie trying to be a hero. The best way to counter such pest is to totally ignore him.