IPMI Business Review Vol. 4

April 2017

FAMILY BUSINESS: SYSTEM, GOVERNANCE and CHALLENGES FAMILY BUSINESS AND THE POWER OF STORY TELLING

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April 2017

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Mar-Sep 2017

Keep Economies Live

by Family Business

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April 2017

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SNAPSHOT IMPACTING

Analyzing Determinant Factors and Guidelines for Entering E-Commerce Business

Keep Economies Live By Family Business April 2017

PIONEERING

FAMILY BUSINESS: SYSTEM, GOVERNANCE and CHALLENGES

MIND SHAPING

WELCOME TO THE DATA TSUNAMI ERA

INSPIRING 8

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LOOKING FOR THE BEST ROLE MODEL FROM SOE CEOs

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WAITING “MIDAS TOUCH” IN PLANTATION SECTOR

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PELINDO TRANSFORMATION TOWARD WORLD-CLASS PERFORMANCE

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SPEEDING TOWARD ASEAN CLASS COMPANY

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IN THE MAGAZINE IPMI BUSINESS REVIEW Executive Editor Roy Sembel Editors Dana Afriza Rega Indra Adhiprana Tammy Tiffany Geneberty Contributors SWA Network Nazneen A. D. Judge Media Production Aswin

TO MAKE THE COMPANY EXCELLENT AT SERVICE AND PERFORMANCE

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THE SAVIOR

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STRENGTHEN EQUITY WITH THE POWER OF ANY AND ALL SUBSIDIARIES, AFFILIATES AND OTHERS FOCUS ON FOUR TRANSFORMATION PILLARS

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INTRODUCING COST EFFICIENCY IN ANTAM

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Art Designer & Photographer Ahmad Noor Setia Pri Andre Agbar

LOOKING FOR LUCRATIVE FUNDING SCHEME

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PREPARE HIGHLY QUALIFIED HUMAN RESOURCES WITH INTERNATIONAL PERSPECTIVE

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RUN FAST TO PURSUE TARGET 35 THOUSANDS MW

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Office IPMI International Business School Jl. Rawajati Timur I/1 Kalibata, Jakarta Selatan 12750, Indonesia P: 62.21 797.8888, 62.21 797.0419 F: 62.21 797.0509 E: magazine@ipmi.ac.id www.ipmi.ac.id The views expressed in articles are the authors’ and not necessarily those of IPMI Business Review or IPMI International Business School.

For advertising information please email magazine@ipmi.ac.id Copyright 2017 IPMI International Business School. All rights reserved.

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April 2017

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A Welcome from The CEO JIMMY M. RIFAI GANI, IPMI EXECUTIVE DIRECTOR & CEO

Greetings from IPMI International Business School!

In line with our Vision 2021 of “being a leading world class business school that produces transformative leaders”, IPMI International Business School is proud to take part in various initiatives and conferences internationally, as well as locally.

Dr. Roy Sembel and Dr. Yulita took part in the Eduniversal Annual Meeting in Perth, Australia, in November last year. Dr. Wiwiek, Dr. Amelia Naim, Dr. Febrizal Rahmana, and Mr. Sudarmawan, took part and presented their papers in an international conference in Malaysia. Dr. Asto and I participated in the Annual

Workshop for Microeconomics of Competitiveness Course at the Institute of Strategy and Competitiveness, Harvard Business School (HBS). IPMI also worked together with SWA magazine to organize the first Indonesian BUMN (State-Owned Enterprise) Leadership Award 2016.

We believe that these initiatives will enhance IPMI’s efforts to contribute more significantly to the society. Over the last few years, we have been intensively involved in the development of small and medium enterprises (SME), as well as family business.

We have just launched our SME Forum, where we provide knowledge to SMEs through

seminars, workshops, and coaching sessions. We have also conducted workshops and seminars on family business issues. Thus, we have decided to choose the theme of this edition of IPMI Business Review in the area of family business. Through these interesting articles, we believe readers will be inspired and be able to take some of the concepts to improve their organization.

We hope that you enjoy this edition of the IPMI business review.

Thank you.

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Impacting

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April 2017

Analyzing Determinant Factors and Guidelines for Entering E-Commerce Business

by Nazneen A. D. Judge IPMI BBA Alumnus Class of 2012

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Introduction Internet & Conventional Business Vietnam

Thailand

• 89,7 million total population • 32,4 million total internet users

• 66,2 million total population • 17,6 million total internet users

Malaysia

Indonesia

• 29,8 million total population • 20,1 million total internet users

• 249 million total population • 74,6 million total internet users

Singapore

Philippines

• 5,4 million total population • 9,1 million total internet users

• 96,2 million total population • 34,8 million total internet users

Growth In Indonesia’s Internet Users 249

252 74,6

252 83,6

83,6

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In-Store

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Online Traditional Advertising

Show Rooming

Retail Environment

Comparison Shooping

Web Rooming

Purchasing

Online Purchasing

Customer Service

Reviews

Leaflet/ Brochure Ad

Social Discovery

Online Search

Online Advertising

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Goals of the Research • • • •

To find out why and how Entrepreneurs emerge their business online.

Identifying the prospect of emerging to Ecommerce for start-up businesses.

Identify what kind of marketing segmentation and strategies are needed to be modified when entering the Ecommerce business.

Breaking down the process of emerging to online business for the readers who wants to get their business to Ecommerce.

Literature Review 1. 4Cs to 5Cs

Change Change

Competitor

4C

Customer

Competitor

Connect

Customer

Company

Company

2. Bases of Segmenting Consumer Market Behavioural Segmentation Bases of Segmenting Consumer Market

Geographic Segmentation Demographic Segmentation Psychographic Segmentation

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3. 7P’s Marketing Mix

7P’s

Place

Proces

Product

4. Business Model Canvas

People

Physical Evidence

Promotion

Price

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Almas Enterprise

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Comparing Conventional to Online Business • • Competitors Online Business

• • • •

Any competitor you already know Start-ups that appear at the top of organic search result pages for important queries.

Start-ups that advertise in industry-related publications.

Start-ups that tweet about the industry on Twitter.

Start-ups that post about the topic on Facebook.

Start-ups that uses a # (Hashtag) of their products on Instagram or twitter

Customers

• • Online Business • •

Youth Women Netizen All over the country or world

Company

• Online Business • •

Customer approaches the business Stay connected to the internet to be updated All sellers will have to have a good manner

• Changes

• Online Business • •

• Online Business

• •

Connect

• • How company • connects to the • customers?

• • • •

Ready to accept inquiries and orders 24/7 although replying hours may be specific Browse online to find a product Try to put on the most interesting offer online as people compare one to another before purchasing Personalisation method on the web/email display based on customer’s search and previous purchase

Customer could be connected to the company, competitor, business agents, etc.

Companies and competitors both get to see their customer’s bad and good reviews directly Company gets to see what their competitor is doing as well as the other way around Web Social Media Online advertisement Social media comment and messaging section Chatting applications Text messages Email Calls

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7Ps: Adapting the Conventional Business in to an Online Business Product

People

Visual Aids

IT Specialist Online Administrator

Price

Anchor Pricing

Charm Pricing

Promotion

Process

Promotion Banner

Physical Evidence Visual Media

Wha t to s ell

Crea ti ng an Onl i ne Platform

High-Def Pictures

Hashtags (#)

Language used

Logo

Good Content

Brand Ambassador

Interaction

Advertisements Videos

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April 2017

Guidelines to enter E-Commerce

Creating an online business plan by using the 7Ps approach

Try ways to get people visiting

Collect followers on social media

Hire an online Administrator

Build relationships with the online customers

Secure a domain name, find a web developer, and start with a professional website.

Start posting!

Create social media accounts Get a good photography kit Create Professional Chatting Accounts and an Email Account

Hire a Graphic Designer

Conclusion •

Indonesian shoppers have chosen online market as a more convenient and efficient way to shop

•

Businesses or individuals are inspired and impacted to start their own online business.

•

Though easily accessed, Online Businesses have a specific guideline to market their products according to the segmented market.

•

This thesis have sorted out the roadblocks for Conventional Businesses to emerge Online.

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Pioneering

Pioneering

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IPMI BUSINES REVIEW

FAMILY BUSINESS: SYSTEM, GOVERNANCE and CHALLENGES

Febrizal Rahmana—Director of Center for Entrepreneurship and Family Business IPMI International Business School

Entrepreneurial firms usually become family owned business. However, once the next generation become shareholders, board of directors then nature of company shifts therefore impact its profile. There are several definitions regarding family business: • Ownership control by two or members of a family or partnership of families • Strategic influences by family members on the management of the firm, whether by being active in management, by serving as advisors or board members, or by being active shareholders • The unique sources of competitive advantage derived from the interaction of family, management, and ownership, especially when family unity is high.

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Below there is an example of a family business story which contains of the things that are important in running of company, as follows: Dick Randall, president and CEO of Real Estate Development Partners, Inc., arrived in Pennsylvania after serving in World War II. He had saved a little money, and together he and his father bought a piece of property and developed it into a golf course. Eventually, Dick decided to build a golf course and real-estate-development business.

His father wanted to limit his personal involvement, so he eventually sold all his interest in the property to Dick. Thus, none of Dick’s brothers or sisters were ever part of the family-owned business.

The company grew at a rate of approximately 9 percent annually and enjoyed annual revenues of approximately $48 million in 2011. It also saw the value of its assets—mostly undeveloped land—skyrocket.

Over this same period, several

national measures of economic activity in the industry indicated considerably lower growth rates in both revenues and asset values of other companies. In fact, Real Estate Development Partners seemed to be growing at twice the rate achieved by the average performers in the industry.

Although he was very pleased with the company’s record, Dick felt that he had two major unresolved issues. First, he questioned whether, given the size of his estate and his age, he could do enough to avoid extraordinarily high estate taxes. Second, he was uncertain as to whether his five sons and daughters would get along well enough to allow the family-owned business to continue to a third generation.

He felt strongly about keeping the business together. Because of the expertise and economies of scale that he had been able to build into the business, he was disinclined to divide it into smaller business units that the sons and daughters could separately own and manage.

Al, the eldest son, had worked in the business since he was 8 years old. Along with his two brothers, Tom and Ken, Al had learned the business from the bottom up by doing mostly odd jobs, especially during the summer months.

They mowed lawns, dug ditches, picked up trash, and repaired clubhouses. The three sons were busy in “the house that Dick built.”

Their sisters, Deb and Amy, on the other hand, always seemed to be protected from toil in the male-dominated industry in which Real Estate Development Partners operated.

He had recently returned to the family-owned business, citing a desire to be closer to his family and also to work in a more caring corporate culture.

Amy and Deb also went to work for other companies. Amy had returned recently and assumed responsibilities in the marketing department. Thus, four of the five siblings (all except Deb)

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From the story above, the family business can be taken three important things, among others : family business system, governance and challenges.

Each described below :

• vision : Become the most prestigious Real Estate development Partners company • legal structure :Dick Randall as the second generation • ownership transfer :Dick’s father inherited to Dick the family business 100% b. Family is regarded of roles and relationship, family values, Conflict that can be breakdown as follows • Roles and relationship : Dick as CEO and none of Dick’s brother and sister owned company • Family values : they believe that education is very important • Conflict :Dick doubted that his five children would get along to own company c. Business is included mission, structure, decision making with explanation below • Mission : to build a golf course and real-estatedevelopment business • Structure : family members of third generation involved both board directors and middle management • Decision making: expand company to other areas, make commercial development of property and collaborate with other owners/investors.

Family Business System

Governance

Family business system has three components that are Ownership, Family and Business. The above story can be explained by following description: a. Ownership is about vision, legal structure, ownership transfer . From this side can be detected that

Story at the top of Shareholders and Board of Directors are from family members. In which the CEO of the company is a member of the family too and for non-family members ranging from middle management down. Under these conditions, it is usually the company

were now working in the firm.

They had very different positions and, as managers, limited interdependence. Most of the need for communication and coordination seemed to emerge around strategic and ownership issues, not the day-to-day running of the business.

Dick thought that there were three major ways the company might grow in the future. First, the company could begin operations in Florida, where it already had developed some expertise with smaller real-estate investments.

Second, it could convert several of its golf club properties into more lucrative commercial developments. Population growth surrounding several of the company’s older properties was pushing office complexes and retail shopping centers right up to the 18th hole. Finally, the company could grow in the property-management area, effectively providing management of properties for other owners and investor groups. In their industry, the service contract side of the business was growing significantly.

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divided the teams to control by establishing audit committees composed of shareholders and board of directors, then there is also the internal auditors of the executive directors and the CEO. After that, the internal auditors monitor all activities performed middle of all operations from middle management to the bottom, while the middle management is as a central part to provide a report to the top and get feedback from the top.

Furthermore, audit committees and internal auditors should enforce good corporate governance (GCG). In this case, board of directors not only monitors how the system can be run effectively and efficiently, but also must carry the correct values of the company. So that GCG is the responsibility of all levels of management within the company structure.

Enforcement of the GCG is to avoid the result that the zero sum game, in which the company should be able to be able to generate positive sum game from time to time.

For example: the application code conduct to boost the company’s revenue, provide benefits to stakeholders provide sustainable progress against the company, anticipates of conflict with a positive value so as not to damage the company’s management.

Challenges In the current era, the world is facing the issues that are lively concern of all countries, ranging from poor countries, developing to developed countries. The issues are: population growth, global warming, dwindling

21 natural resources, sustainable development, and many more others. Where the issues are changing rapidly, massive and structured that directly influence the behavior of all stakeholders.

In addressing this, the family business should have to see it as a challenge that must be answered with a little creative thinking and innovative work. It is expected all the shareholders of the family business is time to evaluate whether existing system and governance, whether those are still relevant or not to face the challenges of the present. If still relevant it must be developed in capacity and speed, but if not relevant anymore then immediately made changes. So every system and governance certainly able to meet the challenge, which is in turn the family business remain a player not a bystander in the development of the world.

Examples of the challenge ahead:v a. Determining the vision and mission of the company, where the company’s vision should be included to increase the value of stakeholder so is no longer a shareholder, then the mission of the company should focus on the empowerment of human resources is no longer a natural resource. b. Determination of the marketing strategy, the company must apply the concept of marketing with E-commerce application so no longer apply the concept of marketing off line c. Sustainable development, in action, the determination of the results and business interactions also pay

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attention to environmental and social aspects so that a family business can pass on positive values to future generations.

From the story above, family business system, governance and challenges are very important factor in the family business. Thus all three of these factors must be realized that a family business can contribute significantly to economic development.

It is known for more than 90% of companies in Indonesia owned by the family. Therefore the family business entities provide a high percentage of the GDP of Indonesia. Correspondingly, if the family business grew rapidly then directly contribute greatly to the economic growth of the nation.

VIVA family business with systems strengthening, improving governance, and answer challenges.

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Sources : 1. “Family Business” by PWC Survey 2014 2. “Family Business” by Ernesto J. Poza, Thunderbird University, 2014 (or ESP).

3. “Preparing Your Family Business for Strategic Change” by Craig Aronoff and John Ward, Palgrave Mc. Millan, 2011 (CASW) 4. “Making Sustainability Work”

by Eipstein, M.J 2008

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Derry Habir—Director of IPMI Case Center

FAMILY BUSINESS AND THE POWER OF STORY TELLING For family businesses, storytelling can be the key to success beyond the first generation.

A number of years ago, a second generation family

business owner asked me to write a story in the form of an in-company teaching case. The story centered on the firing of one of the company’s top and highly successful directors.

The director, a married man,

had been caught conducting illicit affairs and the decision was made to fire him, despite his being responsible for dramatically increasing the profits of the company. The family business owner was

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convinced that the story, used for discussion in the company’s executive training, would be instrumental in embedding the high integrity and ethical values that were the foundation of the successful family business.

to connect. We tell stories to inspire. But storytelling is often ignored as being old fashioned and traditional. However, in recent years, a renewed interest in storytelling as a powerful tool for management has emerged.

The story of Suhardani Arifin’s entrepreneurial spirit is a continuing source of inspiration and cohesiveness to her family.

With only her husband’s first lieutenant salary to provide for the family, she learned to sew from the lessons provided by the Singer sewing machine store not far from her house so that she could make clothes for her children. Gradually she sewed for other people as well. She also became good enough to begin teaching sewing at Singer.

Because of increased demand for her clothes, she used a profit sharing scheme so that her students could produce more garments by sewing at home with their own sewing machines. The business became a success and was dissolved only because the family’s move to Jakarta on the promotion of her husband. But since then, she has created other businesses such as Yummy and Taman Bunga Nusantara that are success stories in the Daniprisma family group of companies.

According to Sole and Wilson, both of Harvard University, stories can “powerfully convey norms and values across generations within the organization”. Their paper on “Storytelling in Organizations” describes how stories can build trust, transfer knowledge and create emotional connection that can make family businesses more effective.

Storytelling is part of the human condition-from cave paintings to the Mahabharata in the East, the Iliad in the West and onward to the present.

We tell stories to teach and learn. We tell stories to share information and

`GenSpring, a company focusing on family business advisory, have come up with 25 best practices that together make for family business success across

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generations. The first listed is the family cohesiveness that arises from communicating “family history and culture” through generations. In a similar vein, Charles Collier, author of Wealth in Families, says that one key ingredient of successful family businesses is the telling and retelling of the family’s important stories.

So how do you start to tell your stories? Here are three basic steps: 1. Share: Share stories about the company’s founding.

What were the reasons behind critical decisions?

Recount achievements and failures. If there are not enough stories to share, begin interviewing family members and key employees.

2. Record: Recording can be in written in different forms such as in cases or books.

Other options are voice recorders and video camera 3.

Keep: Someone should be responsible as the “legacy keeper”. Besides safeguarding and storing the recordings, the keeper should be looking out for supplementary material to enrich the storytelling.

These can include photos, memorabilia, old films and videos.

Finally, start now. Don’t wait until it’s too late.

Derry can be contacted at derry.habir@ipmi.ac.id

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Mind Shaping

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Asto Subroto—Director of Center for Innovation and Competitiveness IPMI International Business School The world is dynamic. Any changes that occur can provide a very significant effect for every human life, including business and marketing. Those changes on the one hand provide benefits to the business development, but on the other hand it can threaten and endanger the future of the company or organization.

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WELCOME TO THE DATA TSUNAMI ERA It is very important to anticipate and observe the changes that occur and influence the business world. Companies need to track, record and store all activities (including marketing activities, communications, customer service), potential, and other parameters into data.

Data becomes valuable asset in evaluating and predicting future business trends. Availability and analysis of data relating to the company is not merely a secondary activity, but currently should be primary requirement.

With the development of technology, data collection

(capture) and processing activities become more advanced. Every organization and company now more easily record and get data from various activities & data is now available in larger volumes, higher speeds, as well as more varied variations. Those will be challenging condition for many organizations to getting the hidden value behind the information in these available data.

Technology can now record every change and activity that takes place in every second.

As a result, data can come very quickly and many. This is very much different when compared with previous human history. Edosio (2014) reported a significant increase in the production and exchange of information, from 0.3 exabytes in 1986 to 65 exabytes in 2007.

Interestingly, in 1986 only 20% were in digital form, in 2007 almost 99.9% digital. That number has increased sharply in recent years. Figure 1 shows the projected growth of Big Data in recent years.

Exponential growth of Big Data (Palfreyman dalam Watson, 2014)

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40.000

30.000

20.000

10.000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2010

2020

The growth of data is predicted reach 50 fold (Rajesh & Latha, 2013) Rajesh and Latha (2013) predict the growth of data volume will reach 50 fold (in exabyte) during 2010 until 2020. Picture 2 show the forecast of data development in the future based on the recent trends.

Every individual interact with social media, smartphones, and any devices, including PC and laptop also contribute in generating of billion data. It is also supported by multimedia activities, which produce significant data growth. In digital era, consumer spends their time to communicate, do browsing, buy, search, and share. The activities also create big volume of data. It is accelareted by state of the art of the internet technology.

The growth of internet is followed by big wave of smartphone industries, social media development, more sophisticated information technology –start from 2G, continued by 3G, now 4G, and soon will be 5G- then enter to the internet of things era, create amazing facts. As illustration, in

60 seconds Twitter can produce 98.000 tweets and Facebook users can post 695.000 status update. High quality video will spend 2000 fold byte of data text storage. It will be bigger if we also count the data from Google search engine, email, and others.

Big Data Guru, Bernard Marr, wrote an article in Forbes about the flood of data in high volume

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and velocity as unavoidable situation. The question is not about received it or not.

But more than it how is the readiness to anticipate and use them.

Then, what are all of the data for if the ability of computing system is not developed in same speed ? High volume data create other challenges. In the past, if we want to process more data, it will take more time. Author remembered when processed information not more than 1 million rows and each rows is no more than 1000 byte. After creating program (in 1990, program data was created by scripting), and in the evening to start processing, computer will be silent and blinking.

The result will be delivered in the next evening. But now, it will not happened anymore.

The technology of integrated computer unites some computer in parallel to process data. The bigger size of data will not make the processing activities slower.

In each minutes, social media can produce thousands until millions of data

29 Not only from human, data is also generated by systems, organization, and machines.

A good example is airplane.

From the perspective of Big Data technology, airplane is machine and super-computer which process millions of data per second and take decision from the collected data to fly the plane, navigate it to the certain place digitally, face any situation of condition, and then land it safely. Many parts of the plane capture and generate data, then they are processed by super computer, including transmitted to the computer center in the ground for further processing.

Only extraordinary event will stop all of the process.

The similar case is autonomous cars that capable of driving its own. Someday, Someone in San Fransisco are possible to switch on and control the parked car in his house in New York then pick him up in the Bay Area building lobby. The current car technology that focus on the sophisticated of the machine to produce movement, will be combined by computer to process millions of geospatial data, so it can move without crash with other cars. Even some parties predict, next people will be prohibited to drive car because manual processing will be interpreted as an intervention to the machine learning process.

Autonomous car will interact and communicate each other to determine location. With the perfect system, it will avoid car accident. When will the era come ? it will be soon. The case is similar with newspaper in the past. In a seminar 2006, I said that newspaper will disappear in 25 years (most said in 40 years).

But, within 10 year, much of printed media has collapsed and force to be ended.

Why arise the term of data tsunami ? Before imagine those term, we have to have the same perception about data. If discussing data, our perception is about a series of numbers, such as population, production growth, turnover, exchange rate of dollar, numbers of birth and death, etc. It is right, because formerly data is recorded in numeric and translated to specific format by computer.

But now, data is not only in numbers, but also in text, image, voice, graphic, video, etc. The term of data mining, formerly is understood as data (number) processing (in some degree), now it develop to text mining, picture mining, and video mining. Video is composed of some pictures.

Besides of technology development which ability to save and process the data in high volume and velocity, the other challenges –it is critical factor, is the availability of human resources to analyze, which is data scientist. Those occupation has not been too exposed because they work behind the scene and always indicated as nerd, now become important position. Even, some parties mention that today as the era of nerd. Data scientist is important expertise and game changer. They can change map of the competition. Social network website, Linkedin, recognize Data Scientist create amazing development and the value increase significantly when acquired by Microsoft.

Data Scientist not only develop algorithm, then the work is

continued by machine learning automatically, but continuously always create new value based on the collected data from internal or external.

What business affected by the era of data tsunami ?

AT Kerney wrote interesting article, there are at least four cases where big data is able to provide a significant value: (1) the development of intelligent customer, (2) enhancement the efficiency in business operations, (3) development of new business processes. (4) new business models. With big data, customer intelligence is becoming a very valuable knowledge since company became well known about how each customer segment transact in detail, so that they can create new ideas about the additional services, new products, as well as pricing strategies according to the consumer behavior.

What business can take benefits from the flood of data and the arise of the technology to process and analyze these data ? actually almost unlimited.

Industries can leverage big data for any business interests. But some industries was greatly benefited by this situation. Consumer-based industries which have high frequency transactions such as banking and retail immensely benefited with big data. Other organizations such as the health industry, will also greatly take benefit from the analysis of the patient’s medical records since history of disease problem & drug used for example will be able to determine the appropriate response to treat of a particular disease. The Indonesian BPJS have very large data. It will be very valuable

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if analyzed, not only for the institution itself but also for pharmaceutical industries, hospitals, physicians, and policy makers.

BIG data is also very useful to the marketing. Ranging from market segmentation, and then determine the appropriate targets for the company, pricing strategy, distribution strategy, even the communication will be greatly benefit from the presence of big data.

Through the transaction data and customer profile, a bank will be able to segment its customers very clearly. How many customer segments will be found and the variables

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of what will be the difference of each segment ? from one bank to another bank would be different. Depend on the objectives and the available data.

Most recently, in an interview at the World Economic Forum in Davos Philipine, January 18th, 2017 ago, Jack Ma - CEO of Alibaba (this company processes the ecommerce transaction about $ 463 billion per year), said that Alibaba is not the e-commerce company but Big Data company. With their available data in Alibaba ecosystem, including Alipay, this company , using artificial intelligent, can conduct credit rating for its consumers and sellers just within 3 minutes.

Furthermore, in just a few

seconds, they can approved loan and transfer money without any people involvement. The whole process based on artificial intelligent developed by Alibaba.

Beside all the valuable benefits of big data for business, but there are some issues that challenge its implementation.

The first is consciousness (awareness) of top management about data. Companies that do not have a culture of data utilization will take longer.

Another obstacle is actually a very serious lack of data scientist (not just the data analyst but a scientist). The tremendous explosions of market need are not balanced with the supply from the university.

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Snapshot

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IPMI 42nd Graduation Ceremony IPMI International Business School celebrated 42nd Graduation on Wednesday, 14 December 2016 at IPMI Campus, Jakarta.

The commencement ceremony was given to our graduates from Executive MBA program, Master of Business Administration program and Bachelor of Business Administration program.

We celebrated the achievment of years of hard work and marks the crucial progression from student to alumnus.

IPMI International Business School 42nd Graduation commencement speech was addresed by our honorable commencement keynote speaker; Mr. Eko Putro Sandjojo, Minister of Village, Development of Disadvantages areas and Transmigration Republic of Indonesia.

In this special honorably occasion, IPMI International Business School also announced the recipient of Bustanil Arifin Thought Leadership Award for the third year.

The recipient of Bustanil Arifin Thought Leadership Award in 2016 is given to Mr. Eko Pratomo Sandjojo an IPMI alumni from MBA 1991 class.

Congratulations to all of our graduates and award recipient.

Wish you all the best.

April 2017

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IPMI PEDULI GARUT Flood Disaster killed dozens of lives at Garut in September 2016. Staff, faculty, management & student of IPMI International Business School collecting materials and distribute through Palang Merah Indonesia.

To stimulate students creativity in entrepreneur, IPMI International Business School giving 30 USD as a capital to the team selected who have great ideas of doing business.

We are hoping they start business well continues to develop for the entrepreneurial spirit to others.

We would like to thanks St. Angela Highschool in Bandung for the opportunity to share the joy of learning at IPMI International Business School.

St. Angela Highschool is one of the best school in Bandung with many achievements in academia, sport, and science olympic. We’re glad to introduce IPMI to the students on 13 - 14 October 2016 in St. Angela EduFair event.

November 2016, we celebrated IPMI Colombian Month as a cultural exchange between Indonesia and Colombia. We hosted the event along with our guests from Colombian Embassy in Jakarta, Young Entrepreneurs from Colombia and Yayasan Citra Kasih Abadi and AIESEC. Beside presentation about Colombian culture from the Embassy of Colombia, we had a traditional dance presented by Young Entrepreneurs from Colombia.

Young Entrepreneurs from Colombia took part of AIESEC International program, they did “Social Cleanup Festival”, at Tihulale, South Maluku.

Together with the people there, they did cleaning up the waste and built lighting.

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IPMI International Business School family member had a nice workshop with Farina Situmorang, Managing Partner at Catalyst Strategy 18 November 2016. The workshop was about “Happiness and What Matters� and we had discussion about bringing happiness in workplace and life.

IPMI International Business School hosted Youth Global Forum Conference November 2016. The forum gather together more than 150 participants from over the world with the aim of brainstroming solutions for the most prevelant youth issues.

Winner announcement of Youth Global Forum in Jakarta City Hall,26 November 2016. Ajay Etikala, who presented project #OrganicUbuntu, granted scholarship prize to study at IPMI International Business School.

IPMI Case Center conducted a Case Method workshop for LEMHANAS. The two days workshop, 12-13 January, 2017 was held in Bogor and was supported by the Dutch Government through NUFFIC (a Dutch based International agency) and LEMHANAS.

IPMI International Business School and London School of Public Relations (LSPR) held ASEAN Talk, 8 February 2017, at IPMI Campus. Dr. Nik Haslinda Nik Hussain, senior lecturer School of Humanities Universiti Sains Malaysia, and Tunggul Siahaan, LSPR Jakarta dean, talked with entrepreneur students about e-commerce and entrepreneurship from Indonesia and Malaysia perspective.

Congratulations to our newly-elected Student Council President Edward Teguh Adiprabowo and Vice President Aulya Afrilianto, both are BBA students of 2015 class year.

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April 2017

IPMI BUSINES REVIEW

POWER TALK feat. Hadi Wenas (CEO of MatahariMall. com / PT Solusi Ecommerce Global) at IPMI Campus, 22 February 2017.

As a leader one of the big eCommerce company in Indonesia, Mr. Wenas shared about the forecast of eCommerce trends in 2017 and ecosystem of eCommerce business in Indonesia.

9 February 2017, around 80 future leaders gathered at IPMI Campus to hear Tidar Rachmadi, Facilitator at XL Future Leaders, and Meiske D. Wahyu, Co-Founder at SabangMerauke. They talked about how to prepare for a journey to explore yourself, face challenges, and achieve bigger purpose as youth

IPMI Campus have signed a Memorandum of Understanding (MoU) with PT PPHBI Indonesia (Pusat Pengembangan Hukum dan Bisnis Indonesia) 20 February 2017. Signed by Executive Director & CEO IPMI Jimmy Gani and Director PPHBI Andrew Betlehn, the MoU focused on the cooperation in education, talk show event, short course, private course, and workshop.

IPMI commit to support SMEs grow in Indonesia by giving serial SMEs training and workshop to SMEs community every month at IPMI campus.

IPMI conduct SMEs workshops series since 2016 until today.

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AIESEC IPMI International Business School had an event of Global Village, 6 March 2017, at RPTRA (Ruang Publik Terpadu Ramah Anak) Pola Idaman, Pondok Labu, Jakarta Selatan.

Global Village is a festival to celebrate cultural diversity among the participants. In this event, AIESEC member and student exchange were teaching basic English to the local kids and exposing them to different cultures.

AISEC IPMI International Business School participate in 30th anniversary of Al Izhar High School Jakarta, 12 March 2017.

A session on Sustainability Entrepreneurship by IPMI International Business School for Al Izhar students, 13 March 2017.

IPMI Investment Gallery hosted “Sekolah Pasar Modal� by the Indonesia Stock Exchange 13 March 2017.

Thank you to Ibu Puspita Pratiwi, the Supervisor of Investor Development Division from IDX, as well as Hendry Wijaya, the Strategic Partnership Advisor from Kresna Securities on giving great insights about IDX, the stocks environment, and how to analyze the stocks for a great long-term investment as well as profitability.

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April 2017

IPMI BUSINES REVIEW

Lead by Dr. Amelia Naim, IPMI Executive MBA Students visited Bank Sampah Malaka Sari, Duren Sawit, East Jakarta, 19 March 2017. This Bank Sampah is an innovative way which has increase the community’s awareness of proper waste management.

The Student donated a laptop, printer, and scale to measure the weight of the waste collected by the community. Those who have collected the waste (known as Customers), will further be compensated.

Bank Sampah in Malaka Sari, Duren Sawit received an award from the government in the program “Jakarta, Orion and Clean”

In collaboration with Universiti Teknologi Malaysia (UTM), IPMI hosted a workshop entitled Creativity, Innovation, and Entrepreneurship, 22 March 2017.

Director of Innovation and Commercialization Centre of UTM, Prof Dr. Amran Rasli shared applying the ‘thinking out of the box’ method and understand the inhibitors of creativity and innovation leads to sustainable entrepreneurship.

Thanks to IWAPI (Indonesian Business Women’s Association) members on 23 March 2017 in our campus to discuss about some business idea and challenges.

IWAPI leading women’s business association in Indonesia, with over 50,000 members in various provinces all over Indonesia.

29 March 2017, IPMI International Business School and PT Daya Dimensi Indonesia (DDI) signed a Memorandum of Understanding (MoU) to support education with an online assessment center program, the MOU signed by IPMI Executive Director & CEO, Jimmy Gani and DDI CEO, Yuri Yogaswara.

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Pioneering

INSPIRING

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April 2017

LOOKING FOR THE BEST ROLE MODEL FROM SOE CEOs SWA in association with IPMI International Business School held the first-time event of Indonesia Best SOEs Leadership Award. Who are SOE leaders qualified to win this award?

What lessons can be learned?

Joko Sugiarsono

REPORTERS: AULIA DHETIRA, MARIA HUDAIBYAH AZZAHRA, NERISSA ARVIANA, SRI NIKEN HANDAYANI

IPMI BUSINES REVIEW

For the last three months, it seems that a number of top SOEs executives busier than usual. Only few of them, not all, only the selected ones. They are apparently making preparation for something, which looks serious. These Chief Executive Officers (CEO), Chief Financial Officers (CFO) and Chief Human Capital Officers (CHCO) have been selected for nomination of the aforesaid award, for which they must prepare paper works and presentation of strategies, programs and the implementation to pursue their program missions in the capacity of SOEs leaders, and evaluation of the achieved results and outcomes. Their presentation must be delivered before a panel of jury.

Wait a minute! This is not an assessment or selection to fill key positions in SOEs holdings

41

which is currently in progress by the Government. The prosess involving these top executives aims to look for the best CEOs from SOEs under a competition initiated by SWA Managize in collaboration with IPMI International Business School.

According to Jimmy Gani, the Executive Director & CEP IPMI IBS, the objective of this competition/contest called Indonesian Best SOEs Leadership Awars is to look for SOE leaders as role models to inspire people in the hope that, according to Jimmy, these inspiring leaders can provide good examples for many parties, especially business world, of how they run their companies either consisting of SOEs, national private companies or multinational enterprises in professional fashion.

The main theme of this contest, according to Jimmy, is that of SOEs Transformation. The contest is to search COEs, CFOs and CHCOs with best charaters and capacities in executing transformation measures

within their organizations.

Jimmy said that the criteria for review include of whether the leadership characters and styles they adopt are supportive to the proclaimed transformation and, their past tract records. Their prowess in developing strategies and how to execute them amid the occuring challenges is also assessed.

It is worthwhile to noting here that this SOEs Leadership competition is to elect

the Best SOE CEOs from personality aspects not of their corporations. For the first time, three categories of leadership are contested, i.e. CEO, CFO and CHCO. Some stages must be taken in this competition process. First, nominee selection process is to determine whether a nominee is qualified to step further in presentation stage.

The latter must be presented before a panel of jury. In this stage, the selection is made by reviewing the financial conditions (represented in several financial ratio) of SOEs they lead. About 70 SOEs have complete financial statements for the last three years. Yet, some of them are relatively new officers in their companies.

To address this case, their track records (including their previous positions) will be also considered for evaluation. “We’re looking for persons not the companies. We want to see how these persons build their tract records and materialize their visions into reality,� explained Jimmy.

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April2017 May 2017

IPMI BUSINES REVIEW

INDONESIA BEST BU

FROM LEFT TO RIGHT

CEO CATEGORY THE BEST CEO ELIA MASSA MANIK

President Director PT PTPN III Holding

Breakthrough:

• Replace 46 directors of PT PN and cut the number of directors from 5 to 3 for each PTPN. • Prepare priority scale of areas requiring improvements ranging from oil palm and rubber sectors and set out downstream strategies with the construction of palm oil processing plant.

• Establish talent pool for position one tier below directors

CEO SPECIAL AWARD IN PRODUCTIVITY

CEO SPECIAL AWARD IN VALUE CREATION

ELVYN G. MASASSYA

M. CHOLIQ

Breakthrough:

Breakthrough:

President Director of Pt Pelindo II (Persero)

• •

•

CEO SPECIAL AWARD IN EXECUTION

Prepare Transformation Road Map toward a world class seaport in 5 years Introduce IT approach into Infrastructure Seaport Management of Pelindo II and carry out comprehensive corporation transformation Accelerate services in the port of Tanjung Priok, delivery services; introduce progressive tariff, apply eservice application and shorten dwelling time

President Director of Pt Waskita Karya (Persero) Tbk.

•

•

CEO SPECIAL AWARD IN COMPETITIVENESS

Support the Governmentsponsored programs in Road Road Development Acceleration of more than 721 km, buy toll concession of Pejaten-Pemalang segment Introduce 4 new business pillars: toll road contractors, properties, precast concrete and energy sector

CEO SPECIAL AWARD IN INNOVATIVE TURNAROUND

ACHMAD BAIQUNI

TUMIYANA

HENDRISMAN RAHIM

Breakthrough:

Breakthrough:

Breakthrough:

President Director PT bank Negara indonesia (Persero) tbk

• • •

Optimize branch offices as points of sales in extending loans Set up special unit in Ebanking infrastructure development so as to accelerate business process Maximize cross selling of BNI business units (Business Banking & Consumer banking), and between BNI and the subsidiaries

President Director of PT PP (Persero) Tbk

• •

• •

Prepare Transformation Road Map toward an Asean-class company in 5 years Develop human resources in the terms of quality and quantity, improve the portfolio of power generation and infrastructure and look for partners in oil & gas business sectors Build partnership with foreign partners of Korea and China in regional development Apply ERP for business integration and monitoring

President Director of PT Asuransi Jiwasraya (Persero)

• •

•

•

Apply reinsurance method in 2009 to enhance the solvency of company Prepare Asset Investment Road Map. As of 2008, the total assets recorded Rp4.7 trillion and Rp15.6 trillion in 2015 Introduce efficient IT through integration that facilitated premium sales and enhance administration accuracy Apply risk management and GCG as from 2009.

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UMN LEADERS 2016

FROM LEFT TO RIGHT

CHCO CATEGORY THE BEST CHCO

CHCO SPECIAL AWARD IN PEOPLE ENGAGEMENT

HERDY ROSADI HARMAN

M. ALI

Human Capital Management Director of PT Telkom (Persero) Tbk.

Human Capital Management Director of PT PLN (Persero)

Breakthrough:

Breakthrough: • • • • •

Introduce improvements in 3 aspects: people, culture and organization Remap the management of 72 subsidiaries of Telkom i.e. from strategic guidance to strategic control Conduct talent scouting to search the best candidates Organize Socio Digi Leader contest for creative and innovative young generation Develop leaders through Great People Development Programme (GDP)

• • •

Establish organization design: structure and job description; Set up regional directorate; every human resource must have sound model competence Use Test Adaptive PLN (TAP) Approach, which is faster, more accurate and more efficient Promote Like PLN program, introduce innovation discussion and knowledge sharing forum. The results: 314 innovative works produced

CFO CATEGORY THE BEST CFO ARIEF BUDIMAN

Finance Director of PT Pertamina (Persero)

Breakthrough:

• Save the company from oil and gas industry crisis for the last decade.

Now, the company has relatively sounder financial performance • Successfully deal with very complicated corporation actions: Petral dissolution and acquisition and debt restructuring action from TPPI • Prepare road map and consistently implement it to pursue Vision of New Pertamina 2030

CFO SPECIAL AWARD IN FINANCE BREAKTHROUGH

CFO SPECIAL AWARD IN COST EFFECTIVENESS

A.N.S. KOSASIH

DIMAS WIKAN PRAMUDHITO

Breakthrough:

Breakthrough:

Finance Director of PT Wijaya karya (Persero) tbk

•

• •

Develop Transit Oriented Development (TOD) in the areas adjacent to infrastructure developed by company Prepare land of 1,900 ha for TOD development in the regions along Jakarta-Bandung High Speed Train Look for new projects from Light Rail Transit (LRT) DKI Jakarta.

Finance Director of PT Antam (Persero) tbk

• • •

Look for innovation to reduce costs with finance efficiency in finance Develop downstream sectors in bauxite Build partnership with Asean countries and India

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IPMI BUSINES REVIEW

the presentation by nominees and ended with question-answer session lasting for 2 x 60 minutes.

The Panel of Jury was lead by Prof.

Roy Sembel Ph.D with members of former practitioners and academicians of IPMI. Of the exCEOs and directors, they included former President Directors of Telkom, XL Axiata, Bank Mandiri, Sempati, Garuda, Sarinah, Pertamina and Indofood on top of active directors such as of Intraco Penta plus Faculty Members of IPMI and SWA Magazine leaders.

GREAT CEO HOTBONAR SINAGA President Director of Jamsostek 2007-2012 The author felt very lucky that for the last three months he had opportunity to see Hotbonar Sinaga for more in-depth discussion and learning about several SOE CEOs nominated by IPMI Business School in association with SWA Magazine for Indonesia Best SOE CEOs 2016.

The nomination process was initiated

with performance assessment of SOEs including the track records of their leaderships. The final stage was discussion between the selected candidates and the nomination team.

The assessment was not only focused on CEOs but also CFO (Finance Director) and CHCO (Human Capital Director). The discussion started with

From this nominee selection stage, the committee obtained 10 nominees for each category to undergo the next stage, i.e. presentation. These nominees can get assistance of their staff.

They must present their papers in front of Panel of Jury. The presentation took place at IPMI

office. However, due to their tight business schedule, some presentation took place in the office of nominees concerned.

This second stage is crucial. The assessment covers the following aspects: strategies (25%), implementation (25%), results (30%) and presentation itself (20%). The assessment results

The author, despite a former director of an SOE, felt a bit diheartened to face these prominent figures. While they were still young in terms of age, yet they had chalked up remarkable and stellar achievements. With their fresh thoughts coupled with “out of the box� innovations and shrew breakthrough they managed to cope with a wide variety of complicated problems, demanding challenges, and on the other side to create opportunities. Indeed, they proved that they had been the right man on the right place chosen by their board of directors and shareholders.

The evaluation process was very interesting since the candidates came from various companies and industries ranging from financial service sector, construction, infrastructure, agribusiness to manufacturing. Unfortunately, not all candidates were interviewed because of difficulty in setting the most convenient time of both parties. Some nominees refused to be nominated despite excellent performance.

The first nominee interviewed was CEO of construction service

are then discussed in a plenary meeting of Panel of Jury. Some candidates were prevented from delivering presentation because of their exceeding work loads. They have no sufficient time to prepare materials of presentation.

Some senior business figures

45 enterprise, i.e. Waskita Karya who the author personally knew since the author had been frequently invited to cover various activities within the Ministry of State Owned Enterprises (SOEs) or asked to attend the inauguration of a project. This CEO had been highly praised for his success in generating values for his company amid tight competition and non-optimum state budget absorption.

The second nominee for Best CEO for interview was the President Director of Jiwasraya, an SOE that has been engaged in insurance sector for more than 150 years. He opened his presentation with a picture of ship “Titanic” in vertical position at sea. She was going to sink down. His company was in gloomy condition when he was appointed as the CEO in 2008. Eight years later he changed this nearly sunk “ship” into a robust “ship” ready to sail and compete with giant life insurance companies of AXA, Manulife and Prudential UK that had expanded their operations in Indonesia for more than two decades. This candidate was qualified to win the award because of his Innovative Turn Around.

The next CEO interviewed was the successor of author in Jamsostek. He transformed Jamsostek into BPJS as a public legal body. He was interviewed in the capacity of CEO Pelindo II. The latter needed “Midas tough” of a highly competent COE to change the orientation of company, not only in elevating the bottom line of company but also in improving the dwelling time, to which the President gave his concern in this issue. Dwelling time must be shortened since it would enhance the productivity of Tanjung Priok port and other ports under

(normally former top SOE executives of big enterprises) have been assigned as the members of Panel of Jury. They are the likes of Hotbonar Sinaga (former President Director of Jamsostek), Zulkifli Zaini (former President Director of Bank Mandiri), Rinaldi Firmansyah (former President

Pelindo II. This CEO has a unique hobby. He is a song composer, a musician and a jazz music fan.

became weak points of SOE. He was deserved dubbed as Master of Execution.

It was interesting when the juries interviewed the President Director of PTPN III who had consolidated 14 PTPN. The career of this COE who was the alumnus of Bandung Institute of Technology (ITB) was dominated with his employment in private companies. To mention some, they included Indofood Sukses Makmur, Suez, Kiani Kertas, Jababeka, Pandega, Kertas Basuki Rahmat, Elnusa and lastly he worked for eight months in Bank BNI before appointed to lead PTPN III Holding.

Author and other juries then interviewed a humble CEO but excelled in leadership. He now lead PT PP (Tbk). He nurtured his professional career from bottom as field executive. His motto: Don’t become player but Coach. He took example of the legendary coach of Manchester United who before reaching glorious career as a coach in less than 30 years, he was a player.

In playing his role as a top leader, he underlined three prerequisites, i.e. knowledge, speed in execution/ decision making and, the most interesting, gut/courage. In agro business such as plantation sector, research and development became success key and thereby a must possess factor. Because of his hobby in music, it was not surprising if this CEO frequently took leave just to attend rock concert of Bon Javi last year. This hobby was tantamount to the hobby of CEO Pelindo II who was ready to go abroad to see jazz concert in, for example, North Sea Jazz Festival.

Bank BNI had been long eclipsed by two big SOE Banks. Under the leadership of A. Baiquni, a CEO who was previously transferred to BRI, Bank BNI changed its direction toward a big bank. The illustrious career of this CEO can be traced back from management trainee in 1986. Thirty (30) years later he turns into the most powerful official of a company. He was very concerned on execution matter, which often

Director of Telkom), Hasnul Suhaimi (former President Director of XL), Emirsyah Satar (former president Director of Garuda), and others. These jury members of business worlds are supported with members of academicians and senior journalists (see the related box for list of Panel of Jury

As previously noted, all COEs nominated as the Best COEs are very unique. It is a bit disappointed to know that age and service terms as director have become limitation factors (e.g. maximum 2 terms).

This condition has prevented their optimum contribution in developing and augmenting the performance of companies they lead. Pursuant to Article 16 paragraph 4 Law 13 of 2003 concerning SOEs the service term of board of directors members shall continue for five years and can be reappointed for one term or maximum 10 years. In some cases, shareholders execute their prerogative rights in General Meeting of Shareholders to assign members of board of directors for more than 10 years under very selective considerations. Their competencies and experience can be maximized in the positions of Board of Commissioners (as knowledge & experience sharing forum), either in their former enterprises or in other companies with similar sectors.

It is expected that this short article can share the professional experience of these great COEs to the next CEOs. Hopefully.

members).

According to Jimmy, who is also a member of Panel of Jury, these senior business figures are important. They can share their past experience, which may encounter similar problems these days. They are complemented with

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April 2017

“

THE QUALITY OF FINALISTS IS EVIDENTLY REFLECTED FROM THEIR COMPETENCIES, ENDURANCE AND STRATEGIES IN LOOKING THE BIG PICTURES AND OPTIMUM IMPLEMENTATON

PROF. ROY SEMBEL

Dean of IPMI International Business School, Chairman of Panel of Jury

academicians and senior journalists to ascertain independent and neutral evaluation.

Jimmy underlined the superiority of this present SOEs Leadership. He said that the contest was not only based on secondary data, but also presentation and questionanswer session between the nominee and Panel of Jury members. “We are not guessing from secondary data,” said this former President Director of PT Sarinah (Persero).

Meanwhile, Prof. Roy Sembel, the chairman of Panel of Jury claimed that interview session and question-answer session would provide an opportunity for Panel of Juty to assess the verbal and non-verbal communication of nominees and to clarify any issue requiring further information from the first hands. “Question-Answer session is vital to explore information explicitly or implicitly,” said Roy, who is also the Dean of IPMI IBS. Roy opened that in general the nomiees had excellent leadership quality. “The quality of finalists are evidently reflected from their competencies, endurance and strategies in looking the big picture and optimum implementation,” assessed this professor in finance discipline.

Hotbonar Sinaga, the former President Director of Jamsostek,

IPMI BUSINES REVIEW

who is also the coordinator of Panel of Jury for Indonesia Best COEs contest forwarded similar opinion. Even, he felt a bit disheartened when compared to the nominees who according to his assessment they had proved themselves with excellent and remarkable achievements.

“These nominated COEs are great COEs. They are very rare,” Hotbonar admired.

Hasan M. Soejono, another member of Panel of Jury, has his personal opinion. He said that the candidates nominated for Best COEs had relatively equal quality to world-class CEOs. According to him, these candidates presented clear visions, and accurately depicted their missions and highly adept in formulating strategies and execution with the right teams resulting better performance.

“Their skills in these aspects have made them different from other SOE COEs,” said this former President Director of PT Sempati Air, who is now the incumbent of Commissioner for PT Garuda Indonesia.

In terms of strategies and implementation, Hasan assessed that there was solid integration of what they thought about and what they said and did. They have been assessed highly credible by many parties. Their strategies can be implemented with ease. “However, implementing strategies are never easy. With trust of all stakeholders, strategy implementation will become much easier,” said Hasan.

47 of Jury members. Massa who is currently busy of consolidating 14 PTPNs has a relatively varying experience ranging from private enterprises to SOEs, from manufacturing industry, oil and gas, bank to plantation.

Panel of Jury for Indonesia Best SOEs Leadership Award 2016 / plenary meeting to determine the winner

Roy Sembel, a jury member for CFO category, was satisfied with the quality of nominees/finalists.

In general, they had exceptional technical competency. They were capable of governing finance division in optimum manner in close cooperation with their CEOs. The ability in translating corporate strategies into financial strategies and implementing such strategies amid intense challenges is beyond question. “The selected candidates have excellent capabilities of strategies and implementation resulting a lot of outcomes,” said Roy. What’s about the nominees for CHCO category? According to Effendy Ibnoe, a member of Panel of Jury, the finalists of this category were obviously qualified. They came from big SOEs such as Pertamina, PLN, Telkom and Wika. “They are brilliant. They are CHCO models who are capable of transforming their enterprises.

Transformation not only concerns with culture but also performance improvement,” said this high ranking official of

Intraco Penta.

Based on Panel of Jury’s evaluation results taken from a planery meeting of 23 November last year, for CEO category the winner of the Best COE went to Elia Massa Manik, the President Director of PTPN III Holding.

Other Best COE nominees with equal qualifications to the winner received special appreciation (special award) reflecting their unique capacities. They included Elvyn G. Massasya, CEO Pelindo II for Special Award in Productivity, M. Choliq, CEO Waskita Karya for Special Award in Value Creation, Adimas Baiquini, CEO BNI for Special Award in Execution, Tumiyana, CEO PP (Persero) for Special Award in Competitiveness and Hendrisman, CEO Jiwasraya for Special Award in Innovative Turnaround.

The achievements and performance chalked up by Elia Massa Manik were so impressed in the eyes of Panel

Hotbonar failed to conceal his admiration to the leadership of Massa adopting three pillars, i.e. knowledge, speed and gut/ courage. Massa who had no banking experience before was tasked to restructure nonperforming loans in BNI with praiseworthy results. His gut/ courage was evident from his decision to dimiss any employee found to breach the regulations even at director level.

Hasan was impressed with the big vision and “out of the box” innovation brought by Massa. His vission was not only successful in turning the enterprise he led into the best plantation company in Indonesia, but also in changing plantation sector into the largest income generation source for the Government outpacing Pertamina. Hasan also appreciated the decision taken

by Massa of working together with the existing teams. He brought no team from external sources.

In CFO category, nominee with the highest score or the Best CFO was Arief Budiman, Chief Finance & Strategy Officer of Pertamina. CFOs appraised with special awards included CFO Wijaya Karga, Kosasih (Special Award in Financial Breakthrough) and CFO Aneka Tambang, Dimas Wikan Pramudhito (Special Award in Cost Effectiveness).

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April 2017

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THE CANDIDATES OF BEST CEOs RELATIVELY HAVE EQUAL QUALITY TO OTHER WORLDCLASS CEOs

HASAN M. SOEJONO

Independent Commissioner of PT Garuda Indonesia, Member of Panel of Jury

Panel of Jury Indonesia Best SOEs Leadership Award 2016 • Roy Sembel Dean & Professor IPMI International Business School

• Rukmi Hadihartini Former of HRD Director & PT Pertamina (Persero)

• Hotbonar Sinaga Industry expert Advisory board CRMS Indonesia & former President Director of PT Jamsostek

• Effendi Ibnoe Director & Chief Human Energy Officer PT Intraco Penta Tbk

• Zulkifli Zaini Independent Commissioner of Indonesia Infrastructure Finance & Former President Director of PT Bank Mandiri (Persero) Tbk • Hasnul Suhaimi Faculty Member IPMI International Business School & Former President Director of Pt XL Axiata Tbk • Hasan M. Soedjono Independent Commissioner of PT Garuda Indonesia (Persero) Tbk • Rinaldi Firmansyah Independent Commissioner of PT Blue Bird Tbk & Former CEO of PT Telkom (Persero) tbk

Hasan evaluated that when assigned in his current position, Arief Budiman faced complicated situation.

He is not only had to serve numerous stakeholders but also the declining oil price, significant subsidy cut, poor corporate performance, etc.

“Arief succeeds in introducing internal breakthrough in finance directorate and fostered solid cooperation with internal and extenal stakeholders. Given that, in relatively short time he managed to elevate the financial performance of company into viable conditions in future,” Hasan evaluated. The most outstanding breakthrough initiated by Arief was that of

IPMI BUSINES REVIEW

• Mustafa Jatim Member of the Executive board iPMi international Business School

• Bambang Gunawan Director of Executive Education IPMI International Business School • Iwanho Vice President Director PT RHB OSK Securities Indonesia • Ardo Dwitanto Special Projects Manager/ Faculty Member IPMI International Business School • Dana Afriza Director of Corporate Communications IPMI International Business School • Sasotya Pratama Deputy Director of Research and Community Development IPMI International Business School • Kemal Effendi Gani Chief Editor of SWA Group

• Asto Sunu Subroto Director of Center for Innovation and Competitiveness IPMI International Business School

• Sujatmaka Chief Editor of SWA

• Jimmy Gani Executive Director & CEO IPMI international Business School

• Joko Sugiarsono Executive Editor of SWA

• Emirsyah Satar Chairman Mataharimall.com & Former President Director of PT Garuda Indonesia (Persero) Tbk • Mira Amahorseya Former President Director of PT Sarinah (Persero)

• Kusnan M. Djawahir Deputy Chief Editor of SWA

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technology-based system, i.e. Pertamina Investment Information System to facilitate the management of corporate investments worth of millions of US dollars.

For CHCO category, the Best CHCO award went to Herdy R. Harman, the Chief Human Capital Management of PT Telkom. In this category, several nominees had been appraised with special awards inclusive of Muhammad Ali, Director of Human Resources and General Affairs Department of PT PLN (Special Award for People Engement).

According to Bambang Gunawan, a lecture of IPMI who is also a jury member for CHCO category, Herdy was excelled in building Telkom’s talents who are ready to compete with global perspective and available to lead other SOEs. In addition, Bambang was also impressed with Herdy’s breakthrough in maximizing technology in talent management. This approach enabled him to monitor the progress of his talents on daily basis.

As a partner in this Indonesia Best SOE Leadership contest (along with SWA), Jimmy Gani, representing IPMI, expressed his satisfaction of this first competition. He admitted some barriers in dealing with this kind of competition. The largest constraint concerned with difficulty in arranging time with the candidates/nominees to make presentation before Panel of Jury. Other challenges, as previously stated by Jimmny included of how to select the best of the best. “Every member of Panel of Jury has his personal perspective. Meanwhile, all candidates are so inspiring,” said Jimmy. “Every candidate has unique superiorities. It is very difficult for Panel of Jury to determine the absolute winner,” added Roy Sembel.

Jimmy expected that this Indonesia Best SOE Leadership contest generated multiplier effects. “We do hope that these inpiring participants become role models to the others,” Jimmy expected. “If we have more people like them, our nation can reap more benefits,” he added.

“

THIS CONTEST HAS OBJECTIVE OF LOOKING FOR THE BEST SOEs LEADERS AS ROLE MODELS TO INSPIRE OTHER PEOPLE

JIMMY GANI

Executive Director & CEO of IPMI international business School, Member of Panel of Jury Business

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April 2017

IPMI BUSINES REVIEW

ELIA MASSA MANIK (CEO PT Perkebunan Nusantara III Holding)

HOW THEY RESPOND THE CHALLENGES

They are unarguably the best talents holding CEO, CFO and CHCO positions in various SOEs. How do they formulate strategy to cope with business challenges they encounter? What breakthrough do they take to promote their enterprises? What are their achievements? Just read the articles that follow.

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CEO CATEGORY

WAITING “MIDAS TOUCH” IN PLANTATION SECTOR

culture to private plantation enterprises. “Financially this company is distressful. Some is nearly bankcrupt. However, there is still promising hope. Our primary tasks are to restructure this plantation company to perform well that can enhance the pride of Indonesia,” said Massa when met in his office.

A know-everything leader who can deal with any problem, this may be the most suitable expression to depict Elia Massa Manik, CEO of PT Perkebunan Nusantara III (PTPN III) Holding.

For his colleagues, it is not difficult to understand the decision taken by the Ministry of State Owned Enteprises of Republic of Indonesia of assigning him to navigate SOE Holding of Plantations with 14 subsidiaries (from PTPN I to PTPN XIV).

The assignment of Massa as CEO for this SOE Holding by the Ministry of SOEs has been, of course, made upon some evaluation. His past experience was dominated with management restructuring of troubled enterprises. “I have no idea of how God direct me. My professional career is in majority to deal with insolvent enterprises, to manage distressed assets and business development,” said this person who was born in Kabanjahe (Karo), North Sumatra.

ELIA MASSA MANIK

Sudarmadi & Rizky C. Septania

How right this appreciation is.

Of 14 SOE enterprises under his leadership, nine companies booked losses. Some of them,

even, committed defaults and blaclisted by banks for loan application. This SOE Holding must shoulder unbearable consolidated debts amounting to more than Rp33.23 trillion. What an unimaginable nominal sum!

Despite total assets in excess of Rp109.72 trillion and semester income of around Rp13.36 trillion, yet this SOE Holding made losses of Rp800 billion.

This condition is aggravated with operational problems, i.e. low estate productivity, inefficient business operation, discouraging human resources motivation, stagnant business development and incompetitive organization

His long career includes CEO for oil and gas company of Pertamina, PT Elnusa Tbk. (201114). In Elnusa, he was tasked to turn around this company from debt trap, to enhance

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the liquidity and addess a wide variety of operational problems. He accomplished these challenges. He ammassed ready for investment current cash of around Rp.1 trillion. He was also successful in reviving the nearly collapsed big property group (integrated property) in Balikpapan. The company now runs soundly (2006-10).

Massa was also recorded as a former CEO for PT Kiani Kertas.

His mission was to restructure this big paper enteprise under new owner who acquired this company from BPPN in 2002.

Another high ranking position he held was when appointed as CEO to revive a paper enterprise in East Java, which was not in operation for long time, i.e. PT Kertas Basuki Rahmat, Tbk. He was also engaged in distressed asset restructuring when he was oppointed to be executive for BNI (Persero) in August 2015 to April 2016. “I’m so confused [of this appointment]. I’m not a banker.

They asked me to deal with non

performing loans. Thanks to God, only in nine months time I managed to turn sub-standard loans worth Rp16 trillion to standard loans,” explained Massa who liked to share his management experience in various forums.

Massa also engaged in business development field. After acquiring his MBA degree from Asian Institute of Mangement, the Phillipines, he joined with business development division of Salim Group (Indofood Group).

A masterpiece product of his team was Sari Roti. When he was offered to be Production General Manager of this bread company, he refused and looked for more challenging position, i.e. Suez Group, a global infrastructure enteprise, which just started its business in Indonesia. As CEO of this French Company he supervised 400 persons.

What is his achievement in PTPN? It is too early to assess his success in PTPN. His service is still less

IPMI BUSINES REVIEW

than one year. However, efforts and breakthrough he introduced and the preliminary results, which were relatively sound indicated that he was on the right track.

Since his assignment in PTPN, Massa and his teams took a number of important measures in corporate restructuring.

The most fundamental things he took concerned with organization and leadership. He believed that the rise and fall of an enterprise was considerably dependent on the leader. Not surprising if he immediately restructed board of directors in 14 PTPN and evaluated their performance.

“Erstwhile, one PTPN had five directors. Now, we change it, i.e. only three directors,” he explained. The objectives to pursue were not only for efficiency but also for facilitation in directing the organization, in unifying commands and in augmenting operational agility.

More revolutionary measure was evident from how Massa filled director positions in these 14

53 subsidiaries. He took a brave step.

He replaced 46 directors within PTPN with new persons. The later is mostly recruited from internal human resources who were deemed qualified. This method was also applied in turning around PT Elnusa Tbk. “Of course, before taking this action I have consulted to the Minister of SOEs. This is part of my strategy. They agree. That’s why I’m available to be CEO for this company,” said undergraduate degree holder in Environmental Engineering from Bandung Institute of Technology (ITB) in 1988.

Before dismissing 46 directors, he gave three months for them to run new strategies outlined by the holding. While some of them managed to implement the new approaches, but their

performance failed to attain the expected progress. They were finally replaced. He invited personally those who were about to be dumped. He explained the conditions of company to them, one by one. “It’s time consuming.

It involves personal feeling of others, which is tiring. But, it is a leadership risk that must be taken,” Massa explained his leadership style.

Massa has principle, as CEO of a holding, he must position himself as the owner of 14 subsidiaried.

“The success of subsidiaries is dependent on how we select COEs and directors. Likewise, the

success of a holding is subject to the leader chosen. I believe that in business, change will come from the owner,” stressed COE who loves playing golf.

In restructuring PTPN, Massa set priority scales in the fields to be changed. “Our time and opportunity are limited. We must be smart in selecting what priorities to be done first,” Massa explained. He then aimed oil palm sector as the first target for resctructuing. This decision was due to the fact that this sector contributed 65% of total PTPN income with the other 15% and 7% from sugar cane plantation sector and rubber sector respectively.

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April 2017

“

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WE MUST ACCOMPLISH EVEN SMALL THINGS. REMEMBER, BIG RESPONSIBILITY COMES FROM SMALL THINGS

Elia Massa Manik

CEO PT Perkebunan Nusantara III (Persero)

In reality, total areas of oil palm estates owned by this holding company reach 733,378 ha or 57.5% of total plantation estates.

Out of such oil palm estates, 531,168 ha are for core estates with the remaining 202,210 ha for plasma estates. In 2015, the productivity of fresh fruit bunch (FFB) just recorded 18.20 ton per ha per annum on average. Meanwhile, the private enterprises could reap 24-25 tons

FFBS/ha. Likewise, in terms of oil palm trees, the record was 118 trees per ha compared to private plantation companies that might reach 135 trees per ha.

This aspect received great concern from Massa and his team. They handled this problem with estate productivity improvisation. From week to week, his team explored various solutions to improve the estates and their productivity. They

referred to better productivity of private enterprises. “Productivity must be increased to minimize costs,” he said. In this respect, he always emphasized his team to expedite the speed. This SOE should no longer “sleep” anymore. He and his team conducted benchamarking survey to Malaysian SOEs, Sime Darby and FELDA. These two foreign companies were renowned for their excellent performance.

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To realize his plan, Massa needed additional funds of Rp9.5 trillion for the next 6 years for estate replanting. The fund was spent to replace old trees (>24 years) or to cultivate sideline lands.

Luckily, after visits to some banks, some of them remained available to provide funds. “Banks normally see the reputation of management team and the prospect after restructuring. PTPN has bright future,” said Massa who was active in searching the funds.

Massa and his team examined the details of operation and finance so as to cut the losses down. He advised of not be embarrassed to learn from other companies with better performance. He gave an example. Rubber business of PTPN always booked losses for

the last four years. In 2015, this business made Rp4,45 million loss per month. When asked of the reasons, his employees replied of too many personnel. However, upon deep investigation, he found that the error lied with the leader.

After replacing high ranking officials in rubber business, he and his team made benchmarking visit to rubber company under foreign investments in Medan, i.e. PT Socfin Indonesia. “The rubber price of PTPN is more expensive.

They sell rubber at US$1.65 per kg. If they reap profits, we should also book profits. Finally, he

invited Socfin team to teach in rubber management. “We start to learn in June. In August we apply what we learn and in September we amass some profits,” told Massa in restructuring rubber business.

In finance sector of this holding company, the most significant action taken by Massa was his debt restructuring of several subsidiaries experiencing liquidity problems. Restructuring must be taken to avoid default and to augment repayment capacity. The next step was to implant profitloss awareness in management and performance evaluation to every business unit. Under a holding company, subsidiaries no longer found any difficulty in looking for funding.

Still in financial matter, Massa

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April 2017

continually urged subsidiaries to record better performance. “For example, some may be satisfied because their companies earn income Rp.150 billion. However, upon my perusal, they should amass at least Rp.600 billion.

Not yet maximum! They must intensify their efforts,” he told his experience in prodding his personnel to work harder. He never received income statement as it was from subsidiary. “It is not enough to say that the company makes profit. From where did the profits come? Where is the cash money? Where is the operating cash flow? This business is in real sector. The most important is

operation cash flow,” he stressed.

In human resources, after restructuring the organizations at board of director level Massa started to develop talent pool for positions just one tier below directors. These positions must be occupied the most competent personnel. The holding company conducted job enlargement and job enrichment while omitting redundant positions to build simpler business organization without compromising organization control and effectiveness.

Thereafter, his attempt was directed to build solid communication with all subsidiaries. “Communication should not be limited at director level. It must go down until reaching the lowest tiers.” Massa visited every subsidiary to ascertain that his restructuring program extended until the

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lowest level. He also launched the so-called “agents of change” forum at subsidiaries. This forum consisted of potential young talents.

In business development affairs, the holding company instigated several business development programs. They included downstream initiatives.

Holding company operated a Special Economic Zone Sei Mangkei of 1,933 ha where palm oil processing plant, rubber processing plant, logistics and tourism are currently in operation. Meanwhile, the construction of cooking oil processing plant with capacity 600,000 ton CPO per year is still underway. For downstream and branding, PTPN recruited senior executive with extensive experience in mass product branding for customer products.

57 The candidate used to work for Heizn, ABC and Bintang Toejoe. It aimed to accelerate downstreaming process.

Despite assignment in April 2016, in eight months time, Massa with his restructuring action started to reap the fruits. Banks were now available to discuss debt restructuring. Rubber business, which for the last four years failed to reap profits, started to accumulate profits.

In consolidation terms, after enormous loss Rp.250 billion in 2015, this year this loss had been significantly cut down until Rp.50 billion. “The first year in turn around cycle will be like that. The first year is normally for organization structure remodeling and adjustments.

Hopefully, next year will be better.

Consistency is important here,” he continued.

Massa adopts principle that as a

leader he must put himself a true leader. He must minimize his ego.

“The big enemy of a leader is his ego. To win trust of people we lead, we must eliminate our ego.

We must be credible, reliable and have personal intimacy to arouse trust of others to us,” he told his secret. Massa added that the higher position of a leader, the lower ego must be maintained.

Don’t do anything because we feel powerful. “A leader will succeed if his personnel also succeed. The success of a leader is the success of team. Leader must get the others involved,” he confirmed.

To sharpen his leadership skills, Massa recalled his father’s message of never stopping

learning from the others. His father also advised him of not pursuing jobs or positions but challenges and passion. The most important message of his father was of accomplishing the given responsibilities. “We must accomplish even small things.

Remember, big responsibility comes from small things,” he reminded us. This lofty DNA of being accountable and sincere persons has been instilled into his employees with a view to completing PTPN restructuring”.

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April 2017

ELVYN G. MASASSYA

PELINDO TRANSFORMATION TOWARD WORLD-CLASS PERFORMANCE Sujatmaka & Rizky C. Septania When asked of his opinion about the appointment as the new President Director of PT Pelabuhan Indonesia II (Persero)/ IPC, Elvyn G. Masassya said that it was just another challenge that must be accomplished. “For me, transformation is something that will arouse my adrenalin,” told this former President Director of BPJS of Workers. It was another call of duty for him, i.e. to make transformation in Pelindo II. “Pak Jokowi asked me and I’m very glad

with her vision of sea toll,” said this man who was appointed as a president director in the end of 2016 and who was born in Medan on 18 June 1967.

With relatively long career extending for 26 years in finance sector, corporate transformation and restructuring was not something new for him. “When I was tasked in Bank Bali, I faced cessie case. In Bank Permata I must merge five insolvent banks.

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Then in Jamsostek, I transformed SOE into Public Legal Body – from bureaucratic enterprise into professional enterprise. I managed fund worth of more than Rp209 trillion with 23 million participants. With good governance approach I brought Jamsostek from maturity Level 4 (matured) to Level (citizenship).

Lastly, I was assigned to make rebranding to Jamsostek into BPJS of Workers,” said Elvyn.

In Pelindo II, Elvyn admitted that the condition was relatively challenging. Labor Unions in Pelindo II had been renowned for their frequent demos. The turbulence conditions in the company sparked many demos.

The first step he took was to meet employees, to calm them

59 down and asked them to discuss their aspiration. “I explain them that this company is their future.

If you agree, let’s develop it together,” he said. And thanks to God, with various approaches the turbulence was finally curbed.

Despite career and experience in finance sector, Elvyn was confident to restructure Pelindo II, an enterprises engaged in seaport management. According to him, banks, insurance and seaport had same business characters.

They rendered services. “For service business, speed is everything. Second, access must be facilitated. Third is attractive appearance and fourth, we must

be friendly,” he emphasized. For seaport management business, according to Elvyn, the dwelling time was a determinant factor.

Terminals and wharfs must be added to facilitate access. Equally important, a port must have operation cranes and deep wharf.

To deal with the frequently complained dwelling time issue, Elvyn took a number of measures. They included: accelerate offloading process from the ships, modernize/ maintain the equipment, speed up delivery services in Tanjung

Priok and introduce eservice and progressive tariff. The results, dwelling time was reduced from previously more than five days to 2.1 days. To complement the above mentioned measures, various initiatives were launched to augment operation incomes from cargo, terminal and container services being the core business of Pelindo II. As of semester I/2016 the operating income of Pelindo recorded Rp.4.26 trillion or 22.7% higher than the same period of last year.

This higher operation income was accompanied with improvements in financial indicators such as operating profit margin (from

24% to 32%), ROA (from 2% to 3%) and ROE (from 9% to 10%). Meanwhile, the ratio of operational expenses to operational income was also to improve from 76% to 68%.

According to Elvyn this bolstering performance was achieved by performing any “must have” measures coupled with better efficiency and effectiveness.

Elvyn committed to bring both internal and external transformation to Pelindo II toward a world-class seaport manager excelled in operation

and experience. “Pelindo II must emulate and even outperform port in Bangkok or those in latin America countries,” he added.

He would strengthen services as destination port. Function of transshipment port would be also intensified to attract Australian and Eastern Asian markets.

Elvyn divided transformation of Pelindo II into five phases.

The first phase, year 2016, was called as Fit In Infrastructure phase or system preparation phase. The second phase, year 2017, was for enhancement covering operational & service in procurement, expansion

of subsidiaries, infrastructure development and strengthening/ enhancing business. Phase 3, year 2018, was establishment phase or business and profitability growth. In this phase, Pelindo II was targeted to reach superior business performance. Phase 4, year 2019, was for sustainable performance phase. And the target set to attain in the fifth phase, year 2020 was to achieve world-class performance.

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April 2017

TUMIYANA

SPEEDING TOWARD ASEAN CLASS COMPANY Sujatmaka & Rizky C. Septania Starting in PT PP (Persero) Tbk with vocational senior high school (STM) certificate, Tuminyana’s career was steadily increasing. Working as surveyor while attending undergraduate program majoring in Civil Engineering at Borobudur University and Management Magister in IPWI he was then appointed as Finance Director of PP in 2008. During his tenure, PP recorded a historical milestone, i.e. registered in stock exchange in February 2010. “It is one of most challenging tasks,” he said in front of Panel of Jury for the selection of Best CEO SOEs 2016 hosted by IPMI SWA.

Meeting of Shareholders held on 29 April 2016 assigned him as President Director of PP to replace Bambang Triwibowo. As the highest ranking commander in PP, he needed no warm-up action. He has been working for 29 years in PP from the lowest position, with eight years as finance director, he was wellinformed of PP business. “So, Pak Tuminyana is one of officials who have been working for long time in PP,” said Hotbonar Sinage, a Jury member. “Yes, sir! While I have the longest service term in PP, but not the oldest,” replied Tumiyana who was born in 1965.

The audience burst to laugh.

His career in PP reached the peak in early this year when General

In the first three months after his appointment as president

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director, Tumiyana and other six directors of PP immediately formulated business plan for the next five years. He called it PP Transformation 3, 2015-2021. The target was ambitious, i.e. to bring PP as a champ in infrastructure sector at ASEAN level outperforming Gamuda Berhard of Malaysia. “We’re no longer talking national competition but regional level,” said Tumiyana who promised to turn PP into ASEAN class company in 2018.

According to him, at present PP remained below Gamuda. In 2016 the after-tax profits of PP were expected to amount around Rp.1.04 trillion. Meanwhile Gamuda earned Rp2.53 trillion after-tax profits. However, with business leaps, profits to be reaped by PP in 2019 were targeted to record Rp.3.38 trillion.

It meant higher than Gamuda, which projected its profits in the same year at Rp.3.24 trillion.

Thereafter, PP would further

61 speed up until the end of the fifth year, i.e. 2021 when PP was predicted to amass profits Rp.5.23 trillion much higher than Gamuda at Rp.3.83 trillion.

To support business expansion, the capital must be strengthened with a series of IPO and right issue to subsidiaries. Four IPOs and three right issues had been planned in five years. It was expected that these events could mobilize funds of more than Rp.27 trillion. Plus profit contribution, etc., it was predicted that total equity would surge up from Rp.11.42 trillion in 2016 to Rp.54.69 trillion in 2012.

From business side, apart from boosting business line in property and construction section, PP would expand and develop energy and infrastructure sectors. Targets set for energy sector include of constructing power and gas generation plant.

As for infrastructure sector, the company would engage in toll road, seaports and airports development. These upstream sectors, as Tumiyana called, would drive midstream and downstream sectors such as in construction equipment manufacturing, which was equally lucrative. “We can create our own businesses. This will reduce government projects by around 18% from Rp38 trillion capex per annum,” he told. In operational aspect, he set targets for six directors. They must manage 26 projects per annum to realize annual business growth at 38% on average.

Until 2021 Tumiyana set target for PP of constructing 100,000 residential units, 4,000 MW power plant, 259 km toll road, 36 millions of pax airports, 50,000 DWT seaports and 2,250 ha of development areas.

IN CAREER Reach maximum achievement at every point no matter how difficult is your position.

Otherwise, you will be sacked.

IN BUSINESS Create employment opportunities and be coach not player since player is dispensable at any time.

A tip to be applied by Tumiyana was to build alliance with foreign companies adept in technology and having strong financial capacity. In high rise low cost building for example, PP would set up partnership with Chinese companies. In integrated low cost residential zone development, he planned to work with Hanwha of South Korea. To expedite transfer of technology in energy and infrastructure sectors, he offered opportunity for foreign professionals as CEO in all energy and infrastructure subsidiaries.

“They will be accompanied by young domestic counterparts to speed up transfer of technology process,” he said.

In HRD sector, training would be intensified to forge young talents into professional employees.

The training was concentrated in PP University, Cisarua, Bogor.

“In Quarter I all supervisors to middle managers will gather in there to take training,” said Tumiyana. To enhance management effectiveness, he introduced ERP with capability of controlling various PP projects in many regions. The target was to integrate all PP projects by February 2017. “All projects will be monitored in dashboard.

On Mondays, middle managers are not allowed to leave office.

They must be standby to receive consultation from their teams in the fields,” he explained.

With the above strategies, Tumiyana is optimistic that PP will turn into an ASEAN-class company in 2018 and further improve in the subsequent years.

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May April2017 2017

ACHMAD BAIQUNI

TO MAKE THE COMPANY EXCELLENT AT SERVICE AND PERFORMANCE Dede Suryadi & Jeihan Kahfi Barlian “To be a finance institute, which is excellent service and performance” is the vision brought by Bank Negara Indonesia (BNI) at present.

This vision is to replace the older vision saying “to be a bank excelled at service and performance”.

BNI’s commitment to revise the vision of bank to finance institute is to accommodate the demands of all stakeholders, to anticipate dynamic business environment marked with more complicated needs of customers that can’t be catered by bank only.

In addition, this new vision is in line with the regulator directives on financial conglomeration for banks operating non-banking financial business units.

BNI operates securities, life insurance, finance company and managing investment. “In light of that, we restate our vision,” said Achmad Baiquni, the president director of BNI. To materialize this dream, BNI develops annual strategic themes as roadmap to actualize its vision. Theme in 2016 is business synergy of bank and subsidiaries. In 2017, the strategic measures include aggressive growth. Until 2018, BNI is expected capable of executing its competitive financial service strategies.

From his appointment as

president director of BNI on 17 March 2015, Baiquni and the team have conducted comprehensive evaluation for external and internal issues that will affect BNI performance. From internal perspective, while BNI is competent in corporate and institutional banking matter, yet it fails to capitalize on such advantage. “According to my opinion, the key is in the execution and execution is considerably subject to human resources and information technology,” said Baiquni who was born in Surabaya 59 years ago.

The main income source of BNI comes from credits.

The problem is that this Bank has relatively high non-performing loan rate.

It must be downgraded. “At that time, I applied pro-active conservative strategies,” said this Economy Faculty graduate from Padjadjaran University, Bandung in 1982. Conservative means to detect any potential non-performed customer either because of economic conditions or poor internal condition of ventures run by customers. From that point, he started to downgrade the substandard loans. He then took pro-active measures to deal with non-performing loans with the formation of reserves.

Net performing loan (NPL) at the time was to rise from 2% to 2.7%.

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It is down to imbalanced business control: a business banking director is tasked to supervise more than 80% of total BNI’s business portfolio.

In fact, there are 10 directors and only one of them has been assigned to manage business banking. Since 2015, business banking segment was divided into three directors, i.e. corporate, medium and small business. It aimed to focus BNI in exploring this segment.

This holder of Master of Business degree from Asian Institute of Management, the Philippines in 1991 gave an illustration. There was a region, which was potential for credit channeling. However, this potential was not optimized due to lack of BNI outlets.

It was the consequence of centralized credit policy. Only few credit centers were put up. In light of that, BNI branch office, which previously served general banking transactions only, has been optimized to be point of sales extending credits. Heads of branch offices have been empowered with authority to approve credits. This policy is to expedite services and enhance quality of credit monitoring.

Geographically they are closer to debtors. In addition, BNI also established special unit tasked to develop BNI’s ebanking infrastructure. It will enable this government owned bank to speed up its business without necessarily building new physical outlets.

The result of optimized BNI outlets is that of higher credit growth: more than 21%.

Meanwhile, credits in banking industry are just to grow at 6.7% in August 2016. The Third

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established betweeen ebanking unit and credit unit in developing digital channel as point of sales for credits to small-scale enterprises.

This approach gives impacts to the non-interest income growing at 20% mainly from recurring fee of trade finance, bancassurance, etc. “echannel transactions significantly increase in terms of frequency and nominal values. Fee income from this kind of transactions goes up 7.9%,” said Baiquni.

Parties’ funds also grow much higher than banking industry: BNI records growth 15% compared to 5.6% by banking industry. Low cost funding (CASA) growth also outpaces banking industry BNI CASA to increase 12.7% with banking industry just 8.7% in August 2016.

In business sinergy BNI maximizes cross-selling among its business units (Business Banking & Consumer Banking) and between BNI and the subsidiaries. With this cross selling strategy, BNI’s subsidiaries can sell the products of holding company to the customers of subsidiaries and vice versa.

Collaboration is therefore

Baiquni is well-informed of BNI business. His professional career has been built in this bank for long time since 1984 when he worked as Officer Development Program (ODP) and tasked in credit division.

Thereafter, he holds a wide variety of positions ranging from Deputy General Manager 2 – Strategic Planning BNI in 1995, Head of Branch Office in Manado (1998) and Head of Branch Office in Bandung (2000). In 2002 he returned to BNI head office as GM Retail Marketing Division. Since 2010, he was the Director of Bank Rakyat Indonesia (BRI).

This position was held for one term only. During BNI General Meeting of Shareholders he was appointed as President Director in lieu of Gator M. Suwondo.

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April 2017

HENDRISMAN RAHIM

THE SAVIOR Vicky Rachman Hendrisman Rahim failed to conceal his worries when appointed as President Director of Asuransi Jiwasraya (Persero) in January 2008. At the time the insurance company he would lead had enormous liabities of Rp.6.7 trillion as a result of monetary crisis in 1998.

Unless restructuring, this iconic company, which was established in 1859 would collapse. “Jiwasraya at the time looks like a sunked ship. Only her flag is visible on the surface,� Hendrisman analogized the situation.

Numerous strategic measures were taken. The significant ones included reinsurance and asset revaluation. Hendrisman managed to handle such huge liabilities in 2009-2013 whitout causing any additional burden to the Government.

According to him, Jiwasraya wished to look for funds from

IPMI BUSINES REVIEW

Government under Capital Partnership and issued zero coupon bonds. This proposal was proposed to the Government but rejected upon various technical and non-technical reasons.

Hendrisman must to find other way, i.e. reinsurance.

Hendrisman and his team worked flat out to assure smooth implementation of his reinsurance scheme. They sent the designed reinsurance scheme to regulator and asked second opinion of Worl Bank actuaris. The latter assessed that this strategy was unique, genius

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and applicable. The success of this scheme was also down to assistance provided by Sofyan Djalil, the Minister of SOEs at the time. Sofyan Djalil issued going on concern certifying that the Government gave guarantee to Jiwasraya. Hendrisman showed this letter to a number of insurance firms in USA but it was no avail. Finally, Jiwasraya got luck in 2009 when an insurance firm from Florida, US received proposal submitted by Jiwasraya.

“God with us,: Hendrisman prayed. Reinsurance was the best momentum from which Jiwasraya received funds,confidence from customers and insurance industries.

In addition, Jiwasraya also revaluated the assets coupled with the introduction of International Financial Standard Reporting for the preparation of Financial Accounting Standard Statements. This action increased the asset values. “We make revaluation to assets consisting of lands, properties, etc. Our corporate assets significantly augment,” said this man whose hobby was to play keyboard and music. Slowely but surely, the financial performance of Jiwasraya was recovering and escaped from debt trap.

This solvent conditions jacked up the assets, income and profits.

As illustration, assets in 2008 totalled Rp.4,7 trillion. This value was to increase from time to time. Jiwasraya’s assets in 2015 hit Rp.25.6 trillion or 23.67% higher than in 2014 (at Rp.20.7 trillion). The operating income of company in 2015 recorded Rp.11.1 trillion, much higher than previous year (Rp.7.8 trillion. Last year’s profit hiked up to Rp.1.1 trillion from previously Rp.681 billion. In the past, this profit never reached Rp.25 billion. “in 2009 we book profits Rp.356 billion,” he said in praud tone.

Hendrisman’s success in managing Jiwasraya is down to many factors. They include higher competency of human resources, corporate culture restructuring, simplified organization structure, the promotion of new insurance products and integrated information technology system.

During the crisis in 2008, he applied discipline that must be followed by more than 1,000 employees. He eradicated fixed cost system and turned it into commission for insurance agents in the field. He recruited no new employee until the existing employees decreased to 900 persons. “We replace, dismiss or transfer old employees with young personnel,” he said.

Now, these young employees (millenioum generation) made

up 60% of total employees. “We change the culture. We give opportunity to these young men to leade division,” added this General Chairman of Indonesian Life Insurance Association.

Hendrisman is very poplar in insurance world. He was the former president director of PT Reasuransi International Indonesia.

He expected that in the coming year Jiwasraya be in the number one not number two in national insurance industries. In view of his remarkable achievements in insurance world, the Panel of Jury for Indonesia Best SOEs Leadership 2016 organized by SWA Magazine in association with IPMI International Business School uninamously agreed to decide Hendrisman as the winner of CEO Special Award in Innovative Turnaround.

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April 2017

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MUHAMMAD CHOLIQ

STRENGTHEN EQUITY WITH THE POWER OF ANY AND ALL SUBSIDIARIES, AFFILIATES AND OTHERS Eddy Dwinanto Iskandar & Maria Hudaibyah Azzahra RESEARCHER: Sarah Ratna Herni With business diversity strategy and equity strengthening, President Director of PT Waskita Karya (Persero) Tbk, Muhammad Choliq managed to turn out faltering company into praiseworthy enterprise.

Cholig, himself, started his career in PT Adhi Karya (Persero) Tbk from 1979 to 2001 with the last position as a director. This man who was born in 12 December 1952 was appointed as President Director of Waskita on 24 June 2008.

When Cholic arrived, Waskita was in poor condition.

The equity of this State Owned Enterprise (SOE) recorded minus Rp.191.48 billion due to exceeding window dressing practices. Waskita must be “hospitalized” or under supervision of PT Perusahaan Pengelola Aset (PPA). In 2010, the Government injected funds through PPA at Rp.475 billion to revive Waskita. Under his leadership, Waskita managed to escape from entangled problems and even took go public in December 2012.

For this achievement, Choliq was rewarded with CEO Special Award in Value Creation in Indonesia Best SOE Leadership Award 2016. He pointed out some tips in turning out Waskita into solvent company.

The first steps were to “clean” financial statements, emphasized transparency, fairness and accountability.

He would not hasitate to fire any corrupt employee in Waskita.

The next step, he expanded business pillar of Waskita to explore new income sources by maintaining core business in construction section. Now, Waskitas has extended its business pillars in five sectors: construction, toll road development, pre-cast concrete, property and energy.

To assure that every sector has been managed in serious way, Waskita established many subsidiaries, affiliates and other business units. “We adopt strategy

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of augmenting equity through subsidiaries, affiliates and others. We have, let’s say, 8 “children”, 11 “grandchildren” and three “grand-grandchildren” from 2013 – 2016,” described Choliq.

To apply such strategy many hurdles must be jumped over.

Choliq was at odd with public opinions. It would be very difficult to control an SOE with a lot of “children”, “grandchildren” and “grand-grandchildren” subsidiaries. This strategy was potential to lose state assets.

Yet, he managed to turn down this public opinions. From 18 assets owned by Waskita to date, none comes from state assets. “All are from private parties. We will sell one by one these assets to the holding company,” he stressed.

He also altered the client composition. Erstwhile, Waskita more concentrated in Government projects that reached 80% of total projects.

At present, the conditions change: 80% of Waskita projects Waskitas projects are now dominated with toll road development projects by Waskita Toll Road. “We acquire the dalapidated toll road projects. And the Government agrees,” said Choliq.

To date, total toll road projects

acquired by Waskita reach 14 segments extending 800 km.

Until the end of this year, it is planned that another 1,000 km toll road be acquired. “This 1,000 km toll road requires investment Rp.100 trillion and as such around Rp.30 trillion will be necessary. Given that, we will take any attemp to strenghen our financial conditions,” pledged Choliq.

Waskita is now changing. It is thanks to capital strategies taken by Choliq. For example, in June 2015, Waskita received additional capital Rp.5.3 trillion.

Out of such sum, Rp.3.5 trillion was from the Government with the remaining Rp.1.8 trillion mobilized from the public with right issue. Last year, total equity of Waskita was to amoount Rp.9.7 trillion.

This year, it is expected that such equity will rise to exceed Rp.20 trillion. A sum of Rp.10 trillion is expected from IPO of PT Waskitas Beton Precast at Rp.5.1 trillion and profits Rp.1.8 trillion plus divesture proceeds part of Waskita Toll Road shares through strategic partners, from which Rp.3,5 trillion will be collected.

Choliq also describes the success chalked up by Waskita in finance matter. Total assets of the company from the last three years are to grow at

67.6% (CAGR), i.e. from Rp.12.12 trillion in 2014 to Rp.57 trillion this year. The values of new contracts in the same period are to rise at 46.4% on average, i.e. from Rp.22.64 trillion to Rp.71 trillion. Operating income surges up at 34.5% on average, i.e. from Rp.10.27 trillion in 2014 to Rp.25 trillion this year. Likewise, net profits are to go up at 47.3% on average for the last three years, i.e. from Rp.501 billion in 2014 to Rp.1.6 trillion this year.

Thus far, construction sector is the largest contributor to total profits of holding company at 65%. Under sinergy pattern of “children”, “grandchildren” and “grand-grandchildren” subsidiaries, all business groups of Waskita in construction sector can enjoy the benefits.

For example, Waskita precast supplies pre-cast concrete to holding company.

Choliq has no plan of establishing new pillar business in near future. “We are conducting study with assistance of PricewaterhouseCopper in identifying which busines pillars most qualified for further expansion. We are also discussing the priorities, energy with power plant or properties,” he revealed his plan.

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IPMI BUSINES REVIEW

CFO CATEGORY

ARIEF BUDIMAN

FOCUS ON FOUR TRANSFORMATION PILLARS Ananda Putri & Aulia Dhetira Year 2014 may be the most impressive year for Arief Budiman. He was trusted to be the Finance Director of Pertamina. He was the former President Director of PT MacKinsey Indonesia. Despite a relatively unsatisfactory conditions when he entered for the first time in Pertamina, with his excellent skills, he recorded positive performance. Pertamina booked a record in margin earning before interest, tax,

depreciation and amortization at 12.28%. Pertamina also recorded net income, which was higher than global players of Shell and Chevron in the first semester 2016. It increased 221% from the same period of last year to US$1.83 billion.

Four key pillars have been adopted in transformation inside Pertamina. This energy State Owned Enterprise gives serious attention to

technology application, service improvements, the development of new capability and organisation and human resources strengthening. “While we engage in oil and gas, we also make investments in technology for operational, financial and investment performance monitoring,� said Arief.

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DIMAS WIKAN PRAMUDHITO

ANTONIUS N.S. KOSASIH

At his relatively young age, 34 years old, Dimas Wikan Pramudhito holds a strategic position, i.e.

Chief Financial Officer for PT Aneka Tambang Tbk. (Antam). When arrived for the first time, the company was encountering a full range of challenges, particularly the plummeted prices of metal commodities of bauxite, gold, nickel and ferronickel. However, with his prowess, he managed to prevent Antam from further going down.

Ananda Putri

INTRODUCING COST LOOKING FOR EFFICIENCY IN ANTAM LUCRATIVE FUNDING Ananda Putri & Nerissa arviana SCHEME

Antam’s financial statements show positive performance after previously recoding losses.

Per quarter III 2016, Antam gained profits Rp.38.3 billion, which out of this sum Rp.23.1 billion was from cost saving. In operation, three aspects he underscored were inclusive of focus on core competition (ferronickel, bauxite, gold and silver), build credibility among investment community and apply prudent financial strategies. “If the prices of commodities have been driven by the markets, the only thing we have to do is that of financial efficiency,” confirmed Dimas.

Antonius N.S. Kosasih’s career in finance sector is unquestionable. This alumnus of Post-Graduate from IPMI has fostered extensive professional experience with various top companies such as Perum Perhutani (Finance Director), PT Transportasi Jakarta (President Director), to lastly in PT Wijaya Karya (Persero) Tbk (WIKA) – a construction enterprise. In this construction State Owned Enterprise, he must shoulder heavy duties.

WIKA as a state owned enterprise, must be able to manage mega infrastructure projects of the Government.

WIKA needs funding in enormous amounts that sometimes lead to high cost of financing. As Finance Director of WIKA, Kosasih must be smart enough in looking for new funding schemes, which are not only lucrative but also give better margin. The most recent measure is to issue new shares of 4.03 billion shares, from which it is expected that WIKA will collect funds in amount of Rp6.15 trillion. “We always look for low interest rate from the banks,” he added.

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IPMI BUSINES REVIEW

CHCO CATEGORY

HERDY R. HARMAN

PREPARE HIGHLY QUALIFIED HUMAN RESOURCES WITH INTERNATIONAL PERSPECTIVE Joko Sugiarsono & Arie Liliyah Journalist: MARIA H. AZZAHRA Herdy Rosadi Harman, the Director of Human Capital Management (HCM) PT Telekomunikasi Indonesia Tbk. (Telkom), upon assessment of Panel of Jury for Indonesia SOEs Leadership Award, reaped the higher scores for Best Chief Human Capital Officer (Best CHCO) category, tha other nominees.

According to Bambang Gunawan, a lecturer of IPMI who is also a jury member, the most significant achievement

recorded by Herdy as CHCO is to build talents ready to compete and available for transfer to other SOEs and to apply digital technology in talent management so that these valuable young talents can be monitored their progress on daily basis.

Herdy who is now the incumbent of HCM/CHCO director of Telkom per December 2014 was the former HCM director for PT Telkomsel, a subsidiary with majority income

contribution to Telkom. He was in this position from 2012 to December 2014. “Pak Herdy for sure has developed strong and sound system inside Telkomsel,” assessed Bambang.

According to Bambang, during the presentation, Herdy demonstrated vigorous desire to execute strategies he developed. The main strategy was to develop young talents of Telkom. This measure is crucial in view of the position of Telkom as global quality enterprise with subsidiaries/ branches abroad. “What make his strategies different are that talents in Telkom will be ready for assignment in other SOEs when they need,” said Bambang.

“What I presented during the contest is what we are currently doing in Telkom, i.e. a transformation process,” said

71 Herdy during interview with Arie Liliyah of SWA in his office Graha Merah Putih, Jakarta. Why’s transformation so important?

According to him Telkom has three ambitious goals, i.e. to be Top 10 enterprises in terms of market capitalization in Asia Pacific region, included in Global Fortune 500 and become digital company (dico) instead of telco company. The last ambition (per August 2016 the cap market in BEI / Indonesian Stock Exchange records Rp.458.6 trillion) was presented by Herdy as a step to transform from telco to dico with end of view to be the King of Digital.

On the other side, as telco operator, as presented by Herdy in the final assessment, Telkom also faced some business challenges, notably the widespread digital life trend. Another fact that should cause for concern relates to the revenue of telecommunication, which records flat trends since 2008 but the telecommunication giants are to grow at 24% per annum on average. Digital strategy applied by telco operators fails to give the expected results, ever by the most successful operator.

In light of that, Herdy was of opinion that telecommunication companies like Telkom must transform as soon as possible and expand their market segments to global markets if they wished to survive amid big challenges.

“To anticipate such conditions we, as HCM, take preparatory actions,” said Herdy. As CHCO Director, Herdy leads HCM division. He started from Integrated HCM Framework of Telkom Group. “Basically what we formulate is consistent with

the foregoing objectives. We set time horizon 2010,” said this former HCM director of Telkomsel.

According to Herdy, the strategy he developed basically covered three aspects: human resources (people), culture and organization. For human resources development, he started from recruitment, development, retention and Herdy Rosadi Harman Biodata Place and Date of Birth: Bandung, 28 June 1963 Present position: Director of Human Capital Management for PT Telkom Tbk. (per 19 December 2014) Education: • Undergraduate Degree (Sarjana) in Laws: Padjadjaran University, Bandung (1986) • MBA, Asian Institute Management Philippines -Institute Management Telkom University • Master of Law (LLM), American University, Washington DC, USA History of Employment: • HCM Director for Telkomsel (2012-2014) • VP Regulatory Management Telkom (2007-2012) • VP Legal & Compliance Telkom (2006-2007) • GM Management Support Telkom (2004-2006)

pension (retired. To build culture, Herdy introduced the so-called The Telkom Way. He wished these corporate values deeply implanted in every employee. As to the organization, he designed Customer Facing Units for Telkom Group, which today consists of 72 subsidiaries and affiliates.

For these 72 subsidiaries, HCM division remapped the management style from strategic guidance to strategic control. They were grouped by customer segments. The customers are differentiated into enterprise customers, individual customers, mobile customers (Telkomsel), etc.

There were also supporting Functional Units such as HCM, Finance and Network & IT Solutions. “This classification is to make the company more organized and structured and the services to customers will be more focused and improved,” argued Herdy.

Herdy further pointed out that people development started from recruitment. In this respect, he developed a breakthrough. “We conduct talent scouting. I applied to universities and asked their best graduates. In conventional way, we will receive thousands of applications letters,” he explained. With talent scouting, he believed that only the best candidates would be promoted.

“We offer them what benefits they receive if join with Telkom.

Candidates who are directly interested will be recruited as Telkom employees.”

The second way in recruiting is to organize Socio Digi Leaders competition, which is also known as startup digital contest.

The point is that Telkom wishes to recruit the most creative young talents through contest.

“Of numerous participants, the finalists are offered to work in Telkom. They also receive other rewards such as study tours to Sillicon Valley of US, Hong Kong or Singapore,” said Herdy.

With regard to People Development stage, Telkon

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launches People Trainee Program. The program is for character building purposes, i.e. to instill the values of The Telkom Way to participants.

“Our philosophy is ‘To Be the Best’ as one of our lead systems,” he said. Spirit of “Always the Best” must be emboldened and adopted as the philosophy or Telkom personnel. This spirit must be, however, complemented with Integrity, Enthusiasm and Totality values. Telkon also advocates Solid, Speed and Smart values as principles to be stars.

According to Herdy, people should be assessed from 3C principle: Character, Competency and Collaboration.

“Character is the most important, weighed at 50%.

No matter how smart a person is, more important is his/her character,” he argued. The next is competency, from which skills and professionalism values will be developed. For

development and training, Telkom receives supports from corporate university, which its new building will be put up in Gegerkalong, Bandung.

To create high-caliber leaders, Telkom launches Great People Development Program (GPDP).

Five aspects developed under this GPDP include: character, leadership, business concept, nationalism and international perspective. “It is our way to assure that Telkom personnel has the above five points,” said Herdy.

Why international perspective?

“We have 10 footprints in foreign countries. In light of that, it is important for us to measure this international mindset to ascertain that Telkom personnel is ready to take global competition,” he explained.

As to talent retention, he assured that Telkom’s employees always work in fun atmosphere. They are happy persons who work. According

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to him, this favorable condition can improve performance until 240%. “I refer this to Gallup research,” he said. “We also provide attractive total rewards not only always in nominal value but also career development, higher education,” he added.

In advocating “Always the Best” culture, Telkom assigned a few employees acting as Culture Sheriff in some points. These sheriffs are held responsible for the application of Telkom culture. For example, if they find any dirty workplace, they must post it for correction.

What is the impact of such strategies and program? “Oh, of course very good,” he admitted.

To prove, he asked SWA to specify any telecommunication company around the world which recorded two digit revenue growth. “None. Only Telkom grows in two digits,” he replied.

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MUHAMAD ALI

RUN FAST TO PURSUE TARGET 35 THOUSANDS MW Eddy Dwinanto Iskandar & Syukron ali Researcher: SARAH RATNA HERNI The current government under President Joko Widodo and Vice President Jusuf Kalla focused on infrastructure development, which included electricity. PT Perusahaan Listrik Negara (PLN) – the spearhead of the Government to carry this mission – must run fast and race with time to illuminate remote regions. Muhamad Ali, Human Capital Management Director of PLN since 2016

told that the biggest challenge of PLN was how to realize the development of 35,000 MW power generation projects.

From the independence to date, this country has total power generation capacities of 55,079 MW only. “In 2015, the power demands will hit 219 TWh and in 2020 these demands will further rise to 332 TWh with growth ratio 8.7% and electrification ratio 98,4% in 2020,” said Ali

who before joined with PLN was retail business leader for Bank Rakyat Indonesia.

To achieve such target, PLN prodded its organization to run faster with corporation planning preparation. The actions to take included, first to increase electricity tariff to close its economic value and second to build effective organization structure with competent human resources, and third, to be industry leader and benchmark leader.

The foregoing three programs are further elaborated into organization design containing organization structure and job description and supported with the establishment of regional

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directorate. “Equally important, every personnel must have good competency model inclusive of main competency, role competency and sector competency,”Ali explained.

PLN also plans to launch recruitment program to support the 35.000 MW power generation project development.

The number of employees will increase significantly, i.e. from 1,608 persons in 2015 to 5,558 persons this year and 6,114 persons in next year.

Recruitment process will adopt PLN Test Adaptive (TAP) method. According to him, TAP method is faster, more accurate and more efficient approach.

The test is developed by PLN team with computerization.

“Efficiency derived from this method consists of shorter preassignment training period, i.e. from 164 days to 101 days,” said Ali. PLN also introduces Human Capital Development (HDC) program. The program will extend scholarship facility to take university program for PLN employees. Every year, around 100 employees are sent to both domestic and overseas universities to attend tertiary

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education.

In Human Capital Retention affairs, PLN prepares general function career path and strategic career path for experts and specialists. “Employees who take strategic expert or specialith path will receive occupational allowance subject to their contribution or expertise in reaching the specified performance in strategic issues respective of their expertise,” Ali revealed.

As for Human Capital Engagement, PLN runs Like PLN program from which diverse innovative programs are launched such as innovation discussion forum and knowledge sharing forum.

“We present 314 innovative works. We also contribute in innovation development for Science and Tech Olympiad. It is important to prepare global competency through innovation breakthrough forum,” said Ali. The results are extraordinary.

PLN succeeded in promoting 2,819 innovation works.

“Of them 180 works are implemented in PLN. Nine works have been patented and received copyright. Patent certification for the other nine

works is still in progress and 43 works are ready for mass production,” he said.

The most significant innovation is PLN Mobile. This innovation is basically a mobile customer selfservice application combined with integrated complaint and grievance mechanism (APPT).

With PLN Mobile that can be downloaded from Google Play, customers can check their electricity bills and token history, predicted monthly bills, new installation application fees, information of how to change wattage, information on the latest tariff rate and other latest news of PLN. With these miscellaneous programs in human resources sector, according to Ali, PLN has made a lot of changes, which include acceleration in transmission project completion from two years to three months.

“In addition, we make new connections to 2,422 customers.

From these initiatives we save Rp.11.4 billion per month.

Thanks to such successes, Ali won CHCO Special Awards in People Engagement from Indonesia Best SOEs Leaders 2016.

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