IPMI Business Review Vol. 2

ipmi business review

VOLUME 7 |ISSUE #2 March - September 2016 www.ipmi.ac.id

16 GrEat SpIrIt

Grand StartEGy

32 GrEta BUnawan:

pOpBOx IS My LIfE

40 MEaSUrInG thE

EffEctIVEnESS Of adVErtISInG

Coopetition

the new way to win competition through cooperation

contents

IPMI INTERNATIONAL BUSINESS SCHOOL Executive Director & CEO JIMMY M. RIFAI GANI, MPA jimmymgani@ipmi.ac.id Dean and Professor PROF. ROY SEMBEL, Ir., MBA, Ph.D roy.sembel@ipmi.ac.id Head of Program YULITA SUSANTI, Ph.D yulita.susanti@ipmi.ac.id Director of External Relation RIFA ZAHIRSJAH, MSi rifa.zahirsjah@ipmi.ac.id Director of Corporate Communication EKA SRI DANA AFRIZA, MBA., CRM dana.afriza@ipmi.ac.id Director of Executive Education BAMBANG GUNAWAN, MBA bambang.gunawan@ipmi.ac.id Director Research & Community Development Dr. Ir. ASTO SUNU SUBROTO, MM asto.subroto@ipmi.ac.id Senior Partner IPMI Research & Consulting Ir. HASNUL SUHAIMI, MBA hasnuls.irecons@ipmi.ac.id Director Case Center AHMAD D. HABIR, Ph.D derry.habir@ipmi.ac.id Senior Research Fellow Ir. AZWAR ABUBAKAR, MM azwar.abubakar@ipmi.ac.id Executive Education Program Coordinator Ir. AMELIA NAIM INDRAJAYA, MBA amelia.naim@ipmi.ac.id IPMI BUSINESS REVIEW Executive Editor Roy Sembel Editor in Chief Dana Afriza Editors Arya Cahyaatmaja Citra Anggia Fathia Rega Indra Adhiprana Tammy Tiffany Geneberty Contributing Editor Adhika Kusuma Media Production Sadeli Wibisono Art Designer Artoio Gomes Contributing Designer Pratiwi Saraswati Koentjoro Editorial 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 us at magazine@ipmi.ac.id Copyright 2016 IPMI International Business School.

All rights reserved.

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IMPACTING Brand Audit Pesona: A Signature Local Culinary Delivery Order Service of PT. Tiki JNE

16

INSPIRING

42 ALUMNI

Great Spirit Grand Strategy

23 MIND SHAPING

Key Strategies in Transforming Garuda Indonesia To A World Class Company

Dendi On How To Turn His Creative Ideas Into Successful Businesses

45 PIONEERING

The Game of Coopetition

48 LEADERSHIP

24 YOUNGPRENEUR

28 STARTUP

50 EXECUTIVE EDUCA-

30

“PopBox is My Life”

34

Ur-Farm Connects Farmers and Buyers

SNAPSHOTS

IPMI 41st Graduation Ceremony

CSR

Community Involvement Project: Waste Management

35 MEET OUR FACULTY 39 RESEARCH

Measuring the Effectiveness of Advertising

How to Be a Talent Master

TION

PGN Creates Better Leaders for The Future

52 GLOBALLY CON

NECTED

Stopping ASEAN’s Brain Drain

54 IDEAS TO ACTION

Coaching: Transform You to Be More Competitive

57 DIGITAL

E-commerce and Coopetition

A Welcome from the CEO

G

reetings from IPMI International Business School! It has been a year since I have taken over the lead in managing IPMI, and it surely is a great timing to relaunch and have a brand new look for our IPMI Business Review (IBR). We hope to utilize this media to communicate and bond the relationship of IPMI's stakeholders.

As a leading business school in the Asian region, IPMI strives to contribute to our communities at large. As part of the IPMI community, we hope you would take this opportunity in participating and contributing towards IPMI's efforts to continuously improve its institution holistically so that we can play a more significant role in society. IBR is hoped to inspire many of its readers.

The lead article in this issue is an article from our Dean, Prof. Roy Sembel, Ph.D (page 45). In the article, Prof Roy discusses the good balance between competition and cooperation. The pendulum of competition versus cooperation has been swinging back and forward, from one side to the other side.

From IPMI's group field project (page 6), our students found that consumers are fond of enjoying local culinary products from a quite distance place via online shopping. This is practical since they do not need to visit the regions of origin.

Jimmy M Rifai Gani Executive Director & CEO IPMI International Business School

In "Great Spirit, Grand Strategy" (page 16), Amelia Naim Indrajaya explores the impact of spirituality in the work place as the on-going quest of human journey in finding their real calling of their existence and working commitment. It answers the gap caused by the lack of empirical study on the subject of workplace spirituality. It suggests important findings on how to increase individual spirituality in order to improve the workplace spirituality and in turn will create a higher commitment and job satisfaction toward increasing performance.

And in "Measuring the Effectiveness of Advertising" (page 39), Dr. Asto Subroto shows advertisements that are mostly targeted to the impact of brand image, brand salience, recall and recognition. By connecting advertisement and buying interest, it opens the opportunity to measure quantitatively the cost spent for the advertisement which is so far still being questioned, especially the impact to the selling.

IBR also strives to support our students and alumni who are in the frontline of the business industry. Greta Bunawan (page 24), one of IPMI Master of Business Administration 2015 graduate, launched PopBox Asia company on June 2015 aimed to facilitate a safe and practical place for the parcels to transit from the courier to be received by the consumer, anytime they could, at the nearest PopBox spot.

Meanwhile, Dendi Reynando (page 42) is not afraid to do business in the creative world. His choice has delivered him to be a successful business entrepreneur in artist management, publishing, and production house under the flag of Mahakarya Inc. with a turnover of billions rupiah per year.

So, enjoy our new edition and catch our daily news updates at www.ipmi. ac.id.

Thank you.

IPMI Business Review | March - September 2016

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Brand Audit Pesona:

A Signature Local Culinary Delivery Order Service of PT. Tiki JNE

by Elviera Putri, Juletty Silalahi, Mety Yusantiati, Muhamad Sukri, Proid Kontura Marta. (Group Field Project - MBA 2015)

L

ogistics is one of the most important basic industries that support the economic growth.

This industry includes the product channels starting from the production place to the hands of consumers as users. The courier service industry also involves the integration of material handling, warehousing, packaging, transportation, delivery, inventory management, supply chain, procurement, and custom tax.

In its development in Indonesia, the courier industry grows rapidly.

The market of courier service in Indonesia reaches IDR 149 trillion out of the total Indonesian logistic market reaching more than IDR 1,734 trillion. This growth is supported by the issuance of Decree No. 38 Year 2009 concerning Postal service which enables more varied courier service provider no longer limited only to BUMN (State-owned Companies/ Badan Usaha Milik Negara) but also to BUMD (Local government-owned Companies/ Badan Usaha Milik Daerah), cooperative, and private companies.

Currently courier service industry is divided into two kinds of companies, BUMN (State-owned Com-

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panies/Badan Usaha Milik Negara) and private companies. PT. Pos Indonesia represents BUMN and TIKI, JNE (Jalur Nugraha Ekakurir), FedEx, DHL and many more, represent private companies.

Along with growth of business and change of lifestyle of modern community, the demand of express courier service is not only limited to small packages and documents but

to also cargo handling, transportation, logistic, and distribution. At this time, JNE has 3,637 delivery networks and is expected to achieve 15,000 delivery networks in 2025.

In line with the growth of online shop industry, the increasing middle class economy, and strong intention to contribute to the community-based economics development in Indonesia, in August 2010, JNE,

Projection of Transportation and Logistic Market from 2013 to 2018.

(Source: BPS, Analysis by Frost & Sullivan)

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the logistic company offering an express delivery service and cargo customs clearance in Indonesia, expanded its business in the online signature local culinary business called Pesanan Oleh-oleh Nusantara known as PESONA.

Who PESONA is The Micro, Small-sized, Middlesized, and Cooperatives or Usaha Mikro, Kecil, Menengah, dan Koperasi (UMKMK) in Indonesia is predicted to grow 7 – 8% per annum and in 2014, the number of UMKMKs in Indonesia was 58 million units. Aligned with growth of UMKMK, the production of signature local culinary grows, however these are yet known to the society. Therefore, JNE, through its Corporate Social Responsibility (CSR) Program launched PESONA in 2010 aimed at becoming a new way for the community to enjoy the signature local culinary without going to its origin city. Consequently, this will enliven and improve the competitive power of UMKMK in the food sector.

So, PESONA is courier service specialized in signature local culinary products launched by PT Tiki Jalur Nugraha Ekakurir (JNE), a courier company having 3,637 delivery networks Indonesian wide and well-established courier company in Indonesia.

Initially, PESONA was founded as a Corporate Social Responsibility (CSR) program aimed at a new way for people to enjoy signature local culinary products by online without visiting its origin city. However, the increase of demands has led the company to be more professional and serious in managing PESONA service. One of the strategies is focused on a signature local culinary product online service.

Since its launching, the demands on PESONA have increased by 400%

E-Commerce Business Process Flow of PESONA (Source: PESONA)

PESONA is courier service specialized in signature local culinary products launched by PT Tiki Jalur Nugraha Ekakurir (JNE), a courier company having 3,637 delivery networks Indonesian wide and well-established courier company in Indonesia.

IPMI Business Review | March - September 2016

and this could indicate the enthusiastic response on PESONA products. The sales of PESONA reached IDR 369 million in 2010. In 2010, PESONA also utilized social media like Twitter and Facebook to market its products besides hiring the culinary idols like Bondan Winarno and other idols that have many followers to promote PESONA. Until now, PESONA has worked with more than 200 vendors of local cu-

linary product suppliers, had 17,000 members, 13,450 Twitter followers and 200,000 website visitors. As part of its promotion activities, PESONA also held a culinary exhibition in Yogyakarta and participated in some important events such as the World’s Tourism Day and Culinary Festival in Jakarta.

By utilizing 5,000 logistic networks owned by JNE spread all over Indonesia whereas 2,000 of them are equipped with the online system and the readiness of its distribution forces in all branches, JNE is ready to support the operational activities of PESONA. In running its business, PESONA introduces its tagline “PESONA, Delicious from all over Indonesia, Deliver to homes.”

At this time, PESONA is a product in the introduction stage. To give the best service and get the expected results, the following is the detail of segmentation, targeting, and positioning of PESONA obtained from our interview with General Manager e-Commerce (PESONA).

In its launching in 2010, PESONA used two approaches to reach its

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•Impacting

customers either online or offline by utilizing JNE outlets. JNE outlets spread all over cities in Indonesia and PESONA utilized this outlet network as a competitive advantage to market its products. PESONA finally realized that physical outlets were not an effective channel to promote its products since the visiting customers of physical outlets did not intend to buy signature local culinary and they were not the targeted market of PESONA. Consequently, in 2013, PESONA decided to close JNE physical outlets as a channel and continued to focus on the online channel to market its products.

To attract more online shoppers to visit PESONA website and give the best service to its customers, in 2015, PESONA made some changes on its website display and logo.

The new online site uses attractive colors dominated by red and orange made it more interesting. In addition, the new logo seems more impressive and professional (see Figure).

To have deeper understanding of the Segmentation, Targeting and Positioning (STP) of PESONA product, the author team conducted a face-to-face interview with PESONA management. From the interview, it was obtained that the initial description of the market segment and target of PESONA products are Reseller, Business Traveller, Corporation, e-Commerce platforms, Communities, and Middle-aged class (25-45 years old). For its positioning, PESONA wants to position its products in the market as the only signature local culinary courier that delivers well and maintain its quality.

The targeted Key partners of PESONA are Small-Medium Enterprises (SME) Business Vendors, Bank Payment/Payment Channel Provider like Doku, Courier Company (JNE),

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Government Relation (Ministries of Tourism, Trade, Small and Mediumsized and Cooperation, and Creative Economics).

As previously described, PESONA was initially founded as part of JNE’s CSR (Community Social Responsibility). However, along with the technology development and Internet user growth, PESONA transformed into becoming one of JNE’s Online-based Division known as Pesanan Oleh-Oleh Nusantara (PESONA) – www.pesonanusantara.co.id This transformation from a social program into one of JNE Business Units has required PESONA to become a profit center. Therefore, PESONA products must be adjusted in accordance to the business strategy of JNE. In marketing its products,

an interesting e-commerce sector.

With relatively young population composition, with 60% are below 30 years old, the internet users may grow up to 2 million u-sers in an annual basis. According to a survey conducted by MarkPlus, the Internet users in Indonesia increased from 42.2 to 74.6 million users between 2010 and 2013. Netizens or the Internet users spending 3 hours of online activities increase from 20 to 40%.

The increasing Internet users could be logically positive for PESONA leading to the increase of its product consumers since it has started its business since 2010. However, this did not happen to PESONA as the total sales gained by PESONA only increased by 43% from IDR 369 million to IDR 1.4 billion in 2014. The

PESONA Logo Transformation

PESONA Marketing Activity includes direct promotion activity on its website, participate in exhibitions in the provincial or national level, and engage in Brand Awareness activities.

Problem Statement Indonesia is the fourth most populous country in the world with an economic power in Asia Pacific.

Besides the growing economics, some economics supporting factors like the growth of Internet access penetration, fast absorption of mobile devices, increasing media social use and expenditures of middleclass society have made Indonesia

observation results conducted in this study provide answers to this question. Some relevant issues are as follows: • Until after 5 years of its launching, PESONA products is still relatively unknown to customers, mainly communities and the middle-age class customers as the segment and target of PESONA. The marketing strategy implemented by PESONA could not introduce its brand to customers; • At this point, PESONA have not yet distinguished its segmentation and target of its products.

Therefore, PESONA does not

IPMI Business Review | March - September 2016

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Model of Intention, Adoption, and Continuance (MIAC)

have a clear focus to run its business; • The decision to concentrate on the online business was not equipped with proper information and knowledge of ONLINE consumer behavior, which is very important to have an effective and efficient business.

Mapping Consumer Behavior Through the Brand Audit activity conducted in our study, it is expected that consumer behavior and value need of PESONA products can be defined. This will include mapping of consumer segments and perspective of online consumer behavior as well as the review of targeted segments.

Our study is aimed at analyzing whether STP and Marketing Strategy or Plan implemented by PESONA is precise. This will be a reference for PESONA to improve its brand introduction making it better known by online consumers. Furthermore, this will help JNE to achieve its goal to improve the potentials of signature local culinary products spread all over Indonesia through wide JNE networks.

Assuming Jakarta as a barometer and representing the business and social life in Indonesia, the study will refer to interview activities and data gathering obtained in Jakarta.

For wider data, the nethnography methodology will be conducted.

This study will especially refer to companies having the following characteristics:

PESONA wants to position its products in the market as the only signature local culinary courier that delivers well and maintain its quality.

IPMI Business Review | March - September 2016

• Online B2C (Business to Consumers), whereas consumers can act as initiators, users, influencers, buyers, adopters, and decision makers. This study does not cover the online B2B (Business to Business). • Small to Medium-sized Enterprises (SME) transforming from the Corporate Social Responsibility (CSR) activity becoming a pure business activity and having limited budgets to conduct Marketing Communication (MarCom).

There is no specific number of signature local culinary businesses in Indonesia. However, if its development is parallel with the development of food and beverage industries, it could be said that the signature local culinary business has a big opportunity to grow. According to existing data, in 2007, the sales of the food and beverage industry was targeted to reach IDR 140.6 trillion and IDR 130.2 trillion in 2006. The food and beverage industry is expected to achieve 8% in 2015.

In 2014, this industry grew 7.22%. The contribution of this industry (food and beverages) is quite significant on GDP of non-oil and gas sector. It is about 27.55%.

The number of signature local culinary businesses is far from the number of other food industries.

However, if we look at its existence in various regions, this business potential is relatively high. Looking at its durability before or after the crisis, special food including signature local culinary has shown their strength. This Indonesian community culture, according to the demand side, puts local culinary as the needs. For those living in big cities, longing to their hometowns creates demands. It not wondering that, besides specifying on one product, vendors also create intermediary products by selling signature local culinary from other regions.

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SWOT ANALYSIS OF

W S

Strenghts

Weakness

• PESONA was established as JNE’s Corporate Social Responsibility commitment, this is the reason why its management was support ive ofthe development of this business; • JNE is a courier service company that has a wide range of network and experience in the delivery service. Therefore, PESONA has these distribution strengths as the competitive advantage of PESONA products.

• Consumers are fond enjoying local culinary products from a quite distance place via online shopping. This is practical since they do not need to visit the regions of origin.

• The souvenirs that usually have to be bought in its origin can arrive on time as promised by JNE, due to their courier operation capability.

• JNE does not have any experience in selling food or other products, with prior focus only on courier service. This new product has given a different pressure to the management that has different skills.

• Product/service of PESONA is not well known by the consumer in general and its specific target audience. Its Brand Awareness is still too low.

• For online selling, PESONA has not equipped with an online mobile application.

• Lack of product innovation and packaging quality. It can and should be better than the current ones.

• JNE is not accustomed with the neither online nor signature local culinary products selling. The photographs displayed on its website are not at premium quality. They are simple and less professional.

• The Brand Name of PESONA is too general and not describing the brand name which representing the products.

• Lack of exposure of the signature local culinary products vendors, resulting in low penetration.

• Selected vendors are not the best representatives of signature local culinary products from each place in each city.

P R E - RO R D E

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PESONA PRODUCTS

T O

Opportunities

Threats

• Indonesian people are fond of signature local culinary. Therefore, the signature local culinary market is widely open.

• Indonesian people are accustomed with buying and carrying signature local culinary as gifts when travel to places. The culture of Indonesians, they always get souvenirs whenever they travel. This makes a promising market of such service.

• Consumers who fond of signature local culinary and economically established are not price sensitive. If the communication is well delivered, a higher price than its original will not be a problem for the target audience.

• Online product or service sales are currently booming in Indonesia, this can be used by PESONA through a more serious management of its website communication.

• The big potentials of ONLINE shoppers in Indonesia with increased of Internet service and affordable smart phones.

IPMI Business Review | March - September 2016

• There is no a high barrierto-entry in the signature local culinary business. Every company can take part in this business.

• If the Product or service of PESONA is not managed seriously, this can be a bad word-of-mouth for JNE as the main company. The consumers disappointed with its service will lead to a bad image of JNE. • The characteristics of Indonesia online shoppers still refer to the intention to see and touch the products directly.

• Most signature local culinary is not easy to carry in a long distance.

Non-durable and easily broken, therefore, needs innovation and special handling.

• PESONA vendors need to be trained so that they can grow together. Currently, they are in the small-medium sized company level having traditional marketing system. Business is run and owned by families, less professional, and lack business minded.

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Key Factors that Support the Intention Online Consumers

Consumer Characteristics: Demographic, personality, value, lifestyle, consumer resources, knowledge, age, gender, income and education background, attitude, subjective norms, and behavior control.

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Media Characteristics:  The availability of networks, reliability, stability, speed, externalities, provided information quality, shopping aid tool and convenience, the influence of environment (like culture and reference from peers)  Easiness and utility of offered technology  Trust and risks that will be received by online local cuisine consumers if they purchase online.

Product and Service Characteristics  The type of products or services offered and their price. The products where consumers do not need to touch physically like CD, book, and canned food can be easily sold online on Internet.  Brand, reputation and quality of service also affect the intention of consumers to purchase.

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According to the description of online market data and the Indonesian signature local culinary market, this prospect if combined gives the potentials of online signature local culinary market.

Consumer Behavior of PESONA To analyze the online consumer behavior of PESONA, framework approach that used is Intention, Adoption, and Continuance (MIAC). This model is used to develop the online consumer behavior framework.

This attitude model of Fishbein has been widely used in the marketing context and this paradigm helps researchers examine some factors explaining the consumers’ intention and adoption. According to this model, the dominant behavior is determined by the intention followed by the consumers’ adoption, which is the moment of truth or decisive moment of behavior leading to the next process. This next process is known as continuance whereas this factor will explain and predict the following behavior of consumers (re-purchasing).

To make the introduction of PESONA brand more effective and efficient to its ONLINE market segment, PESONA can improve its promotion activities intensively so that PESONA brand can be widely known by the community and online shoppers specifically.

The promotion activities inevitably need costs for the development of the existing site and brand communication of PESONA to the public. These promotion activities will reduce the income of PESONA in a short time. However, if this is conducted on the appropriate market segment, which is the ONLINE Shoppers having a high travelling frequency, not having spare time, value oriented customers, and fond of signature local culinary in gen-

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Signature Local Culinary Market Potentials

eral, the promotion activity will be effective and efficient.

Considering the previous study on PESONA consumers who are women, private employees, fond of signature local culinary, and eager to try signature local culinary of other regions, the only way that PESONA can do to make its product known is promoting it through online and offline channels. The availability of these channels will make consumers who have a tendency to

see and touch the products can be directly targeted through PESONA outlets located in strategic areas.

PESONA consumers will have intention, adoption, and continue purchasing (Continuance) PESONA products after they consider the convenience characteristic of shopping channels, product types and characteristics, and perceived price of PESONA product. Therefore, all consumers’ feedback should be taken into account. Improving its

Potentials of Online Signature Local Culinary

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products will also make consumers adopt PESONA products easily and happily leading to the behavioral or cognitive state (deciding and purchasing). The other things that PESONA needs to consider is its efficiency leading to consumers’ subsequent purchasing behaviors. In addition, service quality and trust will help PESONA maximize online consumers’ shopping continuance usage.

The recommended Brand Positioning of PESONA obtained from this study is: “For professional women who are fond of signature local culinary, prioritizing Value (not price sensitive), and busy on a daily basis, PESONA of JNE is the only signature local culinary delivery order service that is practical and can be ordered everywhere online in a one-day delivery service.”

The finding of the Brand Audit shows that PESONA does not understand the online signature local culinary market as a whole, mainly the market behavior that needs to be understood explicitly. The Brand Audit using the ethnographic approach helps PESONA understand the needs, likes and dislikes of consumers on this service holistically.

The audit resulted in a more concrete description of regarding the segmentation of signature culinary delivery service and the responses of consumers on PESONA service and its products. One recommendation obtained from this study is to overhaul the STP (Segmentation, Targeting and Positioning) strategy that is now limited to consumer demography to become STP based on needs and consumer behavior leading to a more focused, effective, and efficient activities of PESONA in the future.

Our study also recommends redesigning packages, changing its brand, revising prices, and overhaul-

ing its brand communication and activation. However, this Marketing Mix can be implemented upon the agreement of management to change the STP of PESONA strategies.

Some suggestions regarding the

PESONA of JNE is the only signature local culinary delivery order service that is practical and can be ordered everywhere online in a oneday delivery service

IPMI Business Review | March - September 2016

Marketing Mix Strategy are as follows: change the Brand Name since PESONA is considered too generic and it does not clearly describe the association to a signature local culinary delivery order service developed by JNE. As an idea, the brand name of “LE OLLE” is suggested to be developed and re-checked by the Brand Communication partner of JNE. The recommended actions consist of two parts, short and long terms. In short-term strategy, the initial step that needs to be taken urgently is to present the result Brand Audit to the top management to give insights and new perspective of the current PESONA situation and explain why they need to make a significant change in managing this business. Finally, the agreement to make re-launching and repositioning of PESONA is essential.

Re-launching/ Repositioning Preparation: 1. Inviting the Operational Team including the Information Technology Division to revise operational and e-commerce-related (online activities) aspects. The internal adjustment should be

well communicated and conducted together with related divisions.

2. Inviting Creative Communication Agency aimed at start thinking some aspects related to Brand element design and Marketing Communication for the relaunching preparation.

• Asking them to give several alternatives of new brand names which to be tested by consumers to decide their options.

• Making a Marketing Communication Plan which consist of several activities to support the brand re-launching, including the advertisements on conventional media and the new ones like social media marketing including some trial activities.

• Improving the website display and content adjusted to the findings of Brand Audit.

Meanwhile in long-term strategy; monitoring the new brand development after its re-launching/ repositioning, conducting a brand tracking study periodically with the help of professionals to gain a concrete description of the new brand equity achievement, the similar brand audit should be conducted every two months to see the dynamics of consumers and the market development is monitored and well accommodated.

The recommended Brand Communication, since its target is professional women, are advertisings like posters and segmented TV on office lifts. In addition, the website needs to be developed according to the selected target audience.

Engaging famous vendors known by community is also an effort to improve the credibility of this signature local culinary delivery order service of JNE.•

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T

he feature of the future organizations will require moral obligations of every organization to contribute to the solutions of the world problems. Researcher came up with the notion that spiritual sides of the organization is an important issue in the company, to encourage employees to see work as a part of a higher purpose and be part of the solution to the world problems (Mitroff & Denton, 1999a).

This positive organizational purpose will motivate employees to work not only for the profit but for the people and the planet. Mitroff and Denton (1999), reported that organizations which perceived themselves as “more spiritual” also saw their organizations as giving more meaning and purpose to the employees, and at the end “more profitable” (better than their less spiritual counterparts). Looking at the organization as part of an interconnection for a higher purpose is one of the organizational level aspect of workplace spirituality (Milliman, Czaplewski, & Ferguson, 2003).

Despite its growing popularity,

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there is yet only limited research looking at the workplace spirituality as a dependent variable. (Peerayuth, Jose Luis, & Ruth, 2013) had proven in their research that Emotional Quotient is giving a significant impact toward workplace spirituality. He proposed that future research should investigate the impact of individual spirituality toward workplace spirituality.

In this paper, the researcher is looking to fulfill the gap and see the impact of individual spiritual quotient toward the spirituality at work (Spiritual at Work = SAW) or also called workplace spirituality, and to evaluate the impact toward organizational commitment and job satisfaction.

Defining SAW, IS, OC and JS Kinjerski and Skrypnek, 2004 started by collecting all experts’ research to develop a comprehensive, conceptual definition of SAW. Various scholars had conducted a similar research on the topic, sometimes it is called the workplace spirituality and other times it is called spiritualitiy at work. Based on all these similar research, Kinjerski tried to develop a clear definition. Inspite of the seemingly impossible task, Kinjerski managed to define the rich similar descriptions of spirituality at work as (V. Kinjerski, 2013): “Spirit at work is a distinct state that is characterized by physical, affective, cognitive, interpersonal, spiritual and mystical dimensions.

Most individuals describe the experience as including: A physical sensation characterized by a positive state of arousal or energy; positive affect characterized by a profound feeling of well-being and joy; cognitive features involving a sense of being authentic, an awareness of alignment between one’s values and beliefs and one’s work, and a

belief that one is engaged in meaningful work that has a higher purpose; an interpersonal dimension characterized by a sense of connection to others and comon purpose; a spiritual presence characterized by a sense of connection to something larger than self; and a mystical dimension characterized by a sense of perfection, transcendence, living in the moment, and experiences that were awe-inspiring, mysterious, or sacred (V. M. Kinjerski & Skrypnek, 2004) (V. Kinjerski, 2013).”

This research based definition is consistent with the definitions by other scholars (Mitroff & Denton, 1999b), (Ashmos & Duchon, 2000), (Milliman et al., 2003), (Duchon & Plowman, 2005). In addition, it also covers the individual experiences in a spiritual workplace. It is also confirmed by research on individuals who experienced spirituality at work where the respondents are not familiar with the concept of workplace spirituality (V. M. Kinjerski & Skrypnek, 2004).

The spirituality of individual is derived from the work of (Rojas, ProQuest, Learning, & Argosy, 2002). The construct is defined as a way to integrate an ideology of spiritual subjects, into an alternative human developmental process in everyday activities. The construct consists of thirteen relational modes of independent variables.

The variables are conforming arrangements of personal behaviors selected as a response to a contextual, relational demand. There are three specific behaviors for each relational mode. Four of the statements are purposefully reversed.

The behaviors are operationalized into statements indicators and are subject to item validation through panels of experts and then subject to reliability and validity tests. Rojas completed this instrument and call

IPMI Business Review | March - September 2016

Amelia Naim Indrajaya IPMI Faculty member

If employees feel that the organizations are treating them fairly, respectfully and in a supportive manner, they will be committed it the Independent Spirituality Assessment Scale (iSAS).

The model in the research is also extended toward the impact of spiritual at work toward organizational commitment. In order to measure the impact of spirituality at work in an organization, experts have conducted researches of spirituality at work and its impact toward organizational commitment.

Organizational commitment is the construct which shows the psychological state that characterizes the relationship between the employees’ and it’s organization. Eventually it will determine the likelihood whether the employees will stay in the company or leave it (Allen & Meyer, 1990) (Meyer & Parfyonova, 2010). This construct has become one of the most cited model (Arménio & Miguel Pina e, 2008).

If employees feel that the organizations are treating them fairly, respectfully and in a supportive manner, they will be committed (Mitroff & Denton, 1999a). The organizational commitment itself is seen from different angles, namely affective, normative and continu-

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ance (Allen & Meyer, 1990), with affective being the highest bonding of organizational commitment (ibid.).

The other dimensions are normative and continuance, with continuance being a bonding of organizational commitment for the purpose of continuance rather than affection.

There are many research looking at the impact of organizational commitment toward performance of organizations and the research had shown that there are significant positive relationship of organizational commitment and organizational performance (Allen & Meyer, 1990), (Riketta, 2002), (Hayati & Caniago, 2012), (Grunberg, Anderson-Connolly, & Greenberg, 2000), (Chen, Silverthorne, & Hung, 2006), (Samad, 2005), (Memari, Mahdieh, & Marnani, 2013). There is a different research that shows OC has negative impact toward performance (Wright, 1997). In this research Wright is using data from 41 employees with long years of working. He observed that this finding is different from the others, maybe due to the specifically long years of tenure of his respondents.

Eventhough the respondents are highly committed, they might have reached the point of saturation and declining work ability. The major finding in this field of research is that the organizational commitment has a positive relationship with performance. Based on my interview with University of Indonesia’s Organizational Behavior’s expert, DR Budi Soetjipto (University of Indonesia, 2014), there are many positive findings of the relationship between organizational commitment to performance that organizational commitment can be sufficient as a proxy to organizational performance in an organizational behaviour research.

Furthermore, in this research the focus is toward the individual behav-

18

iors and not toward organization as the unit analysis. Therefore in this research we will use organizational commitment as the final findings with a positive understanding that it has a significant positive impact toward organizational performance.

In addition to organizational commitment this research will also measure the impact of spiritual at work toward job satisfaction. This is a very popular measurement that (Mishra, 2013) had mentioned in her journal, by 1991 there are over 12400 job satisfaction studies conducted only in the psychological literature.

Job satisfaction study is popular, since it is a central variable in many theories correlated directly with organizational performance. It refers to numerous attitudes that employees have about their jobs, how they feel about their jobs in the general settings as well as various aspects of them. Unlike the measurement of productivity, absenteeism etc, the job satisfaction measurement is only in the mind of the employees and can not be measured directly.

Therefore people had conducted surveys with questionnaires since observations and interviews are too time consuming.

In this research the popular measurement of Minnessota Satisfaction Questionnaire is adapted and used to measure job satisfaction. This questionnaire had been developed since 1967 by Weis et al. There are both the long version with 100 items which represents 25 item skill and the short version questions. In this research we use the short version of the questionnaires developed and adapted by (Gupta, Kumar, & Singh, 2014).

There are many definitions of job satisfaction. In general it is defined as a pleasurable emotional state and attitude toward the job based on one’s perception and

adaptability of one’s job (Anu, 2013).

Job satisfaction represents how you feel about your job and what you think about your job.

Based on the above mentioned theory and literature exploration, the researcher sets up a research model with the main research questions on How does individual spirituality impact the workplace spirituality and how does it influence the organizational commitment and job satisfaction. The followings are the Research model and the hypotheses:

Hypotheses Development Research model is as follow:

JS IS

SAW

OC and JS as a Proxy to Performance

OC

Figure 1: Research Model IS = individual spirituality SAW = spirituality at work OC = organizational commitment JS = job satisfaction H 1: The higher the level of IS, the higher the level of Spirituality at work (SAW).

H 2: The higher the level of SAW the higher the level of Organizational Commitment H 3: The higher the level of SAW the higher the level of Job Satisfaction

The relationship between IS and SAW Research in workplace spirituality have received positive outcomes and have received empirical support from different units of analysis. At the individual level (Milliman et al., 2003) found that workplace spirituality is significantly related

IPMI Business Review | March - September 2016

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to attitudes such as organizational commitment, individual intention to quit, intrinsic work satisfaction, job involvement organization-based self-esteem (Rego & Miguel Pina e, 2008). The research also found that employees’ perception toward workplace spirituality are significantly related to work commitment and job performance. (Duchon & Plowman, 2005) and on the organizational level they further found that work unit that scored high in spirituality at work (SAW) outperformed work unit with a low score of SAW. Nevertheless, the research that reveals potential antecedents of SAW is not common. Mostly SAW is observed as an independent variable in the quantitative research.

Other researchers, do not use a quantitative empirical approach nor a qualitative empirical approach, but merely present a conceptual literature review focusing on the concept of workplace spirituality.

Therefore this research will try to delve deeper in determining the antecedent of SAW. Other attempt to seek for the antecedent of SAW, is looking at EQ as an antecedents to workplace spirituality and it is proven to be significant (Charoensukmongkol, Daniel, & Chatelain-Jardon, 2013). These EQ toward SAW researcher also suggested on analyzing individual spirituality as a possible antecedent of spirituality at work.

Spirituality in an individual (IS) is a further enhancement of the EQ as cited by (Wigglesworth, 2013).

Therefore we would explore first the concept of EQ and intelligence in general. The concept of intelligence has really grown to reach ultimately the Spiritual Quotient, which starts from the Physical Quotient (PQ), IQ (Cognitive Intelligence), EQ and SQ (figure 2). To understand SQ

we need to understand the concept of EQ. Goleman (1995) proposes that EQ is more influential compare to the traditional cognitive intelligence (IQ). Originally emotional intelligence was seen as part of social intelligence. In 1990 it first emerges as the ability to monitor one’s own and other’s feelings and emotions and to discriminate among them and use the information to guide one’s thinking and actions (Mayer & Salovey, 1995).

Charoensukmongkol et, al., (2013) suggest that organization should select employees with high score of EQ, and the employees EQ training would be a powerful pro-

SQ EQ IQ PQ (Figure 2) (Neal, 2013) The Spiritual Pyramid Multiple intelligences in rough developmental priority based on age.

gram. Levenson, Aldwin, & Yancura, (2006) reported that after a year of training, the participants of EQ training were found to have higher level of empathy, forgiveness, spiritual experience and life satisfaction.

The conversation on spiritual intelligence open up a new way to talk about developing human capacity in the spiritual skills based. Spiritual before was a beliefs problem.

Beliefs remain a private matter, but

IPMI Business Review | March - September 2016

spiritual intelligence can be taught (Wigglesworth, 2013).

Since Emotional Quotient is proven to be the antecedent of Workplace Spirituality, we would want to evaluate EQ plus spirituality which is the Spiritual Quotient or the influence of individual spirituality as the antecedents of spirituality in the workplace. Rojas, 2013 had developed an independent assessment which has a more extensive approach in measuring individual spirituality. Rojas instrument is used because of its special approach of measuring spirituality regardless of denomination, religious or ideological preference (Rojas et al., 2002).

This individual spirituality which reflects the spiritual intelligence, arguably would support the employees in experiencing spirituality in the workplace.

Thus, the first Hypotheses is: The higher the level of individual spirituality the higher the level of spiritual at work The relationship between SAW and OC (Benefiel, 2003) wrote that spirituality and management once though incompatible, now has fallen in love. People argued that spiritual being a non-materialistic concern, is incompatible with the material gains to be reaped in an efficient and effective functioning of organizations. But against all odds more and more researcher support the premises that the more people devote to the higher cause, the more they are contributing to the organizational performance. Researchers agree to the appeal of spirituality, for several reasons: • Mitroff (2003); organizations are a great human achievement, since work is the centerpiece of most people’s lives, it should be part of people’s search of the ul-

19

•Inspiring

timate meaning.

• Spirituality enhances employee well-being and quality of life, it provides employees a sense of purpose and meaning of work, spirituality provides employees a sense of interconnectedness and community (Karakas, 2011).

• Meaning in work, community at work and positive organizational purpose were positively related to job satisfaction and organizational commitment (Piryaei & Zare, 2013).

• If inappropriately managed, workplace spirituality may imbue organizational structures with spiritual aspect that serve as a new technology of control, a form of domination in a more sophisticated form (D’Oliveira, Rego, & e Cunha, 2006) • If correctly interpreted, workplace opportunities to perform meaningful work in the context of a community with a sense of joy and personal fulfillment will mitigate or remove what several authors have pointed as allegedly present in many modern organizations: Injuries to employees’ mental health, people humiliation and destruction, dehumanized practices with threats to the human soul (Mitroff, 2003).

Organizational Commitment is a popular construct to determine the degree of morale obligation and commitment of a person to their company. One of the most cited construct of organizational commitment is proposed by Allen and Meyer (2003) as a measurement of employees’ commitment. There are three different commitment, namely affective, normative and continuance.

Workplace spirituality strives, despite the controversial and the skepticism among the researchers. In this research we will support

20

more by conducting a thorough research on the implementation of workplace spirituality and its impact toward organizational commitment. The organizational commitment comprises three different considerations: affective commitment (emotional attachment to the organization), normative (feelings of obligation towards the organization) and continuance commitment (perceived costs associated with leaving the organization). The stronger the organizational commitment is the stronger the intention to stay in the company.

Since there are three different reason for staying in the organizations, each of the organizational commitment has its own value.

The highest is the affective commitment, which will lead to lower turnover, improved performance.

Normative commitment will not come up with such a high performance since they are doing the job because of the norm, not because of pure willingness as in the case of affective commitment. The third commitment, continuance is because they are better off in the current position, thus they are grateful that they are currently already in the best place to work even when they do not necessarily have better alternatives.

satisfaction. There is a significant evidence based on the statistical empirical research that spirituality in the workplace has a very siginificant impact toward job satisfaction.

Another research by Giacalone et. al empirically tested the relation between organizational spirituality with job satisfaction, organizational frustration and other job and organizational iden-tification. The finding shows that specifically organizational spirituality is positively related to job involvement, organizational identification, and work rewards satisfaction and negatively related to organizational frustration (Giacalone & Kolodinsky, 2008). More recently Piryaei and Zare conducted a research on workplace spirituality and positive work attitudes: The moderating role of individual spirituality. They came up with the result that workplace spirituality were positively related to job satisfaction (Piryaei & Zare, 2013).

Based on the previous research we propose the third hypotheses that: Spiritual at work has a positive significant relationship with job satisfaction.

Research Methodology

A pool of indicators used in several studies are adopted for this research. All items are measured using a 5-point Likert scales, ranging from strongly disagree to strongly The hypotheses will be: The higher the spirituality at work the higher the or- agree.

To measure the individual ganizational commitment level spirituality (IS), instrument and indicators established by Ronald Raymond Rojas were used. It enThe relationship between spiritucompasses 13 dimensions of nameal at work toward job satisfaction ly: Fulfillment of Self, Self DeterThere is only limited research mination, Self Control, Discovery which has conducted a study on of Self, Enrichment of Self, Partworkplace spirituality on how it imnership mode, Small group Mode, pacted Job Satisfaction. (Gupta et Organizational Mode, Movement al., 2014) conducted an empirical mode, Ideopraxis (congruence research on spiritual in the workof ideology and lifestyle), transplace and how it influenced the job

IPMI Business Review | March - September 2016

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actional mode, transformational mode and Transfigurational mode.

Each of the dimensions has 3 indicators.

Spiritual at work is measured by the dimensions of Kinjerski (2013), namely: Engaging Work, Mystical Experience, Spiritual Connection and Sense of Community. This dimensions and indicators of organizational commitment is measured through the adaptation of organizational commitment dimensions by (Allen & Meyer, 1990).

Job satisfaction is measured by the indicators adapted from the Minnesota Satisfaction short version Questionnaire (Gupta et al., 2014).

eses were tested using partial least square (Ghozali 2008, Hair et al.

2006).

Conclusions, Implications and Suggestions for Further Research The current study was designed to demonstrate the impact of Individual Spirituality as a significant antecedent of workplace spirituality which gives significant impact toward organizational commitment and job satisfaction. The Great Spirit Grand Strategy approach by PT Telkom is doing a great approach by nurturing the employees’ spirituality based on their respective religion. The spiritual division encour-

ages every employee to be more pious, as a Moslem, a Christian or any other religion in Indonesia. The spiritual division was established since January 2013, to date there are 6774 employees (Spiritual Capital division data as of Sept 2014: Islam 5829, Christian 617, Hindu 328) who have been going through an intensive spiritual at work training for four to five days, based on their respective religion. In estimation by the end of the fourth quarter, there will be 9000 graduates of spiritual at work training which is 52 % of the total employees.

The written feedback of the training have shown a high evaluation on the the dimension of “The

Research Design and Sampling PT Telkom Indonesia has a highly selected platinum level regional operational office called Witel Telkom (Wilayah telekomunikasi). There are only eight high level “platinum” qualification of Witel in Indonesia. Platinum level is given to Witel which is categorized as the highest level revenue generator. The best performing Witel is The Central Jakarta Telecom, receiving the award as the highest quality regional telecom in Indonesia. We use 31 samples from Witel Central Jakarta Telecom. All of the respondents are male, from officer up to manager level. Respondents are at the minimum officers, to ensure that the respondents has adequate experience and knowledge to respond to the questionnaire.

Reliability Analysis Scale name A.

B.

Number of items

Cronbach’s Alpha

Fulfillment of Self

3

0.663

Self Determination

3

0.883

Self Control

3

0.521

Discovery Self

3

0.697

Enrichment of Self

3

0.781

Partnership mode

2

0.549

Small Group Mode

3

0.881

Organizational Mode

3

0.849

Movement Mode

2

0.568

Ideopraxis

2

0.5

Transformational Mode

3

0.632

Transfigurational Mode

3

0.631

Individual spirituality

Spirituality work

Findings and Discussion

Engaging

7

0.944

Personally administered surveys were used to collect data from respondents. The respond rate is high 91.2 percent. Thirty one out of 34 respondents returned the completed survey. Due to the limited sample size, the hypoth-

Mystical experience

4

0.894

Spiritual

3

0.850

Sense

3

0.812

Affective

3

0.922

Continuance

5

0.961

C.

IPMI Business Review | March - September 2016

Organizational Commitment

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•Inspiring

Statistical evaluation shows the result as follows: Independent

Dependent

T-Value

Loading

p-Value

Conclusion

SAW

2,961

0,597

0,003

Significant

SAW

JS

10,310

0,741

0,000

Significant

SAW

OC

4,102

0,518

0,000

Significant

IS

R Square

benefit for training participants�, with 9 items as follows: Understanding the interconnectedness of human being with the universe; Understanding the soul of human being; Ability to implement ways to improve personal character building; Understanding the concept of spirituality at work; Gaining a new spirit at work; Being optimistic with the new spirit of service excellence; Gaining beneficial knowledge for oneself, the family and the company; Believing that spiritual at work should be shared with everyone; Being aware that spiritual at work needs maintenance and improvement. This training evaluation outcome will be an interesting future research.

The limitation of this research lies on the limited amount of respondent with samples only from one Witel, which implies that the result refers to the case of Witel Telkom Jakarta Pusat. In reality the trend in PT Telkom shows an improvement in their overall performance since the first time they have conducted the great spirit grand strategy approach. Therefore a longitudinal future research need to be conducted to see the long term impact of the great spirit grand strategy approach. A more elaborate quantitative research and exploratory approach on the influence of spirituality at work toward sustainable mindset implementation will

22

JS

0,549

OC

0,268

SAW

0,682

make a good additional emphasis on the importance of spirituality in the workplace.

The implications of the research supported the importance of continuous program to improve individual spirituality. In addition to the one full week training of spiritual at work, Telkom has a nation-wide program of Spiritual Enhancement every week. The spiritual division has specifically designed a curriculum

for weekly short version of spiritual talk. All Telkom offices in Indonesia will have the exact same program available for every religion to serve as a spiritual booster to the employees. This research has proven that belonging to a certain support group is one of the important aspect to support an individual to maintain their spirituality as a human being with a mindfulness of his/her high responsibility as a vicegerent of God to lead a sustainable world. ď Ž

In reality the trend in PT Telkom shows an improvement in their overall performance since the first time they have conducted the great spirit grand strategy approach.

IPMI Business Review | March - September 2016

Mind Shaping•

Key Strategies in Transforming

Garuda Indonesia To A World Class Company

OUTCOME OF THE JOURNEY 

Garuda Indonesia has consistently been able to grow and improved during the global economic crisis.



Despite the loss, GA maintain the growth and dominate the market which is crucial for the sustainability of the company



Garuda Indonesia has become a proud place to work for employee and been nurturing the best culture.

Start running or you will be perished



On 5 March 2014, GA has officially been a member of SkyTeam.



GA has officially being one of only Seven 5-star SKYTRAX airlines in the world since December 2014



Garuda Indonesia’s brand reputation jumps ranking.



According Asia’s Top 1000 Brands in 2014, Garuda’s brand performed better than any other across Asia in terms of increased trust and brand reputation.



Garuda Indonesia managed to ride the economic cycle in its transformation journey.

COMPETITIVE LANDSCAPE  Airline is a really super tough industry. It generates rich cash flow but with

minimum margin. The margin that global airlines made in 2012 is only 1%, while other industries that are supported by airlines made hefty margins of 25% (ground handlings); 30% (caterings); 25% (airports).



After a long period of monopoly, in 2005 Garuda Indonesia (GA) was facing the harsh reality of unprecedented open competition.

IPMI Business Review | March - September 2016

*Concluded from Emirsyah Satar's presentation materials at IPMI Power Talk, 4 February 2016. Mr Satar is former CEO of PT Garuda Indonesia, Tbk.

- Emirsyah Satar

JOURNEY STARTS  Need to identify positive factors to



Execute the strategy require best talents. The strategy is to tap into the pool of talents and involve the leadership to develop a culture of excellence as well as engage them to the company.



Roadmap to becoming a Global Player



GA acquires and develop good talents. People are rewarded based on their merit.

feel being optimistic about the future.



Defining a new roadmap



Launch a rigorous Transformation Program



Setting up Strategic Plan



Formulating common values, building the corporate culture



Challenges in securing the funding: between 1995-2005, Garuda has managed to make profit in only 3 years.



At that time, it was clear from the press comments that Garuda was simply not ready to compete.



Apart from worst financial performance, almost all aspects of the company life were facing problems.



Problems brought about other problems creating a vicious circle.

23

•Youngpreneur

“PopBox is My Life”

by Citra Anggia Fathia

IPMI group field project has significant impacts on Greta Bunawan’s life. This is her story.

T

he terms of ‘every end is a new beginning’ is also occurs on the field of opportunity grabbing: every problem you can solve and turn into opportunity, will lead you to another problem. That is the never ending cycle that we face in our daily life, especially as the people of technology era. One of the latest trend, e-Commerce, which is the savior angel that solve the modern and consumptive people problem, has also brought several aftershocks problems following its sensational boom.

Particularly in Indonesia, the most urgent problem on e-Commerce is the delivery and logistic system. The hype of e-Commerce has increased the delivery traffic of the logistic service provider. Thus, overload parcels is often unbearable and it will interfere the whole logistic flow. This situation sometimes also compounded by the dynamic lifestyle lived by most of the e-Commerce user. Their activi-

24

IPMI Business Review | March - September 2016

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IPMI Business Review | March - September 2016

25

•Youngpreneur

ties made them rarely stay at their place to receive the parcels. Then, it may open higher probability of lost parcels and it will reduce the efficiency of the logistic system.

Greta Bunawan, one of IPMI Master of Business Administration 2015 graduate, joined Adrian Lim, to transform this problem into a big opportunity. They’re officially launched PopBox Asia company on June 2015, that aimed to facilitate a safe and practical place for the parcels to transit from the courier to be received by the consumer, anytime they could, at the nearest PopBox spot.

The smart dropbox locker system used by PopBox is actually really famous in China and US for its cost and time efficiency in the logistic system. But it is relatively new in South East Asia, except for Singapore. The “Asia” behind PopBox name is stating their vision to grab the Asia market. Because of that, even though Adrian as the founder is Malaysian, Adrian and Greta believe that Indonesia is the best market to start and to grow PopBox.

26

is mainly located at a strategic pub“Indonesia is very challenging, if lic places such as apartment and we can tackle in here, we can tackle train station. the rest country,” said Greta. The “I even had to find the perfect first challenge in Indonesia for Poplocation for some of our first PopBox is actually the law and regulaBox by myself, and it is exhausting. I tion. “When we made our company am glad that now we already set up in Singapore, the procedure only the team for that. Moreover, lately took three days. In Indonesia, we we are the one who get need five months,” Greta the call from our client to explained. open a PopBox in their loHowever, beside the cation.” fact that Indonesia is the Tips from Greta Unfortunately, several fourth most populated Bunawan for the misconception by the pubcountry in the world, the next succesful lic has frequently comes growth of e-Commerce Youngpreneur off since PopBox’s physical in here is also very prom“Try to develop platform appearance debut. Popising. “Indonesian have a.k.a software based Box sometimes assumed high curiosity on somebusiness. The capital as a traditional locker, a thing new and now very investation is not so big deposit counter, a vendopen to tech-related sercompared to the hardware ing machine, or even a vice,” Greta admitted. based business, while photo box booth. To eduGreta realize that the demand from the cate people, PopBox sent introducing PopBox to investor is very high. Be SPG to walk around the the curious market is not active and get updated on spot and pursue people to hard, but also not that entrepreneur and starttry and know more about easy. For Greta, physical up event such as business what PopBox is and how it appearance is the most incubator. That might could save their lives. This crucial aspect to trigger be your way to find the approach is just one of the the awareness of Popopportunity. Good Luck!” organic style marketing Box. That is why PopBox

IPMI Business Review | March - September 2016

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that is presently used by PopBox. The capital injection that PopBox gained from East Venture two months after their company official launching, which Greta considered as “lucky”, has lead them to plan and work in wise marketing and budgeting concept. So, instead of money burning on promotion, PopBox choose organic style marketing to focus on the relation with their partners, which are the e-Commerce merchant, the venue provider, and the logistic service provider, “We want to grow together with our partners,” Greta said.

PopBox also more concern to allocate their budget on developing its service rather than promoting aggressive media advertising, “We still on process to maximize our service and feature. If we do the keen media advertising but our service is still limited, surely that would be a pity.”

This service and feature development has lead PopBox to many phase of trial. At its 50 spots in six different cities in Indonesia, PopBox have four different types of machine. From the very first to the latest version, Adrian and Greta always take the full control to the design, with consumer and partner feedback as their main source of new ideas and improvement on PopBox appearance.

All this machines has went through several quality check, including UAT (User Acceptance Test) which is directly tested by Adrian and Greta to see whether the machine is ready to use or not. Direct control by the founder and cofounder is also applicated on selecting their human resources.

“We select our team directly.

Attitude is more important instead of skill. We want those who eager to learn and not afraid to try new things,” she said.

Apparently, this criteria is based on the characteristic of Adrian and Greta. Both don’t have any experience in technology, but it is not their disadvantage nor their obstacle to run PopBox. “Adrian is way more experienced on many field including logistic, although his basic background is actually consulting. So, he handle the logistic and investor relation,” Greta added.

On the other hand, Greta who handle operational and marketing of PopBox, have an undergraduate major in psychology. But then, she found out that her passion is on marketing.

At first Greta was only learning marketing by on the job training, until she got so many recommendation to continue her master degree at IPMI. “I always open for new challenges. I always want to try and learn. From doing so, I discover whether I enjoy it or not,” Greta said.

PopBox itself was born when Greta did the group field project at IPMI. On her study journey at IPMI, Greta confess that she got many valuable knowledge’s, especially from the case study method, “It is very practical and applicable.”

Furthermore, her hard study on IPMI all paid off when she was awarded as one of the best student of IPMI 2015 graduation, “I was surprised, I don’t expect that at all. I just give the best of what I can do at IPMI. But, my friends are also doing well and we all help each other’s to give the best of us.”

Not only in studying, giving the best of her has become Greta’s main behavior. She implement this basic principle to every aspect of her life, especially to PopBox. “I always fully dedicated to everything that I do. But of course, my sense of belonging to PopBox is different.

PopBox is my life.”

IPMI Business Review | March - September 2016

We select our team directly.

Attitude is more important instead of skill. We want those who eager to learn and not afraid to try new things.

For PopBox, Greta has left her five year outstanding marketing career at one of the most famous event venue in Jakarta. Greta also put PopBox need ahead from her personal need. The ups and downs of PopBox has been her part of life, and she enjoy it.

“I am happy to be a woman co-founder of technology based business because it is usually dominated by men. I want to prove that we, women, can also success in this industry.” Greta also added, “I also hope that PopBox can be an evidence to the world that in order to build a successful business, you don’t have to be graduated from world’s top university. You don’t have to study abroad to be an impactful business founder. We can if we want.”

Talking about success, Greta believe that success happens when we can give meaningful and positive impact to the society. And that, is also the vision of PopBox. PopBox current facility which is the last mile logistic service, will soon be improved with several upcoming feature, such as first mile logistic service, reverse logistic service, shopping and purchasing service, and many more.

All of them is heading to one goal of PopBox as an all in one box that could serve need of the community in a cost saving, secure, and sustainable way. Not only the community in Indonesia, but also Asia, and later, the world.

27

•Startup

Ur-Farm Connects Farmers and Buyers

by Arya Cahyaatmaja

Besides looking only for profit, we also want to provide a healthy living solution for people by means that are sustainable for the planet.

A

fter completed his university study at IPMI International Business School in 2006, Ferraro and friends, Dea Salsabila Amira and Reza Fahlewi, were decided to become a "new farmers" instead of regular employee. They saw a lot of opportunities in agriculture industry by using a new technology.

28

By using the current technology such as internet, they are also able to help the local farmers increase their market share by provide the platform that connect the seller and buyer directly. They feel that they have a social responsibility to help the local farmers selling their product.

What follows is a transcript of

IPMI Business Review | March - September 2016

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their vision to modernize the agriculture sector.

What is Ur-Farm.com?

Ur-Farm is an e-commerce platform. It is an online marketplace that connects organic farmers and green entrepreneurs with buyers.

Our mission is to help them market their products and reach their customers. We try to implement the 3P sustainability concept: people, planet, and profit. Besides looking only for profit, we also want to provide a healthy living solution for people by means that are sustainable for the planet.

What is your business model?

Basically it is mixed between B2C (Business to Consumer) and C2C (Consumer to Consumer) ecommerce platform. B2C is like

When did you start the business?

We started it on September 2015 with three co-founders. Myself as CSO, and my two partners as CEO and CTO. What are the products?

We have several categories. The first type is organic food categories, such as vegetables, fruits, beverages, juices, etc. The second type is non-food organic categories, such as personal care, lotion, aromatheraphy, etc. All of the products are locally made. We want to increase the competitiveness of our local farmers and entrepreneurs.

How is the business so far?

We are still developing our main website, Ur-Farm.com. For now we focus on seller acquisition. We look for organic farmers, urban farmers,

also create partnership with local organic and urban farming communities, such as Indonesia Organic Community (KOI). A lot of their members are organic farmers and green entrepreneurs who still do their marketing traditionally (offline, open stores, join events). UrFarm can help them to also exist online.

What are the challenges you face?

The first one is capital. It is a big challenge for startup businesses, especially in e-commerce industry.

The second one is education related to startup. It is good for new businesses to have mentors who are experienced and knowledgeable. The third challenge, especially in our business, is time commitment. In fact, all of us the co-founders are also working full-time jobs at other companies. We hope by having investors we can give more of our time for the business.

How do you see your business going further?

For short term, we are focusing on seller and buyer acquisition, along with the development of our website. For the long term, hopefully we get investors, we will expand to cover ASEAN region.

Do you have any tips for those who want to create their own business?

First, as an entrepreneur we must be ready either to get profit or loss. Second, we have to find partners that complementing each other. All of the partners must be ready to take responsibility in either good or bad situations. Third, experience is the best teacher.ď Ž

Lazada, Bhinneka, while C2C is like Tokopedia and Bukalapak. The sellers can register to our platform, but they still need our approval for their products and photos to be uploaded and published. Buyers can also register and look for the products they want. Once the deal happens, we take commission fee for each transaction as our revenue.

IPMI Business Review | March - September 2016

and green entrepreneurs to partner with us. We also look for opportunities to have external funding from investors.

What do you do for marketing?

We use social media such as Facebook and Instagram. Below the lines, we open booth at events on organic food and lifestyle. We

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•Snap Shots

IPMI 41 Graduation Ceremony st

I

PMI International Business School celebrated the 41st Graduation on Wednesday, 16 December 2015 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 achievement of years of hard work and marks the crucial progression from student to alumnus.

IPMI International Business School 41st Graduation commencement speech was addressed by our honorable commencement keynote speakers; Mr. H. E. Robert Blake (Ambassador of the United States of America to Indonesia) and Mr. Rosan Roeslani (Chairman of Indonesian Chamber of Commerce and Industry) In this special honorably occasion, IPMI International Business School also announced the recipient of Bustanil Arifin Thought-Leadership Award for the second year.

The Bustanil Arifin Thought-Leadership award in 2015 was given to Mr. Eko Pratomo (Senior Advisor of PT BNP Paribas Investment Partner), an IPMI alumni from MBA 1991 class year.

IPMI International Business School management and staff congratulate to all of our graduates and award recipients on this year.

We'll see you at the top!

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IPMI Business Review | March - September 2016

www.ipmi.ac.id

IPMI Business Review | March - September 2016

31

•Snap Shots

CEO & Executive Director IPMI Campus, Jimmy Gani, and Director of Rabobank Indonesia, Ponky Nayarana Pudijanto, signed an agreement on Tuesday, 2 February 2016 at IPMI International Business School, Kalibata, Jakarta.

Rabobank will be sending their managers to IPMI's eMBA Program starting March 2016 intake.

CEO of YUM! Brands Global, Greg Creed, shared his knowledge in Power Talk event on Wednesday, 13 January 2016. Mr. Creed shared his experience in his career with "Brand Building, Smart Heart, and Courage" theme. Yum! operates the licensed brands Taco Bell, KFC, and Pizza Hut worldwide.

IPMI team at Education & Training Expo 2016, 27-30 January 2016 at Hall B Jakarta Convention Center

IPMI International Business School had a very special opportunity to open the Indonesian Stock Exchange market on Friday, 27th November 2015 at Indonesia Stock Exchange, Sudirman, Jakarta.

CEO of Citibank (Citi Indonesia) Batara Sianturi shared his ideas about global banking and financial industry in Power Talk event on Wednesday, 27 January 2016 at IPMI Campus, Jakarta.

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IPMI Business Review | March - September 2016

www.ipmi.ac.id

IPMI student council had a campus nite in Villa Puncak Lawu, 18-19 Januari 2016

IPMI Youth Ignition event on Saturday, 14 November 2015 at IPMI Campus, Jakarta. The event was featuring inspirational and successful Indonesian Youths such as Gunawan Susanto (President Director and CEO of IBM Indonesia), Kevin Aluwi (CFO of Go-Jek), Livi Zheng (Director and Producer of Hollywood Movies, in contention of Academy Award), and Michelle Surjaputra (CEO of PT Michelindo Food Indonesia Bonchon brand). Keynote speech was delivered by Dr. Hari Sungkari (Deputy of Infrastructure, Badan Ekonomi Kreatif).

Power Talk event on Friday, 13 November 2015 was featuring Shahrokh Saudagaran Ph.D, Professor and Director of the Milgad's Master of Accounting program, University of Washington at Tacoma, Wahington, USA. Mr Saudagaran shared his experts in "Corporate Social Responsibility: Lessons for Indonesian Businesses Based on Research Evidence."

IPMI Business Review | March - September 2016

The first Power Talk event of this year featured Bruno Hasson, Founder & President Director of Sophie Paris, with theme "How and Why I Built Sophie Paris?" on Tuesday, 12 January 2016 at IPMI Campus, Jakarta. Sophie Paris is one of the biggest fashion multilevel marketing company in Asia based in Indonesia.

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•CSR

W

aste is a problem faced by almost all countries in the world.

Not only in developing countries but also in advanced countries, this unwanted material has always been a problem. On average each day the major cities in Indonesia produce tens of tons of trash. If there’s no well-maintained waste management, it can cause unpleasant smell, garbage flies frequently, and bring the plague. Waste also gives seve-ral environmental impacts for humans and environment. The impact for human is the decline in the level of health. In effect to the environment, both of the ecosystem of water and terrestrial ecosystem can be affected.

First is the impact on ecosystem of water. Garbage thrown from various sources can be distinguished to be organic and inorganic waste. On one side, organic waste can be food for fish and other living creatures, but on the other side waste can also reduce levels of oxygen in the water. Inorganic waste can reduce sunlight into the water environment. As a result, the essential process of photosynthesis in the ecosystem can be disturbed.

Organic and inorganic wastes also make the water turbid. This condition will reduce a micro organism that can live in that condition. As a result, the population of animals or plants are diminished. Seepage waste that goes into the drainage or river will pollute water. Various micro organisms including various fish can die so that some species will disappear. This has resulted in the change of water ecosystem biologically. This environmental issues actually has been a concern for our campus.

IPMI International Business School believe that it is our responsibility to take care and aware more about environ-mental issue, that’s why our campus hold Community Involvement Project in waste management.

To conduct the project, we invited some experts to come to our campus in order to give some acknowledgement to audience. The event was attended by Ministry of Environment and also by neighbourhood and commune leaders (Ketua RT & RW) in surrounding area of the campus. Specially with the fact that Rawajati area was the champion of an environmental award years ago, it’s a special opportunity to have them sharing with the audience.

IPMI International Business School launched this project and in mission to implement waste management within our campus and surrounding area sustainability. In the end of the event, all participants signed a declaration as a promise that we are going to care more about environment and will implement it in our daily life. (Rizal F. Ansori)

34

Community Involvement Project:

Waste Management

IPMI Business Review | March - September 2016

Faculty Members •

Meet Our Faculty AGUS FINARDI Bernardus Agus Finardi teaches Sustainability & Succession of Family Owned Business and Entrepreneurship. He has been teaching in several universities since 2006. He obtained his MA in Marketing Management from Middlesex University Business School, London, UK. He is also co-owner and CEO Bafardi Group, a company that holds distributorship and retailing rights for Nike, Adidas, Quiksilver, Oakley, Rip Curl etc.

Prior to that, he worked for Royal & Sun Alliance Insurance in the UK and USA. He helped his family business, C59, to get 1st rank in Entrepreneurship 50 in 2001 held

by Swa Magazine and Accenture. He is also a finalist for UK Alumni Award in 2008 held by British Council.

AHMAD D HABIR Ahmad D. Habir (Derry) was one of the first faculty members when IPMI began in 1984. Since then, he holds a number of senior administrative positions at the school, including Marketing Director and Deputy Director. He teaches Organizational Behavior and International Business global outlook and is concurrently a Senior Associate of Strategic Asia, an international policy consulting group. He is also a former Dean of the Management Faculty of Swiss German University. In 1976 Derry obtained his MBA in International Business at George Washington University, Washington D.C. and returned to Indonesia to begin a management career. After joining IPMI in 1984, he completes his PhD in Political Science from the Research School of Pacific and Asian Studies, Australian National University, Canberra in 1997. He also has a BA in Political Science from Ohio State University and an MA in International Affairs from the Center of Southeast Asian Studies, Ohio University, USA. Currently he is teaching Global Outlook at IPMI. ALEX ISKANDAR MUNAF Alex Iskandar Munaf graduated his Bahcelor a degree in Business Economics, and Master’s degree in Financial Economics. from American University, Washington D.C., USA. Alex has over 20 years of work experience and conducted training programs in Finance, Management and Marketing at numerous national and multinational Companies, including Vico, Siemens Indonesia, Zurich Indonesia, Indosat, Asuransi

IPMI Business Review | March - September 2016

Allianz, Indonesia Power, Astra Part & Astra 2000, Medi Farma Laboratories, PT Pertamina, PT Telkom, PT OSRAM, PT Daimler Chrysler Indonesia, PT Nokia Indonesia, PT Microsoft Indonesia, PT Ericsson Indonesia, PT Kaltim Prima Coal, PT Air Liquid and Mc.Dermot. Alex has been teaching many courses at IPMI, including Marketing, Accounting, Business Strategy, currently He is teaching Finance 1 and Finance 2 at IPMI. ALEXANDER CYRUS Alex Cyrus joined IPMI in 1999 and has been lecturing the subjects of Competitiveness through Information Management / MIS, Business Strategy, Corporate Strategy, and Human Resources. Graduated from the Electrical Engineering Department of ITB in 1986 and holding MBA degree from Sloan School of Management, Massachusetts Institute of Technology. He got his professional experience when he worked for IBM, McKinsey & Company and, the last, in PT Bank POS Nusantara where he was appointed as Director of IT and HR. He is also an active member of International CIO Academy, Indonesian Renewable Energy Society and Indonesian Electrical Power Society. At IPMI Alex has been teaching several courses at IPMI including Management Information System, Tought Leadership, and Leading Organizational Dynamics.

AMELIA NAIM INDRAJAYA Amelia Naim Indrajaya teaches Managerial Communication and Good Corporate Governance. She has an international background; she was born in New York city and spent early years of education overseas. She obtained her Bachelor degree from Industrial Engineering Department, Bandung Institute of Technology. She decided to pursue and focus more on the management subject.

Therefore she chose MBA from the University of Colorado at Boulder, USA, as her graduate degree. She has developed a special interest in communication, leadership and inter-personal skills. She is the founder of PT Rentang Gunaputra, an engineering and management consulting company. She is also a trainer and motivator and has helped numerous companies, among others: Toyota, Telkom and Kimia Farma in their Communication and Leadership training program. She has written books on communication, motivation and the art of interpersonal skills in the form of real-life stories, with the title Bila Nurani Bicara series. The first book is now on it's 7th edition and had made her a seasoned motivator and speaker for training and seminars in Indonesia.

35

•Faculty Members

ANDRE VINCENT WENAS Andre Vincent Wenas obtained his MBA degree from Monash University and MM degree from IPMI Business School. Now he is the Chief of Corporate Human Capital at Garudafood Group, as well as President Director of Garuda Solusi Inti (member of Garudafood Group). Andre is also a columnist and productive writer. His subjects of interest are Organizational Behavior, Human Resource and Marketing Strategy.

ANDY DO Andy Do is the Chairman and Founder of PT Hadi Kusuma Raya, a company providing management, financing and investment advisory services, and also mergers and acquisitions activities. He has 30 years of business experience in international banking, general management, investment and marketing, with Multinational Companies.

He is Senior Advisor to BAPPENAS, the World Bank, and International Finance Corporation (IFC). He was the Dean of IPMI from 2003 to 2004, and holds doctorate degree in strategic management from Universitas Indonesia.

BAMBANG GUNAWAN Bambang Gunawan earned his MBA from IPMI in 1988.

He obtained a Diploma in Travel Management in 1983, from the National Hotel and Tourism Institute, Bandung.

He also attended the ABA's National School of Bank Card Management at Oklahoma University in 1998. He facilitates courses in e-Business Management and Marketing-related areas. Bambang started his career in local companies which were mostly related to travel and tourism industries. After graduating from IPMI he joined the American Express-Travel Related Services, advancing through various positions in marketing and sales functions. His last position in American Express was Head of Corporate Card and Travel Management Services.

He left American Express in 1977, after 9 years of services to join MasterCard International as the Country Manager for Indonesia. After leaving MasterCard in 2000, Bambang has been offering consulting services and training to various institutions in the area of sales and marketing management, and payment systems.

HARI SUNGKARI Hari experiences in Information Technology for more than 25 years. He is Deputy of Infrastructure in Badan Ekonomi Kreatif (Creative Economy Agency), also Hari Sungkari is known as the Secretary General for Indonesia Digital Creative Industry Society (MIKTI) and advisor for Indonesia ICT (Information Communication and Telecommunication) Award. He is a technopreneur in software industry, and the co-founder and Commissioner of PT. Mitra Mandiri Informatika.

Prior to this he worked for IBM Indonesia for 10 years. He obtained his Doctoral degree and Master degree in Business Law Intellectual Property Right. He received his bachelor degree in Architecture from Institut Teknologi Bandung. Currently he is lecturing Business Law, Global Legal Frameworks and Strategies at IPMI. HARRIS TURINO Harris has extensive experience as a managing director for various companies. He is familiar with several industries; he manages PT. Argo Mas Prima which concentrates on inland transportation of palm oil, furthermore he is also managing PT. Kleo Pacific and PT. Haduo Herbatech which operates in pharmaceutical and medicated cosmetic business, the main target markets being Hong Kong, Vietnam, Po-

36

land, and Western Africa. He also works as a managing director for PT. Fazio beauty which aims to serve the younger exclusive clients, with high-tech and hip ambience. Harris has also extensive academic experience in various institutions such as Universitas Indonesia (UI), Perguruan Tinggi Ilmu Kepolisian, Institut Keseninan Jakarta, Universitas Sumatera Utara, with a strong focus on Strategic Management, Strategic Business, Strategic Entrepreneurship, Business Models, Managing Business Growth, Diversification and Merger & Acquisition. He received his Doctoral Degree from Indonesia University (UI) majoring in Strategic Management, and his MM from Prasetya Mulya Graduate School of Management majoring in International Management. Besides, he has a Master's Degree from Indonesia University (UI) majoring in Policy Administration.

HASNUL SUHAIMI Mr. Hasnul Suhaimi is a former the President Director at Pt Excelcomindo Pratama Tbk, INDONESIA since September 2006. Prior to that he has served the Chief Executive Officer of PT XL Axiata Tbk at Axiata Group Berhad served as its President Director. He served as a Business Advisor for TM International. He also previously held various senior positions in Indosat Multi Media Mobile (IM3). He served as a Director of Cellular Marketing at Indosat tbk PT (Formerly, P T Indonesian Satellite Corp.) from April 2003 to 2005. Mr. Suhaimi also served as a Director-Sales and Marketing from June 2002 to April 2003, President Director of P.T. Indosat Multimedia Mobile from 2001 to 2002, Director of Commerce of P.T. Telkomsel from 1998 to 2000, Director of Commerce of P.T. Indosel (a subsidiary of Indosat) from 1997 to 1998, General Manager of Sales of P.T. Indosat from 1996 to 1997 and General Manager of Marketing of P.T. Indosat from 1995 to 1996. He has been a Director at PT XL Axiata Tbk since September 2006. Mr. Suhaimi served as a Director of PT Indosat Tbk from 2002. Mr. Suhaimi served as President Director of Indosat Tbk Pt since June 8, 2005 until May 2006. He holds an MBA from the University of Hawaii in 1992 and graduated from the Bandung Institute of Technology, majoring in Electrical Engineering in 1981. At IPMI he is teaching Entrepreneurship and Innovation.

HERDIANTO BUDIARTO Herdianto Budiarto teaches Accounting Fundamental and Financial Statement Analysis. He earned his MM from Universitas Indonesia and holds Bachelor's Degree on Food Science from Institut Pertanian Bogor.

Herdianto started his professional career as Finance Manager at PT Radian Utama, and his current position is director of PT Avrist Asset Management..

HOETOMO LEMBITO Hoetomo Lembito, is currently President Director PT. United Total Support. He received Bachelor of Agricultural Engineering from IPB (1983) and earned his Master in Business Administration (MBA) in Strategic Management from PSBA (Philippine School of Business Administration) Manila (1994). He has worked for various companies, among others: PT. United Tractors Tbk, Swedish Welding and Cutting Manufacturer (ESAB) as GM in Logistics, German Material Handling Company (MHE-Demag) as GM in Parts and Service. He took Advance study in Kaizen Logistics at Japan Institute of Logistics System, and Port and Maritime Logistics at Shipping Transport College, Rotterdam. He is Executive Board of Asosiasi Logistik Indonesia. He got Doctorate degree majoring in Supply Chain Management at Program Doktor Manajemen Bisnis, Sekolah Pascasarjana Institut Pertanian Bogor. At IPMI Hoetomo is teaching Global Value Chain.

IPMI Business Review | March - September 2016

www.ipmi.ac.id

LEONNARD ONG As Practitioner for almost 22 years, Leonnard Ong has a wide experience and has held various important position at Astra International TSO, AIG Indonesia, Shell Indonesia, UOB Indonesia and currently he is The Director of Business Frontliner Services a prominent Marketing Consultant in Indonesia and Head of Department Training and Development DPP ISKI (Ikatan Sarjana Ilmu Komunikasi) in Indonesia. Obtained his Master of Commerce from The University of Sydney and has Doctor in Marketing from Sekolah Bisnis IPB Bogor. He is enhanced by Executive Program at INSEAD French and others Business Courses at Spain, UK, USA, Australia, Nairobi, Beijing, Shanghai, Hongkong and Singapore. His area of expertise is Community Marketing, Sales Management, Consumer Behavior, Entrepreneurship and Service Marketing.

MANGGI TARUNA HABIR Manggi Taruna Habir is currently an Independent Commissioner at Bank Danamon and is a financial advisor to companies. Formerly he was Director at Standard & Poor's in Singapore, responsible for corporate and bank ratings in Asia, outside of Japan and Korea. Other previous positions include President Director of Pefindo in Jakarta, Director of Research at Bahana Securities, Head of Financial Institutions at Citibank Jakarta and Business Correspondent for the Far Eastern Economic Review. Manggi holds a BA (Hons) degree in Economics from McGill University, and a MBA from University of Michigan and a MPA from Harvard University.

PETER VERHEZEN Peter is the Principal of Verhezen & Associates Ltd, a management consultancy company that advises boards on corporate governance and integrated risk management throughout Asia and Australia. He is also a Principal Fellow and Visiting Associate Professor in the field of Corporate Governance and International Business at the Faculty of Business & Economics at the University of Melbourne (Australia) and Adjunct Professor in Strategy and Risk Management in Emerging Markets at the Melbourne Business School (University of Melbourne). Moreover, he used to be Fellow at the Ash Institute for Governance and Asian Studies of the Harvard Kennedy School (USA) with whom he still collaborates. He is also Adjunct Professor of Strategy at the Vlerick Management School and Visiting Professor of Strategy at the University of Antwerp (his Alma Maters in Belgium). He used to be the Managing Partner of C-Consulting and Cimad Pacific, an ICT consultancy spin off from IBM, which he ran for about 15 years (within the ASEAN-Australia region). During the Asian crisis in 1997, he was Senior Financial Advisor for IBRA (Ministry of Finance of Indonesia). He received his MA in International Relations from the University of Antwerp (Belgium), his MBA in Finance from Leuven Business School in association with Chicago Booth School of Business. He also pursued his studies in philosophy at the University of Leuven (Belgium) where he obtained his MA and PhD. PIETER ANDRIAN Pieter began his career at PT. Astra International, Tbk. as change Management Analyst handling several Major Change Projects in Astra such as SAP implementation for the whole Automotive Division. He advanced through the positions of Program Manager as well as Solution Provider for Human Capital Development (HCD) in Astra Management Development Institute (AMDI). While pro-

IPMI Business Review | March - September 2016

viding solutions for Astra Group Companies, Pieter also participated in Executive Development courses at AMDI, Prasetya Mulya, Asian Institute of Management and INSEAD. He graduated from IPMI and attained his MBA degree from Royal Roads University Canada. He has been facilitating HR subject for IPMI Business School ever since. He builds up his career at one of the most prominent plantation company in Indonesia PT. PP London Sumatra, Tbk as Senior Manager in Human Capital Development further expands as the Office of Strategy Management & Organization Development Head. Right now he is the Director of water & well-being solutions company PT. Sumber Tirta Persada. At IPMI He teaches Outstanding Value, Talent Management.

PRI NOTOWIDIGDO Pri Notowidigdo teaches Managerial Communication for the Executive MBA/MM Programme. Pri has an Honours BA as well as an MA from Carleton University in Canada. Outside of IPMI, Pri is Senior Partner of Amrop - Context Driven Executive Search since 1996. Prior to Amrop, he was President Director of TASA from 1994 to1996. Previous experience includes being a Partner in KPMG (1987-1994), and Manager in Price Waterhouse (1984-1987) in Indonesia, the Canadian International Development Agency (1977-1984) and the Canadian University Service Overseas (1975-1977).

PULUNG PERANGINANGIN Pulung is a former President/Country Director of PT. Union Carbide Indonesia and Regional Purchasing Director of Union Carbide Asia Pacific Pte Ltd (Jakarta/Singapore, 1996-2001), and former Product and Marketing Senior Executive of Dow Chemical Pacific Ltd, Hongkong, 20012003. He is currently the President Commissioner of PT. Gema Grahasarana Tbk, Interior, Furniture and Lifestyle (VIVERE GROUP), Jakarta. Pulung holds doctorate degree in Strategic Management from Universitas Indonesia. At IPMI he teaches Thought Leadership at IPMI. RETNO DWIYANTI SETYANINGSIH Retno Dwiyanti's 24 Years of Human Resources Practioner (1988 – 1994) Personal and Training Manager Grand Hyatt Hotel, (1994 – 1999) Corporate Training Manager PT Bakrie & Brothers, (1999 – 2005) Human Resources Director AstraZeneca Indonesia and Vietnam, (2005 – 2007) Human Resources Director Nutricia Indonesia, (2007 – 2012) Human Resources Director PT Beiersdorf Indonesia, (2012 – present) Teaching at some Business Schools (IPMI, Sampoerna BS) & Executive Search and HR Consultant ( own company ). She has International Certification : Train The Trainer Hyatt International, Interaction Management DDI International, Change Management – GE, Targeted Selection DDI International, 7 Habit of Highly Effective People – Covey International, Executive Coach – Result Coach International. Retno teaches Leadership, Working Across Borders at IPMI. ROY SEMBEL Roy Sembel is a professor in Financial Economics. Currently, he serves as Director of The Jakarta Futures Exchange, formerly as chairman of supervisory committee of Asian Bond Fund Indonesian Bond Index Fund (ABF IBIF), chairman of PT MARS Indonesia/Capital Price, chairman of certification committee of FPSB Indonesia.

He also had many other senior positions in some companies in the past: PT Bank Niaga Tbk, McKinsey and Company and ABN AMRO Bank in Amsterdam. He is a graduate from J. M. Katz Graduate School of Business (University of Pittsburgh,

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•Faculty Members

Pittsburgh, Pennsylvania), The Wharton School (University of Pennsylvania, Philadelphia), The Rotterdam School of Management (Erasmus University Rotterdam), and IPB Bogor. Prof. Sembel teaches Finance, Investment, International Finance, Quantitative Analysis, Economics, Entrepreneurship, and other related courses.

RUDIANTO PRABOWO Rudianto Prabowo has joined IPMI as a visiting lecturer since 1995, teaching Management Information Systems and E-Business courses for the Full Time and Executive MBA programs. He did his Master's Degree in Information Systems at University of Pittsburgh, Pennsylvania and BSc Degree in Civil Engineering at Universitas Parahyangan, Bandung. He is now working for IBRA as a Vice President for the Systems and Procedure Division. Prior to that, after earning his Master's Degree Rudi then joined University of Pittsburgh's Learning Research and Development Center/LRDC doing various research projects on Intelligent Systems development. After returning to Indonesia, he has served as an Executive Program Lecturer and a Management Consultant with Lembaga PPM/PT Binaman Utama and as a Senior IT Manager for PT Pefindo.

RUPINDER K. TINJANI Rupinder Kumar Tinjani (Rupi) teaches Managerial Economics, Firm’s Competitiveness, Managing International Business, Marketing Management and Business Strategy Simulation.With baseline as a gold medalist mechanical engineer, he was awarded his MBA (General management)

by IPMI-Monash University as the overall best student in 2005. During the past 23 years, Rupi has worked with 5 Global companies in the industrial and manufacturing sector in Asia, Australia, Europe, USA. Currently he serves as CEO of PT Tamco Indonesia, a leading electrical switchgears manufacturing company based in Cikarang.

SONY WIWIEK ANTONIO Sonny Wiwiek Antonio is a IR (Teknik Industri – ITB) CBM – Finance & CBM – Marketing (Prasetya Mulya), Executive Managerial Training (Hagemeyer Cosa Liebermann – Singapore), MM (IPMI), MBA (Monash – MT. Eliza). He has working experience new product development officer (National Gobel), Regional Sales Mannger (Erka Primasta/Kalbe Group), Sales Manager (Star Cosmos), Department Manger (Hagemeyer Cosa – Liebermann Indonesia), Sales & Marketing Manager (Mecomb Tehnik/Sime Darby Group), Director (Universal Arga Perkasa), President Commisioner (Cibodas Alam Sentosa). At IPMI Sonny teaches Microeconomics, Macroeconomics, Introduction to Business.

TRITJONDRO BASKORO Baskoro was holding a senior management position in a telecommunication service company. He took his master in Strategic Management from Universitas Indonesia and his bachelor from Institut Teknologi Bandung. Baskoro is highly experienced in information technology, especially for telecommunication industry sector. He is now running a Management Consulting Business focuses in IT and Business Transformation. He teaches Strategic IT, Business Strategy, MIS and Knowledge Management. At IPMI he teaches Research Methodology, Technology Intfrastructure.

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VINERA ZAINUDDIN Vinera Zainuddin facilitates English for Academic Purposes for the undergraduate program. She has been teaching English for corporations and education institutions for 20 years. She has a degree in Human Resources Management from Universitas Indonesia and a dual MBA/ MM degree from IPMI. She also holds Teaching English as a Foreign Language certificate. Vinera's previous experience includes Recruiting, Training & Organization Capability Manager for PT Procter & Gamble Indonesia and Research Analyst in PT Continental Emperor Indonesia. Currently she is the Director of PT Pendidikan Cerdas Bangsa, the Deputy Branch Manager for LBPP LIA Cikokol-BSD, and a language consultant for English for a Specific Purposes (ESP) Program.

YULITA FAIRINA SUSANTI Yulita Susanti graduated with a degree in Agricultural Economics from Oklahoma state University, Stillwater Oklahoma, USA where she earned a Master’s and Doctoral degree. Also she received her Bachelor degree from IPB, majoring in Economics Forestry. Yulita has 12 years’ work experience in research, teaching and administration position in Education Institutional. Including Research Associate at Oklahoma State University, part time time faculty at University of Indonesia, Academic Assistant at Carnegie University Qatar, and Economics Specialist at Georgetown University Qatar. Currently Yulita is the Head of Program, and fulltime Faculty at IPMI International Business School. The courses she has been teaching are Microeconomics, Macroeconomics, Business Statics, Business Research, Working Across Borders and Managerial Economics.

YUMEI W. SULISTYO Yumei W. Sulistiyo is Product Manager PT. Bristol -Myers Squibb Indonesia period January 1993 - March 1995. He has is Business Unit Head PT. Bristol-Myers Squibb Indonesia period 1998 – 2000 and he has Director: Head of Group HR PT. Tozy Sentosa Subsidiary of Parkson Retail Asia period 2009 – Current and he has Human Soft Skill Certification Behavioral Analyst :CBA / Certified Behavior Analyst : DICS for Personal insight and Team development : 2004 Mind Set Assessment : Identity Compass Certification 2008 Design Human Engineering / People Transformations / Communications / Trainer : Licensed Master Practitioner of Neuro Linguistic Programming TM : DR. Richard Bandler – USA 2008. He earns Bachelor Degree in Psychologist from University of Persada Indonesia, and Master Degree from IPMI International Business School. Currently He is teaching Management at IPMI. WARRY SUMITRO Warry Sumitro earned his MBA from IPMI Business School in 1985. He started teaching in IPMI MBA Program in 1987, when he taught Accounting and Financial Management until 1990. Warry rejoined IPMI Faculty in 2004, and currently teaches Financial and Management Accounting both for the executive and regular MBA programs. Warry has over 30 years of experience in Banking, Finance, and Accounting. His previous work experience includes VP with Bank Duta, Managing Director of Duta International Finance Company, Hong Kong, Director of Rabo Finance Indonesia, and Director of PT Rabobank International Indonesia.

IPMI Business Review | March - September 2016

Research•

Measuring the Effectiveness of Advertising

by Dr. Asto Subroto

I

n his book Strategic Brand Management, Keller identified there are nine communication forms can be held by brand/product managers with their audience/consumer. They are media ad, direct respond ad, ad in specific places, ad in the point of sales, trade promotion, consumer promotion, event sponsorship, public relations, and personal selling. Among those nine, the most expensive ad is media advertisement.

There is an interesting joke in the advertisement research industry. It is known that 50% of the advertising has no impact, while the rest of 50% cannot be identified how to measure it. Although this is only joke, but in some companies that are the real situations.

From visiting and having discussion with some marketing people in many Indonesian companies, I assumed that the happiest person is marketing communication people. How come? None of the other marketing people or non-marketing

Dr. Asto Subroto Research & Community Development IPMI

people will measure the performance of marketing communication division.

In most departments, especially sales, the key performance indicators are very clear. While for marketing communication people, the questions of performance indicators are only related to what have they done, how much is the budget, and how is the communication and visualization. The last one: How good is the advertising? (Even though this is depending on feeling and agreement which is has very high subjective factors).

Is that the joke true? Actually it isn’t. Recently there are so many methods to measure the impact

IPMI Business Review | March - September 2016

of advertising. A researcher which also an ad people has identified there are 456 theory that can be used to measure the effectiveness of advertising.

According to Hierarchy of effect model, consumer will always follow the exact pattern: from watching advertisement up to the purchasing decision. Decision making to purchase and consume the product/ brand will always started by awareness of the product, then follow by the understanding, like, preference to the available products and finally

39

•Research

the decision to buy the product. It said in this model that this process will always flow regularly and start from the introduction process.

Awareness itself comes from information about the brand and product gathered by consumer (whether from proactive effort by the consumer the collect the information) or by proactive activity held by brand/product manager to communicate its product/services.

Although actually there are three function of advertising: to inform about the product/brand, to remind the product/brand, and to influence target audience to use product/brand, but basically the final target from advertisement is to change attitude of the target audience. The problem is only how hard to understand.

If periodization of way to measure ad advertisement is held, it is found that actually there are 4 differences among those four periods. The first period is evaluate ad to direct respond, represented by Claude Hopkins in 1922 through his book namely scientific advertising.

He said this book very influence the way of thinking of David Ogilvy.

The second period is measure the impact of ad execution (picture, voice, etc.) and through way of thinking that followed by Procter & Gamble up to now.

The third period evaluates the ad itself, actually at the individual level. This approach is formalized

by Russell Colley through his book titled DAGMAR (Defining Advertising Goals for Measured Advertising Response) methodology (Colley, 1961), which is finally becomes one of the most popular methods. While the fourth period called as research nirvana, which is known as the strongest in Europe.

In 1994 Mehta who get his PhD from Syracuse University developed

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Shopping Psychographic of Indonesian Consumer Based on Cities (%) Psychographic Classification

Total

Jakarta

Bandung

Semarang

Surabaya

Pragmatic Shopper

23.5

28.5

22.9

31.5

20.9

Medan 9.8

Shopping Lover

36.2

36.3

52.2

28.7

22.9

42.4

Lifestyle Shopper

21.7

21.0

8.3

21.9

37.5

16.9

Just Buyer

18.7

14.1

16.6

17.9

18.6

31.0

Source: MARS Indonesia

Shopping Psychographic of Indonesian Consumer Based on Age (%)

Decision making to purchase and consume the product/ brand will always started by awareness of the product

Age group

Psychographic Classification

Total

18 - 25 y.o.

26 -34 y.o.

35 - 55 y.o.

Pragmatic Shopper

23.5

23.1

25.0

22.8

Shopping Lover

36.2

36.1

34.8

37.2

Lifestyle Shopper

21.7

24.3

22.1

21.1

Just Buyer

18.7

16.6

18.1

18.9

Source: MARS Indonesia

Shopping Psychographic of Indonesian Consumer Based on Socio- Economic Status (%) Psychographic Classification

Total

SES A

B

C

D&E

Pragmatic Shopper

23.5

22.3

24.1

25.4

23.1

Shopping Lover

36.2

36.7

37.5

31.4

41.0

Lifestyle Shopper

21.7

23.5

20.4

21.4

7.7

Just Buyer

18.7

17.5

18.1

21.7

28.2

1 time a month

< 1 time a month

Never

Source: MARS Indonesia

Shopping Psychographic of Indonesian Consumer and Frequency of Visit to Supermarket Psychographic Classification

Frequency of Shopping 1 time 1 time Once in two a week a week weeks

Pragmatic Shopper

10.0

3.7

12.9

23.9

28.6

40.0

Shopping Lover

60.0

63.0

50.3

38.9

32.8

0.0

Lifestyle Shopper

10.0

22.2

22.7

19.4

22.9

0.0

Just Buyer

20.0

11.1

14.1

17.9

15.7

60.0

Source: MARS Indonesia

a model that is aimed to measure advertising effectiveness called Advertising Response Model (ARM).

The method connects advertisement with buying interest. One of the conclusion of this study is that

ad can be evaluated from its impact to the consumer, not only the ad as a whole, but including each element such as message related to the product/brand, and some other things which is related to the ad ex-

IPMI Business Review | March - September 2016

www.ipmi.ac.id

Shopping Psychographic of Indonesian Consumer and Mall Visit (%) Psychographic Classification

Frequency of Shopping 1 time a month

2 times a month

3 times a month

4 times a month

> 4 times a month

Pragmatic Shopper

17.0

14.1

7.1

5.0

33.3

Shopping Lover

40.0

45.1

50.0

55.0

0.0

Lifestyle Shopper

29.2

34.8

39.3

30.0

33.3

Just Buyer

13.9

6.0

3.6

10.0

33.3

Source: MARS Indonesia

ecution and figure used to deliver the message.

ARM is interesting because the research study about the advertisement mostly targeted to the impact of brand image, brand salience, recall (Starch) and recognition. By connecting advertisement and buying interest it is open the opportunity to measure quantitatively the cost spent for the advertisement which is so far still being questioned, especially the impact to the selling (realization of the purchasing interest).

Beside from classified of the way to evaluate the ad based on the period, so far actually there are 4 frameworks about the measurement of advertisement impact, there are: Model based on impact (response) to the selling, Model which is show the persuasion of ad to the audience, Model that is endorse the involvement of the audience, and Model that is based on the salience (popularity).

Which model that has to be followed? Actually that will be depend on the advertising objective. The interesting question is Do the advertiser and its ad agency define advertising objectives? There are many companies defined it rigidly, but from my experience, many companies said don't know about that.

If this condition exist, why should we measure the ad? 

Shopping Psychographic

of Indonesian Consumer

PRA SHOGMATIC PPE R

T JUS ER Y U B

18.7% • Rarely to visit Mall/ Shopping Center • Visit mall/ Shopping Center if needed

IPMI Business Review | March - September 2016

23.5%

YLE LIFESTPER SHOP

21.7%

SHOPPIN LOVER G

36.2%

• Includes people who • Shopping Is a part of rarely visits the store/ the job mall/shopping center • Used to spend some • Regularly visit the time in the store/ • Likes to offer store/mall/shopping mall/shopping center center • Is not a problem to • Always have time for visits many stores/ • Quite entertained shopping shops in order to get with the activites of a reasonable price window shopping • Is not affected by the discount • Is a referral for other consumers

41

â&#x20AC;˘Alumni

Dendi

On How To Turn His Creative Ideas Into

Successful Businesses

A

linkage of this 31-year-old man with the business world began when he was doing clothing business in the final semester of college. Since then, he collaborate with a brand-new band in Yogya, Seventeen. "Incidentally, at that time the guitarist bought our shirt. From there, we talk intensely about the band's management,â&#x20AC;? said Dendi.

From that discussion, precisely, Dendi was invited to join the Seventeen band management. Tit for tat. In 2005, Dendi nodded in agreement. For the sake of totality, Dendi took off his clothing business. Seventeen band that was founded in 1999 and actually has released its first album, Bintang Terpilih, under the label of Universal Music Indonesia. However, the Universal global then closes its local label in Indonesia, so then, their relation with Seventeen is automatically disconnected.

"Well, when the Universal dismissed the band, I was asked to help to create a business plan as the material for finding investors. They had returned to Yogya because of earthquakes, but I remained in Jakarta to get new investors," he said.

42

by Citra Anggia Fathia

Although graduated from Diploma III Electronic Instrumentation Gadjah Mada University, Yogyakarta, Dendi Reynando is not afraid to do business in the creative world.

In fact, his choice has delivered him to be a successful business entrepreneur in artist management, publishing, and production house under the flag of Mahakarya Inc. with a turnover of billions rupiah per year.

IPMI Business Review | March - September 2016

www.ipmi.ac.id

It is not a challenge-free way for him as an artist manager. In fact, his parents had doubt his career choice.

"For village people like us, working as I am, was not cool, because it is sort of single organ manager who called for one to another celebration. It is understandable, we were not familiar with this," Dendi remembered his past with a smile.

The condition began to be better when his directed band, with a new formation, put out a brand-new album, Lelaki Hebat, in 2008 under the new label of MI Tune Music Production. The company is owned by a tax consultant who like music and entrusting the management of the label to Dendi.

The consequences of the new formation and label does not light: Seventeen considered like a newcomer. As the result, he had to fight to convince 600 radio stations in Indonesia to play their song. "We sent a physical CD to every radio one by one. I strived to all over the radio

in Indonesia, there are 600 radios, I called one by one in order to get in to the playlist," he said.

His struggle for 2-3 months has gave a sweet result. People were starting to respond positively on Seventeen band. "On the third month, the response rose," he said. Seventeen band began to get prompted to perform on numerous television stations, also in various regions.

Dendi who continued his undergraduate study in Industrial Engineering University of Muhammadiyah Jakarta and MBA in IPMI International Business School also became more certain with his career choice. In fact, in 2009 he chose to stand alone. "I started thinking

to make my own business in artist management, record label, or in essence, entertainment business. So, I set up Mahakarya Inc. in 2009," he explained.

With a sober funding, even stayed at the headquarters office of Seventeen band, he started the Mahakarya Inc. From there, his businessâ&#x20AC;&#x2122; way continues to spread widely. Dendi then spread the spirit of the business with his team. One of the Seventeen personnel who he pushed, now also producing his own business with indie bands.

Later, Dendi also encroached a production house business with the title of Sarugo Visual Motion.

Initially, Mahakarya made a video clip for the Seventeen band in 2010,

Dendi is a gratefulman, because of his efforts, he had led his parents to go to the Holy Land pilgrimage, and even enrolled Hajj for them too.

IPMI Business Review | March - September 2016

43

â&#x20AC;˘Alumni

then Lila band, and other bands. In fact, Nestle also entrusted one of its projects to Sarugo. Now, a total of dozens video clips has produced by Sarugo.

"Looking ahead, I will develop Sarugo to to TV programs and movies. TV programs is currently being discussed with to two television stations, while for movie, there is a script that we're reviewing, "said Dendi, enthusiastic.

The artist management business is now cope eight artists and bands, including Seventeen, Captain Jack, Gilang Dirga, Komo Ricky, and Ilvie Rahmi.

The business development of Mahakarya follow the progress of the digital world, such as the birth of the Department of Business Development & Publishing. He working that field because the artists need treatment in the realm of media and digital distribution such as ring back tone, iTunes, YouTube, Facebook, Twitter, and has worked with vari-

44

Dendi wants his employees to continue to learn. Like him, who initially did not know anything but want to continue to learn. ous telecommunications companies. "For example, promotion services, we've managed to hold media placement for few artists," he said.

Mahakarya also been helping media placement for BPJS. "Because Mahakarya close to radio, local television, and other media, this service is used for the dissemination of the BPJS Kesehatan," he said.

Mahakarya is currently manned by 15 permanent employees and a dozen part-time workers. Amazingly, two of its employees are now being schooled for magister at Bina Nusantara University and Trisakti University. "I want my employees to continue to learn. Like me, who

initially did not know anything but want to continue to learn, "he said.

In fact, today he also hired three real artist management that armed with zero experience.

Mahakarya turnover this year is more than tripled from a year ago.

"I can not call an exact figure, every year the gross income grew three times," said Dendi which is targeting 15 billion rupiah this year.

Dendi grateful, because of his efforts, he had led his parents to go to the Holy Land pilgrimage, and even enrolled Hajj for them too.

This Mitsubishi Pajero Sport driver is even more convinced his business.

"I believe the potential is huge.

Moreover, the creative industries is realized by the government, can support a lot of things. Digital and social media business is also growing. For digital music, we previously entrusted the distribution, but starting this year we already deal directly with their mobile operator, there are more than 100 content that we distribute," said Dendi.

Dendi is currently too busy with social activities. Through Mahakarya Foundation that was founded in 2012, he was channeling zakat from his employees and artists or other donations for children that are not capable but have many achievements. Currently, MF had 20 foster children spread throughout Indonesia. The first foster child who they helped have already finished college and worked in Pertamina.

For business, Dendi plans to go regional in the next decade. "Mahakarya had a dream to dominate the Asian market for the next 10-15 years and can grow as Sony, Universal, Warner, SM Ent. and other multinational companies engaged in the creative industries," said the man whose ambition to school for an MBA at Harvard Business School. ď Ž(Source: SWA.co.id)

IPMI Business Review | March - September 2016

Pioneering•

The Game of Coopetition

Prof. Roy Sembel, Ph.D Dean of IPMI International Business School Prof. Roy Sembel Prof. Roy Sembel @ProfRoySembel @ProfRoySembel

by Prof. Roy Sembel, Ph.D

“And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.”

(Andrew Carnegie)

IPMI Business Review | March - September 2016

T

he early history of economics is shaped by the concept of the role of competition. In the beginning, the concept was controversial because it was against the spirit of cooperation that was championed by religious and community leaders (Moss (2011)). Since then, gradually the concept of competition had been developed further and the mantra of competition and competitiveness (“We have to be

45

•Pioneering

competitive to survive and win”) had become widely accepted. Many business models and strategy were invented to make companies more competitive to win the competition (Stonehouse & Snowdon (2007)).

To some extent, the phylosophy of competition was stretched to the extreme that the urge of winning the competition had pushed some people to try to win at all costs. As a result, cut-throat competition often colored the dark side of the business world. Greed – the excess of extreme bad spirit of competition – had caused many businesses to break rules and -at the macro levelcountries to declare wars (Moss (2011), Benkler, Y. (2011)).

The early concept of competition in economics was developed paritally and statically, hiding behind the magic words of ceteris paribus (only one factor changes while all other foactors stay the same).The ceteris paribus simplification allowed some elegant and easy to construct models to be built (Fleischacker (2009)).

However, the reality does not work the ceteris paribus way. In reality, if one factor changes, most likely some other inter-related factors will also change, and when there is an action, there will be reaction(s).

No wonder that if we rely on the standard ceteris paribus based traditional models or theories, we encounter phenomena that are not explainable (or commonly called anomalies) with those models or theories. Facing with these anomalies, economists developed new approach based on dynamic interaction of factors and actors. Game theory was born (Brandenburger & Nalebuff (2011)).

The early version of game theory is based on one-period and non-cooperative model. The famous early game of Prisoners’ Dillema captures the essence of this one-period and

46

non-cooperative model (Poundstone (2011)). Here is the illustration.

Two accused thieves (A and B) are caught and they are accused to be collaborating to each other. The police do not have sufficient evidence, and thus need to force the accused thieves to confess that they had been teaming up to steal from some victims. Each of the thieves is interogated in two different rooms.

They cannot see and hear each other.

If both A and B confess, each of them will get 5 years in prison. If A (B) confesses and B (A) does not confess, then the punishment for A (B) will be lighter (1 year in prison) while B (A) will get heavier punishment (8 years in prison). If both do not confess, then both will get 2 years in prison.

Using the traditional ceteris paribus analysis, logically both of them should choose not to confess, so that they will get the lowest total years in prison (2 years+ 2 years = 4 years) However, using the -dynamic action reaction- game theory approach, Prof. John Nash (who are one of the winners of Nobel Prize in Economics in 1994) showed that the resulting equilibrium is actually both will confess such that the total punishment is the worst one (5 years + 5 years = 10 years).

Why is it so? From the point of view of A (B), if B (A) confesses, it is better for A (B) to confess (gets 5 years in prison instead of 8 years if does not confess), and if B (A) does not confess, it is better for A (B) to confess (gets 1 year in prison instead of 2 years). Thus, from the point of view of each person, confession is always a better alternative. Even though from the point of view of collective choice (total years in prison), it is better we both A and B do not confess. This situation is termed the Zero-sum game of competitive

situation: My gain is your loss, your gain is my loss.

Table 1. Payoff of Prisoners’ Dilemma Game Confess

Not Confess

Confess

5 years \ 5 years

1 year \ 8 years

Not Confess

8 years \ 1 year

2 years \ 2 years

A \ B á

In daily situation, the zero-sum game phenomena frequently occur.

For example, wars among countries during the colonialization era, price war competition in business, sport games, sellers cheat on quality of their products, etc. These competitive phenomena result in bad collective outcome. What the actors in these situation need is more collaboration and cooperation.

That illustration is not meant to curse competition as bad thing that we shoud avoid. We do need competition to get ahead together.

However, we need to avoid the wrong type of competition: cut throat, zero-sum type competition.

Economists have recommended and modeled ways to remedy the zero-sum game (Bengtsson, M., & Kock, S. (2014), Stewart & Plotkin (2012)).

The basic premise for the remedy is as follows. First, the game has to be repeated many times. In this repeated game situation, the actors (A and B) will consider the long term impact of their cheating behavior. If one player cheats, in the next game the other player will retaliate such that both players will suffer longterm losses. The potential long term losses can be much higher that the profit of the short term cheating.

Thus, in this situation, both players will choose to cooperate to secure the long-term potential gain. This long-term repeated nature of game is developed and modeled by the Nobel Prize Winners for economic

IPMI Business Review | March - September 2016

www.ipmi.ac.id

science in 2005: Robert J. Aumann and Thomas C. Schelling.

Second, because one source of bad insentive is the non-transparency of information in the zerosum game, the logical remedy is to bring transparency into the system.

Transparency is an important part of Good Governance (Transparency, Accountability, Responsibility, Independency, and Fairness). There are still other mechanisms that have been suggested to remedy the situation. In essence, the good balance between competition and cooperation is needed to gain better collective long-term benefit. That is the core idea of coopetition.

Concluding Remarks The pendulum of competition versus cooperation has been swinging back and forward from one side to the other side. What we need is the coopetition: a good balanced mix of competition and cooperation. There are a lot of –Nobel Prize Level- concepts and models for that issue. Instead of trying to provide a complete description of many complicated models, I resort to storytelling mode to conclude this article.

It is the modified story of the hare and the tortoise Once upon a time a Tortoise and a Hare had an argument about who was faster. They decided to settle the argument with a race. To make it fair, they asked a playful monkey to be their referee. The monkey agreed, and to make the race more interesting, the monkey even offered a good reward if the winner can win the race within a certain time limit for the cumuative total three-round race. The monkey designed three routes and set the time limit for the reward. The Tortoise and the Hare agreed on the routes and the time limit, and soon they started off the race.

As soon as ther race started, the Hare ran briskly and kept running for some time. After seeing that he was far ahead of the Tortoise, he was satisfied then sat under a tree and relaxed for a while. The Hare soon fell asleep. The Tortoise kept moving on and overtook the Hare. The Tortoise soon finished the race and became the undisputed first round champion. When the Hare woke up, he was upset to realize that he had lost the first round race.

The moral of the story for the first round race is that slow and steady wins the race.

The Hare was disappointed at losing the first round race. He evaluated the situation and realized that he had lost the race because he had been overconfident and careless. So he was well prepared for the second round race. This time, the Hare went ran without stopping from start to finish. He won the second round race by several kilometers.

The moral of the story of the second round race: The fast and reliable will always beat the slow and steady.

However, because the total cummulative time of the champion of the first round and the champion of the second round was still above the time limit, there was a clear and present threat that no winner can get the reward.

The situation was getting worse because the route of the third round race was mpossibe for the faster competitior (The Hare) to even finish the race to compensate for the lack of cummulative speed in the first two rounds. The problem is, the third round route consist of two parts: land and a broad river. The Hare may be able to clear the land route but there is no way that he can cross the river.

Evaluating the situation, The Hare and The Tortoise came to a

IPMI Business Review | March - September 2016

conclusion that they need to cooperate to beat the time limit. They started off. This time the Hare ran fast while carrying the Tortoise until they reached to second part of third round route, the river. The finish line was just at the other edge of the river. Now it was the time for the Tortoise to play a leading role.

He swam across the river while carrying the Hare. Finally, the reached the finish line together and beat the cummulative time limit.

The moral of the story? Coopetition - a good balance between competition and cooperation – can produce a better collective outcome.

REFERENCES 1. Bengtsson, M., & Kock, S. (2014). Coopetition— Quo vadis? Past accomplishments and future challenges. Industrial Marketing Management, 43(2), 180-188.

2. Benkler, Y. (2011). The penguin and the leviathan: How cooperation triumphs over self-interest.

Crown Business.

3. Brandenburger, A. M., & Nalebuff, B. J. (2011).

Co-opetition. Crown Business.

4. Fleischacker, S. (2009). On Adam Smith's" Wealth of Nations": A Philosophical Companion.

Princeton University Press.

5. Kohn, A. (1992). No contest: The case against competition. Houghton Mifflin Harcourt.

6. Moss, G. E. (2011). The Dawning Age of Cooperation: The End of Civilization as We Know It--and Just in Time. Algora Publishing.

7. Poundstone, W. (2011). Prisoner's dilemma.

Anchor.

8. Stewart, A. J., & Plotkin, J. B. (2012). Extortion and cooperation in the Prisoner’s Dilemma.

Proceedings of the National Academy of Sciences, 109(26), 10134-10135.

9. Stonehouse, G., & Snowdon, B. (2007).

Competitive advantage revisited: Michael Porter on strategy and competitiveness. Journal of Management Inquiry, 16(3), 256-273.

10. www.nobelprize.org

47

â&#x20AC;˘Leadership

How to Be a Talent Master By: Effendi Ibnoe

We are in VUCA world and the digital era, the challenges faced

by Human Resources leaders and professionals are just huge.

H

uman Resources leaders need to be a talent master, implementing the talent management in the organization, to develop the human resources competitiveness and enhancing the productivity of the company.

Talent is defined as innate ability and inclination. A special, often creative cultural ability or "aptitude", or observed inclination or disposition.

The vision of the Human Resources function is "Building talent, culture and capability for the company (global) growth". In effect, what should be done is executing the 5 Pillars of Talent Management is identification of top talents or high potentials, succession plan development for key/critical positions, leadership development programs, values and culture implementation (living the company values), and engagement and Retention programs.

The talent masters in an company will build the company's "talent machine", developing leaders, it is a kind of leaders' factory.

What more should a Talent Master do? To see who are the promising leaders? Where do they fit? How

48

can they do better? What can we do to help them realize their potential faster?

A company's success is also measured by how well the leaders developing other leaders that the company need.

The idea is making a difference in human capital setting, in the company, at the group level, develop-

Talent Management Framework

IPMI Business Review | March - September 2016

www.ipmi.ac.id

Talent is defined as innate ability and inclination. A special, often creative cultural ability or "aptitude", or observed inclination or disposition.

ing leaders such that the company will thrive and sustainable business growth will be a reality.

Talent master's put people before numbers, and the seven principles of talent masters. First, there should be an enlightened leadership team, starting with the CEO. An enlightened CEO recognizes that his top priority for the future is building and deploying the talent that will get it there. Committed to creating a culture of talent mastery and personally involved in executing it.

Second, meritocracy through differentiation. This is the mother's milk of helping talent reach its potential. Differentiation breeds meritocracy; sameness (the failure to differentiate) breeds mediocrity.

Third, working values. They're the values people live by, because they are absolutely expected of both leaders and employees. By whatever name, masters repeat and repeat and repeat their values, and reinforce them by linking recognition and rewards with them.

Fourth, a culture of trust and candor. A company can develop its people only if it has accurate information about their strengths and

IPMI Business Review | March - September 2016

development needs, and it only can get that information if people can talk candidly - that is honestly and openly.

Fifth, rigorous talent assessment. Talent masters have the same goal and results orientation in their people processes as they do in their financial systems.Explicit time based people development goal to be set and discuss the why and how of these goals.

Sixth, business partnership with human resources. Talent masters

Effendi Ibnoe Chief Human Capital PT Intraco Penta, Tbk

use human resource leaders as active and effective business partners, raising the same, if not higher level as the chief financial officer. The HR function will only be as strong as the CEO wants it to be.

Seventh, continuous learning and improvement. Talent masters recognize that a fast- changing business environment requires constant change and updating of both leaders' skills and their own leadership criteria. ď Ž (Reference: Talent Masters by Bill Conaty & Ram Charan)

The Key Strategies

49

•Executive Education

PT Nestlé Indonesia Emerging Potential Internal Talents PT Nestlé Indonesia and IPMI International Business School have for many years teamed up in running the Management Development Program (MDP) to prepare Nestlé’s potential internal talents to be ready to take on the responsibility to be the future leaders of the company.

PGN creates better leaders for the future PT Perusahaan Gas Negara Tbk (PGN) and IPMI International Business School have designed and conducted The Manager Development Program (MDP) successfully, from October 2015 until March 2016.

The expansion of current and future PGN business requires well-structured and systematic methods to identify and spot potential talents who can support business growth and sustainability.

Well-organized talents development is necessary to support PGN’s business strategy and vision to be the world class company.

The Management Development Program is attended by 100 PGN star talents and upon completion of the MDP participants are eligible to continue into E-MBA degree program.

50

The primary objective of the MDP program is to build business acumen in the participants which will be accomplished through workshops with three crucial activities: • Skill development: comprehensive and interactive lectures.

• Practice: Opportunities to explore and experience through case discussions, problem solving experiences, business simulation and presentation.

• Reflection on Practice: The opportunity to reflect on the experiences and lessons learned.

Nestlé MDP consists of 6 modules and run for 6 months. The recent program of Batch 10 has started in November 2015 and scheduled to finish in April 2016.

IPMI Business Review | March - September 2016

www.ipmi.ac.id

Boehringer and IPMI Conducted Management Development Program IPMI International Business School was appointed to conduct Management Development Program (MDP) by the management of PT Boehringer Ingelheim.

The MDP program uses a problem-based experiential learning approach, specifically designed to develop leadership competencies

for Boehringer Ingelheim future leaders in VUCA (volatility, uncertainty, complexity, and ambiguity) environment.

Participants had discussed and experienced learning modules in 4 days In-Class Training, 2 days Action Learning Program (coaching), 1 day final presentation with IPMI, integrated

with state of the art, case study based, strategic issues.

The program was designed to be highly interactive, thought provoking that goes together with IPMIâ&#x20AC;&#x2122;s spirit: Inspiring, Pioneering, Mind-shaping and Impacting.

GMF AeroAsia Developing theCompanyâ&#x20AC;&#x2122;s Next Generation of Leaders in the work unit. IPMI and GMF AeroAsia had the case study designed based on the day-to-day challenge they are facing as emerging managers.

IPMI International Business School is proud to be a strategic partner of PT Garuda Maintenance Facility AeroAsia (GMF AeroAsia) in developing their future leaders from 19 January until 22 January 2016.

Emerging Leadership Program batch 9 is designed to equip future great leaders with new paradigms and frame work of thinking.

The program is designed for emerging leaders who run the operation management

Through this program IPMI in cooperation with GMF AeroAsia would like to ensure that the participants are able to synergize the activities to improve work efficiency and be able to analyze the working unit problems in a creative decision making process.

Indonesia Power Developing Their Professional Competency PT Indonesia Power (a subsidiary of PT PLN) appointed IPMI International Business School to conduct Program Pembelajaran Uji Portofolio Kompetensi (UPK), from

June until December 2015, in developing their professional competency for the future leaders.

UPK program offer participants the opportunity to learn new

skills by sharing models and best practice tools and techniques. They can then gain insight into their strengths and weaknesses.

The program is also helps employees build the confidence, motivation, and resilience necessary to take personal responsibility for their state and actions.

At the end of the program participants have to present their project papers to a panel of examiners of both the management of PT Indonesia Power and IPMI facilitators.

IPMI Business Review | March - September 2016

INPEX Corporation Creates Emerging Leader Development Program INPEX (a worldwide oil & gas exploration and production company based in Japan) and IPMI International Business School have designed and conducted Emerging Leader Development Program from October 2015 until January 2016.

The program uses a problem-based experiential learning approach, specifically designed to develop leadership competencies for INPEX Corporation future leaders in VUCA (volatility, uncertainty, complexity, and ambiguity) environment.

51

•Globally Conected

Stopping ASEAN's Brain Drain

by Bambang Susantono

A

fter 10 years of negotiation, the Association of Southeast Asian Nations’ muchanticipated Asean Economic Community (AEC) comes into effect at the end of this year. There is much to be lauded in the agreement, particularly its focus on opening sectors to competition and breaking down trade barriers. The benefits of implementation could lift aggregate output by 7 percent by 2025 and generate around 14 million new jobs.

But these benefits are unlikely to accrue in full if agreements on labor mobility for skilled workers are not implemented. Current restrictions on the free movement of workers not only run contrary to one of the central tenets of the AEC, they also make it difficult for the region to achieve its goal of increased economic integration.

Recent studies have concluded that rather than protect countries from brain drain, the current policy setup is encouraging Asean’s best workers to leave the region entirely.

Over 80 percent of all migrants from Thailand and the Philippines find work outside of Asean. The figures are not much better for Vietnam and Indonesia. The consequence is severe shortages of skilled labor in many Asean countries. Current trends indicate that

52

by 2025 more than half of all highskill employment in Cambodia, Indonesia, Lao People’s Democratic Republic, Philippines, Thailand and Vietnam could be filled by workers with insufficient qualifications.

For decades, the vast majority of labor migration among Asean countries—over 85 percent by some estimates—has taken the form of unskilled workers from poor countries moving to richer ones. As part of the commitment to the AEC, Asean countries have decided to promote labor mobility for skilled workers such as those in professions like accounting, architecture, engineering, surveying, medicine, nursing, dentistry and tourism.

Recent studies have concluded that rather than protect countries from brain drain, the current policy setup is encouraging Asean’s best workers to leave the region entirely.

There has been some progress.

Between 2005 and 2012, Asean countries signed mutual recognition arrangements (MRAs) in six sectors (engineering, nursing, architecture, medicine, dentistry and tourism), as well as framework arrangements on MRAs in surveying and accounting to help facilitate cross-border labor mobility.

But a decade after these were first proposed, implementation is still slow—and in some cases nonexistent. This is due largely to the disconnect between regional commitments to labor mobility and existing national legislation and regulations that discourage cross-border movement by professionals.

The portability of qualifications is one of the biggest impediments.

Professionals across Southeast Asia wishing to migrate typically find their skills and education underutilized.

Onerous licensure processes, requirements to repeat education, and uncertainty about rules for both employers and employees are just some of the barriers. While there are differences in education and training systems among Asean countries, these obstacles can be overcome by harmonizing, standardizing and implementing compensatory measures to guarantee quality.

Another impediment to implementing the MRAs arises from the divergent interests of countries, sectors and professional groups.

Less developed countries have differing interests from wealthier ones regarding skills development and the role of migrant labor more broadly; while sector and professional groups have diverging views about opening labor markets.

Despite the need for skilled labor across the region, it is easy to

IPMI Business Review | March - September 2016

www.ipmi.ac.id

understand why implementation of skilled labor arrangements is slow.

While Asean is meant to encourage regional integration, the reality is that its countries operate in a global marketplace and there is strong competition for investment.

Interest groups also hold back implementation in some sectors.

But fears of increasing the flow of skilled workers are greatly over-

blown. Asean is notable among regional trading blocs for the variety of ways in which domestic constituencies can be satisfied by instruments, including numerical caps on foreign workers in certain sectors.

Compare this to the European Union, which has—with few exceptions—completely free movement of labor among its member countries. Even relatively modest regional agreements, such as the North American Free Trade Agreement, allow workers in 63 occupations to

Impediment to implementing the MRAs arises from the divergent interests of countries, sectors and professional groups.

move between Canada, Mexico and the United States.

The tourism sector—a bright spot for Asean—can show the way forward. The MRA for tourism professionals has streamlined the hiring process for workers from across the region and eliminated the need for a case-by-case assessment of qualifications. This is helping tourism workers upgrade skills and is giving companies greater flexibility to move their best workers in response to market conditions. Simi-

IPMI Business Review | March - September 2016

Bambang Susantono Asian Development Bank’s Vice President for Knowledge Management and Sustainable Development.

lar efforts have been made for engineers and architects.

But much more effort is needed. Medical professionals continue to face high barriers to movement, even in the face of severe skills shortages for doctors and nurses.

Leaders across Asean are aware of these issues. This week’s highlevel forum on skills mobility in Bali will help provide a roadmap for implementing existing and future agreements. The will is there; the time to act is now. 

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â&#x20AC;˘Ideas to Action

Coaching: Transform You to Be More Competitive

By Ananta Dewandhono

Coaching help people get clear on what they want in the future, why they want it, and how they are going to achieve it.

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IPMI Business Review | March - September 2016

www.ipmi.ac.id

I

n this era of globalization, we as professional and business leaders face big challenges in many area, driven by diversity of consumer segment and behavior, countries cultures and policies, competitors and business partners, and other variables. The implementation of ASEAN Economic Community (AEC) in the early of 2016 has made those challenges even bigger for us in Indonesia. Free flow of foreign labors, investment, products and services, creates more competitions. The recent news on Panasonic, Toshiba, Chevrolet, Ford and some Oil & Gas companies who have resized their business operation in Indonesia, also shows that we should be prepared for a tougher professional and business environment.

Is our organization, business, products or services ready for more competitive environment? Are we, as professional or business leaders, fully equipped ourselves with adequate knowledge and skills for those tougher challenges?

There is a growing consensus among scholars and practitioners that maximizing the potentials thru elevating the motivations of human resources is central to organizational effectiveness and improved performance in the 21st century global market place of intense competition. It is also indicated that the organizational leaders who manage people can remarkably influence company performances and competitiveness. So, the people motivations and leadership are the key words for improving competitiveness.

In his book “Drive: The SurprisingTruth about What Motivates Us” (2009), Daniel H. Pinkuses the metaphor of people motivation as that of an operating system. He tells readers that humans initial operating system, which he calls Motiva-

Transformational leaders hold positive expectations for followers, believing that they can do their best tion 1.0 was survival. Motivation 1.0 worked well, that was until society started to get more complex.

This second drive, Motivation 2.0, stated that humans set out to seek reward and avoid punishments. Motivation 2.0 is built entirely around rewards and punishments, or "carrots and sticks", i.e. based on external forces. This system did extremely well and made huge achievements, but as much operating systems do, it calls for an upgrade.

This is where Motivation 3.0 comes into play. This operating system still keeps the same outlooks of Motivation 1.0 and Motivation 2.0 stating humans still have the behavioral drive for survival as well as the drive for reward and punishment; but it also states that humans have a drive to direct their own lives. Motivation 3.0 is the operating system we need to meet new realities of how we organize, think about, and do what we do. This kind of operating system can only be fostered by a behavior that concerns itself with more intrinsic desires and more with the inherent satisfaction of itself.

The leadership style that use power and direction (called “Authoritative Leadership“) will work on team who are in the Motivation 1.0 mode. They do the job for their survival propose, i.e. get the pay check, buy food for life, and so. This

IPMI Business Review | March - September 2016

Ananta Dewandhono CEO Vanaya Institute, IPMI International Business School alumni MBA class of year 1999

is a job order relationship between leaders and team, and the organization performance will only there if the leaders are there with the team.

The “Transactional Leadership” style represents the style that use reward and punishment to drive team motivation, i.e. Motivation 2.0.

It is an extrinsic drive by nature and the organization performance will only achieve as much as maximum 100% to the target set. Once the scheme of the "carrots and sticks" no longer attractive to the team to chase or avoid, the performance will be deteriorated.

It is the “Transformational Leadership” that is increasingly suggested as the most appropriate approach for high performing organization, which is central to organizational effectiveness and gaining of competitive advantage.

This leadership style works on creating change from within, i.e. Motivation 3.0, which will bring the team into environment where they strive to achieve goals beyond the set target. As this is an intrinsic drive based leadership style, the result will generally be sustainable, a team automation will be created, so the leader then could concentrate on more strategic matters.

The natural Transformational Leaders, who have intuitive style of interacting with others, utilize more engaging interpersonal communi-

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•Ideas to Action

cation skills during their discussion with their employees, which contributes positive impacts to organization and individual performance.

They do asking questions more than making statements, do sharing the conversation more than dominating the conversation. Transformational Leaders interchanges were a discussion more than a monologue, inquiry/exploration more than telling, dictating and commanding. Transformational Leaders facilitates team to create Motivation 3.0 (intrinsic drive), i.e. this is known as “Coaching”.

The International Coaches Federation (ICF) – http://coachfederation.org/ , which is recognized as the worldwide credentialing organization for professional coaches, defines "Coaching is partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential. It is an ongoing professional relationship that helps people produce extraordinary results in their lives, careers, businesses, or organizations.”

Transformational leaders focus on followers, motivating them to high levels of performance, and in the process, help followers de-

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velop their own leadership potential. Coaching skills or method play significant roles in most of the four components to transformational leadership, sometimes referred to as the 4 I's (Bass & Riggio, 2005): • Idealized Influence (II) – the leader serves as an ideal role model for followers; the leader "walks the talk," and is admired for this; the leader will lead by example by Charisma and act as Role Model.

• Intellectual Stimulation (IS) – the leader challenges followers to be innovative and creative; the leader will use Training & Coaching approach.

• Inspirational Motivation (IM) – Transformational leaders have the ability to inspire and motivate followers; the leader will challenge to Go Higher by Visioning and Coaching.

• Individualized Consideration (IC) – Transformational leaders demonstrate genuine concern for the needs and feelings of followers; this personal attention to each follower is a key element in bringing out their very best efforts, and this is by Mentoring and Coaching.

The research evidence clearly

shows that groups led by transformational leaders have higher levels of performance and satisfaction than groups led by other types of leaders. Why? Because transformational leaders hold positive expectations for followers, believing that they can do their best. As a result, they inspire, empower, and stimulate followers to exceed normal levels of performance and competitiveness!

Coaching help people (clients) get clear on what they want in the future, why they want it, and how they are going to achieve it. Coaches use tools and processes to help people to generate their own solutions and then hold them accountable for following through. Coaching provides a safe and supportive environment that produces on-going mutual respect and trust. In coaching sessions, the clients who sets the goals. Coaching goes way beyond just hearing what people are saying; it stretches into syntax, tone of voice, and body language. Coaching is only about moving forward, not looking backward. Coaching opens the door to a new, extremely powerful kind of goal, purpose, vision and mission setting. Coaching systematically explores specific concerns and opportunities that are central to the client’s agreed goals.

Coaching instills long-term positive change.

Coaching help people to know and focus on their strengths and potentials. Along with creating clarity of the goals, Coaching facilitate people to find their intrinsic drive to achieve their goals by maximizing the strengths and potentials they have. This eventually will transform people, leaders or organization to become a more competitive in facing the tougher professional and business environment where we are in now.

IPMI Business Review | March - September 2016

Digital•

E-commerce and Coopetition

Frans Budi Pranata Former CFO Zalora

by Frans Budi Pranata

E

commerce in Indonesia is still at its infancy but has a tremendous growth potential in all macro drivers. Indonesia is one of the world’s fastest growing economies and its GDP is expanding between 5 and 6 percent annually, a trend that is expected to continue for the next decade. With a rising middle class, the Indonesian economy also becomes more consumption driven and the nation’s retail spending is growing at well above 10 percent.

Online retail itself is still in its infancy but expanding at an even faster pace. Out of the 248 million Indonesians, there were 75 million internet users by 2014. That market is expected to grow at 20 percent and its share of digital buyers by 10 percent per year. Coupled with a higher purchasing power and an increasing credit card penetration, the online retail market overall is expected to grow between 30 and 40 percent per year.

According to SingPost, retail spend was USD 411 billion in 2014 out of which 2.6 billion was spent on e-commerce. By 2016 that number is expected to reach USD 4.5 billion.

The fact that this is still less than one percent of the retail market indicates that the growth momentum is going to continue for a long time, especially when looking at the U.S. and China where e-commerce in the meantime captures 10% of total re-

tail spend and is still growing.

Despite the growth potential, various challenges need to be resolved, most notably in logistics and payments. But the rate of change and investments into solving these challenges look promising.

Logistics companies struggle to serve the sophisticated needs of ecommerce including reliable, fast and nationwide delivery at a reasonable cost. But there have been notable investments in logistics infrastructure, for instance AirAsia which has launched its express courier service called RedBox and allows affordable door to door deliveries at a price 50% lower than other services.

There have also been more partnerships between retailers and logistics companies. One example is the joint venture between SingPost, one of Southeast Asia’s largest provider for e-commerce, and Trikomsel, a retailer of mobile phones in Indonesia.

Similarly, Aliexpress recently bought 10% stake in SingPost in its efforts to expand in the Southeast Asian market. Many e-commerce firms also choose to set up their own delivery fleet, Zalora have own inhouse delivery fleet in Jakarta and its surrounding areas, and currently setting up multiple delivery hubs across Indonesia.

In the payments space, Indonesia ranks lowest among its Southeast Asian peers as a result of lim-

IPMI Business Review | March - September 2016

The rate of change and investments into solving these challenges look promising. ited internet access and low online banking penetration. But also this is changing.

Banks are investing heavily in clickpay and online payment solutions, examples including Mandiri clickpay, BCA Clickpay or e-pay BRI. Also telcos have started entering the space with mobile wallet solutions that are still at an early stage but will also facilitate e-commerce moving forward. Also Lippo Group announced significant investments in payment services and has plans to offer a solution comparable to Paypal.

Given the raise of all these payment options, various online payment gateways have emerged, the most prominent ones being DOKU and Veritrans. They allow e-commerce firms to easily accept a wide range of payment options.

With the rapid improvements in the e-commerce ecosystem and the huge opportunities arising from that, many companies are trying to capture their share and investments in the space have increased. In 2014, SoftBank and Sequoia Capital have recently invested USD 100 million in

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â&#x20AC;˘Digital

Tokopedia, an online consumer to consumer marketplace.

And this year, Lippo Group has allocated USD 500 million for the launch of its ecommerce venture MatahariMall. Moreover, Alibaba has decided to enter the market and launched its Bahasa version of Aliexpress. This is all intensifying the competition in the general merchandising space with most notable players being Lazada, Elevenia, Bhinneka, Blibli, Tokobagus, OLX and the new entrants Aliexpress and MatahariMall. And Gojek has got valuation of USD 300-400 Million within 4 years of operation, and has got significant funding from Northstar, etc.

Apart from that, one should be

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aware that social media and chat apps are taking a large portion of the ecommerce markets. So far, this has mainly been related to small vendors selling on social media platforms such as Facebook or Instagram but more activity is coming from chat apps.

Kakaotalk is the first chat app that was running merchant campaigns and Kakaotalk users receive various promotions, similar to buy 1 get 1. WeChat allows merchants to open an official account where they can sell goods online. Line is selling coins to users to buy premium stickers and "boosts" for games. But they have also started to engage more in the actual e-commerce

space where merchants can sell through a Line Shopping account or their own official accounts.

The fashion space is in a favorable position and appears less affected by the increasing competitive activity. Online fashion is high margin and very brand sensitive and also heavily depends on the customer experience (onsite, customer service, fast delivery and convenient return processes).

Therefore, one should be able to reinforce the position to compete in this fast growing industry. Zalora has already established a strong position here and is likely to remain the number one online fashion destination with more expansion plans.ď Ž

IPMI Business Review | March - September 2016