Doing well: Petroliam Nasioanl Bhd is one of the companies which have shown the better side of GLCs in business. — Reuters
I celebrated my 57th birthday end of last month. I have survived 1,300 days since the discovery of the big C in me. Some of my fellow sufferers have passed on, lasting between 500 and 1,000 days. I feel like I am one of the last survivors still hanging on for dear life.
With continuous chemotherapy, my immunity system has gone down several notches and I tend to catch infections easily nowadays. With much time to kill, I tend to do binge watching of TV series when I am resting at home. The latest of which is Designated Survivor, an original Netflix production with 21 shows in its first season.
When the American president presents his State of the Union address, the whole cabinet and the Congress members are present in the Capitol Building (Parliament House) except one cabinet member who is the designated survivor in case the Capitol Building is bombed out and everybody in the Capitol Building is killed. The designated survivor is then quickly sworn is as the president.
Only in Hollywood will such a scenario happened and lo and behold, the most junior unwanted non-politician of a Housing Minister was sworn in as the president of the United States. He was the designated survivor and pushed into a job that he neither have the experience nor skills to manage a country in chaos.
Within days of his appointment as president, he was faced with multiple problems on many fronts, most notable was the whodunnit mystery of the terrorist bombing act of the Capitol Building and the revolt of a state governor who refused to acknowledge him as the president and started managing his state on a breakaway mode. I started drawing parallel comparisons with my own country and many questions emerge.
Which is more important with regards to legitimacy to rule – constitutional rights or support from the people? Any leader who continues to rule the country based on constitutional rights but without the majority support of the people will eventually be removed. States threatening to breakaway happens everywhere. Governors or chief ministers are opportunistic politicians and when Federal leaders are weak, it strengthens their bargaining power and they begin to flex their muscles and show their strength.
In United States, state governors rely on the independence of the judiciary to counter presidential decrees. When president Trump signed his presidential decree on limiting immigration, some dissenting states and governors went to the courts and obtain favourable judgements to check the power of the president. Having a judiciary that is independent from the executive branch is one of the most important tenets of a democracy.
And what can our entrepreneurs and SMEs learn from these political scenarios? Firstly, have you identified your designated survivor? If something happens to you, god forbids but always a possibility, can your designated survivor take over and manage your business smoothly? Are your immediate family members (who will inherit your shareholdings) well-equipped to manage your investments? Preservation of wealth for your family should always be part of your business strategies as an entrepreneur. Waste not what you have gained or your years of toil will be in vain.
If you are operating in a regulated environment, know your local laws well. There will be times when you need to go to court to fight against the abuse of power by the authorities or the sitting ministers in charge. The many recent court judgements favouring SMEs and entrepreneurs is indeed encouraging. You can now rely on an independent judiciary for a fair trial to prevent the big bullies from destroying your business.
What if your business is dependent on political patronage and connections and now your companies are being raided by Inland Revenue Board and the MACC? It just means you are now on the wrong side of political power. I hope you have gone into the business with your eyes wide open. You should have learnt from the master entrepreneur who has continued to prosper through different regimes. He is the puppet master, pulling all the strings and covering all the bases. If you really do intend to mix politics with business, then be the best that you can be. Stay shrewd and never burn any bridges. You just never know who will be in power next.
What if your business is competing with government-linked company (GLCs)? My SME friends in Singapore has been lamenting on the lack of business opportunities. The Singapore GLCs and its subsidiaries are involved in every meaningful business, each with its own KPIs. The number of individual successful entrepreneurs in Singapore can be counted with your fingers and toes. State domination of businesses have produced a broad pool of well paid successful professional managers but leaving the country short of creative entrepreneurs.
Our Malaysian GLCs are different from our neighbours. Created by the needs of the NEP, our GLCs started with different agendas and different KPIs. Tasked with nation building and socio economic income distribution objectives, our GLC’s have grown into being dominant players in almost every major industry. With politicians involved in the management of our GLCs, some of our GLCs have lost its competitiveness and are managed like a civil service organisation. Those that are left alone to be run by professional managers have gone on to compete in the regional/international stage. Petroliam Nasioanl Bhd, CIMB, Axiata and the likes have shown the better side of GLCs in business. Unfortunately the number of failures outnumbered the successes by a mile and the taxpayers have to bear these extra costs.
But if your business is in direct competition with a well managed GLC, then you have to worry as their financial and political resources far outweigh your entrepreneurial talents and meagre resources. You do have to stay nimble and show quick feet if you want to dance around the slumbering giant.
As an entrepreneur, it is crucial that you develop survival instincts. You will face different scenarios and continuous challenges in your entrepreneurial journey. Perhaps it is time for you to think and act like a designated survivor. Be like Kiefer Sutherland and you will survive just fine.