JUST last month, both my sons quit their jobs from very good companies that they were working with since they graduated. Both of them were planning to work in fin tech and financial startups. Even though I felt that they should acquire a few more years of working experience, I had to consent to their request.
I explained to my wife that I had started my entrepreneur journey before my 25th birthday and if they are brave enough to venture out at this early age, I simply have to support them in their journey. So our family funds co invest into their set ups.
Starting a set up from scratch is not really difficult. You start with a clean sheet of paper, fill in your vision, build a viable business model, get in the right partners and off you go. It is more difficult to buy into an existing business where there are many challenges facing you.
In my last 33 years since I started my journey, my partners and I have bought three businesses. We bought a household rubber glove factory in 1987 when I know next to nothing about manufacturing nor export business. This was before the booming growth of examination rubber gloves in the 90’s due to the AIDS epidemic sweeping the world.
If only I had pivoted to manufacturing of exam gloves then, I would now be as big as Kossan or Top Glove. That was a missed opportunity, if only I was brave enough to stick through the bust and boom of the industry.
The second business we bought was a smallish cosmetic distribution company with 13 staff back in 1996. Despite having been involved in food and toiletries distribution business since 1985, I had no clue as to what the cosmetic business was all about. Lip and eye liners was as alien to me as centrifuged latex was back in 1987.
Then the currency crisis hit us in 1987-1988 but I stuck to the business as there were no other business to work on. This was the high margin business that I have been looking for and I was determined to succeed.
The third business that we bought was in the year 2000 when we bought over Revlon Malaysia and Revlon Singapore as Revlon had wanted to pull out from direct distribution in these two countries. It was a daunting purchase as we took on a business that had three times as many staff as we had.
The most difficult task was to assimilate local staff who had worked in an MNC environment into a company steeped in Chinaman culture and philosophy. To add to my problems, Singaporean staff did not consider Malaysian owners as favourably when compared to previous MNC American bosses. Some staff left within a short space of time when they realised that they could not fit into a new working culture. But many stayed back and we still have more than 50% of ex Revlon staff who is still working with our company today.
Looking back, the primary concern of the Revlon staff was all about job security followed by owner’s integrity and purpose. It took me a few years to earn their trust and I am glad that those who stayed back formed the backbone of my organisation’s growth over the years.
Besides the good people, I also inherited an MNC management accounting system which instilled financial discipline in my management practices, where most decisions were made based on financial numbers readily available.
I had to cut off suppliers when I thought they were overcharging and after they had refused to renegotiate. The new suppliers brought in then are still with us after so many years. Fair profits shared leads to long term relationships in business.
Many decisions were made, some bad and some good. As an entrepreneur you have to be brave when you venture into the unknown. You need a strong heart and will of steel to go through the trials and tribulations while meeting the expectations of all the stakeholders in your business, from shareholders to staff to suppliers and to customers.
After having experienced the difficult moments of buying into an existing business, I do emphatise with the current Pakatan government. Managing a country is way more complicated than managing a marketing and distribution business.
This motley crew of politicians were unexpectedly brought in to manage the country on an initial five-year contract. What they have inherited from the previous management is a country with many broken dysfunctional parts. I believe their management decisions made over the next five years will become a great case study for management students all over the world.
After facing long delays to be officially installed as the new government of the day, the Pakatan team took over a country where they faced an uncooperative civil service with a staff strength of 1.6 million people. Morale was low. Corruption was high. The Treasury was lacking in financial discipline and worst still, the country had high debts.
Many supplier contracts were considered dubious with high mark ups. Internal security was compromised, independence of the judiciary and rule of law was suspended. Press freedom and free speech was suppressed.
Worst nightmare in any mergers and acquisitions exercise. Buying into a company and realising that it is broken and rotten across the organisation. Like facing a perfect storm.
The new management team headed by an experienced 93-year old CEO took the bulls by the horn and made many brave decisions on finance, security and human resource issues.
The CEO personally negotiated the big infra projects with overseas suppliers. All projects have been suspended, postponed or to be renegotiated. Preservation of cash flow is of utmost priority. International diplomacy is strained but common sense prevails due to good neighbourly relationships.
Meanwhile, the CFO is renegotiating with local suppliers for savings of a few billion ringgit. As the government is the biggest customer in the country, most suppliers will be cut off if they refuse to re negotiate once the project is considered dubious or excessively over charged. Bold steps required if the books have to be balanced. Cut out the leakages and the wastage.
Internal security and constitutional security was quickly restored. Capable Malaysians of all race was quickly roped in to help out due to lack of trust with previous batch of division managers.
On human resource management, many heads of dubious characters were removed whilst those who do not agree with the new working culture resign and left. The rest of the civil service was given short term relief with the announcement of no retrenchment. Was it a guarantee of job security or was it that any right sizing of the civil service will result in high non performing loans due to extremely high personal loan debts?
But there are still many constituents who are unhappy with current management team. Pakatan was swept into power largely by the combination of non Malays and moderate Malays. There is no political will to fulfill some of the promises made on education and religion prior to elections.
On education, current the PH government are not brave enough to have local universities recognise UEC exam results. The Chinese voters who voted them into power will not forget the promises made. The moderate Muslims who wanted a softer, kinder and less intrusive Islam are still waiting in vain for Jakim to be reformed.
The various ministers involved have flip flop in their decision making, lacking clarity and resolve. Some Ministers are still clueless as to what their Ministry should be striving for. To be fair, there are some Ministers who have exceeded our expectations by acting swiftly and boldly.
My good friend, Pat Liew remarked that this is a good opportunity and right timing for the current government to be brave and to act decisively. After all they have more than four years left in their management contract to explain and prove to their stakeholders that they have made the right decisions.
To the flip flop Ministers, do the right things as fortune favours the brave.
In order to achieve anything, you must be brave enough to fail. This nation will remain the land of the free so long as it is the home of the brave.