Doctor in the House: Tun Dr Mahathir Mohammed

Book Cover. MPH Group Publishing (08-MAR-2011)

Latest released book, “A Doctor in the House,” by Tun Dr Mahathir Mohammed – fourth Premier of Malaysia – is a surreal read for history buffs, politically-inclined readers and those who enjoy a solidly pleasant book.  It tells the tales of a medical doctor who lived through a myriad of foreign occupations, raised a family, led a nation for 23 years, and had a simmering penchant for business.

Many people know Mahathir for being the Prime Minister of Malaysia with the longest tenure and the one who played an integral rule in placing Malaysia on the world map – but few realize how much of a role he played in creating some of Malaysia’s most important brands and promoting them globally. It can be said that he had more than a thumb in Malaysia’s economic pie – and though “A Doctor in the House” is full of his memoirs as an individual and mostly, a politician, the reader is unable to ignore his viewpoints on emphasizing role of business and technology, marketing them, and ultimately enhancing the Malaysian nation brand.  Indeed, Mahathir became a brand name himself.

Feast or Famine: Entrepreneurial Instincts Kick In

Mahathir’s curiosity in the business and entrepreneurship realm began during the Japanese Occupation, when he was in his impressionable teens. Although the general Malay aspiration of the time was to become a government clerk, and many of his siblings struggled to serve the struggling government under the strict Japanese regime, Mahathir found that his survival instincts of an entrepreneur had played to his benefit. He and some comrades set up a small stall selling food and it was during that time that difficult period of non-subsidies that it was either feast or famine for the local Malaysian. The young entrepreneurs found themselves more successful than their peers who struggled with desk-job employment with the administration. After a few stints in different trades, Mahathir found himself educated on unfair trade (through learning how to short-change the customer). And it was through this experience that he suggested regimented rules on how to eradicate corruptive practices by businessmen later on. His plight – earning money, moving on, experiencing setbacks and becoming successful – strongly represents the journey of many players of the small-medium industries in Malaysia, whereby entrepreneurship is something of the cultural norm amongst locals. In recent years, the government has also launched graduate entrepreneur schemes and have included entrepreneurship degree programmes and elective courses in universities and colleges to enhance the entrepreneurial substance of the country.

Jostling with the British for the Malaysianisation of Companies

Mahathir talks succinctly about the negative effects of colonisation, and like other countries that have been colonised by the British, the grappling for ownership over some important economic sectors were difficult but slowly achieved over the years. Malaysia is richly endowed with many natural resources such as tin, palm oil and rubber. All three sectors represent a substantial segment of growth for the economy. Exports that have been born out of these raw materials include tyres, gloves, food cans, soap and cooking oil. Crude palm oil, in particular, has always been an earmark for economic discussion relating to Malaysia as the country remains the world’s largest producer of the same, warranting its own index on the Malaysian Bourse.

Malaysia, as a rapidly developing nation – one that is set to achieve the developed status in 2020, a Vision also coined by Mahathir – would have never been in the position to formulate such a strategy had Mahathir and his office not grappled for rightful ownership over the corporations that were channelling tax revenue back to Britain.

The Branding of Malaysia

Mahathir’s idea on the branding of Malaysia came very much by the Vision 2020, the perfect vision for anyone to have, according to optometry – his master plan that he had laid out was to have Malaysia placed on the world map through attaining the developed status without forgoing the Eastern ideals and customs. This, through his own vision, would materialise through a major shift in industries.

From Agriculture to Manufacturing and Finally, Services

Developing countries have been known to make an important shift in sectors (as to capitalise on the more effective economic drivers) and Malaysia was not alien to such a change. Although agricultural projects have always been a forte in the economy, and arguably, still is – Mahathir decided to embark on new projects with emphasis on technology.

Ironically, although his memoirs talk about the fear and uncertainty under the Japanese occupation, when Mahathir first assumed office as Prime Minister in the early 80s, one of the first policies he implemented was the Look East Policy for the business infrastructure of Malaysia. The Look East Policy embalmed a strong belief in looking towards Japan for the better foundation of business culture, such as implementing their self-discipline, business policies and organisational behaviour. It is interesting to note that at a time during the Japanese Occupation, Mahathir attended a Japanese-run school, and it was through certain practices such as radio drills, intermittent breathing exercises long distance running in formation, that he found he had the stamina to accomplish his goals. This is probably how he remained in office for so long and how Malaysia pushed forwards to reap revenue from the manufacturing industry and later the services sector.

One of the first manufacturing-based leaps of faith came through the electronic transistor, which led Malaysia to become a major exporter of microchips ad this was when the country began to draw attention on the world map.

Another major project was Proton, the Malaysian national car. Mahathir decided that he did want to see more Malaysians driving cars, but driving Malaysian cars. Proton has definitely faced much criticism over the years due to government policies that continued to protect the “infancy” of the local car manufacturing sector – even after decades of its existence – by imposing oppressive levels of tax upon foreign imports. Consumers argued that this was curtailing their choice in purchasing better quality cars for the sake of saving a government project. And critics insisted that Proton was one of the companies that were meant to fail under a capitalist market – in order for the sector to grow stronger and produce better quality cars for the local market. On the flip side though, supporters of the shift to the Heavy Industries sector insist the change was a positive one as it propelled Malaysia from being an agro-dependent economy and forced a change in mindset on how to utilise technology to build locally-owned products, and in the case of Proton, the national car.

Seemingly so, the birth of Proton was set to change the mindset of traditionalist Asians, as Mahathir calls them, those who disliked change as compared to the progressive Europeans, who he perceived as people who “wanted to improve on everything.” So in revving the local engine, Proton was meant to improve attitudes, work practices and culture – alongside improving the Proton models as each new one emerged.

Several other government-led corporations that have been recognised globally as well throughout the Muslim world include Malaysian Airlines, Petronas and Sime Darby, but have also received similar criticisms as to their survival.

Breaking into the Services Sector

The Multimedia Super Corridor (MSC) was meant to be the launch pad for a paradigm shift in the mindset of Malaysians with respects to ICT, emulating the Silicon Valley in the US. Unbeknown to many though, the MSC was born from the accomplishments of the microchips project and pushed Malaysia forwards into the Information Age with full control over her destiny.

The MSC essentially is one of the mega projects left of Mahathir’s legacy, especially with respects to achieving Vision 2020. Creating a virtually physical corridor from the city centre to the Kuala Lumpur International Airport and Malaysia’s own F1 Circuit (a project also led by Mahathir), the MSC encompasses a stretch of companies that are strongly affiliated to ICT.

Unfortunately, Mahathir, as much as a founder of many business projects and a marketer of many leading Malaysian brands, was and is a politician to the core. The MSC, he admits himself, hit many stumbling blocks after he stepped down as Premier and although it seems like the private sector in Malaysia has matured in ICT development, a lot of ambiguity still rests with the real progress of the industry, mostly due to the lack of governmental support.

Memoirs of Mahathir

Mahathir is recognised as a brand name across the Muslim world with Malaysia being known to be a progressive Muslim-populated country. It can be said that most modernisation came from the fourth premier who was always forward-looking in wanting to achieve goals for the country. His personal account of how he came to be a government servant, the Prime Minister of Malaysia and his life afterwards (in line with his personal beliefs he has abided by) is a must-read for any person who is inclined to learn about the country or the man himself.

Islamic Microfinance Award Highlights Successes

Al Amal Microfinance Bank of Yemen (AMB) clinched the Islamic Microfinance Award 2010 (held in February 2011), walking away with a grant worth USD104,000 for its idea to launch an Islamic leasing facility, something new in the micro financing sector.

Micro financing serves to meet the needs of 2.7 billion people who have no access, or inequal opportunity to attain financing. Muslims in this group are often faced with conventional/non-Shari’ah compliant investment instruments.

The Consultative Group to Assist the Poor (CGAP), Deutsche Bank, Islamic bank for Development and Grameen-Jameel partnered to address the challenge of Shari’ah compliancy within the micro financing sector, by way of Islamic Microfinance Award.  According to CGAP, “An estimated 72% of people living in Muslim-majority countries do not use formal financial services. Although the supply of Islamic microfinance products is concentrated in a few countries–the top three are Indonesia, Bangladesh, and Afghanistan–the demand is high. For example, surveys in Jordan, Algeria, and Syria, revealed that 20-40 percent of respondents cite religious reasons for not accessing microloans.”

130 banks and Microfinance Institutions (MFIs) submitted their ideas for the award, but AMB, the first MFI in the Arab world to offer only Shari’ah compliant products, was awarded the prize. Competing finalists for the award included: Tameer Micro Finance Bank Ltd (Pakistan), Tanzania eco Volunteerism (Tanzania), Bina Insan Sejahtera Mandiri (Indonesia) and Centre for Women Co-operative Development (Pakistan).  Below is a brief profile on each.

Al Amal Microfinance Bank of Yemen (AMB)

AMB was established in 2002 through the Social Fund for Development (SFD), the Arab Gulf Program for United Nations Development Organizations (AGFUND), and the contribution of the private sector. During the 4th International Conference for Youth Funding held in Washington in September 2010, AMB was selected as the second MFI in the world to support youth entrepreneurs.

AMB dominates 25% of the microfinance market in Yemen with more than 20,000 savers and has funded more than 24,000 micro projects, as of year-end 2010. AMB has a loan portfolio of USD 5.5 million with over 125,000 beneficiaries. The majority of AMB’s clientele are women.

Tameer Micro Finance Bank Ltd (TAMEER)

TAMEER vies to be a global benchmark for innovative and commercially viable solutions to empower those who are socio-economically challenged. Managed by a group of experienced bankers, TAMEER distinguishes itself from competitors by being the first corporate micro finance institution in Pakistan.

TAMEER’s professional outlook has allowed it to serve a kaleidoscope of clients to produce an economic multiplier effect for the economy. Established in 2002, TAMEER focuses on poverty elimination, sustainable development and economic empowerment, offering a suite of investment tools to suit their range of clients. Some of their products include Trade Micro Credit, Micro Group Credit, Emergency Micro Credit, Micro Mortgage, Micro Leasing, Micro Savings, Micro Insurance and Tameer Term Deposits.

Tanzania eco Volunteerism (TeV)

TeV tells a different story of its work, as the corporation focuses very much on the youth of Tanzania and international members of society who are interested in eco-volunteerism. TeV was established in 2001 and has launched projects revolving around community development, health and education, sports development for the youth, environmental conservation endeavors, and construction projects.

A major milestone materialized in the World Youth Millennium Awards (WYMA), an exchange program established between the Prince’s Trust and TeV, to establish a volunteer exchange between the UK and Tanzania.

The landscape of micro financing for TeV revolves around natural resource management. This has allowed marginalized communities to acquire new skills and to realize the importance of environmental management. TeV encourages women and young entrepreneurs to start their own businesses by offering social, vocational, and practical skill building workshops – mostly related to the theme of nature.

Bina Insan Sejahtera Mandiri (BISMA)

BISMA commenced operations in 2003 to participate in the development of microfinance in Indonesia. Unlike the other finalists, BISMA does not deal with micro financing clientele but seeks to build MFIs to fuel Indonesia’s entrepreneurship landscape.

BISMA supports the expansion of micro working capital of MFIs through time deposits and loans. Beneficiaries of such instruments include rural MFIs, cooperatives, and local non governmental agencies.

BISMA also focuses on providing incubation services, training and consultation to improve the technical skills of MFIs. Such services include workshops, mentoring and assessments to strengthen networking and capacity building amongst MFIs and banks, establishing long term partnerships amongst the same.

Centre for Women Co-operative Development (CWCD)

Since its inception in 1992, CWCD has been shouldering an important incentive in providing micro financing to the women of Pakistan; encouraging professional endeavors, independent sources of income, and the development of personal interests and strengths. As such, poverty alleviation has prevailed as a prominent result of its efforts, and CWCD’s strong alliance with institutions like the First Women Bank has elevated the status of women with respect to professional development.

Over the course of its 12 years in operations, CWCD’s micro-credit projects have paved the road to seizing entrepreneurial opportunities. for both the financially deprived and the illiterate. By funding ventures in various business segments – ranging from textiles, to electrical equipment, to accessories – CWCD has helped make unlikely dreams of Pakistani women into economic realities.

CWCD has played an integral role in helping single mothers, failed serial entrepreneurs, women who share the financial burden of their husbands, and family businesses become successful. Although CWCD champions the cause of women, the institutions also focuses on children’s welfare; caters to men who live in equally deprived conditions; and concentrates on improving conditions of overall healthcare and education in poverty stricken areas.

Book Review: Blue Ocean Strategy

Management Gurus W. Chan Kim and Renee Mauborgne have presented a critical strategic management approach for today’s global competitive environment in their international bestseller, Blue Ocean Strategy: How to Create Uncontested Marketspace and Make the Competition Irrelevant. The book, which debuted in 2005, is a must read for any corporation today. Resting upon four “formulation principles” and two “execution principles,” Blue Ocean Strategy teaches the reader to create uncontested market space and break away from bloody competition by strategically moving into the area the authors call the “Blue Ocean.”

An example of its application to put the book/ strategy in context is the Nintendo’s newest game console Wii which unlocked a ‘blue ocean’ of new market space of whole new mass buyers – Adults including senior citizens that never before played video games. This enabled it to bypass the bitter competitive rivalry with the Sony Playstation and Microsoft Xbox. As many of the world’s leading growth companies showcase their success in exploring Blue Oceans (eg. Apple, Google etc), such examples are far and few in between in Muslim world economies. However, an example to note would be, Bangladesh based Grameen Bank which has created a blue ocean in finance industry by focusing on once non-customers of banking and finance – the poor. Another one would be Malaysia based AirAsia who has successfully implemented a business model to capture an untapped budget travel market in the travel industry.

Challenging the focus on Market Share wars

Management strategies, corporate strategies and marketing strategies: any strategy crafted by a corporation traditionally focuses on profit-maximization. Increasing the wealth of a firm is strongly related to capturing revenue through market share. The golden rule of business denotes that the higher the market share, the larger the revenue stream – consequently, the greater the wealth of the firm (provided there is constancy of market prices). Blue Ocean Strategy challenges this notion by forcing firms to create new a market space and in many cases, work parallel to the competition.

Obviously, this overhaul of ideas would entice strong resistance to change by corporations who have become accustomed to their practices (as they comfortably match their competitors’ ideals) and continue to contest for market share. Such a strategy would only serve to increase costs, cause conflict amongst staff and diverge from the corporation’s vision.

In the introduction to Blue Ocean Strategy, readers will find that this is hardly the case, and though there would be hurdles to overcome when executing the “Blue Ocean Strategy” (as hurdles would be inherent in any strategy), appropriate sub-strategies would have to be implemented for the successful creation of demands for new products or services.

Most importantly, the book highlights that the “Blue Ocean Strategy” is not a new concept. The growth of unique industries and the ever-changing lifestyles that are enjoyed by various communities around the world is proof that many corporations have successfully adopted and implemented “Blue Ocean Strategies” in the past and that the potential of creating uncontested market space in the future is most certain, provided corporations follow the intricate formulation and execution principles. The book talks about the business world 30 years prior to its publication and forecasts the growth of the “Blue Ocean Strategy” as an integral part of corporate reform for the next 3 decades.

Four Actions Framework

Source: www.blueoceanstrategy.com

How to Create Uncontested Market Space and Make the Competition Irrelevant

The book is intricately designed to walk through the process of its six principles and teaches the reader how each principle is able to reduce risks inherent in any new strategy. Blue Ocean Strategy is not only a book to read but a strategy to adopt and implement for corporations that are determined to succeed in the long-run.

The six principles that fall under the formulation and execution building blocks are designed to reduce various risks in adopting a new approach to business. Even for the most risk-averse business owner, a well-formulated “Blue Ocean Strategy” cannot be ignored.

To fortify this understanding, the authors wove in various case studies and true success stories to reinforce several points. First, they these cases create a familiarity within the reader who, as a consumer, is able to relate to certain cases such as of Cirque du Soleil®, Starbucks® and Curves®, and observe how consumers are affected by the “Blue Ocean Strategy.” Second, the reader is able to visualize the strategy as it is crafted in “opposition” of competition, by using its suggested managerial tools such as “The Strategy Canvas” and “The Four Actions Framework.” Lastly, the Book substantiates proof that Blue Ocean Strategy has existed since the 30s and that it is an ongoing process for the firm rather than a one-time strategy that will outlast competition.

The Waves of Blue Ocean Strategy

Kim and Mauborgne present Blue Ocean Strategy as part of strategic management, being a long-term focus rather than an intermediate route at a problematic juncture. The strategy is comprehensive and takes a macro approach towards how the strategy should be formulated, implemented and nurtured to its success. At the same time however, the authors present cases endorsing that corporations who ride the Blue Ocean wave will succeed in a shorter time-frame compared to those who continue to battle with competition in the shark-infested red waters. They do not discount the macro approach to Blue Ocean and assert that a misinterpretation of the formula or a miscalculation during its implementation will inevitably lead to failure.

The strategy concentrates on value innovation, which reduces costs for corporations. Instead of focusing on outdoing competition, the book advises corporations to use managerial tools such as “The Strategy Canvas” to identify voids in customer values. The book presents multiple cases validating how companies easily overlook opportunities to cater for valuable services concerning their existing and potential clients. This usually happens because decision makers in a company are absorbed with battling head-on with competitors rather than shifting their focus on clientele-oriented values. To be better acquainted with existing and potential clients and their values, the authors strongly advocate that top management descend to the grass-roots of their industries to blend in with their consumers and understand their trends. Furthermore, many corporations tend to outsource their marketing research to specialist marketing intelligence. This, according to Blue Ocean Strategy, is a detrimental approach to understanding the market and creating uncontested market space.

The Strategy Canva

Source: www.blueoceanstrategy.co

Besides challenging the norm of competing with rivals, Blue Ocean Strategy also challenges several other perceptions of new business strategies. Increase in product value and services do not necessarily require technological advancements. A successful “Blue Ocean Strategy” is seen to rely on existing resources and in many cases, allow companies to cut down on further resources.

Finally, Blue Ocean Strategy emphasizes the importance of interpersonal office skills in executing a successful new strategy. Employees are often sidelined during decision making and are generally not treated with the appropriate respect and humanity deserving of employers.. The authors caution the reader that employees and office politics are not only strong determinants of the strategy’s success but can also lead to failure even before the strategy takes off.

Although written in simplified English, the book retains a text-book feel because of its technical terminology. The authors provide numerous examples and case studies to ensure the understanding of readers who are not necessarily familiar with managerial terms. Additionally, their multiple illustrations and steps under each principle allow readers to observe and learn the different phases of crafting a strategy.

A Must have Tool for the Next Generation of Business Leaders

Blue Ocean Strategy has already benefited numerous companies and has received stellar reviews. Its authors have already been listed amongst the top 10 most influential thinkers of 2007 (The Thinkers 50 biennial poll of business thinkers.) The Strategy has emerged as one of the most important business strategy in the new globally competitive markets. An evidence of that is the acknowledgement of this business strategy by senior executives in China as a ‘Top 10 China Management Practices’ (source: Chief Executive China, the largest-circulation management magazine in mainland China’s ‘Fourth Annual Top 10 China Management Practices.’)

Business leaders in the Muslim world economies seeking global/ regional competitiveness cannot afford to ignore the ‘Blue Ocean Strategy.’ There are some encouraging signs certainly. Deputy Prime Minister of Malaysia Datuk Seri Najib Tun Razak is known to be a big supporter of the Blue Ocean Strategy. In an interview in Malaysia Star newspaper it was noted that he liked the book so much that he ordered 30 copies for members of his staff. We hope this and other such support will lead to many Blue Ocean Strategy successes from the Muslim World.