Strategic Change Leader MM Eksekutif 46 Tjahjono

Strategic Change Leader MM Eksekutif – 46 Tjahjono Soerjodibroto 14 Augustus, 2010

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CHANGE FOR BUSINESS SURVIVAL • Industri Telekomunikasi: operator, hardware supplier • Industri Infrastruktur: PLN • Industri Airline: budget airline • Industri Mobil: hybrid car • Industri Peternakan: integrasi • Industri Farmasi: obat generik, kemasan • Industri Perbankan: UMKM • Industri Pertanian: organik, bio-fuel 3

Total Kredit dan Kredit UMKM Per-Bank 4 4

Pertumbuhan Total Kredit UMKM dari Tahun 2007 -2008 48, 0% 50 40 36, 8% 36, 7% 43, 0% 42, 9% 40, 1% 39, 1% 34, 6% 34, 1% Rata-rata pertumbuha n kredit UMKM 30 23, 7% 18. 8 20 28, 7% 17. 3 15, 6% 7, 9% 10 A M N B A N K K N A B EG IS P K N A B PP O K N A LI B IT I U K B O A N PI N K TN B C B PE R M A TA IN B B A A N N K K II B N PA A B A N K N A N IA M G O C B K N A N K D A M -10 B N A I N B I R B A N D IR I 0 -4, 6% 5 Sumber : Biro Riset Info. Bank (birl), 2008 5

Right Thing Done Well Done Poorly Right Products/Services Business Adjustment/ Recovery Wrong Thing • Target market • Products/Services • Technology • Cost Structure • Competency, etc Death Trap Detour Business Challenge Matrix 6

What is your reaction and response? NORMAL CONDITION (happen gradually): A. Anticipative, or B. Unaware / Neglected and Denying GLOBAL CRISIS (taken by surprise): A. Quick response thru Restructuring and Alignment, or B. Denying and think we are still OK 7

STa. RS Model Reallignment Turnaround Gagal Berhasil Divest Gagal (New S-Curve) ? Sustaining-success Michael Watkins, The first 90 days 8 Berhasil Gagal (Start-Up) Start-up/ New S-curve

UNDESTANDING THE CEO MIND 9

Driver for Change from CEO perspective Will shareholders agree for additional capital? Should we stick with the current business only? Will they support our new expansion plan? Impact of the coming deregulation? How should roles be defined? Can we differentiate? Can we enter new markets? How should we finance the expansion plan? Shareholder expectation? What should it look like? How fast? 10 Should we go for IPO? Is there any other alternative? Is there enough market to grow? What do they want? Do I know my customers? Should we form alliances or acquire? Should we continue to support low end market? How can we restructure the cost? Can we lock our customers? New market opening up Impact of new technology on my cost base? Customers will have a choice New geographies Should we expand or diversify Can the business evolve fast enough? Do I have the right team to cope with this change? CEO Is my organization structured to evolve? Can we compete? Are we ready to enter new business? How can I motivate and get commitment? Who are my competitors? Is there enough market opportunity? Where should What should I I source do about my future funds? cost of capital? Should we What will be apply crossneeded for Can I subsidy? preparation? compete? That I don’t know That I do know Existing and new markets

Driver for Change Internal Process Customer Financial Productivity Strategy Improved Cost Structure Growth Strategy Long-Term Shareholder Value Increased Asset Utilization Enhanced Customer Value Expand Revenue Opportunities Customer Value Proposition Price Quality Availability Selection Functionality Service Relationship Product / Service Attributes Operation Management Processes Customer Management Processes • Supply • Production • Distribution • Risk Management • Selection • Acquisition • Retention • Growth Partnership Innovation Processes • Opportunity ID • R&D portfolio • Design/develop • Launch • Environment • Safety and Health • Employment • Community Learning and Growth 11 Information Capital Culture Brand Regulatory and Social Processes Human Capital Organization Capital Leadership Alignment Brand Teamwork

Business Process in Monetary Terms MONEY TALKS ! 12 PEOPLE LISTEN ! Source: Chase, et. al

UNDERSTANDING THE CONSQUENCES 13

DELAPAN LANGKAH PERUBAHAN • • Kita Harus Segera Berubah! Membangun Koalisi Merumuskan Visi dan Strategi Perubahan Mengkomunikasikan Visi dan Strategi Memberdayakan Setiap Orang Ciptakan Kemenangan-kemenangan Kecil Menjaga Keberhasilan Membangun Budaya Baru APAKAH SUDAH DIANTISIPASI KONSEKUENSINYA? 14

As Director As Coach/ Nurturer As Interpreter 15 Change Manager As Navigator As Caretaker

Characteristics of four different types of Change: Change type Continuous process improvement Expenses of single exercise Length of each exercise Ambiguity of results Smallest Shortest (could be days) Clearest Largest Longest (could be years) Most ambiguous Process revolution Product/service improvement Strategic changes 16

Change Must be Complete • • • 17 Compelling Reason for change Vision, Direction and Blessing Champion and solid change team Infrastructures and interactions Supporting systems

Huawei’s Management Transformation CEO’s wisdom: Be prepared since winter is coming 18

Huawei’s Management Transformation Huawei’s Value Transformation China-based Low cost R&D resources Strong innovation of Products & solutions Leading supplier in emerging market Widely accepted by high-end markets Global delivery capabilities with speed to market Fully audited by multi. National operators Brings the best TCO benefits to customers 19 World class management practice High quality, reliability & large-scale deployment

Huawei’s Management Transformation Huawei works with top management consultancies to bring World-class expertise to the company IBM consulting Hay. Group Towers Perrin Price. Waterhouse. Coopers IBM consulting Integrated Product Development and Integrated Supply Chain Human Resources & ESOP Financial Management Fh. G MERCER 20 Quality Control Organization Transformation

24 Customer Touch Points Pre-journey Customer Touch Points Pre-flight 4 Layanan ke customer dapat melalui beberapa service area : 4 4 4 Pre-journey Pre-flight In-flight Post-flight Post-journey 21 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Website (DQ) Call Center (DE) Sales Office (DI) GFF Center (DI) Service Center (DI) Ticket Sales (Airport) (DF) Customer Service Desk (DI) GFF Membership Service (DQ) Check-in Service (DN) Transfer Service/Desk (DF) Executive Lounge (DF) Boarding Gate (DO) Cabin Service (DN) Cabin Comfort (DE) 15. Lavatory (DE) 16. Onboard Catering (DN) 17. In-flight Entertainment/IFE (DN) 18. Amenity Kit (DE) 19. Sales on Board (DF) 20. Arrival Assistance (DO) 21. Baggage Delivery (DO) 22. Lost and Found (DO) 23. Customer Affairs (DQ) 24. Loyalty Program (DQ)

Growth Strategy Map Sustainable Growth Turnaround 2010+ Competitiveness & Expansion To Intercontinental 2008 • Finalize debt restructuring, start of privatization process • Improvement in product and 2009 • Domestic/ regional competitiveness & expansion • Effective Privatization service Survival Focus on Turnaround 2008 - 2009 2006 Consolidation • Cost efficiency/revenue improvement • Reduce negative cash flow • Pre arrange routes • Capital injection approved by government 2007 Rehabilitation • On going debt restructuring • Product & service enhancement • Cost efficiency/revenue improvement • Positive cash flow/strengthen capital base

Financial Perspective Revenue Growth Customer Perspective Indonesian Hospitality Best Value For Money Domestic Convenience On Time Brand Image Healthy Capital Structure Cost Efficiency Increase Traffic International FLY - HI Profitable Growth Optimize Subsidiaries of Increase value Asset Utilization Cargo Chartered/Hajj Reliable & Competitive Reliability Reliable Value For Money Learning & Growth Perspective Internal Perspective Safety Indonesia Culture/ Service Manage Channel Effectively Expand Network Effectively Assured Aircraft Supply Advertising Reduce Waste Sharpen Segmented Pricing Acquire New Aircraft Increase Resources Utilization Well Planned Maintenance Process Streamlining Subsidiary Synergy With Operation Reliable & Effective IT Conserve Fuel Supplier SLA High Productivity Recruit New Staff with Right skills High Motivation & Discipline Conclusive Work Environment Develop Leadership/ Managerial Skills Change Culture/ Mind Set

1. 2. 3. 4. 5. 6. 7. 8. Restrukturisasi Keuangan (Debt Restructuring Completion) Restrukturisasi Neraca (Balance Sheet Restructuring) Restrukturisasi Organisasi dan Human Capital (Organizational & Behavior Restructuring) Reliability dan Keselamatan Pesawat (Aircraft Reliability and Safety) Kenyamanan Pesawat (Aircraft Comfortability) Meningkatkan Kualitas Pelayanan (Service Quality) Konsep Baru dan peningkatan Kapabilitas Pemasaran (New Concept and Enhanced Capability of Marketing) Image Recovery

Problem with middle management? The most demanding part of company reform was to change the mindset of the middle management. The reason for this was simply that changes proposed by the senior management were acclaimed by the ordinary staff, while for the people in the middle, the changes meant that they would either lose something or be forced to make some changes. Therefore, the most challenging part was to transform the attitudes of the middle management. Louis V. Gerstner Jr. , the former CEO of IBM 25

Remember Pendulum Effect 26

7 -S Mc. Kinsey STRATEGY SKILL STRUCTURE SHARED VALUES STAFF SYSTEMS STYLE 27

UNDERSTANDING THE REJECTION (THE PSYCHOLOGY OF CHANGE) 28

29 DIEHARDS LATE ADOPTERS LATE MAJORITY EARLY ADOPTERS INNOVATORS People and Change # OF PEOPLE TIME

Stakeholders = Customers Executive, CEO Training/HR Manager Worker/Learner Transform the business Leads in the competition Reduce Cycle Time Stay nimble and innovative 30 Line Manager Make my numbers Increase customer satisfaction Better controls Stamp the competition Get them trained Cut cost Satisfy the user department Meet my plan target Improve my skill Earn more money Keep at leading edge Simple procedure And not confusing

Every individual are different…. Different treatment is the logical consequence… Not Willing Not Able Not Knowing Douglas K. Smith Taking Charge of Change 31 Counseled, Incentives, Special Treatment Educated and Trained Communicated and Involved

How long and when it’ll be finished? Emotional Responses to Corporate Changes • Denial • Fear • Anger • Sadness • Acceptance • • Relief Interest Linking Enjoyment The ‘It won’t happen’ syndrome ‘When will it happen? ’ ‘What will happen to me? ’ ‘We’ve been sold out’ - Resentment towards those considered responsible Mourning and grieving for what’s past Recognition of futility - positive approach starts to develop Things actually better than expected Increasing feeling of security Recognition of new opportunities ‘It is really working out well’

FOUR KINDS of COMMITMENTS at FOUR LEVELS Committed Human Energy SPIRITUAL COMMITMENT INTELLECTUAL COMMITMENT and EMOTIONAL COMMITMENT INTELLECTUAL COMMITMENT or EMOTIONAL COMMITMENT POLITICAL COMMITMENT 33 Source: DICK RICHARDS, The Art of Winning Commitment

RELA - PAKSA • DIPAKSA untuk BERUBAH agar menjadi TERPAKSA • Karena TERPAKSA harus BERUBAH, maka menjadi BISA BERUBAH • Setelah BISA BERUBAH, lama kelamaan menjadi BIASA dengan yang baru • Karena sudah menjadi BIASA maka tidak akan merasa ada PERUBAHAN 34

PENGALAMAN PENERAPAN PERUBAHAN: BIOFARMA • • Visi: • Upaya: • 35 Sense of Urgency Short wins: – Delisting dari WHO, Okt 2004 – Rubah budaya indoor ke outdoor – – – Pengenalan Budaya di luar industri farmasi Benchmark ke industri farmasi lain K/s dengan pihak asing – – Kepercayaan Arabio, Japan Polio Research, Bexter Diakui kembali oleh WHO, Okt 2005

PENGALAMAN PENERAPAN PERUBAHAN: PEGADAIAN • Sense of Urgency • Visi: • Upaya: • 36 – Pegadaian sebagai ukuran kemiskinan – Menjadi Lembaga Keuangan yang modern & dinamis – – – Perbaikan sistem keuangan, sdm, logistik Benchmark ke perusahaan lain Perbaikan citra Budaya: “Merasa Dibutuhkan” ke “Kami Membutuhkan Masyarakat” Pertumbuhan adalah harga mati – – – Hasil audit Wajar Tanpa Syarat pertama kali Logo dan tampilan baru kantor Pegadaian Motto “Melayani Masalah Tanpa Masalah” Short wins:

PENGALAMAN PENERAPAN PERUBAHAN: WIJAYA KARYA (WIKA) • Sense of Urgency • Visi: • Upaya: – Persaingan antar BUMN dan dengan swasta – WIKA STAR 2010, Menjadi Pelopor di Jasa Konstruksi – – Rubah pendekatan Human Resources ke Human apital Karyawan sebagai aset untuk didorong “Kekuatannya” Penerapan gaji dengan sistem merit, komponen insentifnya lebih besar Kultur Paksa Rela: Dipaksa agar jadi Terpaksa; Karena Terpaksa jadi Bisa; Karena Bisa alkhirnya jadi Biasa Penerapan NLP – Prestasi meningkat secara bertahap – • 37 Short wins:

PENGALAMAN PENERAPAN PERUBAHAN: PENGAWAS BANK INDONESIA • Sense of Urgency • Visi: • Upaya: – Banyak bangkrut setelah krismon, BLBI jadi beban – Perubahan dalam Good Governance secara timbal balik BI dan industri – – – 38 Pengawas: “Know your Bank” Bankir: “Know Your Customer” Pengawasan: dari “compliance based” ke “risk based approach” Benchmark: konsep baik dari satu bank dijual ke bank lain Kebijakan BI: dari Top Down (pemikiran BI semata) ke “diwacanakan” dahulu ke pasar Penerapan kewajiban sertifikasi “Risk Officer” untuk tiap bank dan diulang/update

PENGALAMAN PENERAPAN PERUBAHAN: SEMEN GRESIK GROUP • Sense of Urgency • Visi: • Upaya: – Saling berebut pasar padahal harus hadapi Kompetisi luar – Defragmentasi untuk tingkatkan margin & cegah over-supply – – Restrukturisasi Perbaikan Revenue Management, Cost Management dan Utilization Menghapus iklim “silo” Penerapan KPI yang jelas Motto: “Lakukan dari sekarang, lakukan diri sendiri, dan lakukan dari yang kecil” – – – • 39 Short wins: – – Progress dari Restrukturisasi Peningkatan profit melalui efisiensi dan harga saham Persetujuan Rencana Pabrik baru Persetujuan Rencana Power Plant

PENGALAMAN PENERAPAN PERUBAHAN: KORAN TEMPO • • Visi: • Upaya: • Short win: • 40 Sense of Urgency Tantangan Baru: – Distribusi ke Agen telat sehingga sering ditinggal – Menjadikan bisnis Koran Tempo sebagai “cash cow” – – – Menghilangkan mitos ”cetak tengah malam” Ubah jam kerja Redaksi sehingga bisa naik cetak jam 23 Adakan Piket (hanya 5% dari Redaksi) untuk tampung bila masih ada berita malam yang penting (meledak) – – Koran Tempo tiba di Agen paling pagi Oplag di beberapa lokasi naik 2 kali – Pesaing bayar Agen untuk menahan Koran Tempo

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