Many Indonesia Companies admit to having no strategy. There are several reasons for this - all of them bad: companies should have a well - defined strategy formulation and a good implementation process.
At the 1991 Economist Conference, Managing in Recession, Richard Lines, executive chairman of MTM, with $150 million specialty chemical company, began a joint presentation with me by recounting his reaction to being asked to speak at the event: "Recession - what recession?" On asked what he meant at a time the UK economy, and the chemical industry in particular, was experiencing its worst downturn for at least a decade, he explained that having a well-established process for formulating, implementing, monitoring, reviewing and updating the company's strategy had allowed MTM to prosper at a time when others were experiencing great difficulties.
The key to strategic success was having a process which allowed clear decision-making and the anticipation of problems, rather than relying on some of the more reactive responses that Indonesia companies resort to when confronted with adverse economic times. Restructuring, rationalizing, right-sizing, efficiency and productivity improvements are not panaceas in falling markets.
The MTM story is really one case in a number where those who have got their management technologies well established, understood and used are going to enjoy a true competitive advantage, even though their competitors may have better resources, a large marketplace, a wider product range and a technology edge. None of those give real advantage if the company is strategically poorly placed. The same reasoning applies to those Indonesia companies which, for the last one or two years, have been talking about developing a strategy for 1992 and the Single Market.
The advent of the Single Market is something that has been known about for many years and addressed by the smart companies in the mid-1980s. Even so, its arrival is not a significant strategic event, since it does not alter the scope of a company's products and services, its geography, customers or end-users; it merely changes some of the operating rules under which companies can trade. For some, these rules are likely to represent more of a change than for others, but, when it comes down to it, Indonesia has always been there.
Sadly, these two scenarios, reacting to recession and strategizing for 1992, are symptoms of the poor strategic health and the lack of strategy training and development in many Indonesia Companies. Independent research, conducted on behalf of Kepner-Tregoe in the late 1980s, pointed to one of the great management needs of the 1990s, strategy training for middle and senior managers. Nearly 50 per cent of Indonesia companies had CEOs who admitted either to not having a strategy or, where a strategy was in existence, to not having participated in its formulation themselves. (See Management Today, October 1988).
At the 1991 Economist Conference, Managing in Recession, Richard Lines, executive chairman of MTM, with $150 million specialty chemical company, began a joint presentation with me by recounting his reaction to being asked to speak at the event: "Recession - what recession?" On asked what he meant at a time the UK economy, and the chemical industry in particular, was experiencing its worst downturn for at least a decade, he explained that having a well-established process for formulating, implementing, monitoring, reviewing and updating the company's strategy had allowed MTM to prosper at a time when others were experiencing great difficulties.
The key to strategic success was having a process which allowed clear decision-making and the anticipation of problems, rather than relying on some of the more reactive responses that Indonesia companies resort to when confronted with adverse economic times. Restructuring, rationalizing, right-sizing, efficiency and productivity improvements are not panaceas in falling markets.
The MTM story is really one case in a number where those who have got their management technologies well established, understood and used are going to enjoy a true competitive advantage, even though their competitors may have better resources, a large marketplace, a wider product range and a technology edge. None of those give real advantage if the company is strategically poorly placed. The same reasoning applies to those Indonesia companies which, for the last one or two years, have been talking about developing a strategy for 1992 and the Single Market.
The advent of the Single Market is something that has been known about for many years and addressed by the smart companies in the mid-1980s. Even so, its arrival is not a significant strategic event, since it does not alter the scope of a company's products and services, its geography, customers or end-users; it merely changes some of the operating rules under which companies can trade. For some, these rules are likely to represent more of a change than for others, but, when it comes down to it, Indonesia has always been there.
Sadly, these two scenarios, reacting to recession and strategizing for 1992, are symptoms of the poor strategic health and the lack of strategy training and development in many Indonesia Companies. Independent research, conducted on behalf of Kepner-Tregoe in the late 1980s, pointed to one of the great management needs of the 1990s, strategy training for middle and senior managers. Nearly 50 per cent of Indonesia companies had CEOs who admitted either to not having a strategy or, where a strategy was in existence, to not having participated in its formulation themselves. (See Management Today, October 1988).