The National Car Proton: A Dismal Failure, So Bury It

February 17, 2016

The Star reports:

 Wednesday, 17 February 2016

Proton to replace parts

SHAH ALAM: Proton Holdings Bhd will be recalling some 95,000 of its vehicles to replace faulty CFE oil cooler hoses, a problem that could potentially cause the engines to overheat.

Owners greeted the news with relief, with some crediting the national car manufacturer for what they saw as a shift towards greater transparency in handling customer issues.

In announcing the recall – its biggest to date – Proton chief executive officer Dato’ Abdul Harith Abdullah said the initiative was part of Proton’s move to revive the brand, which has seen dwindling sales figures in recent years.

He said the recall would affect 94,577 units involving 59,663 Exora units, 28,642 Preve cars and 6,290 Suprima vehicles.

Speaking at a briefing yesterday, he said the oil cooler hoses of the three models would break down when the cars reached an average mileage of 40,000km, due to the degradation of the internal tube material.

“We will call the owners individually and priority will be given to cars with mileage of 40,000km and above. We hope to finish this within the next six months.”

Abdul Harith added that Proton would be spending over RM2mil to replace the faulty hoses.

Abdul Harith: ‘Although we have improved ourselves in many small ways, we know very well that we cannot be complacent.’

“The hoses are cheap, about RM17 each, but labour cost will be expensive. So, we expect the cost to be over RM2mil,” he said.

According to Proton, the root cause of the problem was due to the hoses not being able to withstand the high temperature of the engines.

Ruptures can also be caused by skipped or prolonged services. The type of lubricant used could also be a factor.The national carmaker said consumers could take their cars to any of its service centres to rectify the problem.

“Affected customers are advised to bring their cars to service centres for free inspection and replacement of oil cooler hoses under warranty,” he added.

For cars outside the warranty period, the replacement process will apply provided the service interval is adhered to.

The National Car Proton: A Dismal Failure, So Bury It

by Koon Yew Yin

COMMENT: I was not surprised to see The Star’s front page headline, ‘A Hose of Problems’, on Proton this morning.

The founding of Proton National Bhd in 1983 was a big expensive mistake to begin with. Billions of ringgit from taxpayers have been lost in the process.

The hemorrhage seems to have continued forever. Malaysians have been wondering – is this the end to this unhappy saga of the government’s foray into the production of a so-called ‘national car’, or will the burden on taxpayers and car owners be continued in other new ways?

A revisit of this white elephant project could generate a larger public discourse, especially amongst taxpayers who should be more concerned as to where all the tax money they are paying have gone to.

One simplistic assumption which appears to have been made by former Prime Minister Dr Mahathir Mohamad, the initiator of the national car project, is that an industry that’s growing yearly should be profitable. It is not.

Jomo KS

Economist Dr. Jomo Kwame Sundaram- Staunch Proton Critic

In fact, industry data shows that the total profits of all the car companies in the world over the last few decades amount to only a modest return, and that only for the fittest in the industry.

The British Experience

Consider the case of British Leyland, a vehicle-manufacturing company formed in the United Kingdom in 1968. It was partly nationalised in 1975, with the government creating a new holding company.

The company incorporated much of the British-owned motor vehicle industry, and held 40 percent of the UK car market.

Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best-selling Mini, British Leyland had a troubled history.

In 1986 it was renamed as the Rover Group – later to become MG Rover Group, which went into administration in 2005. This ended mass car production by British-owned manufacturers.

Today, many British car marques have become owned by foreign companies. For example, MG Rover Group and the Austin, Morris and Wolseley marques have all become part of China’s SAIC Motor Corporation Limited.

The Recalcitrant Mahathir

Why is Mahathir’s inability to learn anything from the disastrous British car industry experience, something that completely escapes many Malaysians?

Surely, any good leader would have had his officers to do due diligence.If they had done so, they would have found that the industry – even with year on year rises in sales – is not guaranteed to generate good returns to shareholders, even in a highly developed economy with a long tradition of successful car manufacturing such as Britain.

This is because one of the forces that limit profitability, is the intensity of rivalry between car companies from around the world. This leads to oversupply and pressure on prices.

Moreover, it is exacerbated by a high degree of freedom for new competitors to enter the industry.

Unless there is an enormous internal market like China’s or the United States’ – and we can take advantage of the economies of small-scale producers such as Malaysia – we are forever doomed to a minor placing or bankruptcy in the market place.

Played out by Mitsubishi?

Maybe We should investigate the links between Dr. Mahathir, Mitsubishi and The Mind of The Strategist Kenichi Ohmae–Din Merican

As far as Proton is concerned, Mahathir’s mistake in ignoring the economic fundamentals of the industry was compounded by our lack of expertise or comparative advantage to produce cars.

The anticipated technology transfer from Mitsubishi did not take place – this should have been anticipated. Why should Mitsubishi transfer their know-how to Malaysia, when it can control the pace of transfer to maximise its profits?

In fact, the top management of Proton should ask Mitsubishi to open their books to see how much profit they have made from Proton since it began its operations. Mitsubishi knew that Proton could not do without them, and they were quite happy to continue making money from Proton while the company here continued to bleed to death.

To encourage people to buy Proton, the government increased the import duty for other cars and car parts. As a result, the consumers have suffered. For over 30 years we have had to pay higher prices for all cars – including Proton. Even this has not been sufficient to save the national car.

Another question to ask is: why several car manufacturers, until recently, appear to have gotten into bankruptcy? Only then can prices rise relative to the costs, and shareholders would be able to get a fair return as well.

There are two main reasons. In some countries there is always the perennial optimism of managers and shareholders. In Malaysia, the reason is different.

Here, our government has been changing rules and regulations to obstruct other cars from entering our market, whilst providing special favours – including an ever-ready supply of financial assistance to keep Proton afloat.

The end result is that some Malaysians have ended up with more expensive cars of other brands, whilst most Malaysians have had little choice but to buy Proton – a poor substitute!This is the price we have to pay for brainless patriotism.

Ours is a sorry saga which is a classic case study on how not to set up a car industry.As with the national airline, I propose that a special course on our experience with Proton be offered in the ‘Institute of Dr Mahathir Mohamad’s Thoughts’.

What better way to honour Mahathir than a postgraduate course on his pet project – the national car – and inviting him to be a guest lecturer! I am sure he will have lots to share and many people to blame as to why the project has failed.

KOON YEW YIN, a retired chartered engineer, is a philanthropist.

Tolls and Taxes, Corruption and what is next (?)

October 13, 2015

ProtonFunding a Man’s Ego

COMMENT: We are being buggered by our government everyday and made to bear the burden of their policy cock-ups, failures, sheer incompetence and blatant corruption. Our car national policy is one classic example. We know that our national car project, conceived by Tun Dr. Mahathir in the 1980s, is a failure, an outcome that was predicted by our economists (like Chee Peng Lim, K.S. Jomo,  Edmund Terence Gomez ) decades ago. Yet we continue to fund this failed project to this day. Why?  Out of deference to Tun Dr. Mahathir bin Mohamad?

Time and time again, Proton had to be supported by taxpayers (although it is now privatised to Syed Mokhtar’s DRB Group). Its R&D programme is being funded by the Federal Government and the national car is insulated from foreign competition by high import duties, meaning that without this high tariff, Proton cannot compete and fund its own R&D. Do we know what R&D is being done at Proton?

Something has gone terribly wrong when we have to burden the Malaysian consumer with taxes and  heavy excise duties of all kinds. Even our privatization policy is a one big mess. It is time for our government to take a hard nosed approach towards all GLCs, and their management should be told that if they failed to perform that the government would shut down their companies. Can you count how many times, Malaysia Airlines and Bank Bumiputra (before it was absorded by CIMB) had to be bailed out by fresh funds from the Treasury? I can’t. –Din Merican

What I Think

jahabarKlang Valley toll rates are up, fuel prices will stay high, the road tax is here to stay, cars remain pricey, so what’s new, Malaysia? Fact is, toll rates will rise every three years or so, according to contract. But the ruling federal government delays it every time there is a general election, and use taxpayers’ money to compensate them. We can’t change the toll contracts and fuel prices are dictated by global prices, but the government can cut road and vehicle taxes. Why are we paying more in taxes when our wallet is already emptied by toll rates and fuel at market prices?

Malaysia: The Deplorable State of the Agricultural Sector

October 11, 2015

The Deplorable State of Malaysian Agriculture

by Murray Hunter

The agricultural sector is crippled by mismanagement, lack of planning, featherbedding, says Murray Hunter

Murray Hunter2Over the past 30 years, Malaysia has grown into a middle income country, transforming itself from a primary producer of minerals and commodities, to a multi-sector economy. However, the country’s agriculture sector is characterized by missteps that have cost lost opportunity in better food security, rural, community and regional development, development, employment and poverty alleviation, and missed some of the great agro-based sunrise industry opportunities of this millennium.

Political considerations have dominated investment and research, with government-linked companies receiving lavish funding in areas that often made no sense and which have resulted in the waste of hundreds of millions of US dollars and left a range of defunct programs scattered across the landscape. Politicians and staff have flown around the world on lavish “research” jaunts that appeared more an opportunity for government-paid holidays than attempts to seek proficiency.

According to statistics cited in various Malaysian Plans, agriculture in 1970 represented 28.8 percent of national GDP against only 9.33 percent in 2013. However in some states like Perlis, Kelantan, and Sabah, agriculture still makes up 20-30 percent of the economy.

50 years of Malaysian AgricultureEmployment in the sector has fallen from 13 percent of the workforce in 2007 to only 9.3 percent in 2014. However 66 percent of the people involved in working within the agriculture sector are over 50 years old. The plantation sector is primarily staffed with foreign laborers, bringing little income benefits to local communities.

The push to industrial crops in the 1960s, although rapidly developing the agricultural sector, decreased diversity. Even settlement schemes like the Federal Land Development Authority (FELDA) and the Federal Land Consolidation Authority (FELCRA) shied away from food and cash crops towards the palm oil and rubber because of the relatively large returns available with little need to market and sell their crops.

If drawbacks are factored in such as poor basic infrastructure, inadequate access to irrigation and roads, the poor level of education of most smallholders, conmen taking advantage and promising big returns to smallholders if they buy seeds from them, and the condescending attitude many government bureaucrats have towards small holders, it’s not hard to understand why this sector is so much in decay.

There is little evidence that local communities have benefited from the presence of GLCs, yet state governments have been eager to transfer state land to them for development with virtually no transparency. Virgin forest is still being ripped up to make way for new palm plantations to replace those developed into housing and industrial estates, where the GLCs are making mega-profits. 

Agricultural direction was planned through a series of 5-year plans. The political and bureaucratic elite have always presented rosy forecasts and gained publicity through staging MOU ceremonies to announce projects which never happen, or fail through mismanagement.

Part of the problem is that the politicians and bureaucrats have been thinking big at the cost of thinking small. For example, the Ministry of Agriculture has developed a list of agro-based industries that should be national priorities. The Malaysian Agricultural Research and Development Institute (MARDI) and the Forest Research Institute of Malaysia (FRIM) restrict their research to these national priorities, while leaving a void in research on crops needed to spur on the growth and development of small local communities.

Consequently, research efforts have benefitted few communities, which still remain in relative poverty today, particularly in agriculture-dominant states like Perlis, Kelantan, Sabah, and Sarawak.  Institutions like MARDI and FRIM have become showpieces to please the politicians.

Further, the bureaucrats involved in implementation have appeared to lack the zeal and commitment to see plans progress into reality. Managers on the ground have focused on building hard infrastructure where favored contractors can be employed, rather than ploughing resources and money into education and extension. The result has been a number of white elephants that litter the country. Corruption via land grants, misallocation of funds and building irrelevant facilities is a major issue hampering effective rural development in Malaysia today.

Malaysian CowsAs an economy skewed towards state planning and intervention, Malaysia has attempted to pick winners and develop them through the state apparatus. In the case of herbs and biotechnology, massive funds were allocated in the pursuit of achieving success in these “sunrise” industries, where the funds were predominantly channeled into developing ineffective and costly bureaucracy.

The Malaysian Herbal Corporation was formed in 2001 with much fanfare, considered within the bureaucracy to be the driver and “flag bearer” for the industry. The corporation undertook many initiatives, with the staff travelling widely and luxuriously around the world. Today, the Malaysian Herbal Corporation is defunct.

With former Malaysian Prime Minister Abdullah Ahmad Badawi’s focus on biotechnology as a “sunrise industry” midway through the last decade, the Malaysian Biotechnology Corporation (MBC), along with various state funded biotechnology companies such as Melaka Biotech, J-Biotech in Johor, K-Biocorp in Kedah, and Kelantan Biotech, were all well-funded with hundreds of millions of ringgit in grants, but have little, if anything to show for it. 

Most of, if not all of the grants given out by MBC to commercial companies failed to produce any commercialized intellectual property, as did university research. 

NFC ScandalThe Forgotten RM250 million NFC Debacle is small potato compared to RM42 billion 1MDB Scandal

Technology Park Malaysia (TPM) built biotech labs around the country in places like Perlis, which are mostly empty. The East Coast Economic Regional Development Council set up herbal parks in Pahang and Terengganu which are basically inactive in regards to their original purpose.

FELDA opened up the FELDA Herbal Corporation, which now has been replaced with another attempt at developing biotechnology through Felda Wellness. Biotropics was set up by Khazanah Corporation and is basically only producing some cosmetic and herbal products. The Ministry of Health set up NINE BIO to produce Halal vaccines and herbal products.

The arrangement between Malaysian University of Science and Technology and Massachusetts Institute of Technology partnership hailed as an example of a smart partnership, came unstuck after five years in 2011 and cost the Malaysian taxpayer US$20 million with absolutely nothing to show. The government, rather than being a driver of the industry, became a participant with disastrous results.

What is tragic is that there has been no transparency in the way the government handed over responsibility to personnel within these GLCS with no accountability.

Top-down planning with no consultation with local industry, communities and scientists has led to the sector falling well behind its neighbors within the Asian region. Top-down planning has allowed bureaucracy to overrun market considerations in Malaysia’s agricultural and agro-based industry development.

Development programs like the agropolitan schemes in Sabah are conceptualized and developed within the bureaucrats’ paradigms. GLCs are asked to take up large swaths of land, plant palm oil and develop small corridors for local villagers. They have been of large benefit for these GLCs, but local villagers have been shortchanged as the GLCs fail to live up to their responsibilities.

Likewise, other bureaucrat concepts such as combining fragmented land holdings into paddy estates run by anchor GLC companies as promoted by the Performance Management Delivery Unit (PEMANDU) within the Prime Minister’s Department disempower local land owners who are expected to work as laborers on their own land. These types of projects have failed in their conceptualization, let alone during implementation.  As a consequence, opportunities to alleviate poverty in rural communities have been missed, and opportunities to develop new crops, and create new industries have been ignored.

Many successful programs like entrepreneurship mentorship schemes run at Agricultural Institutes around the country are starved of funds because of the preference for the bureaucratic white elephants that benefit policy implementers financially.

The country imports up to 60 percent of its current food needs including rice, milk, beef and mutton, flour and fruits.  With the level of national debt, falling foreign reserves due to a declining ringgit and a potential slowdown in exports due to a sluggish international economy, food security appears likely to become more important than ever.

Malaysian agriculture needs new farming practices, business models, and reinvented supply/value chains. The decline of the value of the ringgit will help Malaysian farmers find a new era of competitiveness that the sector has never had.

Murray Hunter is an Australian academic and development specialist living in Thailand.

Mr Transformation Blues stays on as Pemandu Chief

September 9, 2015

COMMENT: I respect his decision to stay on as Pemandu Chief. In the face of a gathering economic storm,  his presence at Pemandu will keep the team he assembled in tact to carry on the tasks he sought out to do over the last six years.

din and kamsiah at klinik2As a spokesperson, Dato’Jala has done a good job for the government. It was a difficult one. I for one would admit that transforming Malaysia is a huge assignment. He has been like a captain of an oil tanker was ordered to make a quick change in direction. It is even tougher when he is serving a Prime Minister who lost our trust and confidence. 

The question I want to ask him is this: now that you have decided to press on with your transformation agenda, will it be more of the same, or will you change your implementation strategies in the light of difficult times ahead?

It is not about cherry picking. Life is unfair as the late President John F. Kennedy said. Malaysian critics in particular will attack you in areas where you are most vulnerable. Engage them intelligently since they are not enemy; they are stakeholders.

Today, it is all about our economy. It is about getting our country out of an economic mess created by your boss. Expect more, not less bricks thrown at you and your team. Remember that you are no longer in the Cabinet. As a CEO, your task will be a harrowing one since you are no longer part of policy making. You know well that Malaysia is all about politics. In this case, it is going to the politics of regime survival in the face of mounting public pressure on Prime Minister Najib Razak to resign.

So, Dato’Jala, your persistence and courage under fire are admirable. May you continue and finish what you had set out to do, but I hope that having learned the lessons of managing change over the last 6 years, you know how to do it differently. Do not over cook things. Just speak the truth. -Din Merican

Mr Transformation Blues stays on as Pemandu Chief to face a gathering storm

by Idris Jala

All said and done, one thing I know for certain – in life you cannot cherry-pick. It comes with the good, the bad and the ugly. But it is our own volition how we choose to live it, to have the willingness and faith to make a difference for the better. I am hopeful that when the upside comes, we will stand strong and ready to catch that ride.–Idris Jala

idris jalaDURING my childhood growing up in the Kelabit longhouse, my father – always the teacher – would use the word “ketui” to spur me on. Meaning “burning desire to win”, he did not accept half-measures and lukewarm efforts. He was adamant I embody the burning desire, especially when the going got tough.

After serving for six years as Senator in the Prime Minister’s Department, I attended my final Cabinet meeting two weeks ago. The Federal Constitution has a two-term limit for Senatorship, bar none. As I have absolutely no political ambitions, that route in presuming any extension as a Minister has always been closed.

At that session, I was especially overwhelmed by the gracious remarks made by the Prime Minister. As in any epic journey, he was clear we cannot stop midstream. He asked that I continue in my role as CEO of Pemandu, and to see to the successful conclusion of our national transformation programmes.

For months, I agonised over the decision of continuing as CEO of Pemandu or moving on to other pursuits. You can imagine the predicament as many people reminded me about the “trust deficit” in Government, telling me to leave.

There are two ways to drive transformation – via external transformational push for a change of Government or an internal transformation from within. I joined the Government because I felt I could contribute, in a small way, towards our transformation journey.

Our achievements as a country over the last six years are well documented in the Economic Transformation Programme (ETP) and Government Transformation Programme (GTP) Annual Reports. Though we made progress, we still have some ways to go. The question I grappled with was simple: Given the current problems and controversies, can the ETP and GTP programmes continue?

The answer is an unequivocal YES. Current conditions should not stop us from implementing programmes that will benefit the economy and rakyat. For example, we still need to attract investments, build the MRT and rural roads. Reforms, both fiscal and educational, must endure. The fight against crime and corruption never ceases.

Instead of caving in to despair, I see a silver lining. Percolating issues give us the impetus to push certain things. Getting all political parties to accept reforms on political financing, just as we proposed under the GTP in 2010 is one example. That is why I agreed to work with Dato’ Paul Low who is heading the reform committee on political funding.

Hence, I have decided not to abandon ship in the face of a storming sea. I admit to another motivating factor. In previous leadership roles – be it with Shell or MAS – I had always “inherited” an existing team. I may have hired a few persons but the teams were nonetheless acquired without much room to maneuver.

With the setting up of Pemandu in 2009, for the first time in my corporate and public life, I had the space to assemble my dream team. With no previous organisational baggage, we started out on a clean slate to tackle the hard work of transformation.

Over the years, I have come to love how my team has developed. They are impassioned in wanting to contribute and are prepared to shoulder the load. There are no half-measures to this journey – we have to finish what we started. I cannot imagine walking away from that.

This brings me to our current challenge, the economy. Malaysians must remember we are significantly plugged into the global economy. Shocks experienced globally undoubtedly affect us.

From January 1 to September 2 this year, the ringgit depreciated by 17% against the US dollar. But some perspective is needed – New Zealand, Russia and Australia for example have all taken painful hits in the same period, not just Malaysia.

As a nation that is huge on trading, we tend to be more exposed to external shocks beyond our control. Sniffles and sneezes from key trading partners in the US, China, Europe and Taiwan may cause us to end up with a cold too, as supply and demand patterns swing dramatically.

The Government, as keen observers of the global economic movements, was acutely aware of the need to ramp up on resilience:

  • Goods and services tax (GST) introduced in April this year to broaden the tax base and create a more equitable and sustainable taxation system
  •  Large subsidies, including fuel, have been progressively rationalised to reduce and streamline Government spending
  •  For more economic maneuvering space, we have been steadfast in cutting fiscal deficit from 6.7% of gross domestic product (GDP) in 2009 to 3.2% in 2014, while keeping our debt level below the self-imposed ceiling of 55% of GDP.

These are reasons why we are better poised today to face a downturn than we were during the Asian financial crisis:

  •  Our fiscal position has improved significantly, investments are at record levels, and trade numbers remain better than most countries
  •  We remain one of the best performing economies in ASEAN, having recorded a healthy GDP growth of 5.3%
  •  Under the Economic Transformation Programme, all sectors (National key economic areas or NKEAs) registered growth, reducing our reliance on oil and gas revenue from 40% in 2009 to 29% in 2014.

I am writing this article in Jerusalem while on a Christian pilgrimage to the Holy Lands. My family and I have dreamt about this for years. We traveled for 10 days through Jordan, into Palestine and Israel. Battered by centuries of wars and conflicts, they simply do not have the kind of peace, which we take for granted in Malaysia. I was moved to see gripping images on CNN about the ongoing migrant crisis involving hundreds of thousands of Syrian refugees in Hungary, waiting to get into Europe for a better life. For these people, it is a harsh and cruel world. I am just grateful I am a Malaysian.

All said and done, one thing I know for certain – in life you cannot cherry-pick. It comes with the good, the bad and the ugly. But it is our own volition how we choose to live it, to have the willingness and faith to make a difference for the better. I am hopeful that when the upside comes, we will stand strong and ready to catch that ride.

Dato’  Seri Idris Jala is CEO of Pemandu, the Performance Management and Delivery Unit. Fair and reasonable comments are most welcome at

Congrats, Tan Sri Dr. Samad Alias

September 8, 2015


Congrats, Tan Sri Dr. Samad Alias for doing the Right Thing

Nazir Razak

Reputable corporate figure Nazir Razak (above) has questioned what signal was being sent to government-linked companies (GLC) and agencies when state-owned 1MDB could deny information to its own adviser.

Nazir, who is also Prime Minister Najib Abdul Razak’s brother, said this in response to Abdul Samad Alias who revealed yesterday that he had resigned from the 1MDB advisory board after his repeated requests for information, over six months, were denied.

“Respected, honest professional appointed by the government and welcomed by the (1MDB) chairman with fanfare.But denied access to information by management. If this is true and tolerated, what message does it send to other GLC/ agencies?” Nazir said in a posting on Instagram today.

TS Dr Samad AliasSamad (photo), who is also Malaysian Deposit Insurance Corporation (MDIC) chairperson, was appointed to the 1MDB advisory panel on January 25 this year. However, he resigned on July 29, after futile attempts to get a briefing on the state firm’s affairs.

“I waited for six months. Despite repeated requests, I didn’t get any,” Samad had said. Najib is also chairperson of the 1MDB advisory board.

In a separate Instagram posting, Nazir shared also shared some words of wisdom – politics and family should not mix. He said this after informing his Instagram followers that he had finished watching two seasons of the American drama series, Tyrant.

“Entertaining, violent drama about a crumbling Arab dictatorship. Moral of the story – politics and family is a toxic mix,” Nazir said.

Malaysia: Forgive Najib and Fawning Ali Hamsa for they know not what they are doing

August 11, 2015

COMMENT: Both Prime Minister Najib Razak and Chief Secretary  Ali Hamsa are exponents of INSEAD’s Blue Ocean Strategy for our civil service since the day they assumed office. What is Blue Ocean Strategy?

Najib's Blue Ocean StrategyHe cannot even navigate the Pahang River

I did not know what they were talking about. So I googled and found out that:

“Blue Ocean Strategy is a book published in 2005 and written by W. Chan Kim and Renée Mauborgne, Professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute.

The book is divided into three parts:

1. The first part presents key concepts of blue ocean strategy, including Value Innovation – the simultaneous pursuit of differentiation and low-cost – and key analytical tools and frameworks such as the strategy canvas, the four actions framework and the eliminate-reduce-raise-create grid.

2. The second part describes the four principles of blue ocean strategy formulation. These four formulation principles address how an organization can create blue oceans by looking across the six conventional boundaries of competition (Six Paths Framework), reduce their planning risk by following the four steps of visualizing strategy, create new demand by unlocking the three tiers of non-customers and launch a commercially-viable blue ocean idea by aligning unprecedented utility of an offering with strategic pricing and target costing and by overcoming adoption hurdles. The book uses many examples across industries to demonstrate how to break out of traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry by using blue ocean (reconstructionist) strategic thinking. The four principles are:

  1. how to create uncontested market space by reconstructing market boundaries,
  2. focusing on the big picture,
  3. reaching beyond existing demand and
  4. getting the strategic sequence right.

3. The third and final part describes the two key implementation principles of blue ocean strategy including tipping point leadership and fair process. These implementation principles are essential for leaders to overcome the four key organizational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, finding the resources to implement the new strategic shift, keeping your people committed to implementing the new strategy, and from overcoming the powerful vested interests that may block the change.

In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base to create unconventional success – a strategy termed as “blue ocean strategy”. Unlike the “red ocean strategy”, the conventional approach to business of beating competition derived from the military organization, the “blue ocean strategy” tries to align innovation with utility, price and cost positions. The book mocks at the phenomena of conventional choice between product-service differentiation and lower cost, but rather suggests that both differentiation and lower costs are achievable simultaneously.

The authors ask readers “What is the best unit of analysis of profitable growth? Company? Industry?” – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the company nor the industry is the best unit of analysis of profitable growth; rather it is the strategic move that creates “blue ocean” and sustained high performance.

The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about “value innovation” being the cornerstone of a blue ocean strategy. Value innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant.”‘-wikipedia

So Blue Ocean Strategy is about corporate governance and making your competition irrelevant. Of course, it can be adapted for civil service management.But it cannot be mere sound bytes. Civil service reform is a serious business of making the civil service rakyat driven.

But look at the state of Malaysian civil service. From being one of the best in our region decades ago with English as the language of public administration, the PTD, as it is referred to, is now a laggard. Senior civil servants have become lapdogs of politicians in power.

KOTA KINABALU 03 Disember 2014. Ketua Setiausaha Negara, Tan Sri Dr. Ali Hamsa (dua dari kiri) menunjukkan buku laporan pada sesi pembentangan Laporan Suruhanjaya Siasatan Pendatang Asing di Sabah di Kota Kinabalu. NSTP/Malai Rosmah TuahWhy? The reason is simple enough: bad leadership by Najib Razak as Prime Minister and by Hamsa Ali as Civil Service chief. In fact, Ali Hamsa  is not an innovator, but just another run of the mill civil servant who got lucky.

Given the legendary excellence, professionalism and integrity of the Singapore Civil Service, what our Prime Minister said in Singapore about Malaysia sharing  common aspirations on good governance sounds  hollow.  A bad joke, if you like. Latching on to Singapore’s success is a bad idea.

1MBD and related matters show that we have become a regional model what governance is not. It may be too damning for me to say that our country is a basket case of corruption and blatant abuse of power, but the truth is that we are under the leadership of Prime Minister. –Din Merican

Malaysia: Forgive Najib and Fawning Ali Hamsa for they know  not what they are doing

by Jahabar

Over the weekend, Singapore celebrated its 50th year as an independent nation and both the Malaysian and Singaporean Prime Ministers toasted each other, writing warm messages in the main English dailies in both countries.

Prime Minister Datuk Seri Najib Razak wrote in Singapore’s Straits Times, and ended with the following paragraph.

“The reality is that we share your aspirations for good governance; for a strong, inclusive and sustainable economy based on sound fundamentals; and for stability, harmony and diversity.”


Perhaps Tan Sri Dr Ali Hamsa, the Chief Secretary to the Government, can then explain what good governance is when two senior officers from the Malaysian Anti-Corruption Commission (MACC) are treated as ping-pong balls for their “behaviour“.

The officers who were transferred on Friday to the Prime Minister’s Department – MACC Special Operations Division Director Datuk Bahri Mohamad Zin and Strategic Communications Director Datuk Rohaizad Yaakob – have since been reinstated following outcry that the move was a form of harassment amid the agency’s ongoing probe in a former subsidiary of government strategic investor 1Malaysia Development Bhd (1MDB).

They were to have started new postings at the Prime Minister’s Department yesterday but had instead met with Ali, as well as the Director-General of the Public Services Department, where they were given the opportunity to explain their positions.

“It’s just how public officers should behave,” Ali told reporters yesterday at the civil servant’s Hari Raya gathering in Kuching, Sarawak.

Ali, however, would not elaborate on what sort of behaviour he meant and how it was wrong. The Head of the Civil Service also said that the transfers had “nothing to do with the investigation”, referring to the police’s probe into the MACC for alleged leaks of official information on 1MDB.

The shock transfer has further damaged the Najib administration, a week after the Prime Minister reshuffled his Cabinet, sacking UMNO Deputy President Tan Sri Muhyiddin Yassin as the Deputy Prime Minister and party Vice-President Datuk Seri Shafie Apdal as a minister.

Attorney-General Tan Sri Abdul Gani Patail was also removed from his post while the Special Branch chief had his contract ended.

In many ways, the MACC transfers and the July 28 sackings came as suddenly as 1MDB found itself with a new boss, banker Arul Kanda, last January 5.No matter how it is explained, it reeks of a government throwing tantrums and re-arranging the furniture of a sinking ship.

Yes, everything that Najib wrote is something that we all can agree on. But his government’s actions are taking us far and away from that, and confidence has evaporated.

Ali and the rest of the civil service have to do better than arbitrary transfers if they want Malaysians to retain whatever little confidence they have in the government. We have a trust deficit that keeps getting higher every day.

It is time the government walked the talk, be it on good governance or the already discarded catchphrase of People First, Performance Now. Mere words cannot match the deeds done.

* Jahabar Sadiq runs The Malaysian Insider.