An Inclusive Malaysia Needs ‘Intrapreneurs’
Over the past several months media headlines were dominated by shifts and swings in national elections and referendums held across several continents, reinforcing the perception that people all over the world are restless and angry, and therefore hungry for change and renewal.
The persistent anger found expression not only through ballot boxes. South Koreans, for example, have also resorted to aggressively acting it out on to the streets, leading to the impeachment of their President.
In short, these “writings on the walls” for global change and renewal can be ignored by societies and those in leadership positions only at their own peril.
The reasons for mass anger and uprisings are varied, some country-specific. Nevertheless, there is a discernible pattern, top of which is rejection of corruption and abuse of power, followed by intolerance of income disparity and economic injustice.
Other than anger, there is also fear in the air, due to a growing sense of economic insecurity. Jobs are threatened and the future uncertain; worsened by disruptive forces that are reshaping business landscapes, affecting incomes and livelihood.
Malaysia is fortunate to have dynamic private entrepreneurs doing a fantastic job developing the economy, and they must be facilitated to do more. However, to simply do more of the same without compensatory measures to address economic injustice, reduce exclusivity and bridge economic divides is no longer tenable.
What is needed is a formula for renewal, focused on expanding the entrepreneurial class by offering every Malaysian equal opportunity for upward mobility.
The time has come for Malaysia to create an alternative trajectory for a more inclusive growth. This calls for bold strategies to reinvent the corporation, restructure corporate control and redefine Malaysian entrepreneurship.
Reinventing the corporation involves innovative institution building. One feasible option is to create a critical mass of “community-owned” corporations to include fully market-driven GLCs and Corporate Waqfs.
A greater GLC and Corporate Waqf role will incrementally shift the economic system from its currently almost exclusively private “shareholder-centric” construct towards an inclusive “community-centric” one, involving amanah or trust institutions representing the larger interests of the community.
A community-centric trajectory also requires a redefinition of entrepreneurship that is too often identified with ownership of enterprises. CEOs and executives of GLCs and Waqfs as amanah or trustee managers require a different set of rewards, as they do not have the benefit of stock options, management buy-outs (MBOs) or privatization.
It is proposed that these amanah entrepreneurs be referred to as “intrapreneurs”, emulating the highly successful practice of Johor Corporation (JCorp) as a GLC.
I had the privilege of serving as CEO of JCorp between 1982 to 2010. Under the leadership of intrapreneurs, JCorp’s 280 companies with more than 60,000 employees (at end of 2010), recorded extraordinary business performance. Eight of these companies were publicly listed, one on the London Stock Exchange.
More than 80 JCorp companies were start-ups, fully exposed to entrepreneurial risks. Throughout my career as CEO, I recall having to shut down more than 35 companies involving write-offs exceeding RM350 million. These losses, however, were more than compensated for by several intrapreneur ventures that excelled, becoming lasting strategic enterprises, creating value and career opportunities.
The most iconic is KPJ Healthcare Bhd (KPJ), a JCorp start-up that became a market leader in healthcare and one of Malaysia’s Top 100 listed companies with market capitalization exceeding RM 4.5 billion today.
KPJ was led for more than three decades by intrapreneur extraordinaire Tan Sri Siti Sa’diah Sheikh Bakhir. The intrapreneur culture at KPJ was highly inspiring, enabling many junior executives, technicians as well as nurses to rise through the ranks and become members of management, several even becoming CEOs of subsidiaries.
KPJ’s and JCorp’s intrapreneuring scheme was focused on empowering people, enriching careers and widening opportunities for self-actualisation to compensate for lack of equity rewards. These turned out to be advantages that GLCs and Corporate Waqfs as amanah institutions must leverage on. In KPJ’s and JCorp’s experience, they were extremely effective in retaining loyal and dedicated teams of staff and executives.
Additionally, amanah institutions have a unique appeal to those Malaysians who prefer to build careers in organisations dedicated not only for profit, but also to serve a higher, nobler cause. Muslim executives in particular would regard a Corporate Waqf venture dedicated to a “Business Jihad” championing ‘adl (justice) and prospering life as enjoined by Islam energizing, and a worthy cause to pursue as a career.
In conclusion, a new strategic trajectory towards a “community-centric” and more inclusive national economic regime involving a greater role for GLCs and Corporate Waqfs is indeed an imperative. Malaysia must strive to overcome economic injustice to avoid public anger and fear from spilling over into unnecessary future chaos, threatening political stability.
Especially when Corporate Waqf’s institutional feasibility had also been endorsed in “A study of Johor Corporation’s Corporate Waqf strategy” conducted by Oxford University’s Said Business School, published in December, 2010. Among others, the study concluded, that “… Business Jihad, Corporate Waqf and intrapreneurship have been highly effective and have far exceeded what would have been likely achievable through using conventional development economic tools and known policy-driven methods.”