WHY US MANAGEMENT TIPS FAIL IN INDONESIA

INDONESIAN MANAGEMENT: A FREE FIRE ZONE
© Duncan Graham 2006

A major private bank in Indonesia has just abandoned one of its public relations activities.

Since 2002 the bank has been sending welcome letters and useful information to selected top-end customers. This is considered good management practice overseas, a proven way to generate client loyalty.

But not in Indonesia. Here the bank’s clients want their financial dealings kept secret – even from spouses and families. Mail from a bank can reveal the existence of Dad’s private accounts. Customers complained – so the bank is dumping its program.

Management books are big sellers in Indonesia. Most are US texts, but the philosophies and techniques they offer don’t always translate well. That’s because they ignore the culture factor. Here are some examples:

Mark McCormack’s Never Wrestle With a Pig (Penguin), a top seller by the man who wrote What They Don’t Teach You at Harvard Business School, is brimful with smart business suggestions.

His tips include resisting the urge to dominate at meetings, ending the day on time and encouraging staff to be creative.

Fine in the US and Europe – but ridiculous in Indonesia. In Javanese culture a boss who doesn’t control everything is considered weak.

The widely accepted overseas ritual of asking down-the-line workers to contribute ideas can be counterproductive in Indonesia. Lower level staff reason:

‘If the big man is asking us, it means he doesn’t know. If he doesn’t know he’s not fit to run this show and doesn’t deserve our respect.’

There’s a standard joke among business expats in Jakarta. It runs like this:

How do you pick the staffer with most initiative? Call a meeting and seek advice. It’s the one who’s last to reply: ‘Up to you, Boss’.

And why end the day on time? Although labour laws require overtime to be paid this rule is widely flouted. Staying late at the office, even if it’s just to discuss golf handicaps, indicates importance. In Indonesia underlings don’t have the right to after-hours private lives – they can leave only after the boss shouts for his driver.

It’s not in the employment contract. It is in the culture.

Foreign management texts are also based on the belief that most workers are ambitious. Not in Indonesia.

The Batak manager of a five-star hotel in Surabaya once told me how frustrated he’d become because his Javanese staff didn’t seek promotion. Head office had reshaped all sections and created new positions.

The manager explained this carefully to the workers and insisted none would be sacked. Instead they’d be able to get promotion and higher salaries if they could demonstrate aptitude.

A few weeks later he’d received no applications so made inquiries. Although the pay boost was attractive, employees said they were happy with the old system. They didn’t want to become supervisors because this might distance them from their colleagues who were also their friends.

Built to Last by James Collins and Jerry Porras (Harper) is a guide to the ‘successful habits of visionary companies’. Collins is the author of Good to Great (Harper) and claims to have sold one million copies. This tries to show why some enterprises succeed and others fail.

Both books are valuable for any executive provided they work elsewhere. Don’t expect them to offer templates for success in the archipelago.

For starters much emphasis is placed on publicly listed US companies, while in Indonesia the pattern is for firms to be held by families. So Collins’ ideas on testing leadership skills and the right way to pick a successor don’t apply when the son is going to become CEO whether he likes it or not.

Likewise management gurus’ advice to trust staff and give them space to be creative runs counter to Indonesian business culture.

Count the number of shops you know where the staff are allowed to open the till. If they can they’re probably part of the family.

Watching adult employees sell a product and then hand the money to a child who uses the cash register sends a clear message to the workers: We don’t trust you!

For advisers like Jim Collins this would be a recipe for business failure. In Indonesia maintaining suspicion seems to be the key to success.

The other theme running through all foreign texts is the need to select quality staff – and keep them. That’s certainly good advice in economies where skilled workers are highly mobile, and where labor laws on discrimination, gender equality, workplace harassment, dismissal procedures and compensation are enforced.

Similar rules exist in Indonesia. But it would be a brave worker who tried to insist contract conditions apply unless they belong to a powerful and incorruptible union that employs tough street-smart lawyers.

Management advisors recommend executives maintain good morale and boost productivity by complimenting staff on their work. The fact that this rarely happens in Indonesia means workers are one up on their overseas counterparts.

They have no false ideas of their value. They know there’s an estimated 20 million unemployed and a similar number underemployed across the archipelago.

If those with jobs want to exercise their rights and be treated as equals then they risk being shown the door. Outside is a queue of desperate hopefuls who’ll be happy with less money and will promise to never complain.

Indonesia is a bosses’ market – and they don’t need American textbooks to tell them how to make money.

(First published in The Jakarta Post 29 November 06)
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