Posts in category: Insights

By Woody Ang & Khoo Woon Hann

Gas is a finite asset

The gas industry is a substantial component of Oman’s economy, contributing significantly to export earnings and serving as an important enabler to local industries. In 2017, Oman produced 41 billion cubic feet of gas, of which 32% was exported by Oman LNG while the remaining 68% was consumed locally, with consumption growing at an average of 2.3% per annum for the past eight years. Its proven total gas reserves stood at 25 trillion cubic feet as of end-2017.

As a GCC country rich in natural resources, Oman’s gas reserves are however a finite asset. Its current supplies remain healthy in the short-to-medium-term, but with pressure now to diversify the economy and reduce its over-reliance on oil and gas, its gas assets will need be utilised to directly spur other economic sectors. Gas requirements for economic generation, particularly in the manufacturing sector, will need a long-term supply commitment, and the country will need to balance this with its existing industrial and residential commitments, the latter of which continues to grow as the nation’s population increases.

Against this backdrop, and as part of a wider programme of economic diversification, the Omani Government saw a need to carefully manage supply and demand in the gas industry to mitigate any probability of a gas deficit situation in the medium-term. The supply-demand dynamics were further impacted by the fact that 97% of its power was generated from gas-fired plants. From an energy security perspective, Oman needed to consider diversifying its sources and avoid over-reliance on gas. Preserving this precious finite resource and allocating it to industries that generate the highest economic returns then became a priority for long-term sustainable development.

Complementing the effort to manage its gas resource was the need for effective governance that provided a conducive planning and regulatory environment for Oman’s industry players. The Ministry of Oil and Gas serves as an able custodian for the Oil & Gas industry, while the Electricity sector is managed by separate Authorities who do their best within their respective mandates. Moving forward, consolidation of the strategy and planning of these two closely related sectors would allow for harmonised development, taking into consideration a rapidly changing economic landscape.

Delivering tangible transformative outcomes

Through the PEMANDU Associates’ BFR Methodology Labs, Oman devised and adopted a 3-pronged strategy specifically for the Gas sector: (i) Ensuring long-term gas supply security, (ii) Optimising growth-driven gas demand and (iii) improving infrastructure capacity and efficiency.

Firstly, thorough investigation was conducted on all existing gas producing assets and development plans for greenfield projects. Specific supply-based projects were identified with the potential to increase Oman’s gas production substantially by 2042, and as a result, extend Oman’s available gas supplies. These projects include immediately implementable initiatives such as flare gas reduction, replacement of gas usage in existing operations to generate thermal energy, increasing asset productivity through modern technology; and longer-term greenfield and brownfield gas development projects.

Secondly, to complement the effort to increase gas production, the Lab deliberated on ways to optimise demand. After careful selection, a set of robust and stringent gas allocation criteria was developed and proposed. The ultimate objective was for Oman to allocate gas to industries that generate the most economic returns. Future applications for gas usage will be assessed and then prioritised using these new criteria. This represents a paradigm shift to a more objective, measurable and impactful allocation practice. In addition, a standardised gas application process was designed and communicated to all impacted stakeholders from both the public and private sector.

The third strategy for the Gas sector is to improve gas infrastructure capacity and efficiency. The Lab assessed high industrial growth areas against the availability of pipelines to meet future demand. This culminated in new pipeline projects that will transmit extra gas transmission capacity to critical regions like Sohar, Duqm, Sur and Salalah by 2019.

One of the key components in Oman’s Energy sector is the Electricity sub-sector. A comprehensive transformation of gas consumption would not be complete without assessing this sub-sector, where gas contributes 97% to all power generation capacity. There is thus a critical need for energy diversification for electricity generation to include renewable energy sources.

Two major outcomes were achieved in the Lab. First, 17 non-gas power generation projects were identified and prioritized for implementation. These projects will cumulatively provide up to 11% non-gas source generation by 2023. This is a substantial achievement considering Oman is still a developing nation with overall projected electricity demand expected to increase further in the next five years. The projects encompass utility-scale solar PV plants, wind farms and waste-to-energy plants. The Ibri 500MW solar power plant is an example of Oman’s government drive to diversify its energy source mix. This project is expected to be completed by 2021 and will be the first large scale solar project in the Sultanate.

Lastly, the Lab recommended that harmonised planning and development of Oman’s Energy Policy be institutionalised. Currently there is no one single entity, nor there exists a process that will enable the holistic development of an Energy Policy that considers interest of all sectors. The solution adopted will involve expanding the jurisdiction of a single existing entity to include policy-making for both the electricity and gas sub-sectors holistically.

Momentum for the future

The key lessons revealed through Oman’s Energy Lab is the need for a coordinated and structured approach for planning in this critical sector. Since the sub-sectors are all intricately linked, changes in policy and executive decisions must be done taking into consideration ramifications to all stakeholders. The Lab discovered that one of the biggest hindrances that industry players faced was due to the lack of central coordination of policy decisions and follow-up actions. If possible, policy-making should be centralised to encourage greater efficiency.

In addition, for a country facing diminishing reserves of a finite resource, demand planning such as consumption optimisation and subsidy rationalisation should take precedence. The political will to shift from a way of potentially wasteful cheap resource consumption to a more conservative approach of utilisation needs to be present. The BFR Methodology Labs have certainly provided the platform for a collective realisation that continued reliance on gas as Oman’s sole energy source will not be sustainable for the long-term, and has generated the momentum for the country to aggressively diversify into renewable energy. The future of energy diversification and security looks to be on the right track.

By Leon Jala

In an industry filled with polarising buzzwords, 2018 welcomed a new contender – the ‘cagency’.

The slightly cringe-worthy term describes a new wave of consultancies venturing into the creative space. In an increasingly data-driven landscape, this seems like a natural trajectory for consultancies and agencies. But is it, really?

A glimpse of the industry’s future

A look at Cannes Lion 2018, the festival and awards event for the creative and marketing communications industry, already points to the increasing presence of consultancies actively desiring a share of the proverbial agency pie. Accenture Interactive set the tone in a big way bagging a Gold Lion for its interactive campaign, JFK Unsilenced.

As all good things should be, the idea was simple: give the world the speech that John F. Kennedy was supposed to give before he was assassinated. Illustrate the possible social impact. Its success at Cannes has sent a strong message on the boundless possibilities when creativity and data enabled by technology find synergy.

A creative and a consultant walk into a bar…

If it was really that simple, everyone would be playing the same game. But the reality is that creative and management consulting are often two different creatures – while the currency of the creative is emotion, consulting banks on data. Finding real synergy is not easy. But easy never made for much fun anyway.

And that’s exactly the challenge that PEMANDU Associates has gone head-first into, by setting up its communications subsidiary, COMMUNICATE. Helmed by its Managing Director, Alex Iskandar Liew, the company’s approach to this conundrum has been to build a team of creative-consultant hybrids passionate about storytelling and communicating the right messages to the right target audience through focused platforms.

But the main point here isn’t about hybrids. For Alex, it’s about “breaking down silos or the perception that communication is a last mile of a strategy or an implementation programme.” When we stop putting each other in the traditional boxes where planners only do strategy, suits only manage accounts and creatives only tell everyone else they’re wrong (I know, I was a copywriter), individuals within a creative agency will begin developing a collective sense of ownership for the work.

Thus, just as the ad people of yesteryear realised the magic in bringing an art director and writer into the same room, so too should we be looking to get more people into the bigger rooms of today. And that includes our clients.

Collaboration over order-taking

More creative agencies can benefit from working closer with their clients by involving them more heavily in the process. Not just by taking a brief. Much like their parent company, COMMUNICATE advocates ‘labs’ in their methodology. A lab is an extended workshop involving the client’s stakeholders for a given area of focus, facilitated by the consultancy.

For COMMUNICATE, being able to accurately identify and verify the case for change and opportunities together sets a clear path for the creative work to begin. More importantly, it establishes a clear narrative and illustrates an outcome that the work should deliver.

Many creative agencies pride themselves as branding experts, but ultimately, the brands will know their challenges more intimately. Brands are not just driven by perception or awareness; their performance is also anchored on profit and loss. And brand diagnostics are multi-layered with solutions influenced by all facets of the corporation.

You wouldn’t trust a doctor’s diagnosis without first revealing your own symptoms. It is similar with the clients – they have a need; they need to know that we are listening; they must be assured that we understand before they can take our proposals seriously.

Over-fascination with creative. Under-fascination with outcomes.

More importantly, we need to facilitate the essence of a brief against the desired outcome so that the work actually works. After all, what good is an award-wining creative campaign if it’s homogenous?  What good is a warm and fuzzy piece of piece of advertising, if the brand logo is interchangeable? Brands are unique. Therefore, the messaging too must be unique.

On the topic of awards, it’s great to see the annual Kancil Awards exploring a festival format. This is a step in the right direction to being more inclusive to those outside of the ad world. Agencies were always meant to be partners. Not vendors.

Ultimately, the cagency model is still a model – it isn’t the answer in and of itself. To truly transform the industry landscape, we must begin engaging in ‘business unusual’ – to embrace the ever-transforming process on how a good piece of creative work is delivered. Perhaps, then, as teams find themselves on award show stages amidst roaring applause, it will truly be a collective award for both clients and agencies, regardless of budget.

By Reinier Starink and Zehan Teoh

“The ERGP had determined US$195.98 billion in private investments required to achieve its target of unlocking sustained inclusive diversified growth for the maximum welfare of Nigerians”

The second largest economy in Africa after South Africa, Nigeria is a uniquely diverse country comprising 371 ethnic groups with over 520 spoken languages. Its economy, however, was dependent on revenues from oil exports and thus had been adversely impacted by the decline in global oil prices in 2014 to 2016.

This resulted in the country experiencing a recession in 2016, leading the government to formulate the Economic Recovery and Growth Programme (ERGP) 2017-2020 to transform the economy. The ERGP requires US$245.13 billion to implement and had determined US$195.98 billion in private investments required to achieve its target of unlocking sustained inclusive diversified growth for the maximum welfare of Nigerians.

With this agenda in hand, the Nigeria’s Ministry of Budget and National Planning, tasked with overseeing the ERGP, appointed PEMANDU Associates to synthesise its plan into realistic implementable initiatives, looking to our experience in deploying our proprietary BFR methodology in effecting economic transformation in countries such as Malaysia, Oman, South Africa and India.

Specifically, they sought help in mobilising private sector investments in six sectors identified as the economy’s most productive. The sectors were then clustered into three workstreams based on their relevance to each other: Manufacturing & Minerals Processing, Agriculture & Transport and Power & Gas.

“The initial interactions with the CEO and leadership of PEMANDU Associates was reassuring and gave a lot for the team to anticipate as to how the Labs would be run, and how this would constitute a key developmental experience for the country, the team members and the Lab participants. The CEO’s inspirational approach was therefore commendable. 

The Labs provide extensive involvement of most stakeholders to co-create solutions rather than have the solutions developed by a small team of consultants or just involving the stakeholders for consultation only over a few hours.

Towards the end of the project, the PEMANDU Associates project team and PEMANDU Communications, that assisted with preparing for the Open Day, appeared very outcome-oriented and this was positive. The communications team indeed appeared very positive in their approach and this was commendable.”

– Folarin Alayande, Co-ordinator, ERGP Implementation Unit/Senior Special Assistant to the President (SSAP, Economic Recovery and Growth Plan (ERGP)

Overcoming challenges, bridging gaps

Challenges in crafting a three-feet plan for these clusters for Nigeria, as with most countries in the world, were multi-faceted, stemming from the polarity in expectations between the public and private sectors. Governments typically have a record of amending policies and plans, while the private sector are generally motivated by the bottom line, hence may be cautious in participating in grand government plans.

This was a specific challenge tasked by the Nigerian government to PEMANDU Associates to decrypt. Drawing from PEMANDU’s previous experiences in mobilising private investment, such as the US$444 billion in investments facilitated and identified under Malaysia’s Economic Transformation Programme and the 775 projects valued at US$96 billion identified in the Urban Development Lab in Andhra Pradesh, we found that most economies in the world are dependent on the public sector to spur investments and expenditure.

Our role in Nigeria was to develop and enable a programme that would ensure the government continuously works with the private sector to own, initiate and implement transformational projects that would yield positive multiplier outcomes for the economy.

Thus, for much of the first half of 2018, the PEMANDU Associates project team was stationed in Abuja to conduct the necessary groundwork and undertake Wave 1 of the ERGP Focus Labs.

Under this project, PEMANDU Associates helped the Nigerian government identify US$22.5 billion in private investments which could be unlocked from the implementation of 164 projects, paving the way for the creation of 513,981 jobs.

This was done by encouraging the private sector to take a proactive participation in the ERGP Focus Labs.  This proved to be a unique value proposition to the industry captains and with the support of the government who sent key decision-makers to the labs, it generated positive interest amongst the private sectors.

A total of 500 participants from both the public and private sectors, comprising the relevant stakeholders from the three workstreams, were brought together under one roof for six weeks.

Given the existing polarities, the exercise was expectedly met with its fair share of scepticism, with some private sector stakeholders turning up with their products with sales in mind, while some expected to garner public investments. Some, were taken by surprise at the level of involvement required of them, having been used to government-led economic initiatives. So, the challenge was to shift expectations and mindsets from ‘What is in it for me’ to ‘How can I contribute in terms of planning for my sector’.

Nonetheless, the presence of public sector decision-makers in the Labs, and the participants’ determination to achieve tangible results allowed them to put aside their cynicism and work towards to common goal. The private sector became the engine of the labs and the shift in conversation was a remarkable breakthrough.

“We would like to especially commend the management and project team of PEMANDU Associates for organising and facilitating the smooth conduct of the ERGP Focus Labs of the Federal Government of Nigeria, particularly the Agriculture/Transportation Projects.

Our company, Trucks Transit Parks Ltd, benefitted immensely from the programme in the following ways:

– highlighting to the government the social necessity that the project seeks to address;

– bringing to the notice of the government challenges faced by our company in progressing the project;

– assisting us to more properly package our project for fast-tracking by the government;

– enabling us identify certain inherent challenges to attracting investments into the project; and

– putting us in direct liaison with key regulators.

This would not have been possible if not for the professional approach of PEMANDU Associates’ hard-working team.”

– Jama Onwubuariri, Director, Trucks Transit Parks Limited, ERGP Focus Lab member

Getting to work

Once participants were on board, the next challenge was identifying and prioritising initiatives. Projects were categorised to their level of readiness and conversations were created to discuss their business model; from how to grow, plan and finance, with each project put under scrutiny.

These buckets of conversation separated projects ready for implementation and acceleration from projects under incubation. Creating relevant conversations which engaged participants successfully retained participants throughout the whole six weeks of the Labs, producing frank, transparent conversations.

The outcome of the Labs and its in-depth, implementable programmes were presented during an Open Day in Abuja in May 2018.

The Open Day, which was attended by the public and private stakeholders as well as the media, served to communicate the ERGP Focus Labs initiatives to the public.

Together with the Labs, the exercise served to inject greater transparency into the government’s initiatives, representing a good start for the Nigerian government to win over the hearts and minds of the country’s people in its bid to transform the economy.

In applying our 8-step Big Fast Results (BFR) Methodology, the approach in its start will always be met with a degree of cynicism. As experienced in previous projects, however, these sceptics are very quickly won over when they witness how the methodology works, our flexibility to adapt to client needs, all the while staying focused on meeting a clear set of deliverables.

Key to success in any of our BFR consulting projects has always been the team’s commitment to understand the country’s dynamics, the unique relationship between the private and public sectors, its tipping point, diversity and issues. The BFR Methodology has always allowed PEMANDU Associates to take a collaborative approach with participants to steer the conversation towards a true outcome guided by an objective. Leadership commitment and participation is always a mainstay in allowing incredible sharing of knowledge resulting in implementable outcomes.

Nigeria has today completed Steps 2 (Lab) and 3 (Open Day) of 8 and now has a clear plan for the first phase of its ERGP. The Government will now need to set these action plans into a detailed programme by way of a Roadmap for implementation. Coupled with the discipline of action and rigorous monitoring, the Nigerian Government has set itself on the path of transformation. And while the public and private sectors have painstakingly converged to realise this programme of change, the ultimate stakeholders who stand to benefit from this work are the people of Nigeria.

Reinier Starink and Teoh Ze Han share their experiences from the lab with Nigeria’s Ministry of Budget and National Planning to unlock US$ 22.5 billion under their Economic Recovery & Growth Plan.

Pt. 1 // Why Did The Nigerian Government Need A Rescue Plan?

Pt. 2 // Getting Nigerians To Believe Their Government

Pt. 3 // The Lab Process Reimagined

How do you say, ‘True North’ in a different language? As one of the main elements which anchors the work of PEMANDU Associates, translating the term True North, and so much more, lay at the heart of projects the organisation recently undertook in non-native English-speaking countries.

“It was definitely challenging – the work bandwidth tripled!” says Mohd Fauzi Puniran, a Vice President who was assigned to the Federal Road Agency Transformation Lab in Russia in late 2017. The Federal Road Agency (Rosavtodor) is responsible for overseeing the road transport industry and transport engineering in Russia, and had sought PEMANDU Associates’ Big Fast Results (BFR) Methodology to identify its True North to guide its management of federal roads. The Agency also requested our assistance to determine related initiatives to support regional economic growth.

“Some English words just do not make sense in Russian due to contextual issues, and may even appear offensive once translated. Hence, we worked closely with interpreters and our Russian counterparts to ensure the correct meaning was conveyed upon translation,” Fauzi, who was the engagement manager for the project, explains.

This process was painstaking, with the involvement of interpreters who would translate simultaneously while the Lab was underway. Each workstream was also co-facilitated by a Russian co-facilitator in addition to a PEMANDU Associates facilitator. This allowed the project team to gather the required input during the Lab towards preparing the final Lab report.

Hence, for the two months of the Lab, the team’s typical day consisted of 16-hour days spent facilitating the Lab, summarising the Lab findings in English then translating it to Russian. This was done not only to develop content for the final Lab report, but also to prepare for subsequent days’ proceedings throughout the duration of the Lab.

The team also put in effort behind the scenes to ensure the language barrier did not disrupt the work flow or working relationships between the Russian client and our associates, who are based in Malaysia, where English is the accepted language for business in addition to the national language, Bahasa Malaysia.

“We undertook frequent engagement with our client even outside of working hours. It also helped to build relationships among key stakeholders. Another strategy we adopted was to keep things simple. This did not only apply to our choice of words, but also in the way we conducted the Lab. It was important to explain each task undertaken during the Lab, so the Lab members not only understood the words we used, but also the meaning behind each action,” says Fauzi.

Zehan Teoh, a Senior Vice President at PEMANDU Associates who was stationed in Russia for a separate project, agrees on the importance of keeping it simple, adding that the fluency of language sometimes emerged secondary in communicating with clients and stakeholders.

Speaking on his experience in the country, he observes, “Very often we noticed that between non-native English speakers, although the vocabulary used was stripped down, it did not mean that information was being left out.

“Verbal cues are only part of the entire spectrum of communications, you also have non-verbal cues and body language.”

He adds that while translating on-the-go, be it from English to Russian or vice versa, did pose a challenge in the working environment, another important element it impacted was the ability to build trust amongst the project team and their Russian stakeholders; a crucial determinant in the success of any project.

Like Fauzi, Zehan saw that finding local advocates to help explain the context of discussions went a long way in ironing out communications breakdowns. Again, non-verbal cues, as well as staying engaged in discussions, even if they are being a conducted in a language you are unfamiliar, with also play a crucial role in building trust.

“Although the vocabulary used was stripped down, it did not mean that information was being left out.”

“Be sincere through your body language and show interest in trying to understand what they are saying. Even exhibiting that first step of being willing to reach out and being present will give your stakeholders the encouragement that you are sincere. Hence, even without a common language of communication, there are other ways to build trust,” he says.

The challenges posed by language barriers are also present in PEMANDU Associates’ currently on-going Senegal Agropole Lab project, which aims to identify projects to add value to priority crops and establish shared infrastructure and services for increased efficiencies by 2020 in South Senegal. This was despite half of the project team being fluent in French, the country’s official administrative language.

“The biggest challenge with the assignment is the subtle nuances between languages requiring Lab output to be monitored closely. Working with our client to ensure the meaning and context for the Lab output was captured and translated correctly was essential for future implementation. From a project management point of view, this required more time than usual, which means it put further pressure on a highly intense assignment like a Lab, says Yoong Huey Yee, a Vice President who is engagement manager for the project.

She points out however, that the difference in language allowed the project team to bond with the client due to the extra effort demonstrated. “Our fluency in French added to the client’s appreciation in our effort to make the assignment a success, despite our mother tongue being English. Working closer also facilitated trust-building,” she says.

She also agrees with Zehan’s advice that certain factors transcend language barriers, such as humility, attentiveness, respect and empathy, all of which helped the project team bridge the communication gap.

Beyond proving the importance of a common language in undertaking projects, our work in Russia and Senegal testifies to the universal transferability of PEMANDU Associates’ BFR Methodology – one that transcends differences in language in the pursuit of driving transformation.

By Nyoomi Rasiklal Kamani

“We feel that only when we are challenged with our backs against the wall, innovation and ideation takes root…”

Having joined PEMANDU a little over a year ago, I have been witnessing evident outcomes achieved by our Big Fast Results (BFR) methodology. Some of the governments that have actually deployed this methodology, customised to deliver their economic transformation, included Malaysia, Tanzania, South Africa (whose ‘Phakisa!’ transformation programme translates to ‘Faster!’), Oman, Maharashtra, Andhra Pradesh. More recently, PEMANDU has been tasked to work on similar projects in Russia, Botswana, Nigeria and Senegal, of which I have personally been involved in.

Anchoring BFR is a 6-8 week lab process, where our consultants, analysts and project stakeholders engage in intense discussions to achieve consensus on a project’s high-level True North and its granular action plan which outlines step-by-step actions, persons responsible, timelines, budget requirements and measurable targets.

Our labs are also divided into four phases: pre-labs (determining the work scope), labs (where our stakeholders are required to be present), post-labs (where the detailed implementation plans agreed upon in the labs are scrutinised) and syndication sessions (ensuring that our client and all their stakeholders provide feedback on the lab and agree on its final outcome).

Business Unusual

As a newcomer to BFR, I admit that there were nuances which caused me to pause momentarily as the 6-8 week period is both rigorous and can be overwhelming, especially to a newbie. However, I was able to see the importance and significance of this timeframe as it involved analytics, solutioning and detailing of intended plans to mobilise transformation.

This time is used to not only gather, process and syndicate data but also build rapport between our consultants and lab members. Every problem or case for change is often overarching. Hence, to ensure that the interest of all parties is acknowledged, we invite representatives from each party.

This usually involves individuals from private and public sectors, smallholders, entrepreneurs and ministry representatives. Engaging the participants in the labs was also a first for me. I witnessed that most participants would come with a pre-set idea of the direction they would want to pursue. Hence, there was a need to break these silos down, so that all possible ideas, solutions and determinants were robustly discussed and agreed upon. In theory, the lab may seem to be a workshop but in reality, it is a platform that requires able facilitation to derive the right mix of solutions that will deliver the True North.

Emotions usually ran high as each lab member would defend the interests of their stakeholders. The management of these polarities represented a large chunk of our work. Often debates may come from disenchanted stakeholders who had participated in previous studies and research papers by other institutions, contrary to present environment. Managing discussions based on these pre-set ideas is a common feature in labs. Participating in a lab also requires different individuals to work together and this dynamic may also be a challenge that requires facilitation.

Witnessing the more seasoned PEMANDU consultants in action allowed me to gain a new perspective in facilitation. The polarities were managed through constant open communication to encourage our lab members in uncovering a common goal.

Economics can make sense

Theoretically, we could write down the True North at the front of the lab room, emblazoning the Gross National Income, private and public investments we are pursuing. However, this doesn’t translate as a common language. We have to strip these numbers down to the bare essentials – identifying how these numbers are arrived at, how the lives of their stakeholders stand to benefit from the transformation, what are the common social impact and how the targets will even be achieved.

These rounds of communications represented how we had to facilitate conversations between stakeholders by redirecting them to parties who will be affected by the changes proposed and encourage clear communication between them all.

Another reason why these labs are business unusual is because when we get all of our stakeholders under one roof, this removes the typical delays impacted by locale differences, as well as those with fragmented interests but have chosen not to participate. In our labs, we get them to plan, agree and detail their vision so that their results are Big and Fast – as promised. The labs are also where we pursue the most important component of transformation – gaining stakeholder buy-in. Without stakeholder buy-in, it is difficult to push the plan into immediate action.

Being Accountable

At the end of every lab, we publish syndication and budget reports. This means lab members cannot just agree on something at a superficial level. We question, challenge and encourage until each lab member understands the rationale behind a particular transformation initiative and are able to commit themselves and volunteer to lead the initiative. It is also here where they are required to confirm the anticipated resource and budget, as well as committing to a feasible timeline for the project.

Embracing the Big and Fast in BFR

It is this comprehensive process which necessitates the 6-8 week lab we highly recommend to our clients. But having participated in several labs since joining PEMANDU, I’ve come to realise, there are often different horses for different courses. I recalled reading one of PEMANDU’s first lab projects when I was still a student. It was on the development of Malaysia’s Economic Transformation Programme. I remember wondering what were these labs and what constituted the work in conducting 12 labs over two months in 2010, involving 6,000 stakeholders. Now I know!

PEMANDU has always encouraged the Lab participants to play the game of the impossible. We feel that only when we are challenged with our backs against the wall, innovation and ideation takes root. A need for commitment manifests itself and from there, being accountable and driven to deliver comes second nature.

It is a mindset PEMANDU nurtures from an employee’s first day, up until the impossible is merely another item on our checklist and always bearing in mind that if you do business as usual, you cannot go big or fast; and to get Big Fast Results, you cannot do business as usual!

By Marc Fong

“In such a system, no one – not even the Government – can act as a single point of control”

Systems in countries, from the third world to highly developed nations, are complex. Whether it is addressing economic value chains, education, health, or other kinds of systems, governments must work with a fragmented, diverse set of stakeholders with various capabilities and often conflicting goals. They typically must contend with issues such as a disparate “consumer” base (the public), supply-chain infrastructure, corruption and political intervention.

Compounding this, the various institutions and agencies of the government typically work within their own corner of the system, unable to see or optimise that whole. In such a system, no one—not even the government—can act as a single point of control. This complexity can be seen even in corporations and organisations – albeit on a smaller scale. Leadership is often focused on long-term goals whilst members of the leadership team have different priorities depending on their portfolio and stakeholders.

In an age of social media and real-time information, priorities can also change in the blink of an eye. Politicians worry about pacifying an electorate while business leaders are answerable to their shareholders. While stakeholder engagement and management are critical aspects of leadership, having a set of constantly shifting priorities is guaranteed to stifle delivery.

Developing the True North

The most successful examples of delivery share a common starting point – one where the leadership of a country or organisation have agreed that urgent intervention is needed to ensure delivery of a common purpose that they will commit to above other interests. Leaders need to acknowledge the burning platform, the raison d’être for transformation that they commit to regardless of their individual agendas.

In short, clarity and alignment from the leadership form the foundation for which to kickstart transformation.

Transformation must begin at the very top – the Prime Minister or CEO must make a clear statement that he or she acknowledges the problem and is willing to commit the resources (time, manpower and financial) to transform and ensure compliance from the rest of the leadership.  In addition to this, the leader must have a clear vision of his end-goal or ‘True North’, a single overarching goal that becomes the mission for the nation or organisation.

The leader must then communicate this to his or her leadership. In some cases, the True North can be amended or further refined based on input from the leadership but the end-result is universal acknowledgement from the leadership on the scale of the problem, the urgency of it and the True North that they will prioritise ahead of their own political or individual agendas.

Malaysia’s example

When Dato’ Sri Najib Tun Razak assumed the role of Prime Minister of Malaysia in 2009, he was faced with an economy that had stagnated as a result of the 1997 Asian Financial Crisis and further suffered from the 2008 Global Economic Crisis, jeopardising the nation’s aspirations to become a fully developed nation by 2020.

Over a series of 5 retreats, the Prime Minister and his Cabinet agreed upon and set the direction for the National Transformation Programme (NTP), for which PEMANDU was mandated to performance manage and facilitate. This is where we introduced our 8 Steps of Transformation methodology, a radical and structured approach incorporating clear diagnosis, planning, implementation, execution and feedback; in a sequence which ensures transparency and accountability during transformation.

The 8 Steps begin with setting the True North, or strategic direction, for transformation, which is what we facilitated during the Cabinet Retreats in 2009.  Workshops or retreats are often ideal platforms to obtain clarity and alignment as they provide a dedicated location and time for the leadership to have a discussion. Preparation is extensive to ensure the best-informed decisions — at a national level, key institutions such as ministries and their agencies are engaged with the objective of obtaining data as well as developing models and scenarios. Participants are engaged ahead of time and briefed so they can come prepared with data-driven points of view.

Our facilitation of the process allowed for frank discussions, reducing the risk of hidden considerations and internal agendas. The role of the facilitators is to ensure conversations are healthy (i.e. not dominated by a single party or point of view) as well as to ensure that the discussions are data-driven.

Driving Transformation

The result of the Cabinet Retreats was agreement on a ‘True North’ for Malaysia – the achievement of high-income nation status (as defined by the World Bank) by 2020 – as well the principles of the NTP: growth that was sustainable (by reducing dependence on public investment and diversifying the sources of economic growth) and inclusive (ensuring Malaysians at all levels benefited from the transformation).

The ‘True North’ for Malaysia was then refined into its final form, a target expressed in Gross National Income (GNI) which provided clarity for subsequent implementers – every initiative and project was assessed and prioritised on its ability to contribute to GNI. This resulted in a decision-making process that was both significantly accelerated and transparent. By publicly committing to these targets and principles in a series of strategic engagements, Dato’ Sri Najib and his Cabinet made themselves fully accountable for delivery.

It is important to note that the Cabinet did not make this decision in isolation – while the leadership remained accountable, throughout the process existing institutions were engaged to provide input and data ensuring a fully informed decision.

Since the Cabinet Workshops in 2009, Malaysia’s NTP has doubled growth in private investments and consistently ranked well in global indices. The gap between GNI per capita and the World Bank’s high-income threshold has narrowed significantly from 33% in 2010 to 20% in 2017 whilst both mean and median incomes for the bottom 40% of income levels has grown at an annual rate of over 12% from 2009 to 2014.

Our 8-Step methodology has also since been adopted by other countries around the world, such as Tanzania, India and Russia, while we continue to work with governments and the private sector in new markets. However, none of this could be achieved without completing our first step of transformation: developing clarity at the top and defining the True North.

By Idris Jala

“Malaysians must be able to rise above the distractions to look at our fundamentals and make an informed choice.” 

For those who develop resolutions, we always begin each new year with renewed vigour and optimism. More so, when we begin to look at how Malaysia is growing against the global landscape. As we move to complete the first quarter of 2018, stable growth is still being exhibited by leading economies, given that the global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage points to 3.9%. This translates to a positive outlook.

When we compare the Malaysian economy against the rest of the world, we’re moving at a very good pace. Malaysia’s GDP was recorded at 5.9% in 2017. This outpaced regional neighbours such as Singapore, South Korea and Taiwan.

The performance was recognised by the World Bank, which revised its forecast for the country’s economic growth for 2017 twice during the year, raising it from 4.3% in April to 4.9% in June to a higher forecast of 5.2% in October 2017. Fitch has also reaffirmed its A- rating for Malaysia with a stable outlook. The central bank, Bank Negara Malaysia, also continues to earn recognition for its handling of the country’s monetary policy.

In fact, the National Transformation Programme (NTP) has year-on-year catalysed Malaysia to move closer to its True North of becoming a high-income nation. In 2017, the gap between Malaysia’s GNI per capita and the World Bank’s high-income threshold has narrowed to 20% after the country spent more than a decade stuck in the middle-income trap.

We have always maintained that the journey to transform is a marathon, not a sprint. As Malaysia nears the completion of its transformation, the country must remain focused in implementing the initiatives to achieve its True North.

The outlook for this is positive. In 2018 Malaysia is expected to continue solidifying growth from its fiscal policies and economic diversification efforts from the NTP, which included growing private sector investment.

Decisive measures

Prior to the NTP, the economy was too reliant on the oil and gas industry, which is susceptible to price fluctuations. In 2009, oil and gas revenue contributed to 41% of government income.

Through the NTP, the government chose to focus growth on 12 economic priority sectors, enabling the government to reduce its dependency on income from oil and gas revenue, which has declined to around 14% in 2017. This has allowed for balanced and stable economic growth, bolstering the economy’s resilience against external shocks such as the reversal of commodities prices seen in recent years.

This is why, as demonstrated by the economy’s results in  2017, the country has continued to outperform global growth since the launch of the NTP in 2010.

Market observers and investors have shown that they value the strength and stability emanating from economic and business conditions in Malaysia. This is reflected by the country’s 23^rd ranking among 190 countries in the World Bank’s Doing Business Report 2017 and continued foreign investor confidence.

Notably, Saudi Arabian oil and gas giant Saudi Aramco committed a US$7 billion investment in the Refinery and Petrochemical Integrated Development (RAPID) project in the Pengerang Integrated Petroleum Complex (PIPC). PIPC is one of the flagship projects under the NTP and has the potential to become one of the largest downstream oil and gas hubs in Asia.

Staying inclusive

When the plans for NTP were laid out eight years ago, we knew that for the transformation to be complete, its outcomes needed to be inclusive and sustainable. To this end, the economic diversification contributed to the creation of 2.68 million additional jobs between 2010 and 2017. This has supported the narrowing of the country’s Gini Coefficient, which measures income disparity, to 0.399 in 2016 from 0.441 in 2009.

The NTP also ensured to address the areas most pressing to Malaysians. This included their safety and security through the reducing crime focus area, where efforts to combat crime have resulted in a stunning 53% reduction in index crime between 2010 and 2017.

The government is also striving to transform the delivery of its services to the public. Thanks to efforts such as the establishment of Urban Transformation Centres (UTC) and Rural Transformation Centres (RTC) to serve as one-stop, integrated premises for the efficient utilisation of public resources, the public is seeing better service from the government. Initiatives to improve the public healthcare system has also enabled shorter waiting times for patients and reduced congestion at government hospitals.

As testament to these initiatives, the World Economic Forum’s Global Competitiveness Report 2017-2018 ranked Malaysia second out of nine ASEAN countries and 15^th globally for efficiency in public spending – this also put the country ahead of developed nations such as Finland, Norway, Sweden and Japan.

All these indicators suggest that Malaysia is in a good socioeconomic position and the country is on the right track. Different commentary and opinions will always exist and will get even louder considering the country’s impending 14^th General Elections.

Whatever our stance is, people must understand that when politics is exploited, it is nothing but a play on perspectives. Concerns pervade every election season. Malaysians must be able to rise above the distractions to look at our fundamentals and make an informed choice.

This boils down to the question of: how are we doing as an economy? Do our people have jobs? And are we getting closer to our target of becoming a high-income nation? Keep this in mind, while we walk towards the polls this year and carry out our duties as a democratic nation.