Work Relationships

Work relationships have culture, process, technology and strategy for breakfast, lunch and dinner. They are the 20% that drive 80% of business results—and the sustainability of your competitive advantage.

Bear with me on this.

1) What is your name? Answer in a second. 2) Who are you? This will take a minute, because you will ask for a bit of context. Whatever context is set, you will describe or refer to a relationship or relationships. Deeper… 3) What do you stand for? This will need two minutes. For your answer will reveal the what, why and how of your role in those relationships. Last one… 4) Are you a happy person? Three minutes to assess the current state, the quality, and the success of your relationships, their failure or their absence.

Relationships qualify who you are, define what you stand for, and determine your emotional state of affairs. But it’s more than that. Your personal effectiveness will be shaped by the quality of your relationships. Their added value usually kicks in unexpectedly during times that you need help—and you call it just being lucky. In reality, relationship excellence will shape your success or failure in the journey called life.

Work occupies the biggest part of life. Naturally, work relationships constitute a predominant chunk of who you are, what you stand for, and your emotional state of affairs. Top management have traditionally paid attention to this strategic dimension of business called organizational behavior, but with little success. The best proof of their limited success is the silo, the arch enemy of agility.

Silo is too often used to refer to large groups of people. Sectoral ego is perhaps the most popular way to describe the phenomenon. In fact all silo behavior emanates from individuals.

Exclusivity starts in the individual with an unbridled ego and often a well meaning intention that is strengthened by ignorance. Exclusivity is unwittingly reinforced by teams in the ways that their leaders choose to solve problems and make decisions, which results in either organizational effectiveness or inertia.

Work relationships constitute the critical success factor for agility. Work relationships determine how well technology is used, how well processes are executed, and how well corporate culture is cultivated on a daily basis. If the quality of work relationships is poor, the value of having technology will not be maximized, the brilliance of processes will not be realized, and the sustainable advantage of culture cannot be harnessed.

What does top management misunderstand with their lopsided passion for talent and lack of attention for work relationships needed for an agile team performance culture?

The best answer comes from my mentor, CNBC’s 2020 Lifetime Achievement Awardee, Theodore P. Rachmat. “Talent is important. But work relationships that enforce process and empower people excellence are extremely more important for competitiveness.” This bias is built into Organizing for Business Excellence. The paradigm was formed over a series of lunches with Pak Teddy over 7 years, when we were building the foundation for Astra’s corporate culture by training the first batch of 1,500 managers. (see https://youtu.be/cYz23cwcWE4)

Rectify your inordinate focus on talent with attention for building an agile team performance culture. Enforce process excellence and empower people excellence by enhancing the quality of work relationships.

Forbes Indonesia Magazine, Jan 2021

By Andrew Tani

You will do better if…

The command and control framework used by religious and military organizations for many centuries is still the most reliable way to unite individuals based on hierarchy—meaning obedience—and skill. How relevant is command and control for business in this digital economy, when agile innovation can be vastly more urgent than optimization, or doing more better?

Let us examine the strengths and trade-offs of the four key features of command and control.

· Centralized decision-making. With this feature, CEOs have strong control over the priorities, programs and actions of the organization. Your decisions carry less operating risks because you have access to more sources of relevant information. Speed is your trade-off from centralized control. Escalating issues means slower response time, and higher market risks. Customers are fickle and opportunities are fleeting in this economy.

· Function-based departmentation. Your core competency is nurtured by highly specialized skills, which promotes learning and sharing among specialists. Having fewer general managers who see the big picture, the cross-functional perspective, is your trade-off from specialization. Function specialists tend to have narrower mindsets that get in the way of healthy debate.

· Function-based performance management. It is easier to formulate and establish accountability for goals and standards. The difficulty to define accountability for goals and standards that can only be achieved when several functions collaborate well is your trade-off. Time to market, for example. Encouraging collaboration across functions is always a challenge.

· Function-based work characteristics. With function specialization comes highly structured methods of getting work done. A difficulty to innovate is your trade-off. It is never easy to make changes in an environment with strictly enforced rules and procedures. The process of change is expectedly slow, even reluctant.

Those trade-offs cause inertia. You’re still profitable, no doubt, but you’re getting less than the optimum. And you’re aware of it. To remedy the trade-offs, you have turned to some of the more popular management approaches and techniques.

Peter Drucker’s management by objectives, and the balanced scorecard developed by Schneiderman, Kaplan and Norton can mitigate the trade-offs from centralized control.

Alfred Sloan’s decentralization model for divisionalized businesses at GM and the widespread practice of rotation can multiply opportunities to train and develop competent general managers. Structural and ad hoc committees and cross-function teams, and matrix reporting arrangements can address the issue of poor collaboration across functions. Total quality training and suggestion systems, agile work practices used by software development teams, and design thinking techniques can help to increase the capability to innovate.

The sustained use of those management approaches and techniques implies that the time and resources invested in them are justified. However, our decades of management consulting work in large organizations continue to show that they deliver only incremental relief from treating symptoms, and do not provide permanent relief.

You will do better if you can remedy the inertia induced by hierarchical, power-based work relationships between individuals who report to different function bosses. From people who work to achieve and get rewarded on the basis of meeting often unsynchronized function goals and standards? From people who have to wait for top management meetings to confront issues that had accumulated during the prior month or week?

Where can we find that elusive remedy?

Forbes Indonesia Magazine, Jan 2022

By Andrew Tani

Strategy

Strategy is about setting your priorities and goals for the future and the actions you plan to undertake to achieve them, analyzing options and considering attendant rewards and risks.

SW-OT, short for strengths, weaknesses, opportunities and threats, is the most renowned acronym for the thought pattern most-followed during strategic planning eXercises. It is a logical pattern that can help you re-evaluate the near-term wisdom that you are already eXecuting. EXtrapolate where you are now to what can be achieved neXt. Understand and assess your strengths and weaknesses. Make sense of the limitations they impose when you search for and evaluate the ability to eXploit immediate opportunities and address threats. Optimize or pivot as needed.

To formulate the desired longer-term state, use a different pattern, OT-SW. It will force you to think beyond the neXt step. A longer planning horizon brings scale into the picture. It opens your mind to data you would otherwise ignore. And it’s not just about thinking big— it’s about tapping more human energy from the desire to do great things.

The most successful entrepreneurs I have worked with use OT-SW to define the desired future state. For them, strategy starts with the search for ample opportunity in the long haul. It’s not as much a conscious search as it is an articulation of something that just dawned on them and proceeded to ponder. Their conscious thinking starts with interpolation when they consider threats and the strengths needed to overcome them. Shortcomings and weaknesses are seen as things that they need to remedy along the way.

Where SW-OT promotes caution by considering limitations in the short term, OT-SW breeds optimism in a huge opportunity that can only be justified by a series of remedies that are sought over the long term. While SW-OT will produce incremental growth by helping you optimize and pivot with the current strategy, OT-SW can make the quantum leap that stems from unleashing human energy with a compelling future state.

The quintessential strategist Lee Kuan Yew used OT- SW when he decided to build the first Changi airport terminal. On TV, I heard his riveting story of how crit ics had a field day pointing out that the first terminal was way overbuilt. Can you imagine Singapore without Changi today? Dr Mahathir Mohammad replicated that strategic decision for Putrajaya. Please read up on how their great business counterparts used OT-SW. Salim. Soeryadjaja. Wijaya. Rachmat. Santosa. Gates. Jobs. Bezos. Ma. Musk. Ironically, the digital economy is a good time for business thinkers to learn OT-SW. Many of your assumptions about the future are no longer valid. Think like a strategist. Differentiate and use the right-thinking pattern for the right need. The sustainability of your business depends on it.

Forbes Indonesia Magazine, October 2021

By Andrew Tani

The New Distribution and Banking 4.0

In the New Distribution, the hallmarks of an Indonesian Digital Bank are personalization, relevant value, accessibility and reliability.

There are three global shifts on which CEOs need to focus their attention and energy: 1) catering to ruthless multi-generation consumers in The New Consumption; 2) rallying multi-generation employees to be productive in hybrid WFH-WFO arrangements in the New Workplace, and 3) innovating their business models to face massive disruption in retail and financial services in the New Distribution. Let’s talk about the New Distribution.

The vital customer-facing step in the value chain has changed rapidly in the 21st century. The roadmap shows retail solutions with persistently improving levels of proximity, variety, quality, price and service. Indonesia’s retail industry started as highly fragmented wet markets and more than a million independent family-owned neighborhood shops. Because transportation was not always easy, proximity was their main advantage.

Global brands and some local business groups saw the opportunity and stepped in, offering air conditioned premises, guaranteed quality, freshness and service warranties. Warehouse-sized premises enabled price friendly variety to boot. Good enough for small retailers to source their stocks for resale. Think Carrefour-Transmart and Lotte. A handful of business groups saw the opportunity for a nation-wide supply chain to support thousands of their branded small shops situated very close to the customer. Customers appreciate proximity and are willing to pay slightly higher prices in return for air-conditioned premises, guaranteed quality, freshness and service warranties. Think Indomaret and alfamart.

The game changer at work until now are the online shops. They eliminate the stress and cost of visiting physical shops. Their customers gladly forsake the effort to touch and inspect the goods to be purchased in exchange for quick access to limitless variety. Pictures, price comparisons and product reviews are indispensable. Brand value has never been more assuring. Online B2C and B2B marketplaces converge buyers and sellers. In collaboration with logistics and financial service providers, they deliver and finance purchases with reliability and competitive prices. Customer data is mined and exploited to serve as a competitive advantage in due course. Ecosystems flourish.

Indonesian banks have their share of challenges and opportunities in distributing financial services in the New Distribution. To optimize its financial intermediary role and maximize its contribution to national economic development, the highly regulated industry faces two immense structural challenges to financial inclusion. They operate in the world’s largest archipelago, and they serve the world’s fourth largest population. Digital technology can only improve their ability to overcome those challenges and reach the coveted level of financial inclusion of more developed economies.

Fintech startups, neo banks, blockchain-enabled cryptocurrency, and social media intrusion into some of the traditional turfs of the banking industry will progressively step up competitive pressure. The only way to continue to dominate financial services is to attract, engage, convert and retain customers through the bank’s version of the New Distribution. Enter the Digital Bank.

In the New Distribution, the hallmarks of an Indonesian Digital Bank are personalization, relevant value, accessibility and reliability. The service capability development milestones of one such bank show us that the journey will be an arduous one. One that can only be completed if executed in perfect congruence with the other two shifts faced by Business 4.0.

Forbes Indonesia Magazine, August 2021

By Andrew Tani

2010-2020-2030

Agility alone cannot guarantee success. Creating the psychological climate for teams to find the best idea to execute with agility is the game changer—it’s called idea meritocracy.

Ten years ago I helped the CEO of Telkomsel (2019 revenues IDR 93 trillion), Sarwoto Atmosutarno, on their first digital transformation exercise, called Telkomsel 2.0. We named it after Enterprise 2.0, a shift of emphasis in the use of technology from faster computations to ubiquitous connections when getting things done at work. Whatsapp on Android started service that year, and Snapchat the following year. When we all started making free

Whatsapp calls three years later, the giant telco was ready for the eventual disappearance of its legacy voice and SMS revenues.

To stay relevant for my Client CEOs in the blossoming network economy, I began pondering what needed to be transformed in our Firm’s management consulting practice. Our entire playbook was based on the legacy paradigm that Theodore Rachmat and I co-authored, called Organizing for Business Excellence, Orbex for short, which worked well for building the team performance culture at Astra when he was at the helm in the 90s.

That pondering took all of five years, and subsequently gave birth to the Orbex Leadership Paradigm (see illustration). Our yin-yang SECU VUCA study on the digital mindset underpins the paradigm, which aims to build an agile team performance culture for its users. The learning content and methods were developed and tested under the auspices of the giant BNI (2019 Assets IDR 846 trillion) in a program called BNI digiLab in 2018.

An organization is but a concept. A theory in action. It is juridical, not physical. You cannot debate with an organization. Neither can you bump fists with it. You can only do those things

with the people who think, feel and act in the belief that they represent and, hopefully, work for the best interests of the organization. People are engaged by the organization to perform tasks alone and in relationships that need to established, driven and nurtured. In essence, an organization is a system of hierarchical and network relationships.

To realize the organizational agility needed to continue to win in the network economy, three relationships are essential. Orbexcalls them the three C’s. Cooperation. Coordination. Collaboration. But agility alone cannot guarantee success. Creating the psychological climate for teams to find the best idea to execute with agility is the game changer—it’s called idea meritocracy.

Cooperation takes place between individuals who report to the same boss. Collaboration between individuals who report to different bosses. And coordination is the hierarchical relationship between the leader of a team and its members. These are important distinctions for our body of knowledge that are not in a dictionary.

To perform is to create value. All relationships seek to create value. In the 21st century, organizations need to build the capability to do it remotely, so we call it remote value creation. It is indicated by behavioral norms for idea meritocracy, coordination, cooperation and collaboration across the enterprise.

Leaders need three critical skills to help the organization to build teams that practice idea meritocracy, and corresponding norms for people and process excellence. We call them the three E’s. Empathy. Engagement. Execution.

Leaders cooperate well, with a skill that we call empathy. They strive for relationship excellence. Understanding, not just knowing, what the other person sees and feels enables the influence associated with personal power. When they are in charge of a team, they use position power to coordinate well, with a skill called engagement. They strive to enforce order for process excellence and stoke morale for people excellence—they manage by head and lead by heart. Finally, they collaborate well, with a skill called execution. With it, they strive for business excellence as they work with other teams within and outside the organization to achieve shared goals.

I am dedicating my next ten years to helping leaders understand and apply the Orbex Leadership Paradigm. So they can foster unity through a common language and an adaptive leadership style that can help the organization build an agile team performance culture.

This article ends with heartfelt congratulations to the man with a vision for Forbes Indonesia, Dato’ Sri Tahir, and an expression of gratitude to the people who will help him to continue with the highest standards of journalistic excellence in the next decade.

Forbes Indonesia Magazine, October 2020

By Andrew Tani

Stop Calling It A Digital Economy

You and your predecessors worked hard for decades to build and strengthen organizational effectiveness, and measured its six key parameters: financial strength, customer satisfaction, social responsibility, productivity & efficiency, innovation and quality of people & teamwork. And you were successful. Your stakeholders were satisfied with your performance. Revenues yielded dividends. You and your people were adequately rewarded.

Suddenly the party’s over. In less than a decade the world you knew so well changed. Like many, you thought that the internet was just another enabler for business, a technological breakthrough that helped people communicate faster and cheaper. Or was it?

The popular press called it a “digital economy.” So everyone focused on the first word and marvelled at it as a technological revolution. A CNBC article in October 2019 headlined, The USD900 Billion Reason GE, Ford and P&G Failed at Digital Transformation, concluded that, “Companies have discovered, creating processes, implementing tools and identifying workflows is straight forward. Changing people is hard. And organizations that are unable to get the right message to the right people at the right time will find it downright impossible.”

Look at the Forbes list of ten largest global companies in 2008. There were only two digital businesses. Ten years later, there are seven digital businesses, five of them less than 20 years old.

What don’t the industrial giants understand about the challenges and opportunities of the 21stcentury? What do the new kids in the block see that they don’t, thereby rewarding them with exponential growth?

Industrial era giants still think it’s just another technological disruption. So they use their deep pockets to hire digital talent, buy digital software and install the latest digital hardware and gadgets. But they missed what the new kids in the block got right—the technology is digital, the economy is not.

In his landmark September 1997 piece, sage WIRED magazine editor, Kevin Kelly, best described the network economy when he formulated its four new rules. 1) Wealth flows directly from innovation, not optimization, by imperfectly seizing the unknown, not by perfecting the known. 2) The ideal environment to cultivate the unknown is to nurture the supreme agility and nimbleness of networks. 3) The domestication of the unknown inevitably means abandoning the highly successful known, by undoing the perfected. 4) The cycle of find, nurture, destroy happens faster and more intensely than ever before.

Why do industrial business leaders still don’t get it? If you too are bewildered, blame it on Mother Nature. Human beings are not created with a reset button.

To survive, to grow and continue to win when you confront the challenges and opportunities of the business you are in, you choose and validate the beliefs and values that work well for you. This time-consuming process forms a mindset that unconsciously influences how you think, feel and behave, the predictable pattern of which is called your style. For a group of individuals with a shared mindset and behavioral norms, that predictable pattern is called culture.

The mindset is indeed very difficult to change. It’s true. But it is not impossible. Start with awareness and understanding. Stop calling it a digital economy—it’s a network economy.

Forbes Indonesia Magazine, July 2020

By Andrew Tani

Human Energy

People management has come a long way since the 70s when the business environment was dominated by a call for mass production, and CEOs segmented their markets to improve the competitiveness of their offerings. Man was treated as a provider of labor needed by the capitalist to produce and sell goods and services to turn a profit. Workers formed unions to protect their interests and balance the power wielded by business owners. The relationship tended to be distrusting, and industrial relations fire fighting was the overriding theme for the work of people management.

Personnel Administrator became the title of choice after the following decade saw progress in effectively preserving industrial peace. As the orientation of management shifted from building scale to increasing profits, quality was added to cost as the new frontier for competing in the marketplace.

Seeing and treating people as human resources started in the 90s. The C-suite rewarded the function with a seat on the Board to recognize the strategic value of people management. If financial resources are managed at the Board level, why not human resources?

At the turn of the century, the best-managed companies assigned their people managers to work side by side with their market-facing counterparts, and called them Human Capital Business Partners. Their proximity was designed to increase and accelerate the value contributed by people management to the company’s effort to win the market in a digital economy, which saw ecosystems being redefined by technology in a web-wide world.

During the decade of the 2010s, we saw only a selective disruption of markets. The ubiquity of smart phones changed the internet from enabler to becoming the space that all players need to understand and profit from. Enter the New Consumption, the New Marketing and the New Distribution, all demanding that people management professionals build their capability as an engine for transformation of the enterprise.

As we enter the decade of the 2020s, the disruption of markets will be widespread. Governments need to heighten collaboration with business to win in the unified digital marketplace, which transcends geographic boundaries. Startups and nimble industrial giants who “get it” will progressively displace the industrial giants who don’t.

With consumers and the workforce dominated by millennials who value meaning more than money, CEOs must make a fundamental change in the way that man is seen or treated in the work place. They can start doing this by renaming Human Capital to Human Energy. Human capital is worse than human resources. Human capital caters well to the concept of shareholder wealth, but it degrades the human factor in business. Capital is invested and exploited by its owner to generate returns. Exploit is the same word that we use for minerals after successful exploration. We should abandon even the hint of exploitation in the treatment of man in the work place.

We must progress from appreciating and engaging people at work from their physical and intellectual quotient to their emotional quotient at the end of the 20th century, and in the 21st century to what Alibaba’s Jack Ma calls love quotient. People are created in the image and likeness of The Almighty. It is the energy of their existence that we engage to help the company fulfill its societal mission and realize the vision of its leaders.

Forbes Indonesia Magazine, April 2020

By Andrew Tani

Five Dictums of a Winning Team

Think of your organization as a chain and imagine each team as one link that is securely connected to the other links.

Your organizational chain is only as strong as its weakest link. When one team fails, the effectiveness of the whole organization is affected.

Chains are designed and built to be flexible and strong enough to fasten or secure objects and pull or support loads. Think of your organization as a chain and imagine each team as one link that is securely connected to the other links. As teams execute your marketing, sales, exploration, production, and all the middle and back office functions in series and in parallel, the capability of your organization chain to achieve its goals and standards will be determined by the weakest link in the chain.

Last year a coffee shop opened five blocks from my house, which is on a very busy street in South Jakarta. Until now I’ve noticed that the parking spaces in front of the building are always empty. More recently a second coffee shop opened two blocks from the first. Different story. It’s always busy. I visited both places to find out what’s happening.

Their owners were clearly serious about their investments. Both buildings were designed from the ground up and interiors were built well, for ambience. Both also sport unique brand names and custom-designed logos. From my customer’s point of view, they were different on just two ac- counts: the menu items to go with the main attraction, a cup of coffee, and the personalities of the service personnel.

One or both of those features can explain why the second coffee shop is winning while the first one is at risk of closing shop soon. I don’t have any more information. What I do know is that those features are the outputs of different teams, who are impacting the success of the business.

One or both teams are their organizational chain’s weakest links. A single coffee shop is a small business.

What if your business needed more than 10, 100, or 1,000 teams, each of whose outputs were linked to connect in series or to work in parallel to achieve your prescribed goals and standards? Would it be any different?

All businesses need winning teams that link together to create a strong organizational chain. It is the responsibility of the CEO and the top management team to make sure that none of the teams weaken the entire chain, and to tirelessly cultivate a team performance culture.

Indeed, what is a winning team? The following are five dictums that can guide your effort to build a team performance culture:

A winning team is a source of focused human energy. It ignites, stokes and channels the passion and commitment of its members to achieve the organization’s business and social goals.

A winning team is a vital link in the value creation chain. It produces the inputs needed by the customer, the next process, on time, within spec and at the right cost.

A winning team is an institution of learning. It supplies essential knowledge and hones the skills essential for executing the organizational mission.

A winning team is a specimen of the corporate culture. It is the manageable forge of human inter- action upon which behavioral norms are started, shaped, or stopped.

A winning team is a wellspring of purpose and vision. It nourishes the soul and satisfies the hunger for meaningful work needed by every human being.

Does your team fulfill the Five Dictums of a Winning Team?

Forbes Indonesia Magazine, January 2020

By Andrew Tani

Mr. Digital Mindset Indonesia

Indeed, having the yin-yang ability to practice optimization and agile innovation, called the digital mindset, is not a matter of epoch but practical wisdom.

The digital mindset is the yin-yang ability to choose between two conflicting thinking patterns: optimization, a habit born from facing the stable, expected, complex, understandable (SECU) conditions of the industrial era, and agile innovation, a necessity born from facing the volatile, uncertain, complex, ambiguous (VUCA) states of the digital age. I found someone who, in my opinion, deserves the distinction to be called Mr. Digital Mindset Indonesia. In 1994 he passed away at 64 and left behind what has now become a global brand, Aqua. He is Kwa Sien Biauw, or Tirto Utomo to many.

In the early 70s, one of the foreign guests he hosted as a Pertamina official contracted diarrhea from boiled water served during dinner. Tirto Utomo shunned the clarity and orderliness of a status quo solution to a problem (SECU) for courage and empathy (VUCA) and set sail on uncharted waters to discover how best to serve truly potable water consistently.

Dr. Ashar Munandar, a teacher from Universitas Indonesia, told me about the LPPM visit in 1973. Tirto Utomo wasted no time and, with agility (VUCA), engaged younger brother Slamet to intern at Polaris, a 16-year-old bottler of drinking water in Thailand. After learning the ropes, he asked LPPM in Menteng to help him with a feasibility study for a bank loan he needed to build a six-million-liter bottling plant for his company, called Golden Mississippi.

Dr. Munandar failed to persuade Tirto Utomo to abandon the plan. He asked, “Why would anyone buy a 950 ml bottle of water for IDR 75, almost double the IDR 46 it costs to pay for a liter of gasoline?” That question drew a smile and fell on deaf ears. Tirto Utomo abandoned firmness and prudence (SECU) in favor of open-mindedness and candor (VUCA) by accepting an argument from his consultant, Eulindra Lim, to change the brand name Puritas, his first choice, to Aqua, mainly because it was easier to remember. The plant started production two years later.

With patience and consistency (SECU), Tirto Utomo suffered four years of red ink before Golden Mississippi started turning a profit. In the early 80s, he left Pertamina and let curiosity and intuition (VUCA) lead him into experimenting with the use of mineral water from a self-flowing natural spring versus a deep well. The experiment proved to be a game-changer.

Expanding sales and distribution was the next challenge. Tirto Utomo needed clarity and orderliness (SECU) to set up a door-to-door delivery system and a host of improvements in packaging materials, product sizes, and production quality with the help of a key executive, Willy Sidharta. Continuity and attention to data (SECU) guided the expansion of bottling facilities in East Java. Prudence and firmness (SECU) ushered in a steady growth of exports to overseas markets.

Back and forth between agile innovation and optimization, the ways of Mr. Digital Mindset Indonesia were passed on to his daughter Lisa Utomo. She decided in 1998 to let the multinational player, Danone, take over to carry on the legacy of her father and grow Aqua to become the largest bottled water brand in the Asia Pacific region today.

Indeed, having the yin-yang ability to practice optimization and agile innovation, called the digital mindset, is not a matter of epoch but practical wisdom.

Forbes Indonesia Magazine, December 2018

By Andrew Tani

Making Indonesia 4.0

In what state of readiness is Indonesia for Industry 4.0?

THE COUNTRY’S Industry Minister Airlangga Hartarto is on a mission. He is advocating the transformation of five of the country’s 84 industrial sectors, namely food and beverages, electronics, automotive, biochemicals, textile, clothing & apparel. Together, they represent 60% of the country’s GDP and 60% of its exports and provide employment for 60% of the workforce.

“Sectors outside the priority list are in any of the three stages of the industrial revolution. Our hand-made clove cigarette factories are in 1.0 and will continue to provide massive employment in the provinces where they are located. We have many factories in 2.0 that have mastered the assembly line to efficiently produce goods in large quantities. Among those in 3.0 who have computerized their production processes, we prioritized those five sectors to blaze the trail toward the smart factory. Indonesia 4.0 is the change concept that will guide our initiatives in technology, human resources development, and the digital revolution, which refers to the interaction between man and product, and man and machine,” explained Hartarto.

Industry 4.0 is commonly referred to as the fourth industrial revolution. The most progressive manufacturers have deployed computerized automation and connectivity with the internet of things & artificial intelligence in the third revolution. Germany is leading the world into the fourth revolution, where smart factories aim to enable fragmentized customization by digitizing all processes and apply- ing robotics to the optimum.

Enterprise 2.0 refers to communication and information technologies converged, business processes digitized, on-demand technology accessed, virtual teams deployed, and data instantly and seamlessly shared across the enterprise. Imagine Industry 4.0 as the manufacturing counterpart of Enterprise 2.0.

The ministry has raised the bar for its employees, re-training and re-skilling them to become as digital savvy as their private-sector counterparts. Hartarto asked the academic community to join the revolution. Curriculum design in advanced economies introduces manufacturing topics such as 3D printing, welding, or computer numerically-controlled machines, as early as the first year of learning across the board, side by side with the social sciences. “I urge our academic community to strengthen three essential foundations that our workforce will need in the digital economy: the English language, statistical data analysis, and computer coding,” concluded Hartarto.

One of the recent examples of support for Minister Hartarto’s mission for making Indonesia 4.0 is the decision of a Telkom Group subsidiary, Telkomsel, to make available to industry players and the academic community the results of a six-year AndrewTani Research study. It articulates the digital mindset, leadership practices, and corresponding digital skills needed to survive and grow in the digital economy.

As Indonesia 4.0 rallies government, industry, and the academic community in a concerted effort to build smart factories, the executive decision to pursue massive investment in infrastructure finds further strategic justification. Indeed, it is now the turn of industry and trade to pick up the proverbial ball and take full advantage of the socio-economic fruits of President Joko Widodo’s growing achievement in building the national infrastructure.

Forbes Indonesia Magazine, September 2018

By Andrew Tani

Page updated

Google Sites

Report abuse