One of the great pleasures of writing this blog is the opportunity to stay in touch with friends and former students. I received a nice note from Tenglum Low, who is a top executive in Malaysia. Tenglum took my course when he was in an executive program at Harvard.

Tenglum wrote that over the last 25 years, a significant amount of his time was spent in reorganizing two publicly listed Malaysian companies, serving as COO and CFO.

The first was a steel company which he helped grow from 200 to 2,000 employees over 15 years. He started his career in this company when it had 200 employees, and he had a key role in selecting and developing the employees during its growth period. He noted that once the company’s vision and values were aligned, it grew quickly. While the company did not have the financial resources to hire experienced people, the commitment of the employees and the strength of the culture permitted them to succeed.

However, as they expanded through acquisitions, they were not able to integrate the cultures of the newly-acquired companies with that of the “original mothership.” The management team was reluctant to divert management resources to the newly-acquired subsidiaries because they were so important to the strategic and financial performance of the main business. Tenglum noted, “The acquired subsidiaries continued to be a sore thumb in terms of financial performance.”

The second company Tenglum managed was a mature brewing company, formed through the merger of two breweries. These entities had a similar history and heritage, but were competing in the marketplace prior to the merger. After the merger, the shareholders of the respective companies, through their representative directors, were acting more as brand owners than as owners of the whole enterprise. They were suspicious of each other, and this caused further problems. The company did not reduce the workforce and wound up with two separate organizational cultures, which were continually fighting with each other.

When Tenglum joined this company as a top manager, he initiated the following changes:

  1. Elevated the responsibilities of the independent directors over those of the representatives of the two former companies in order to align the board members around a common vision for the whole enterprise;
  2. Aligned the management team with this new integrated vision, and formed a culture around it;
  3. Reduced the layers of senior staff who were not contributing directly to the company’s operations;
  4. Raised management expectations in order to identify those managers who were both committed to the new vision and capable of achieving it;
  5. Allowed about 1/3 of the management team, who were committed but less talented, to retire over time with dignity – and replaced them with committed, capable younger managers.

Tenglum noted that this is a painful exercise, “but the results were great, a continuous 9 years of growth to become the market leader.” He also noted, as a bottom line, that without a massive reorganization, it is very difficult to merge companies, and quickly improve their management skills and allegiance to a viable new strategic vision.

I have had the privilege of staying close to Tenglum Low for over ten years. He is a manager who combines great capability with deep compassion. He was able to learn from his experience at Malaysian Steel, and to apply those lessons to successfully turning around a major brewery and guiding it to industry leadership.

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