The old clubby way will not do MAS any good

SEEKING TALENT: MAS' search for a new CEO who can rally the troops while making changes to rescue it should be not only far and wide, but also unharried. PHOTO: REUTERS


    Aug 26, 2014

    The old clubby way will not do MAS any good

    THE hunt for the person who will lead beleaguered Malaysia Airlines' (MAS') major cleanup is no ordinary chief executive search.

    The country's flag carrier is not only bleeding badly, it is broken - and understandably so.

    It has lost 27 of its own people and 510 passengers from many nations in two recent tragedies involving its planes.

    Amid the debris of human despair and left at a forlorn financial crossroads, the airline needs hope: Hope that can stem only from the helm.

    For that reason, the search for a new CEO who can rally the troops while making wrenching changes to rescue the airline should be not only far and wide, but also unharried.

    Picking a CEO from the relatively limited coterie of government-linked companies (or one who has helmed the company before) signals the very opposite.

    This may be the right time for clubby Malaysia Inc to rewire its insular culture in hiring top executives and widen the net to not just non-Malays - it did this back in 2005 when turnaround specialist Idris Jala, a Sarawakian Christian, was appointed to rescue cash-strapped and loss-making MAS - but also foreign experts.

    The high-pressure job to yank MAS out of the doldrums may not be a coveted job for the fainthearted.

    But surely there must be gutsy executives or industry lifers (including those who have retired from the industry) who thrive on such a challenge.

    Casting the net too close is not going to see a suitable candidate turn up on the CEO shortlist: One who can dive straight into the carrier's operational and financial trenches.

    The past 10 years have been turbulent for MAS, half of that period spent in losses while four bosses have walked in and out of its C-suite.

    This explains the countless revamps it has executed (a new chief is always inclined to pitch his own reform agenda), all of which were unsustainable or failed.

    Two things have remained the same, though: One, state-owned Khazanah Nasional, which is now planning a RM1.5 billion (S$592 million) buyout of the carrier, has remained its controlling owner; and two, MAS has never had an airline expert in the top post.

    In stark contrast, all of Singapore Airlines' (SIA's) bosses - since it broke away from its predecessor Malayan Airways and undertook a series of restructurings that culminated in its creation in 1972 - were not only insiders, they each had decades of operational experience before swooping up to the perch.

    Suffice to say, this has proven to be a fruitful strategy for the carrier.

    If Khazanah is serious about rescuing the ailing carrier (which is set to suffer its fourth straight year of losses, exacerbated by the two tragedies in March and July), it needs to dramatically shift MAS out of its old ways.

    A foreign expert or outsider could lend a fresh and unemotional perspective in resolving MAS' dilemma - not one who is seasoned to think like Khazanah (for what would be the point of that since Khazanah has shown its lack of aptitude to clean up MAS in the past?).

    MAS' eventual redemption (if it happens at all) will carry the feel-good hum of renewed national pride, regardless of who steers it back to profitability.

    Think Japan Inc.

    Traditionally loathe to give up management control to foreigners, it placed Howard Stringer in the top job at Sony and Carlos Ghosn at Nissan.

    Four years ago, it overcame its stigma against bankruptcy when struggling Japan Airlines (JAL) - deemed one of the country's biggest corporate flops - filed for bankruptcy protection.

    Post-rehabilitation and some two years and eight months later, JAL was all spruced up to woo investors' monies again for a relisting.

    Under siege, Japan Inc was willing to go out on a limb to save its corporations.

    Sadly, Malaysia Inc has yet to show similar gumption.