If you are coming to Indonesia then you must understand the Indonesian culture; foreign companies often enter the market with the mindset that people must adapt to the company's culture but this is not the case
Jakarta Consulting Group is a leading management consultancy firm in Indonesia with over thirty years of experience. Since establishment, what have been the main strategies that have worked to expand the company and effectively position the group in the market?
Dr. A.B Susanto: The company was founded in 1983 and we are a strategic management consultancy firm. We have a variety of services with consulting being the largest area, headhunting including executive assessment and training among others. Our services are particularly valued for family business management and holding company management for mainly large (70%) and medium (30%) sized organisations. We have a branch in Jakarta and another in Surabaya.
Ms Patricia Susanto: In the next five years we have to have affiliations with international companies because this is the demand we are seeing from our clients. As our clients’ businesses grow, they must comply with international standards; many of which have not been implemented in Indonesia but are required in other countries. As there is little know-how on the matter in Indonesia, we must bring in an outside perspective. We are looking for these alliances now and are building them with those that have specific technical knowledge of these types of standards such as BS 9000.
We are part of the IRC network which is present in 37 countries; this is specifically for our executive search in order to support our clients should they require expatriates and personnel from abroad. We have already begun seeking international affiliations and in the next five years we expect to have a strong platform in terms of long term partnerships.
From a management consultancy perspective, what can you tell us about how your client’s needs are evolving in line with Indonesia’s rapidly changing business climate?
Dr. A.B Susanto: At the beginning our clients were mainly multinationals and they appreciated the need for strategic management services. Then we had many private organisations and after the 1998 crisis we began working with a lot of state owned enterprises. There has been remarkable growth in the past decade of SOEs and their need for strategic management guidance.
In the past, companies needed help for their management structure but now they are more advanced and have more specific needs such as leadership and process engineering. We have several projects dealing with fast growing organisations and how to cope with this kind of growth.
Ms Patricia Susanto: The demand for our services has increased and we have noticed that the second generation of business leaders coming in are much more demanding. They know what must be done and they have the know-how, but they do not have the time to implement what they want to do in their company. Therefore our services are no longer educating the client on what must be done but on implementing the system. Previously we carried out a lot of workshops and seminars particularly on corporate governance and family governance. The service has moved from theoretical to practical by understanding their business in full. This is our challenge; to improve the system and also execute our projects quickly due to the change in culture.
This speed is required as Indonesian businesses are behind other countries and must catch up quickly with their competitors.
This is the case for us too; there is an increased presence of multinational management consultancy firms in Indonesia so we must stay ahead in knowing the Indonesian business culture. The business environment is changing rapidly for the private sector but also for the government sector, albeit at a slower pace.
Ms Patricia Susanto: At the moment our services are concentrated on business expansion; particularly for financial services. We created Grow Asia Capital in a move to meet specific needs related to financial services.
What advice could you offer to foreign companies looking to set up in Indonesia and gather together a strong team of human resources?
Ms Patricia Susanto: If you are coming to Indonesia then you must understand the Indonesian culture; foreign companies often enter the market with the mindset that people must adapt to the company's culture but this is not the case. We have seen very bad cross cultural conflicts among foreign companies in Indonesia due to poor communication. Companies need to invest in both their expats and locals on their cross cultural understanding as well as the culture of the company. We provide training on this and assist them in understanding the Indonesian culture.
This means understanding how Indonesians work; in a group there are often unidentified leaders who do not hold a position of seniority but hold a high position in their community. Another area of the culture is giving; over Ramadan it is a common procedure to provide a bonus and sometimes gifts to employees. Although this is a practice that is often not permitted by foreign company regulations, a failure to respect this tradition can be regarded negatively by local human resources.
In the highly competitive management consultancy industry with the presence of major multinational companies in the sector, how does Jakarta Consulting Group differentiate itself?
Ms Patricia Susanto: We have the local know-how but so do our competitors. What we do offer is that as a local company we go the extra mile for our clients as we do not have the global brand that other companies may have. Therefore when we do a survey we go into the field and get real insights in a short amount of time, going further than our competitors.
Ms Patricia Susanto: Indonesia is a growing market that has been poorly understood. Issues such as corruption and bureaucracy are being improved but this is not being exposed. The market is growing rapidly and coming in now is the best time as things such as property and land for agribusiness are still reasonably priced. The culture is highly diversified and must be understood but we are on the right path, so now is the right time to enter the Indonesian market.
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