Posts tagged: Transformation

All citizens expect governments to make choices that are in our best interests, improve the quality of life within the country, and be transparent and upfront about the changes they would be making. The difficulties faced today by governments (and organisations alike) isn’t in the crafting of policies or plans but in implementing said policies to ensure that results or outcomes are delivered.

Several governments have begun utilising the idea of delivery units to overcome this implementation gap. In the UK for instance in 2001, the Prime Minister’s Delivery Unit (PMDU) was set up under then-Prime Minister Tony Blair’s cabinet to provide support and scrutiny across issues in the education, health, transport and justice sectors. Its efforts produced strong results. For example, dropping the number of patients waiting in emergency rooms for longer than four hours from over 23% to 2.3% in just two years. PMDU became a pioneer of the delivery unit model, starting a trend of delivery units being founded by governments seeking to enact and implement transformations of their own. The past two years alone have seen delivery units spring up in multiple countries in Europe, the Middle East, Asia and Africa.

Figure 1: Locations of delivery units in Latin America, the Caribbean and the world[1]

What is a delivery unit?

Delivery units are teams that concentrate on developing, implementing and monitoring transformational projects. Typically deployed by governments, they can operate at the state, local or national level to help ministries and government units monitor high priority policies and ensure the performance of these policies are on track.

These teams are small and highly skilled, able to gather and analyse a constant stream of performance data and watch out for any roadblocks. In the event that the desired results are not materialising on the ground, the teams will investigate and intervene. Some also scrutinise policy proposals to see whether implementation plans are feasible, and address delivery capability gaps in the public sector workforce through activities such as training and co-designing implementation plans.[2]

Do delivery units work?

Today, delivery units are an effective government implementation support that delivers measurable outcomes. While there is genuinely global appeal around the delivery model, as with any unit tasked to effect change, criticism is sure to abound – most of which surrounds sustainability of such units. Reports show that many of these new units have limited timescale of operations and in doing so, much of the criticisms are on “what happens next?” Like any other tool, understanding both the origin of delivery units and the value they bring will enable governments and organisations alike to use them to the best of their ability.

Below are the top four criticisms of delivery units and how to make them work for instead of against you.

1. Delivery units don’t last.

A report from consultancy firm Acasus points out that every delivery unit established more than ten years ago has been closed down, including those in the UK, the Netherlands, Indonesia, Australia (Victoria, Queensland and Canberra), Sierra Leone and Maryland.[3]

Figure 2: Location of past delivery units[4]

The thing to remember is that delivery units are not designed to last for years or ad infinitum. These units aren’t government departments; they’re formed specifically to work on a particular programme and should or will be disbanded once the project is done. Part of the mandate of delivery units is to build capacity and transfer their knowledge to existing government units who can carry on the methods and mindsets instilled. In this way, the results-oriented culture continues even after the unit has been disbanded.

In light of this, the measure of success for delivery units shouldn’t be in their continued existence or the length of their service, but the outcomes they deliver. For example, a delivery unit in Pernambuco, one of Brazil’s most violent states with 4,000 deaths a year, introduced the ‘Pact of Life’, a strategy improving data-gathering for decision-making used in weekly meetings organised by the delivery unit.[5] As a result, there was a 27.1% drop in the number deadly and violent crimes between 2007-2014. In contrast, the number of homicides in neighbouring states increased.

2. Delivery units are overly dependent on political backing.

Delivery units are often established by and report to the highest tier of governance; because of this, they depend on the authority invested in them by the leadership to function effectively. In Sierra Leone, the delivery unit introduced periodic reviews and increase accountability as part of its mandate to improve the ministries’ monitoring and follow-up capacities. Due to the unit’s location in the president’s office, they were able to substantially improve coordination amongst ministries and improve their ability to promptly identify bottlenecks and problems requiring presidential intervention and to adjust their strategies accordingly.[6]

Critics have pointed out that the delivery model falters when there is an administration change or when a transition of power occurs. In actual fact, there are delivery units who have survived transitions of power; it’s just the direction or the programme that changes. For example, Australia’s Cabinet Implementation Unit became the Strategic Co-ordination Unit after ownership was transferred to the Prime Minister’s Office.[7] Ownership aside, its responsibilities remain the same: to provide high-level, strategic policy advice and coordination. Delivery units are there to ensure that whatever was already planned would be implemented. They assist governments and organisations to deliver on the high-impact socio-economic outcomes which benefit both the public and business community. Transitions of power aside, the agenda to deliver impactful results should always be paramount.

3. Delivery units overpromise

Claudio Seebach, from the President’s Delivery Unit in Chile, remarked that “on one side, stretch targets help persuade people to work hard to get things done. But on the other side, you can aim too high and miss, or if communicated badly, people take what you achieve for granted so it is a fine line to tread. This means that you also need clear accountabilities – so everyone knows who is doing what.”[8]

Once the true north has been broken down into manageable, achievable parts, it is easier to see what progress has been made so far and how much is “too little”.

The Performance Management and Delivery Unit (PEMANDU) in Malaysia became a globally recognised and acknowledged expert in addressing Claudio’s comment. During their time within the Prime Minister’s Department of Malaysia, they had utilised their proprietary “lab methodology” to ensure that all stakeholders, from ministers to private sector and subject matter experts were brought together into a lab to discuss and collectively resolve issues at hand by implementing a 3ft programme geared at achieving outcomes.[9] The lab allowed these key people to pool their knowledge together, find solutions and agree collectively on how to move forward. This model is today adopted in several countries.

4. Delivery units are just a form of government propaganda

One of the greatest challenges facing governments is keeping up with public expectations of transparency and accountability. When the transformational agenda is not credible in the eyes of the public, it is seen as political propaganda and the veracity of the data produced during the project is questioned. Thus, even if positive results are achieved, the delivery model becomes discredited in the eyes of both the public and heads of governments. Wales’ First Minister’s Delivery Unit – now defunct – was regularly criticised for being “shrouded in secrecy” due to a lack of public awareness of its activities other than just giving Welsh leader Andrew RT Davies “a heads-up when he’s about to face criticism”.[10]

Regular progress updates are critical. Few countries publish annual reports on what has been done during the year or invite external review of progress made which does little to encourage transparency. Understanding this, many units today are proactively publishing information on the projects and providing stakeholders – including the public – with access to delivery plans and performance data. This has been done through mechanisms such as:

Table 1: Transparency initiatives undertaken by delivery units[11]

In Malaysia, PEMANDU overcame this by developing a public sector communication programme, holding several open days where citizens were exposed to the strategies and initiatives for the country’s National Transformation Project. Delivery unit members as well as policymakers were present during these events to answer questions and collect feedback from the public. PEMANDU believed that by doing this, the public would be fully informed of the plans made on their behalf and could keep the government accountable should progress on these goals falter. Furthermore, after a full annual cycle of implementation, annual reports illustrating the achievements, challenges and way forward are published to demonstrate greater transparency and accountability. Today, open days and annual reports are recognised as important steps in their Big Fast Results (BFR) – 8 Steps of Transformation™ Methodology when working with international governments and businesses.

On the value of delivery units

Acting more like policy SWAT teams deployed to expedite results, delivery units aren’t meant to change a whole country overnight. Their value lies in getting specific policies implemented and changing the culture of a government towards one that is results-driven, accountable and transparent. They can be used to break stakeholders out of their silos and bring them together to work on one common goal. Used correctly, the delivery unit can be a government’s best tool to bridge the implementation gap.

1. Mariano Lafuente & Sebastián González (2018) Do Delivery Units Deliver? Assessing Government Innovation, IDB Technical Note [1]
2. The Mandarin, 2017 [2]
3. Acasus, 2017 [3]
4. Institute for Government, Tracking Deliveryreport [4]
5. Mariano Lafuente & Sebastián González, 2018 [5]
6. Ibid. [6]
7. Institute for Government, Tracking Delivery, 2017 [7]
8. Centre for Public Impact, 2016 [8]
9. To read more about PEMANDU’s lab methodology, read the World Bank report here: http://www.worldbank.org/en/country/malaysia/publication/driving-performance-from-the-center-malaysias-experience-with-pemandu.[9]
10. Andrew RT Davies, 2015 [10]
11. Institute for Government, Tracking Delivery report, 2017 [11]

Popular science educator and children’s show host, Bill Nye, appeared on Last Week Tonight Sunday on May 12, 2019 to deliver an extremely blunt and expletive-laden message to hammer in the point that climate change has very real, very dire consequences. By the end of this century, if carbon emissions keep rising, the average temperature could rise another 4 to 8 degrees, or as Nye put it, “the planet’s on [expletive] fire.”[1] Dire warnings aside, Nye’s message is meant as a rallying call to spur countries and companies alike to action: the world is out of time, so what are we going to do about it?

Malaysia’s struggle with climate change

Malaysia positioned itself within the global climate change debate as early as 1992. When Prime Minister Mahathir Mohammad addressed the Rio Earth Summit then and spoke about the concerns of developing countries having to cut back on development to be more environmentally sustainable, he also advocated Malaysia’s willingness to play its part by signing international environmental agreements and pledging to keep 50% of its total forest cover.

However, domestically, these international agreements were not robustly supported by national policies. The question of environmental protection was – and still is – a sensitive issue in Malaysia as part of a larger debate over resource allocation. Malaysia is still a developing country that depends heavily on its natural resources to fuel development and economic performance. Many business groups still pursue profit over sustainability and the need to adhere to environmental policy, but this trend is seemingly changing today. Investors are increasingly focused on sustainable business strategies and pushing businesses to integrate sustainability into their core business strategy.[2] The challenge ahead is turning this talk into big, fast results.

Towards a results-based sustainability agenda

The reality we face is that addressing climate change isn’t going to be free or easy; it will take making some very tough choices every day for things to change. As the debate over the Green New Deal rages in the US, other countries are beginning to push their versions of a new green agenda.

And the good news is, governments will not be fighting the good (green) fight alone as companies have also started to incorporate more sustainable habits into office culture and business practices.

The team at PEMANDU Associates have always been driven to address one main question when embarking on any transformational journey with our clients – how can we deliver the biggest results, in the shortest period of time? Why the haste? Because the time we spend with each client is limited, but also because big problems often require radical changes. And this should be no different when it comes to climate change. Governments and companies alike can benefit from a results-oriented approach to their respective efforts to perpetuate the green agenda. All this begins with setting a clear true north.

The game of the impossible

PEMANDU Associates believes that real transformation begins with setting an ‘impossible’ target or what we call ‘the game of the impossible. We encourage our teams and clients to shoot for the stars because even if they miss, they’ll at least land on the moon. Once the target is set, the next step is to plan a detailed action plan, prioritising the initiatives that would move the needle quickly.

In the context of climate change, the game of the impossible has already been set: stop global warming. The ‘how’ has already been answered in two international agreements. The Paris Agreement sets the goal of keeping the global average temperature to below 2°C above pre-industrial levels. The UN Sustainable Development Goals (SDGs) created a blueprint that addresses 17 goals targeting everything from responsible consumption to protecting life on land and below water.

Several Malaysian-based companies have made great strides in using the SDG blueprint to guide their business practice towards a more sustainable future. One of them is conglomerate Sunway Group which issued its first sustainability report in 2011, disclosing the company’s performance on economic, social and environmental issues, and has since publicly adopted the SDGs into company policy and public relations. As a conglomerate focusing on property development, one of the goals that Sunway focuses on is Goal 11, building sustainable cities and communities, which has resulted in its flagship township being branded a green, low-carbon city – a first in Malaysia.

Another is DiGi, Malaysia’s telecommunications giant which has committed itself to minimising its carbon footprint following Goal 12, responsible production and consumption. Its climate strategy focuses on energy efficiency as a way to manage the use of natural resources and balance growth with sustainability. Conscious of the growing amount of e-waste, DiGi has set a target to achieve 100% recycling rate of decommissioned electrical and electronic equipment to be disposed of safely by licensed vendors.

Track. Review. Tweak. Repeat.

In light of an ever-changing landscape, organisations need to adopt an attitude of what we call ‘recursive problem solving’ – this means having the self-awareness to know what is working, what isn’t and what measures can be put in place to turn things around. To do this requires frequent validating and verifying of results. Keeping track of data and results, whether by the organisation or a third party, will measure how close we are to the true north.

For businesses who are committed to becoming more environmentally sustainable, this is already being done though sustainability reporting, which has been made mandatory for all Malaysian businesses since October 2015. Countries, however, are not obliged to make such reporting public. The UN has set up a voluntary review mechanism as part of the SDG agenda and have encouraged countries to conduct regular and inclusive reviews of progress done as a way to keep track of what has been done so far. However, this process is optional and, in a way, detracts from the momentum created by the blueprint.

There also needs to be a way to track the overall effect that these sustainable development initiatives have had. Currently, there is no mechanism that tracks the overall progress made on the environment as a whole and it is difficult to know whether these changes are making a difference. Without being able to see the overall progress, it is easy to get disillusioned and de-motivated to make those hard choices that climate change action so desperately needs. If we can track how even a small change – like for a business to go paperless or for a family of three to change to a zero-waste lifestyle – contributes to preventing the increase of carbon emissions, we can expect to see a lot more buy-in from companies and communities alike.

Making the tough choices for a greener world

In October 2018, the United Nations (UN) Intergovernmental Panel on Climate Change released a report detailing how limiting global warming to just 1.5°C could make a life-or-death difference in the next few decades for people and ecosystems everywhere. While the report states that the 1.5°C target is possible within the laws of chemistry and physics, it also noted that to do so will require unprecedented changes which are unlikely to happen given today’s political climate.

Sustainability is more than just CSR or a philanthropic exercise; it means creating long-term value by considering how we live and, will continue to do so, in the wider ecological, social and economic environment. Bill Nye reminds us that the climate is changing and it’s our fault – time to get to work on this. We are already halfway there; the impossible goal has been set and we have (several) roadmaps ready to go. Right now, implementation is on-going but slow in some areas.

Fighting climate change will require everyone to make some tough choices. But the good news is that with the right structured approach in place, we can be better equipped to stay the course towards the end goal of creating a sustainable and green world.

1. CNN, 2019 [1]
2. Eco-Business, 2018 [2]

Forest, the New Economy

As climate change concerns grow and increasingly weighs itself on policymakers globally, PEMANDU Associates saw an opportunity to exercise their Big Fast Results (BFR) Methodology – 8 Steps of Transformation^© to work on a project that could facilitate the creation of a forest restoration-based economy right here in Malaysia. The lifeblood of the firm is what we call “the game of the impossible”. And this project was one more for the books.

Working closely with Tropical Rainforest Conservation and Research Centre (TRCRC), it was evident their passion for conservation was rubbing off on the PEMANDU Associates team, who were equally excited embarking on this unique project that focused on protecting the environment.

TRCRC had an archive of data and expertise in collecting, germinating, propagating and reintroducing local plant species back into the native habitats. Ultimately, the end goal was to preserve and conserve tropical rainforests in Malaysia. This knowledge and expertise enabled us to prepare an action plan and communicate said plan to relevant stakeholders – crucial steps in our methodology.

Source: The Sustainability Consortium (2018)

Sitting down with TRCRC, the team came up with the plan to promote forest restoration as an economically viable and sustainable alternative to monocrop plantations. Land in Malaysia is a premium resource, and sustainable land-use is crucial to enhance economic and social benefits. The answer was to create a new economy around forests, ensuring their protection as well as unlocking their potential as valuable resources. At a glance, the Forest the New Economy lab proposed to:

• Revive and restore degraded land – Degraded land is land that has lost some of its natural productivity due to human-caused processes. This includes abandoned land as well as land that has become unable to support the growth of cash crops.
• Introduce eco-tourism and agro-forestry as other sources of revenue that can support conservation activities while still being environmentally sustainable – Malaysia has a woefully under-supported eco-tourism industry that can easily be expanded upon to take advantage of the country’s lush natural resources. For people who enjoy the outdoors, it is a shame that eco-tourism isn’t higher on Malaysia’s list of attractions.
• Explore downstream opportunities where sustainably-managed natural resources can be used for biomass production – While the main focus for Forest the New Economy is forest conservation and restoration, biomass production can be a side product that could turn into a ready source of renewable energy for when the country is ready to make that transition away from fossil fuels.

A common challenge with working on environmental projects in general is getting buy-in from everyone involved. The lab is purposely designed to gather all stakeholders into one room for the duration of the project as a way to facilitate discussion and arrive at a resolution. (Our CEO, Dato’ Sri Idris Jala calls this the ‘Hotel California’ effect, borrowing from the famous line, “you can check-out anytime you like, but you can never leave”.) However, given the vast geographical make-up of our stakeholders for this lab, we did not have the luxury of gathering them in a single location. While the team had planned for that, this wasn’t without its challenges. Initial meetings took place in the Klang Valley, but as the circle of stakeholders expanded, so did the locations of subsequent syndications with the team travelling from one part of Malaysia to another to meet their stakeholders over the course of the lab. From Kuala Lumpur, the team travelled to other states like Perak, Sabah and Sarawak over the course of a month. Nonetheless, despite the logistical changes, we were able to stay the path to meet the desired outcomes of the lab.

The beginning of a new, greener Malaysia

It’s been about a year and a half since the lab took place. To say that this lab has irrevocably changed the future of Malaysia’s forests would be a bit of a stretch – much still needs to be done and new policies would need to be drawn up and enforced.

However, the stakeholders were and remain confident that the lab has given the project a solid foundation to provide a good push in the right direction. In fact, since the conclusion of the lab, several Memorandums of Understanding (MoUs) have been signed with key stakeholders – including one with the Sabah Forestry department to start the project which was signed at the end of October in 2017.[1]

The same year, another MoU, was signed between TRCRC, University Putra Malaysia, Cirad, and Biodiversity International to collaborate and share knowledge on conservation with an end goal of developing a more holistic and coordinated forest restoration effort.[2]

The project itself is continuing under TRCRC and looks to be gathering more momentum amongst public and private sectors, and landowners alike. Progress has also been helped along by a sense of renewed public interest and global concern about the dangers of climate change which has led to more voices, not just from civil society, calling for a greener Malaysia. There’s still a lot more that needs to be achieved before the first forest is replanted, but PEMANDU Associates is indeed grateful to have played a part in this national movement to preserve Malaysia’s forests.

1. Sabah Times, 2017 [1]
2. Cirad, 2017 [1]

Unemployment, especially amongst Malaysian youth, is rising. In fact, youth unemployment in Malaysia has been at a high of over 10% for the past two years in a row, reaching 10.8% last year. In 2017, graduate unemployment in particular constituted about 40.5% of total unemployment in Malaysia. This pegs Malaysia with the third highest rate in ASEAN – in comparison, the global youth unemployment rate was at 13% in 2018, three times higher than the figure for adults which was at 4.3%.

This isn’t a new problem. Malaysia has been struggling with the issue of general unemployment for years – youth unemployment has been above 10% since 2001. Generally, a high youth unemployment rate shows that many young people today are getting a slow start in the job market which may cause them to earn lower lifetime earnings. As unemployment rates tend to increase during a slowdown in emerging economies like Malaysia, we could very well see even more youth out of a job. After all, youth have always been most vulnerable to economic downturns – often the last to be hired and first to be made redundant because due to the age-old adage of a ‘lack of experience’.

Malaysians have been talking about youth unemployment for years with varying levels of patience. However, is it fair to blame it all on a “mismatch” of skills or “lazy millennials”? Or is youth unemployment a deeper issue that exposes gaps in the overall school-to-work system?

A Catch-22

Most often, we have teachers, universities and employers pointing fingers at each other trying to blame the other for producing sub-par graduates. While employers often blame the educational system as a whole for not adequately preparing graduates for the workforce, some of that blame comes down on the students themselves for being unwilling or unable to perform suitably.
 

In some reports, employers have been quite scathing about the apparent unsuitability of fresh graduates to meet the standards of the workforce, citing reasons such as unrealistic expectations and a lack of soft skills.

Malaysian Trade Unions Congress president Datuk Abdul Halim Omar has remarked in the past that graduates have poor knowledge of what is needed in the field, making them unused to job requirements and make unrealistic demands regarding their starting salary and working hours.[1] The recent Job Outlook Report 2019 by JobStreet Malaysia noted that 68% of employers complained that fresh graduates were asking for “unrealistic” salaries and benefits – instead of asking for higher salaries, JobStreet advised fresh grads to adjust their expectations according to the expected salary level offered for that particular job.[2]

Other complaints lodged by employers include the lack of adequate communication skills of Malaysian graduates as well as the inability of graduates to think critically, creatively, and work independently. Graduates may be equipped with the right knowledge related to their field of study – the hard skills – but soft skills, such as the ability to communicate what they know in an effective and convincing manner, are often overlooked. Businesses expect that their employees should already know how to do things like speak convincingly to clients, understand and report what others have discussed, and present facts in a clear and concise manner – and usually do not want to have to train new employees.

These faults have been noted and repeated for as long as youth unemployment remains a problem in Malaysia. However, consider facts such as:

1. Most job openings in Malaysia tend to be in low-skill jobs which aren’t where most university graduates are applying. There are only a handful of vacancies for high-skilled jobs. In 2018, 76% of all job openings were in elementary occupations; in 2017, 86.3% openings were in low-skill jobs.[3] Interestingly, unemployment is higher amongst youth with tertiary qualification than those without – which means that overall, there are three times more (10.8%) jobless youth than there are unemployed adults. Could this be suggestive of a job market that does not reflect the true composition of the workforce and talent pool?
2. Because the number of high-skill jobs are low, competition is fierce – and not just between graduates. More often than not, fresh graduates are going up against industry professionals who have more work experience and related skills that will be more attractive to employers. Therein lies the catch-22; most jobs require working experience to apply but fresh graduates need jobs to get that experience!
3. There has been a decrease in starting pay over the years. For example, an average fresh graduate with a diploma could earn RM1,458 in 2010 but only RM1,376 in 2018. There was a similar decline in the same period for the average master’s degree holder from RM2,923 in 2010 to RM2,707 in 2018.[4]
4. Monthly expenses across Malaysia have also risen exponentially over the years. Considering that RM2,700 was the living wage – the income level needed for a single adult to achieve a minimum acceptable standard of living in Kuala Lumpur – recommended by Bank Negara Malaysia in 2018, this does not leave much left in terms of savings for fresh graduates who are likely earning under RM3,000 a month.
5. While soft skills such as communication and fluency of English can be taught in universities, learning continues while on the job. Often enough, companies still have to train their employees in professional skills during employment – many companies today offer on-the-job training which teaches the skills, knowledge and competencies needed for employees to perform specific jobs within the workplace. This sort of training is difficult to teach in universities without involving the expertise of industry professionals.

What can be done?

Youth today are fully conscious of the difficulty of finding a job after graduation. Many are disillusioned with the fact that despite getting top-quality education from a good university, the chances of getting a job remain a challenge, let alone a well-paying one. Even a foreign degree, once coveted and sought after by Malaysians, is no longer a guaranteed path to a well-paying job.

Students today aren’t looking for a basic education anymore. They can’t afford to. Instead, they’re looking for universities and programmes which can give them an edge when applying for jobs. In a way, getting an education has become a secondary goal after getting a decent job which ultimately, isn’t sustainable.

Therefore, how can the whole education-work ecosystem work together to get more youth hired?

Khazanah Research Institute (KRI) released a report in December last year on tackling the school-to-work transition of youth in Malaysia.[5] The report recommended strategies such as:

• Promoting the teaching of soft skills and work-based learning
• Incentivising employers to provide work-based learning
• Doing an overall review of wage levels and differentials to allow for living a fair and decent wage instead of just a minimum wage
• Strengthening bond between employers and education/training institutions to promote youth employability

Figure 1: Youth labour supply vs demand of the workforce from the KRI report

The KRI report rightfully puts part of the responsibility of turning out valuable graduates back on the employer. Isolating youth from the workforce isn’t sustainable as eventually the elder generations will retire and there will be no one to replace them.

As a consultancy that regularly hires young Malaysians as part of the team, PEMANDU Associates has a unique insight into youth unemployment in Malaysia. Spurred by a philosophy they hold to called the ‘game of the impossible’, the firm strongly believes in on-the-job training, evidenced by the fact that a fair number of our consultants started off as fresh graduates and have learned and grown with each project.

One soft skill that can’t really be taught in universities that we teach in our lab process is the ability to successfully get buy-in and collaboration from high-level policymakers and industry professionals. In that light, we believe that both universities and industry professionals should work together to offer a more comprehensive education in order to produce skilled and employable graduates.

In fact, PEMANDU Associates has helped two private universities to reform their curriculum to keep up with the changing needs of the workforce and their students. Much like the proposals put forward by KRI, the intensive labs recommended that universities today focus on offering a holistic education which focuses on enhancing employability and life skills. Holistic education was defined by the labs as an education that achieves academic excellence, life skills and emotional wellbeing, with students being taught discipline-specific knowledge, thinking and problem solving, lifelong learning, communication skills, personal and social competencies, entrepreneurialism and global perspectives – an entire package from basic tertiary education to industry experience.

Moving forward

However, one thing to note from all this is that our youth are resilient. We are seeing a higher rate of entrepreneurship and volunteerism amongst young people in Malaysia who see these activities as a viable alternative to the traditional nine-to-five job.

More youth are also shouldering the responsibility to get themselves better prepared for the workplace by joining student councils and organisations while still in university. There has been a rise in student-led associations such as AIESEC and the International Council of Malaysian Scholars and Associates (ICMS) which organise networking events, internships with leading companies to earn some of that much-needed work experience and volunteering opportunities. Such organisations can provide students with a much-needed boost to their leadership skills and career development.

Combatting youth unemployment will take an entire country, from students to educators, employers and everyone else in the community. We can already see signs that more people are taking steps in the right direction; the task now is to keep up the momentum to ensure that more of the nation’s youth will be able to make their mark in the workforce.

1. Malay Mail, 2018 [1]
2. Malay Mail, 2019 [2]
3. The Edge Markets, 2018 [3]
4. Ibid [4]
5. Khazanah Research Institute Report, titled “The School-to-Work Transition of Young Malaysians” [5]

While oil and gas remain among the top commodities in the world today, there is a growing interest in alternatives to fossil fuels which are finite and in danger of getting depleted. Just last year, the International Energy Agency announced that investment in electricity surpassed investment in oil and gas for the first time ever.

The great oil crash in November 2018 signalled a dramatic decline in crude oil prices from a four-year high to under USD$50 a barrel in mere weeks. CNN business attributed the crash to a slowdown in global economic growth as well as relatively weak demand for oil in Europe and Asia.* Is this then indicative that oil is no longer the hot commodity it was ten years ago?

Times have changed and champions of Big Oil are starting to show an interest in renewable energy and a willingness to engage with policymakers about climate issues.** The renewable energy movement isn’t just limited to America. More and more countries are seeking to seeking to reduce a dependency on fossil-fuels and move towards renewable energy.

New Zealand is one such country who made the decision to regulate (and eventually reduce) emissions of greenhouse gases as early as 2007. In April 2018, Prime Minister Jacinda Arden announced an end to further offshore oil and gas exploration and vowed to reduce the country’s net greenhouse gas emissions to zero by 2050. New Zealand is well on its way to end its reliance on fossil fuels as its main source of energy as the country already obtains 80% of its electricity from renewable sources.

However, the next big challenge is faced by industries and products that rely on fossil fuels. Where does this change to renewables leave the energy companies who specialize in oil and gas? Will they be left out in the drive towards green and renewable energy?

Playing the Game of Impossible

While this shift away from oil and gas dependency itself is certainly challenging, PEMANDU Associates believe that it is possible to diversify and conduct feasible as well as profitable turnarounds.

As the saying goes, ‘acknowledgement of a problem is the first step towards its solution’ – first, companies should understand that their problem is only going to get worse as more countries start to remove their dependence on fossil fuels. The next step is to robustly assure a state of readiness.

PEMANDU Associates’ experience in utilising its proprietary BFR (Big Fast Results) Methodology to enable clients to define and achieve their goals with the 8 Steps of Transformation ©, has been key in assisting governments like Malaysia and Oman in diversifying their economy from oil & gas dependency. The oil and gas industry is one of Oman’s primary industries, with petroleum products fuelling the economy and enabling Oman’s development over the past 30 years. This dependence on oil subsequently caused Oman’s economy to be greatly affected by the 2016 global drop in oil prices. As a result, the government initiated the Tanfeedh programme aimed at unlocking the non-oil sector. Tasked with diversifying Oman’s economy, PEMANDU Associates suggested developing sectors such as manufacturing, logistics, tourism and fisheries – all of which were earmarked as having high potential – as well as holistically governing Oman’s energy sector.

PEMANDU Associates has also utilised the same methodology to enable private sectors in that particular field to enhance their downstream operations; the Pengerang Integrated Petroleum Complex, for example, was a recommendation by our team to serve as a centralised storage facility for the petrochemical industry. The facility was built as part of a public-private partnership between the state government, Petronas and foreign investment.

In 2018, PEMANDU Associates was tasked by an oil and gas company in New Zealand to facilitate a strategic workshop to identify a feasible turnaround strategy for the company in the shortest possible time. This was underpinned by a true north of steering the company away from oil and gas dependency.
 
 

To get the needle moving, the three-day strategic workshop involved 30 participants from the top levels of the company with a total of 720 total man hours of effort.

Prioritisation is a key component of our methodology. With that, the workshop focused on key enablers that would yield real outcomes for the company. These included expanding into new markets within the industry by offering new products, identifying new markets and client demographics, and diversifying the company’s business portfolio by applying existing competencies to a different sector.

The workshop generated 34 business ideas which were categorised according to impact and feasibility: 20 ideas were classified as ‘Breaking New Grounds’ ideas; and 14 as Business Opportunities for deprioritised ideas. PEMANDU Associates recommended that the company continue with the BAU ideas they had already planned for, but spice things up by adding fresh ideas to elevate the company beyond the norm.

Fresh eyes, bold new ideas

PEMANDU Associates believes that the only way for oil and gas companies to diversify is to expand into new markets or look for fresh opportunities in new industries. As the client already had experience in construction, most of the high priority suggestions were aimed at strengthening its foothold in the construction industry while scaling back its oil and gas operations.

The top new idea suggested was to expand into waste management by repurposing waste into building materials. With China’s plastic waste ban that started in January 2018, countries around the world are scrambling to find a substitute for China, turning instead to Southeast Asia. However, Southeast Asian countries are now following China’s example and closing their doors to waste imports – starting with Vietnam in July 2018, Thailand and Malaysia in October 2018 and now the Philippines in January this year. New Zealand previously shipped 15 million tonnes of waste plastic a year to China, which means that there will be a serious plastic waste build-up very soon if alternatives are not found. Repurposing plastic waste into building materials is an innovative and green alternative that can reduce the amount of discarded waste through a low energy and eco-friendly recycling process.

Another opportunity suggested at the workshop was to provide modular residential housing by incorporating industrial building system (IBS) techniques when building housing units. This was in light of construction trends in the region revealing a concentration of construction activity in the residential sector. And on top of that, the government’s recent launch of the KiwiBuild program which aims to build 100,000 quality affordable homes for first home buyers within 10 years. With IBS techniques, units would be built in the factory and assembled onsite – meaning that units could be built faster, cheaper and still allow for flexibility in design.

Towards a new horizon

While it is still early days yet, suggestions from the workshop were well received by the client who is now in the process of implementing the initiatives in phases in the next 5 years. Part of the PEMANDU Associates process is to aim for the seemingly impossible while making significant and regular progress along the way.
 
 
 

In this case, the goal was not to entirely discourage the client from continuing with its work in the oil and gas industry, but rather, to offer fresh new ideas to diversify and expand its horizons with greater confidence beyond their original industry.

Source: *CNN Business, **Bloomberg