Michael D. Ruslim, Captain of a Huge Ship: Astra Group

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Looks can be deceiving, so never judge a person from their appearance, such as from their clothing, footwear, glasses or hairstyle. Many important and powerful people dress simply, just like regular people. This applies to Michael D. Ruslim, chief executive officer of the Astra Group, one of Indonesia’s business giants in control of dozens, if not hundreds of companies, ranging from automotive companies to oil palm plantations and employing no fewer than 120,000 people.

The figure could be three or four times more than that if vendors of vehicle components, authorized workshops and retailers selling Astra’s products were taken into account. Thus Michael could be considered the captain of a huge ship.

Despite his high position, Pak Michael, which is how his employees and fellow directors address him, remains modest in fashion and in word. “I’m but just one of Astra’s components,” said the executive, who earned a Bachelor of Science degree in industrial engineering from the University of California at Berkeley, U.S., and an MBA in finance and operations research from the University of Wisconsin, Madison, U.S.

Upon the completion of his MBA program in the U.S., Michael returned to Indonesia and worked at Citibank NA, Jakarta from 1978 to 1983. His last position at the foreign bank was Investment Banking Division head. Then he moved to Astra and was placed in the company’s finance division. Michael said, however, that he never dreamed of being appointed the top gun in this highly diversified business group.

His observant mind, perseverance and agility were already apparent early in his career. While he was at Citibank, for example, Michael, who was born in 1953, already had a far-reaching vision about his future. If he remained at Citibank, the highest position he could possibly attain would be the second position as the top position would always go to an expatriate. “And at that time I wanted to work only in Indonesia, so I looked for opportunities outside of Citibank,” he said.

His decision to move to Astra proved wise. The finance division where he was placed was directly involved in the restructuring of Astra in the early 1980s. Om Willem, then the owner and top leader of Astra International (AI), was developing his business in the financial, agricultural, manufacturing and infrastructure sectors. “I was part of this business development,” Michael said.

Michael dealt well with every challenge that came his way. He felt at home at Astra despite the many challenges he faced because of a favorable working environment and strong teamwork. One of the major challenges that AI faced during the financial crisis of 1997-1998 was mounting debts of US$1 billion while the sales of motorcycles and automobiles dropped substantially. “But with our strong fighting spirit as a solid team, we continue to overcome adversity even today,” he noted.

Another thing that has shaped Michael into the person he is today is the corporate values of this group. He has carefully observed the ups and downs of AI’s business over the last 30 years, during which the company’s shareholders have been replaced several times. “This experience shows me that Astra has a good working pattern, cultural foundation and philosophy,” said Michael, a father of two and an avid reader.

Michael was referring to the company’s Sapta Dharma philosophy. AI used to run various types of businesses but later decided to focus on just four areas. The first area is the automotive chain, from the upstream part of the business to its downstream part, namely from auto parts to auto finance and insurance, including Toyota Astra Finance and Astra Buana. “AI’s business in automotive is focused on distribution and manufacturing. There are no automobiles with an Astra trademark, though,” said Michael.

The second area is agribusiness, with Astra Agro Lestari as the spearhead. The third area is mining, spearheaded by United Tractor, which sells tractors and heavy-duty equipment for the mining, forestry and infrastructure industries. It also sells mining services. Under the flagship of Pama, this mining part of the group controls a major share of the Indonesian market (40 percent). “Pama does not control any mining sites but if there are opportunities, AI could buy them,” Michael said.

AI is also involved in infrastructure such as toll roads and water. In this respect, AI is motivated by a desire to help the government build the country’s economy. AI’s involvement in infrastructure is relatively recent, though. “We try to learn from the Tangerang-Merak toll road, which is operational, and also from Palyja clean water,” said Michael. “We have bought both in the context of preparing our competence in infrastructure and gathering experience in this field.”

This year AI celebrates its golden anniversary but the group did not go all out to celebrate owing to the occurrence of various disasters, such as floods and earthquakes, for example. When asked in what direction he would take AI in the future, Michael said, “I don’t have any personal ambition but as a CEO, basically I will try to honor the trust given me. I will try to build Astra just like Om Willem did before.”

On his management style he said, “I would like to see continuity but certainly it is not a status quo. When there is continuity, we have to keep abreast of changes. I have the responsibility to bring AI to the next stage so that AI can quickly develop and be something like a banyan tree that shelters many people.”

AI principles, he added, are supported by the 3 Ws, namely a winning concept, a winning system and a winning team. To make all the plans come true, Michael stresses the significance of communication, especially two-way communication. Communication is important in social and organizational relations as well as in relations with fellow principals. “Communication allows us to understand the other party. It helps us understand why someone asks for this or that. Perhaps we won’t come to an agreement but at least we understand each other,” Michael said. “Understanding leads to trust,” he added.

Aminuddin, senior vice president and corporate secretary of AI, confirmed that Michael always stresses the significance of communication. “He always says ‘If our employees do not understand, how can we reach our target?'” Aminuddin said, quoting his CEO.

To ensure there is two-way communication, Michael holds a meeting of the AI board of directors twice a week. These meetings discuss things related to business strategies. Michael also tours the regions, visiting AI’s branch and sub-branch offices, two to four times a year. In his regional tours, Michael, who takes along a core team of directors, meets employees and conveys to them the company’s vision, mission and plans.

Another principle that Michael strongly adheres to is that he always works under one system. “This principle also conforms to the Japanese culture, which believes that plans are important and can be implemented,” he said.

Michael maintains that there are problems with any position but it all depends on the attitude of the individual coping with the problems. When the government decided to raise fuel prices, for example, the public’s purchasing power became weaker. Then there were also problems when the Toyota and Daihatsu principals opted for restructuring. However, nothing specific has caused difficulties for Michael. He faced all these problems unwaveringly and resolutely.

“We must try but we also must let God decide. That’s why I try not to get stressed or I could make the wrong decisions,” said Michael, who, regarding this principle, acknowledged the influence of Subagyo Wiroatmodjo, his first superior. Michael learned how to analyze a problem from Subagyo so that other people could understand it and help solve it. In the 1980s, Michael used to exchange ideas with Edwin Soeryadjaya, one of the children of AI’s owner, Om Willem, who was also his friend and partner.

Michael also specifically mentioned Teddy P. Rachmat, former AI president director, who always stuck by him whenever they had to agree on an important step to take. From someone far senior to him in Citibank, he learned about the courage to make a decision or take a stance. (Lily G. Nababan and Ardimas Sasdi)

The Jakarta Post, April 4, 2007  

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