(Writer’s Note on 18 Feb 2015 – I have since changed my mind about Goh Choon Pong, the chief executive of Singapore Airlines. I will keep this original comment below as a record of where my perception was in 2013. Please go tot he bottom of the page to read how Goh Choon Pong has proved me wrong.)
Since the time of his appointment in 2010, I have had my reservations about the current chief executive of Singapore Airlines. Chosen from a lineup of equally geekish peers, his name is difficult to remember only because it did not come with a personality that made him memorable.
Still I had asked myself if I was being too harsh, too judgmental or too preemptive, in making this assessment? So I gave my thoughts some time to fester before writing these comments. What I have to say now is that the choice of a chief executive is reflective of the priorities of a board, and it tells us more about the influence of the board and the key shareholder in a more profound way than either would like to reveal.
It is popular for example, to berate Chuck Prince and subsequently Vikram Pandit, in their roles as chief executives of Citibank during its most tumultuous times. All eyes were on their leadership styles, their quirks, their goofy statements, and perhaps most importantly, their lack of understanding of the core business they were chosen to lead.
In reality, all eyes should have been on the board. Why did the board of Citibank deliberately choose two clear outsiders, when the bank was filled with layer after layer of superior quality senior managers with the bench strength to actually run the organization, and especially during its darkest days? Superficially, in selecting Prince, the board could argue that compliance was the biggest priority and in selecting Pandit, the board could say that the management and divestment of assets were the biggest priority. But secretively, the board could have had other agendas that was never quite revealed, and it got away with not being probed as deeply as the gentlemen it put in place.
In the same way, we have to ask, why did the board of Singapore Airlines choose such a colourless personality to lead what is in effect the pride of a country’s asset – it’s national airline? Someone whose first media interview as CEO involved his press manager sitting next to him and virtually coaxing the replies out of him, when a core skill of any leader was to tell the story. Any number of worldly wise executives could have handled the press naturally as part of his job as chief executive. A crew member on board a flight on his own airline could not describe the CEO beyond saying that he “walked from his seat to the toilet and back” the entire flight.
A brand like Singapore Airlines could have attracted just about the best potential CEO talent from around the world. Someone who by virtue of personality could have energized the entire team, like some of the previous chief executives have. Mention the names Chew Choon Seng or Cheong Choong Kong, and the faces of the older staff who remembered them would light up. They attribute adjectives, some complimentary, some colourful. But for better or worse, these were personalities that were engaged with their organization, and this is the point.
In asking this question, “what was the board thinking about” we get a clearer picture of the real source of this organisation’s future ability to keep up with the competition.
In order to answer this question, we have to ask what is its first premise so ingrained into its DNA that underscored its success that needs to be preserved? Who created the daily processes that thousands of employees have built their careers around, and made it into the global brand it is today? It is an amazing story because it is arguably a state-owned asset, and as we can see from similar airlines around the world, few others come close to this one in terms of brand and service quality.
The truth is if you read all the official literature on Singapore Airlines, it gives the impression that it was built by a committee, a group of faceless men and women in the 1970s. This was simply not true. Of all the men and women who worked on it, there was someone who set the bar high and set the phase for the rest. The one name that kept coming up in all the supporting literature was that of JY Pillay, its first supposedly non-executive chairman, who at the time was a top ranking civil servant.
A human resource manager, quoted in a university thesis, started her comments by saying, “Mr Pillay always told us…” A ground engineer quoted in an old local newspaper article, said, “Mr Pillay told us the customer pays our salaries.” The founder of the advertising agency that Singapore Airlines used in its early days recalled in his book that, “Mr Pillay would disagree with me on the English used in the ad.” Many flight managers now in their late 40s and 50s have readily told me, “Mr Pillay would come to the galley and ask me about my family, my house…”
Now, why would a non-executive chairman be quoted by so many employees just about everywhere on the shop floor as the person who inspired them? No mention of the chief executives who worked under him. The role of a non-executive chairman in a Singapore government linked company is a curious one. In many of them, these non-executive chairmen have offices on the corporate floor and come to work every day as if they were afraid of being accused of not working hard enough. But some, like JY Pillay, went beyond and defined their industries.
Not identifying the fact that this airline was born out of one man’s genius was a big mistake. Because it gave subsequent generations of pen-pushing senior managers armed with first class degrees that have no bearing on the job the right to brag about their indispensability. Until Ryan Air and Air Asia came about to show that executives without university qualifications can do just as good a job and fill their planes to the brim every single day, we were all fooled to think that corporate Singapore could only be run by scholars.
It was both Mr Pillay’s mistake as well as the Singapore government’s mistake. It was Mr Pillay’s mistake because he likes playing life that way. From my own small encounters with him, I watched how he loved making other people think that something was their idea while he prodded them into what he wanted to see happening. He goes to great pains to give this impression, and belittle his own role, even if he was engineering everything. Last year, when he was awarded Singapore’s highest civilian decoration on national day, he was famously quoted in the local newspaper saying “it was a small thing I did.” That’s the way he wanted to play life and it has served him well.
The Singapore government is at fault because the idea that many things about Singapore was built by faceless committees has a nice touch to it. But Singapore itself is an example that nothing worth building was ever built by a committee. It was built by a few men who had a sense of ownership over what they built with that rare combination of guts, vision and execution skills.
The World Bank and the Asian Development Bank often sponsor studies to find out what enables state-owned enterprises to succeed like private sector ones. The name Singapore keeps coming up in such studies. I have seen some of these studies and they try to de-personify the critical success factors and describe Singapore as if it had a corporate model that could be replicated by others.
But it does not. It’s secret was simply a few good men. Men like Goh Keng Swee, Howe Yoon Chong, Lim Kim San who built everything from housing to ports and the airport on world class principles. More recently, the former chief executive of state-owned CapitalLand Liew Mun Leong, who showed that the same business can look so different with the right person running it.
Where Singapore Airlines was concerned, it was clearly J.Y Pillay. Where a country is fortunate enough to have such men, state-run corporations can succeed like commercial ones. Where a country did not have such men, all the training, blueprint, funding and wishing in the world could not yield such a result.
It is a great mistake not to acknowledge the founder because now Singapore Airlines has gone through several iterations, and subsequent generations have already started losing the plot. From great non-executive chairman, to a series of energized chief executives, to its current trouble – an “energized” board and a weak chief executive. When we behave as if personalities don’t matter, and the core compentency of an organization does not matter, we are guaranteed to lose our way.
The people at Temasek, the state-owned asset management company that controls Singapore Airlines, like to constantly say how they don’t control Singapore Airlines. They love pointing out how in the neighbouring countries, the national airlines are subject to any levels of interferences, from flights delayed to await royalty, to unprofitable routes to satisfy politicians, to chairmen siphoning off money to buy supplies from his side business at inflated prices. None of these ever happens at Singapore Airlines and this is true.
But the fact that the management team at Singapore Airlines today has to contend managing four different assets: Singapore Airlines, SilkAir, Tiger Airways and now Scoot, is an interference in a more profound way. How it came about that Singapore Airlines today is a mesh of four different airlines, purportedly to serve different customer segments is a story of how its main shareholder clumsily went about trying to respond to the unknown challenge brought on by the budget airlines, as it rapidly unfolded.
At first, they tried to deny the threat. A former Singapore Airline chief executive was rebuffed for trying to launch what would have been the first budget airline in the 1990s. In those days, as it is today, Singapore Airlines was treated like a sacred cow that they would not sacrifice for a better idea.
When Air Asia came about, Temasek did a due diligence on them, and then decided to co-invest in an Australian budget airline, Jetstar, for the only reason because the mighty Singapore Inc does not support upstart entrepreneurs, even from within the country, and definitely not from a lesser neighbor. Then Tiger Airways was set up to teach the boys and girls at Singapore Airlines how to run a budget airline. It barely survived and made a fool of itself in Australia. Then Scoot was introduced like an innovation lab to experiment with the concept of humility, but within the safety of the fold.
What a right royal mess. No chief executive would be able to keep focus on the core proposition, while juggling the three other assets, to deliver good group results. The company is today clearly a playpen for someone outside of it to sort out his own ideas of where the airline industry is heading. Its main shareholder is clearly dealing with Singapore Airlines as an asset management business, and not as a going concern. This and this alone explains the choice of the current chief executive.
It’s a dangerous experiment. It might pay off, it might not pay off. But the fact that not a single Singapore Airlines management staff, least of all the chief executive, can explain convincingly to any investor or even a customer as to why they need to manage four different assets, is an indication of just how dangerous it is. It is an even more dangerous experiment because if it fails, it will be nobody’s fault.
In fact, I have only heard one management staff attempt to explain the four assets – it was the Kiwi boy they tapped to run Scoot. Apparently, the name “Scoot” for an airline was his idea, which speaks well for him, because he was taking ownership for it. But it made me think also why would Singapore, in all its glory, give over an important experiment to a foreigner instead of to one of its own sons-of-the-soil (think Singaporean bumiputra) to learn and build his own management skill? Where would the future Singaporean business leaders get their training from? In New Zealand?
It’s one of the curiosities of Singapore, where they clear out the hawkers centers to accommodate jobs for the locals, but give the opportunities that every mother wants for their children to “foreign talent”. I have never seen any population that is relentlessly reminded that they are not good enough for their own country’s top corporations. So few rise to the occasion. But how could this Kiwi boy be considered a “foreign talent” if he was also doing this for the first time in his life? But I digress.
So it is, that the reason Singapore Airlines has such a weak and uninspiring chief executive is not because he is a good worker, or that he has great integrity, all of which I am sure he has in abundance. But because that it is all he will be required to be. The board has taken on itself all the leadership roles of making the strategic decisions for the company.
Having said that, the current chairman is not anymore inspiring. On a flight to New York two years ago, I had the chance of watching how non-executive he was. Let’s just say that exemplary service before self was not on his mind at all, even with paying passengers all around him. Later, I heard how he could barely string a useful sentence together when giving his take to the staff redesigning the airline’s lounges. So, quite clearly he’s not the one pulling the strings either.
Why would an airline that spends millions of dollars on advertising world-wide not be able offer up its chairman or its chief executive as living expressions of its brand? The short answer is that it does not value its own brand, as evidenced by its falling rankings on all the major lists worldwide. The long answer is that this is how the state runs business.
If these are the kind of people responsible for Singapore’s most visible asset today, you wonder how it all runs. The answer is, on standard operating procedures that have not been refreshed or revived for a new age since 1974. Large organisations run on doing the same thing every day. After a while, you will not be wrong to imagine that there is nothing more to add, and so a mere administrator for a chief executive will do just fine.
But without a refresh on the core themes of the business, subsequent generations of managers will only know how to take away rather than modify or add to the unique factors that makes the company successful. This is the reason why customers who were accustomed to being delighted by this company in the 1980s found all the delights taken away from them one by one more recently. More than ever, this company is crying out for a new chairman or a new chief executive who will take ownership of refreshing the dream and resetting the DNA for a new phase.
We don’t realize the decay at first, because things work as they are supposed to. But the dream is lost. So the purposes for which they do what they do is also lost. A sense of entitlement sets in, and a generation of managers and board members take more than what they give to the fine brand.
The late Sir Brian Pitman, former chairman of Lloyds TSB was so pleased to be on the Singapore Airlines board that he could not find any reason whatsoever to objectively describe the things it was struggling with. Every board meeting was a happy encounter to listen to all the rave reviews the airline was getting at that time. He also served as advisor to something else I was doing when he was alive, and so over his favourite gin-and-tonic we would chat about my list of things he could bring up at board meetings.
One of the previous short list for the current CEO position was an old friend from University, with whom I used to be quite cordial. He would not connect with me on Facebook, while we were connected to other mutual friends, when he found out I criticized too much. Criticism as valuable feedback is a basic tenant in the service industry, but it is definitely not in the DNA of the management team.
It is these same senior managers who ask their frontline crew to take customer complaints on the sheen, while they can’t themselves. That is why the story of the origins has to be told correctly, so that managers like these can at least pay lip service to the standards that the men and women who built it set for them.
But Singapore Airlines is not on steady state. It is going through a real test as a company. It makes so many mistakes at every level every day. The new website debacle two years ago should have been the best alert that all is not well in the kingdom of Denmark. The company did not have a handle on its own infrastructure, let alone its distribution capability in an internet driven world. But there is more.
The guys who price tickets are going nuts treating premium ticket passengers like budget airline bums – shorter validity, high penalty fees and so on. This is the only airline that is capable of making a full fare paying first class passenger cry because she had to pay a US$300 penalty for missing her flight at the gate, with boarding pass in hand. On top of that, it chided the ground handling company for trying to restore some dignity to the situation. All this just because another former chairman, Koh Boon Hwee had installed the culture of nickeling and diming all their most valuable stakeholders – the customers and their partners – and losing the plot yet again.
The guys running cabin design can’t decide what comforts to give economy passengers to stay competitive – so they stock the economy seat with lots of gadget connections except for the most important of all – a power socket. Emirates does just that and steals precious customers on that route.
On the surface, these are normal everyday decisions that all companies struggle with. Some companies get some things right and other things wrong. But only an organization that is led by vision will head in the general right direction.
We only need to remember the SAS story to realize that a brand pitched at the premium end needs to only make a few mistakes to run to the ground. The recent decision to dismantle non-stop premium flights to New York is one case in point. From having a monopoly on that route, Singapore Airlines is now setting itself up for competition from every airline in the region introducing new hardware at half the fares. The reason for the decision appears to come an asset management one – only one type of aircraft is able to fly that route – at the expense of an overall strategic idea that create winners and losers in business.
They won’t be able to blame it on the price of oil, because Singapore Airlines was born in 1974, just before a much worse oil crisis, at a time when the hedging market did not even exist. They won’t be able to blame the budget airlines because these are run by people with less education.
The clear conclusion I have come to is that yes, chief executives should have the personality and character to lead, in addition to skill and integrity. Just being administratively competent is not good enough anymore. Being charismatic and even charming are useful, but it is asking for too much. The base line is that being visionary and with a vocabulary to state his strategy are inalienable characters of a good CEO, if only because he has so many moving parts to hold together.
He also has to contend with a thinking public, critical people like me, who take the time to write some of these things precisely because we enjoy, as long term and loyal customers, being part of that story. There are very few people in management position who get that.
When a CEO suspiciously does not have that holding power, look to the board, and ask, what is the board up to? Look at the CEO again and ask if he is a correct expression of the board’s thinking. Very often, the CEO is trying his best to do the job they gave him, so he is not the one to blame. The responsibility rests with the board. This applies in boring Singapore as much as in boorish Hong Kong or in dazzling America, where everything is expected to shine. Leaders must lead, and from the front.
A postscript: The feedback to this entry suggests that there were already issues at Singapore Airlines under Chew Choong Seng and Cheong Choong Kong that I was not aware of.
Quite clearly then, this company's real problem is that it takes its leadership transition very lightly, handing over the reins to the next nice guy who can banter in Teochew or Hakka or in some really inane connection peculiar to Singaporeans. Unfortunately, this is the converse side of the Pillay legacy – from the beginning, it never really mattered who the CEO was.
The fact that both Chew and Cheong were able to sail through their years shamelessly without scrutiny is also directly the result of the lack of rigorous scrutiny of the media. The cosy relationship that corporate Singapore enjoys with its local media. Very senior industry editors do nothing more than behave like rookie reporters.
Without changing any of the text I have written above, I would still say that articulation skills are still core to the function of a chief executive. There is a difference between a chief executive and a chief operating officer. The current chief executive appears to be fulfilling the function of a chief operating officer. Both are very important, but the two are fundamentally different, as is the necessary role of a truly wise chairman.
— Post script on 18 February 2015 – In the past two years, goh Choon Pong and his team have done an amaing job in cobbling together the disparate assets (SQ, Silkair, Tiger, Scoot) and turning what would otherwise be a liability into a strength. His strategy has been to use the different assets to take a multiprong approach to attacking different markets depending on whether they were good for SQ’s premium products or budget products, pricing accordingly without losing brand or customer loyalty. At the back end all the assets share the same operational infrastructure. SQ’s online platform has grown from strength to strength, and is an indication of the rewards of sticking to a strategy even if the initial phases are difficult. Goh handled an interview with Singapore’s Business Times late last year very well, much more confident and in a truly humble manner, like a good steward who has a feel of the ground rather than a hairy fairy leader running on air. He may well turn out to be the best CEO that SQ has ever had since the chairman JY Pillay gave the airline its breath and soul. A humble man who runs with his team. The rise and maturing of Goh Choon Pong is a lesson in where Singapore might find some of the future leaders of its national assets. The pool of Singaporean talent may even appear geekish at first, unsuitable for leadership if compared to those with personalities and the ability to communicate. The Singaporean’s edge is execution. Where execution and the ability to carry the organisation is of the essence, you will find leaders like Goh hidden somewhere within the ranks, willing and able to take on the mantle if called on. Their weakness may be that mature best in a crucible, when as much of the variables are minimised so that they can grow into their roles. If there was infighting or lack of clarity in the board, someone like Goh may not have been able to find his own way. He is the new generation Singaporean technocrat in some ways. Whatever the circumstances, as a customer, as a shareholder and as an commentator on the theme of leadership, I am happy to have been corrected and very happy indeed to see someone like Goh come into his own. The beneficiaries are the thousands of employees of Singapore Airlines, they will have perhaps another 10 years of a stable environment to excel in their professions, and pass on this quality to customers who can see the difference between Singapore Inc and the rest of the region. Sure, there are many things that a Qatar Airlines or Etihad or Luftansa is so much better at than SQ is today. Sinagpore’s Inc’s greatest weakness in today’s world is the incremental nature of their boldness to change. Their focus on the hardware rather than the software. But that’s par for the course. It’s for them to learn and respond. For the moment, they have found in Goh Choon Pong an inspiring leader whose focus on execution has enabled them to correct many small things that adds up and gives them an edge in a highly unforgiving marketplace. That’s as much leadership as someone who can paint the big strokes. He may not be articulate, but he speaks loudly by being there with his troops. We must not under-estimate this. He has proven that there is steel inside the geek. Temasek had handed to him a weak deck, but he turned it into a strength. They better be grateful.