COPE and corporate planning for SOEs

While some SOEs have good corporate plans and continue to review progress regularly, others have made these plans only because of a Government requirement

Many SOEs were found wanting at recent Committee on Public Enterprises (COPE) meetings, mainly because they had no corporate plans. Strategic organisation-wide planning or corporate planning is essential for an organisation to succeed in business or deliver services to the citizens. 

While some SOEs have good corporate plans and continue to review progress regularly, others have made these plans only because of a Government requirement. The process of corporate planning and strategic thinking with the staff involved is far more critical than having an impressive document. A corporate plan is not a static document but should be a dynamic one responding to the constantly changing external environment. It also should align all employees towards the same objectives and goals. 

As the Chief Executive of several SOEs in the past, I initiated corporate planning in all these organisations, a new exercise for many senior managers then. More than producing a well-documented plan, the process of corporate planning aligned all the senior staff in the correct direction. 

One striking example was my experience at Ceylon Ceramics Corporation. We were trying hard to reach an agreement on what our mission was. One senior DGM insisted that our mission was “To produce tableware and sanitary ware at a price all citizens of the country could afford”. He emphasised that all manufacturing corporations should have a similar objective. His answer was simple when confronted with how to sustain ourselves with continued losses due to subsidised prices. “That’s what the Treasury is for; they should cover our losses”. To my horror, most of the top 50 executives involved in the planning process agreed with him. This was in 1988. Finally, with more explanations and after teaching some basic finance and accounting concepts, we decided that whatever we do must end up with a reasonable surplus. Getting this internalised took four weekly sessions but was worth the effort. 

Many SOEs resort to subcontracting the preparation of a Corporate Plan. This method is a futile perfunctory exercise. During my consulting days, I was involved in several SOE Corporate Plans. Still, I agreed to the service on the basis that I would only guide and “hold their hands”, but the Plan must ultimately come from the Management, and they should take complete ownership.

The corporate planning exercise began with utter confusion at the Employees’ Trust Fund (ETF) Board. Most of the staff and even some of the Directors had yet to learn what the Fund was created for. They needed to read the Objectives specified in the Act. Finally, after extensive discussion on the difference between the Employees Provident Fund (EPF) and The Employees Trust Fund (ETF), we prepared a comprehensive corporate plan. 

Whenever I was appointed to the Board of an SOE, I always asked for the Act by which the institution exists, the Corporate Plan, the Budget and the Annual Reports for the past three years. This helped me immensely to assess the situation in each institution.

Even ministries need clarification about their mission. Sometimes the officers go in different directions. 

During a study tour in Malaysia in the early 1990s, the Malaysian coordinator said that Mahathir Mohamed, the then Prime Minister, had declared that all Ministries, Departments and SOEs should complete a corporate plan by the end of that year. One of our team members wanted to know the punishment if the deadline was not kept. The answer was simple. “That’s an irrelevant question,” the coordinator said, adding that it will always be kept when Mahathir Mohamed gives a deadline.

In summary, my recommendations are as follows:

1. The President should set a deadline for corporate plans by all ministries, departments, boards and SOEs. He should personally take to task the Board of Directors of any errant organisations.

2. The organisation should never subcontract its preparation. It should be participatory, with even union participation. It should be drilled down to each unit with appropriate action plans.

3. It must be regularly monitored by the Board and preferably by a Board sub-committee on strategic/corporate planning and revised from time to time if necessary.

(The writer is a Specialist in Enterprise Productivity, Business Excellence and Japanese Management techniques.)