Don’t let Mueller’s work go to waste

Any approach the new MAB CEO takes should accord with what the German turnaround expert has done so far.

COMMENT

It’s hard to disagree with PKR Vice-President Tian Chua when he speculated on the reason for Christoph Mueller’s resignation from his position as CEO of Malaysia Airlines Berhad (MAB). The Batu MP said Mueller must have faced too much pressure from Malaysian work politics, which he probably found hard to understand.

Known for his turnaround work with Aer Lingus of Ireland and Sabena of Belgium, Mueller was hired a year ago on a three-year contract, and he proceeded to cut thousands of jobs and a number of unprofitable routes. The quickfire layoffs are a trademark of Mueller’s; it isn’t for nothing that he’s known as the Terminator.

In explaining MAB’s main problems, Mueller mentioned an unsustainable network of routes, high operational costs and archaic information technology systems. More interesting, though, was his diagnosis of Malaysian corporate culture, especially the kind practised in a state-owned company. He said it was strangled by red tape and saddled with employees with too many “entitlements”.

“It’s that damned German efficiency,” said James Cagney in his famous role as a Coca-Cola executive in the 1961 film “One, Two, Three”. Damned or not, the Germans’ infamous attitude towards work has made them one of the biggest industrial powerhouses globally.

This is where Malaysians and Germans would especially come to odds. The Germans have an iron-clad rule about work hours: Nothing else but work. No Internet surfing or office gossip. Articles frequently cite the BBC documentary “Make Me A German”, in which a young German woman explains her culture shock as she begins work in the UK in an exchange programme. She finds that her British colleagues spend much of their time discussing their nightly plans over coffee.

Put that in a Malaysian perspective, and you’ll begin to understand. Can you imagine not even opening Facebook once during work hours?

This is of course only a surface observation that doesn’t really summarise what Mueller most likely faced in MAB. What he faced were thick layers of bureaucracy. Coming from a workplace that values straight-to-the-point, goal-oriented communication, he would have been frustrated by the red tape and the entitled workers he had to deal with.

In a press interview early this year, Mueller said it was hard work cutting through the corporate culture of the state-owned company, adding that he had pushed for hierarchies and bureaucracy to be slowly removed.

According to a report in the New York Times, analysts had said that earlier attempts to restructure the company did not go far enough because of union resistance or political interference. “Tense labour relations and a bureaucratic management culture had stymied earlier efforts to reform the airline,” said the article. A 2011 plan to exchange shares with AirAsia and share expenses, for example, failed because labour groups opposed it.

The airline’s response to the loss of two of its aircraft did not help. In 2014, relatives of two brothers who died on MH17 called the carrier “rigid and bureaucratic”, complaining that they had to haggle for help from the airline in the days after the flight was shot down over Ukraine.

So where can MAB go from here? The five-year 12-point MAS Recovery Plan (MRP) set out for MAB remains on track despite Mueller’s planned departure in September. Mueller has committed to remain on the MAB board of directors as a non-executive director to see through the leadership transition and continue contributing to the MRP’s implementation.

Former Malaysia Airlines chief Abdul Aziz Abdul Rahman has said the national carrier should be headed by a local as there was no shortage of competent candidates for the job. He said if a local was hired to replace Mueller, then the person should be given six months to a year to perform and replaced if he failed.

Whatever MAB decides, it should remember that it owes its current hulking, lumbering situation to years of unnecessary bureaucracy, red tape, and political interference. Any approach Mueller’s replacement takes should accord with what Mueller has done so far.