✨ Interview with BJCORP’s Jalil (12 March 2022)
Transcript of a recent interview with BJCORP's CEO Jalil Rasheed
Highlights:
Jalil’s Career Pre-BJCORP:
Jalil first became a CEO at 26, learned a lot, and was then invited to become CEO at PNB (a Malaysian sovereign wealth fund).
He wanted to institutionalize PNB, and introduce new international processes into the company to improve things there. Jalil enjoyed his short stint there and had no regrets, but also wished that he had more time to complete the transformation process at PNB.
After PNB, Jalil met BJCORP’s founder Tan and started casually discussing with him how Tan could improve Berjaya’s consumer companies (Jalil was a former Consumer-focused fund manager). They were in the middle of setting up a Consumer fund together – when in the final stages of setting up, Tan invited Jalil to become CEO of BJCORP.
Tan said, “come in, help me right the ship, institutionalize the business – and when the time is right, you can continue doing whatever you want”. Tan didn’t specifically look to hire Jalil, it was just an organic process where one thing led to another.
Jalil’s main motivation for accepting the job was to create an impact, to leave a positive example in corporate Malaysia.
Jalil after joining BJCORP:
When he first joined BJCORP, there were 3 main thrusts to his strategy – “Respond, Recover, and Reset”.
“Respond” was mainly about looking at cash flows – some of BJCORP’s businesses like Hospitality were not allowed to operate, and therefore had zero revenue but still had costs. Thus, they had to learn how to manage costs, and reevaluate what within the business were considered core and non-core. There was also uncertainty over how long the pandemic would linger, so cash flow was an absolutely crucial priority.
“Recover” was about how to respond in terms of recovering from the pandemic – e.g. would everything just go back to the pre-pandemic normal, or would businesses in the Retail and Food sectors look different in post-pandemic times. It could basically be described as them looking into the future, and deciding if they could do anything differently.
“Reset” was about rethinking the existing business model – e.g. in order to get there, do we need to change the way the business is currently operating, do we need to outsource certain things ,etc. There was a lot of work done under the hood throughout the pandemic period that was not visible from the outside and which people couldn’t see. With the pandemic recovering now, they seem to be on a nice recovery path.
The recovery strategy was challenging mainly due to the timeline – due to the uncertainty over exactly when the pandemic would end, they had to keep plans fluid and goals were constantly a moving target. They had to keep costs quite low, while still being ready to “switch the button on” tomorrow if necessary.
In terms of Hospitality specifically, it was quite challenging as people hadn’t been working for months or even up to a year - and time was needed not just to get people back, but also to get them back into the “operating groove”.
A first, they didn’t open hotels at 100% capacity – they only opened at 50% capacity to stagger the recovery process.
On the Government’s pandemic recovery strategy:
The reopening of the Malaysian borders next month was long overdue – Jalil says that we need to be able to live with the pandemic. Tourism is important to the wider economy not just because it is a large sector, but also because it contributes a multiplier effect to the wider economy.
Longer-term, the government needs a risk management plan – the handbook didn’t exist previously, since this was the first time all governments were going through a global pandemic. As a country, the population also needs to take responsibility – e.g. corporates need to actively take up roles in society to help address future pandemic risks.
At the beginning of the pandemic when there weren’t as many people vaccinated as today, they implemented a rotation schedule for BJCORP employees – but as things improved, they left the decision to the respective departments (e.g. divisions had autonomy to decide how they would handle employees working in office or WFH).
On transformation of Malaysian PLC’s amidst declining profitability, Jalil opines that there is a need to recognize the difference between their profitability pre-pandemic vs post-pandemic. However, he also thinks that corporations need to take ownership over it. It will likely be a long road going forward and difficult decisions need to be made, however whatever priorities had previously been put on the backburner has now come roaring back centerstage – whether that might refer to the need to digitalize or cut certain underperforming businesses.
On Sustainability:
PLCs’ priorities will be balanced between Growth and Sustainability going forward, depending on the specific business – if you had been badly affected by the pandemic, your main priority right now would be to recover and start Growing. Whereas for more established businesses, sustainability is also coming to the forefront as a priority.
Even if businesses don’t think Sustainability is a priority, their bankers will. One of the main questions bankers are now asking companies is “tell us what you’re doing about ESG”, and that becomes part of your credit scoring:
Previously the concern was only your ability to make repayments; now it’s also about what impact you are making on society with that borrowed money.
There’s a lot of pressure for companies to adopt this – obviously the pressure will first be felt on the larger companies since they have the capacity to implement these ESG priorities immediately; but sooner or later smaller companies will feel that pressure as well.
If you had to put a label on it, smaller companies would probably be more focused on Growth right now, while larger companies can start prioritizing Sustainability.
PLC expansion into ASEAN:
When asked about whether PLCs can also tap on the ASEAN market? Jalil thinks there’s always a Macro vs Micro disconnect:
e.g. the demographics in Vietnam might look good and might justify entering it if they can capture just 1% of the market; but while the Macro numbers might look very flattering, the reality of doing business on the ground is very different – from getting permits, licensing, etc.
If there is a great understanding of the challenges there and business are willing to assume them, then they can and should look to other ASEAN markets. But just because one has been successful in Malaysia, that doesn’t mean that ASEAN is a “plug-and-play”.
There are highly visible advantages for Malaysian businesses to expand into other ASEAN markets – there does exist a loose economic cooperation framework between ASEAN nations; and geographically speaking it’s not too far from home.
However, the reality of doing business is that they are all 10 very distinctive countries with separate cultures – and different nations even occupy different economic subsets. One has to be careful, and recognize that overseas expansion into an unknown market is not the only way to grow the business.
Jalil’s Future Plans:
When probed about his future plans, Jalil mentions that he has never really thought about it – but he has always wanted to run a Consumer fund and go back to his roots as an investor. He has always enjoyed looking at companies, speaking to founders and management, and asking about their businesses – and seeing whether there was any room to become partners with them.
When asked whether there was any room for politics in the distant future, he simply says that while he enjoys following political news, he doesn’t think that he’s made for politics.