Simplifying complexity: Elisa Lumbantoruan

Throughout his illustrious career – including a five-year stint as CEO of Hewlett-Packard Indonesia between 2002 and 2007 and a six-year tenure at Garuda Indonesia – Elisa Lumbantoruan was no stranger to adjusting to the many transformations a company undergoes as the world changes ever more quickly around it. In fact, Elisa has made it his specialty skill. "Over the years, I’ve developed a core competency in both business transformation and people development," he remarks.

Such skills have certainly come in handy after Elisa took on the role of President Director and CEO of the Indonesian arm of Danish facility services provider ISS in September 2015. The CEO Magazine had the opportunity to pick his brains on why business transformation and people development are critical skills, not just in his role overseeing more than 60,000 employees across time zones spanning eight hours but for any CEO in any industry.

The CEO Magazine: You’ve had a range of experiences across many industries. Is business transformation really that straightforward?

Elisa: Yes, pretty much. You first identify the common issue or problem the company is facing and then, based on that, create consensus among all the employees and management on the best way forward.

If you add any more to that, you’re making the task needlessly complicated. There’s a very simple transformation journey in every company. I believe that, in any business, change is something every organisation needs to accept, and must always be initiated in any company. It’s the way to develop a good learning culture within an organisation.

The tagline on your LinkedIn profile says ‘simplify complexity’. Why are you such a firm believer in that philosophy?

It came from when I was at university. With every complex problem, there are many simple solutions. Simplified complexity is one of the concepts that every leader needs to understand. Every leader needs to think, "What value can I bring to my environment or my organisation?".

Leaders need to ask themselves whether they can add value. If they cannot answer that question in the affirmative, then they are not leaders.

It’s not just going along a career track, receiving a promotion and getting to a certain position. Leaders need to ask themselves whether they can add value. If they cannot answer that question in the affirmative, then they are not leaders.

As a global firm, what is the main goal ISS is looking to achieve in Indonesia?

For the Indonesian business, it’s all about job creation and people development. We’re not too concerned about providing the widest range of services like ISS is doing in other countries.

What I’m concerned about is whether there’s any sort of work that can create job opportunities for more people.

In terms of portfolio development, the criterion for us is providing jobs that are people-intensive. We use technology, but only to make people more productive and efficient, and to feel empowered to do their job. For us, that’s the role of technology.

Which services make up the largest chunk of ISS Indonesia’s job base?

The largest single portfolio we have today is cleaning services. The second-largest is security services, and then catering followed by parking management. But we are not limited to these. We also provide other technical services as well as office support to our customers.

For us, the most important thing is how we can transform people because, in this service industry, it is not just competencies that need to be developed. The most important aspect that we want to develop
in our people is attitude. It’s about behaviour, it’s about being service-minded. This is where we are unique in the market.

People can gain competencies and new skills, but what we are focusing on is education and training. Education is about ‘Why?’, while training is about ‘How?’.

Education is about ‘Why?’, while training is about ‘How?’.

For us, every single employee in ISS Indonesia needs to know why they do what they do and, from there, everything we do is about helping them fulfil their purpose. That’s a strong driver of behaviour in our employees.

What makes your employee onboarding program special?

We have a general leadership program where we are working with the three best business schools in Indonesia – the Business School of BINUS, Business School of ITB, and Business School of Prasetiya Mulya. We have already developed 250 potential leaders through this program in the past two years. From a total of about 60,000 employees in ISS Indonesia today, we have about 4,000 people at the supervisor level and above.

What makes our onboarding program special is that it applies to all our employees, blue-collar as well as white-collar. When I joined ISS, I attended the cleaning service training too.

How did you find going through the onboarding experience yourself?

I thought it was very good because it really opened my mind to how our people on the frontline are doing. You get to understand the sorts of challenges they face. Most of these newly hired employees on the frontline are not very motivated in the beginning, saying things like, ‘This job was not my first choice.

I’m forced to do this because I don’t have any other option’. After three to five days of onboarding, they are totally changed and start saying, ‘I’m proud I can be of value.’ People need that sort of motivation. We’ve turned negative perceptions into positive ones.

We also have a comprehensive reward system to complement the onboarding program. That’s the only way to keep people motivated in this very large organisation because I won’t be able to see each of them face-to-face. So we need to understand what motivates employees to do their work, and how they want to be appreciated and rewarded.

As an organisation with around 60,000 employees, what is your employee retention rate like?

Our employee retention rate is actually very high. One possible explanation is that our employees are mostly local, and don’t want to move from place to place. Our turnover rate for our white-collar workers is less than 1%, which is very low. For our blue-collar workers, it’s about 33 per cent, which is still low compared with the industry average of 59%.

The average length of service is approximately three years, but that’s not because the staff don’t like the organisation. There are two reasons why they leave. The first is that they get a better job, because they don’t want to be a cleaner forever. They need to develop and move on to something else.

Usually, our clients will hire them once they reach the competency level required. For example, one of our clients is a big mall in Indonesia, where we provide cleaners and security guards. After two to three years, these workers become employees of the mall. Which leads me to the second reason – we cannot legally stretch some of these contracts for more than three years, and so we have to terminate them.

What are the big challenges your industry faces as it continues to grow?

The main industry challenge has to do with reputation, especially in Indonesia. In 2003, new labour regulations were issued by the government. Most companies then tried to outsource their business in order to bypass these regulations because of the huge defined benefit obligation that every company was expected to comply with.

When we advertise a job at a particular salary, more than 1,000 people usually apply for the position because of the level of unemployment in the country. In most cases in our industry, our competitors transfer all the terms and conditions from the customer on to the employee.

However, at ISS, we make it clear that we are the ones who are accountable for all the regulations, such as paying our workers above minimum wages as regulated by the government, as well as all the other social and health benefits mandated by the government.

The challenge for us then, and across our organisation globally, is maintaining consistency. We have to create our own competitive advantage because we cannot compete with others on cost. We are competing on quality, compliance, and long-term relationships. Not many companies appreciate this strategy, but the market is big. Even with 60,000 employees, our market share is less than five per cent. In Jakarta alone, there are around 730 companies in the same business.