Saturday, February 27, 2021

You Don’t Have to be a Greedy and Selfish A**hole to Get Ahead

 What can a Pig Farmer can teach a Politician about Management?

At the beginning of this month, I wrote a piece entitled PROFIT MAKING ENTERPRISE BEATS WORKERS COOPERATIVE IN WORKER WELFARE” (Published 2 February 2021), which talked about how Seng Siong, one of our local supermarkets had managed to grab the headlines by announcing that it was awarding a 16-month bonus to its employees in light of its exceedingly good year in 2020.

As I wrote that post, I realized that what made Sheng Siong particularly unique was that it proved that you can succeed by sharing your success and by treating workers fairly. What was striking about this particular comparison was the fact that Sheng Siong, a profit-making enterprise with a legal and moral obligation to maximise returns for shareholders, had not only made enough to ensure shareholders had a regular dividend but also provided great social benefits by selling products at lower prices and paying its staff better than NTUC Fairprice, a worker’s cooperative which has a mission to “moderate” prices.

The point that I was trying to make in that piece was enforced by announcement on February 24, 2021 that Sheng Siong’s Q4 profits had jumped 84.9 percent to S$32.1 million. The news report can be found at:

https://www.straitstimes.com/business/companies-markets/sheng-siong-q4-profit-jumps-849-to-321-million

A snap shot of Sheng Siong’s financial performance can be found at:

https://corporate.shengsiong.com.sg/sheng-siong-groups-net-profit-grew-54-4-yoy-to-s31-8-million-for-3q2020/

 

This significant news for one simple reason. It exposes one of the biggest myths that powerful people in Singapore work very hard to perpetuate, which is the fact that it is necessary to pay people in power a lot of money because you have to pay for talent and it is important to somehow pay people at the bottom of the ladder less because it allows businesses to provide us with “cheap” living.

One only has to look at the debate on wages. I think of the late Lee Kuan Yew telling the public during a debate on ministerial salaries that “A 100 million dollars is a small price to pay for people to run a 100-billion-dollar economy.” At the other end of the scale, I remember being at a function with a senior minister of state, who was asked about raising wages for those of the lower end of the social ladder. His reply was “well, we understand what you’re saying but would you be prepared to pay more for…….” Paying a million dollars is called attracting talent whereas paying the old lady who cleans up after you at the hawker centre a hundred a month more is the cause of why you can no longer afford that plate of kway teow.

The polite term for this is “sanitizing” our wide inequality gap and it’s not just the locals who actually believe this. I first took issue with the “Fawning Follower” or “Critical Spectator” as he likes to call himself, when he decided to promote the disease-causing accommodation that our foreign workers were housed in as a “blessing” because it enabled to our construction companies to provide us with “cheap housing.” To be fair to the Fawning Follower, I’ve heard this argument used in many variations. Pay the bus drivers more – do you want the price of transport to go up. Pay the hawker centres cleaner more – are you willing to pay more for your noodles.

If you follow the logic that the powers that be have used, you’d get the impression that lavishing things at the top and denying the bottom is a crucial element for Singapore’s national survival.

So, how does Sheng Siong get away by not following this model? How is it that Sheng Siong pays workers more and sells products for less but still makes healthy profits? Is there something that Mr. Lim Hock Chee, Sheng Siong’s CEO, know about business but the rest of us do not?  

I cannot claim to be a management expert. However, could Mr. Lim’s secret be the fact that he’s motivated his stakeholders such as his workers a reason to do things that make him succeed? Just look at the following comments from Glassdoor, about working at Sheng Siong:

 

By ensuring the front-line staff are well taken care off, Mr. Lim has seen to it that his customers see happy workers who are willing to make their shopping experience a pleasant one. As for the customers, who wouldn’t like to shop at a place where you are well treated and the prices are more than affordable?  

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Maira Gall