It Takes Brains to Mess it Up

 Before Donald Trump came to power and made America the world standard of comedy, the British used to make some of the funniest shows around. In the 70s there was Monty Python and these days, it’s the various characters like Ali-G, Borat and Bruno who send us all into stitches. Like his 1970s predecessors, Mr. Sacha Baron Cohen (the man who is Ali-G, Borat and Bruno) has become a global icon by being very silly.

What’s striking about Britain’s “Silly” exports, is the fact that all of them have great degrees from world class universities. The Python’s and Mr. Sasha Baron Cohen are from the University of Cambridge. Mr. Rowan Atkinson (Black Adder and Mr. Bean) is an engineering student from the University of Oxford. As one of my dearest friends from the UK said, “It takes brains to be very silly.

 

You’d Never Guess these guys came from:

 

These established universities.

My friend’s point wasn’t limited to comedy. It also existed in journalism. British Tabloids like the Sun were designed to the lowest common denominator (or the type of reader who doesn’t care what news is being reported on as long as the paper has a picture of a girl with nice tits on page 3. They were world masters at producing the most sensationalized headlines that were designed to stir up passions. The Sun is one of those papers where you’d probably not want to be caught buying.

Leaving aside my personal feelings towards the Sun, it’s actually a work of art. It takes brains to come up with those headlines. Whilst people like me would turn our noses up at the Sun and take pride in reading things like The Times, Guardian, Telegraph or Financial Times, the truth of the matter is that the top graduates from journalism school ended up working for the Sun. It takes far more brains to write for the less discerning.

When I came back and started working in Singapore, I realized that this wasn’t a particularly British thing.  Singapore has the phenomena of “It takes brains to be stupid.”

Unfortunately, our local version of this, isn’t intentionally funny. This becomes especially true when you look at how the Government Linked Corporations (GLCs) have done. All these firms are nominally part of the private sector. More often than not, they are listed on the stock exchange and management is accountable to shareholders. They all have very health balance sheets and are either in a monopoly or duopoly in the home market. The uniting factor is that the largest shareholder is Temasek Holdings Pte Ltd, which is in turn owned by the Ministry of Finance. Whilst the government states that it merely owns shares, its perhaps no coincidence that the guys running these companies are more often than not, former civil servants (usually generals) who went to the best universities in the world at the government’s expense.

To say that the performance of these companies has been lackluster is charitable. The only notable exceptions are SIA, which competes in an industry where government protection is of no use (Singapore’s air space is only so big) and to a certain extent SingTel, the former Telco monopoly which had the good sense to use its cash pile to buy companies overseas (biggest cash spinners being Optus in Australia and Bharti in India) and DBS Bank, which has been run by people from elsewhere since 1998, when John Olds, an American who had never run a bank before, was appointed as CEO.

When you consider the advantages that all these companies have, the question remains – how could they not make money? To use a sporting analogy, it would be like cloning Cristiano Ronaldo into 11 players and putting them onto a soccer pitch to play against 11 bedridden one-legged grandfathers, with the referee under pressure to ensure the team of Cristiano Ronaldo’s would have a super serum to make them play even more magically whilst the bedridden grandfathers would have more limbs tied up and yet, despite this, the team of Cristiano Ronaldo clones would lose.

The example I personally dealt with is Ez Link Pte Ltd, which somehow lost $17 million in 2003. This is a company that was wholly owned by the Land Transport Authority (LTA) had a monopoly on a product that just about everyone in the country had to use every day (think of the number of rides on the public transport system every day). The company collected one percent of the value of every transaction (think of 1 cent per person times two million and the only real cost being the few staff members and rent of the office). The best part to this system is that money was collected upfront (they don’t get paid when you tap – they get paid when you top up your card). You would think that this was a business that would print money even if you staffed it with zoo animals.

On a larger scale, we had the SMRT system, which is run by a former Chief of Defense Force (CDF), who took over the CEO job from his predecessor as CDF. The first former General became a hero to his shareholders when he made money for them by selling the entire operation back to them. His tenure as CEO was marked with consistent train breakdowns, which were all due to the fact that there was, apparently a lack of funds for basic maintenance. This is despite the fact that the SMRT sells a service that nearly everyone in the country uses and in addition to that, they are sitting on some of the most valuable rental properties in the country. Yet, somehow there was no money for maintenance and the only way to make money for the shareholders was by selling the business to the shareholders.

Another former CDF (to be a top general in Singapore you need to be very clever – an Oxbridge degree is the minimal qualification) showing us how to make a mess of things is Ng Yat Chung who has famously failed to make money in not one but two businesses. In the five years of being CEO of Neptune Orient Line (NOL), Mr. Ng failed to make a profit and left his shareholders with no choice but to sell NOL to CMA-CGM, who promptly turned it around in a matter of months.

His reward was to be moved to the helm of Singapore Press Holdings (SPH), the owner of every newspaper in Singapore bar one and collector of more than half of every dollar spent on media space in Singapore. In his tenure as CEO of SPH, Mr. Ng has seen SPH kicked off the Straits Times Industrial Index (an irony given that the Straits Times is SPH’s main product) and on 6 May 2021, Mr. Ng had to call a press conference to announce that the loss-making newspapers would be spun off into a “non-profit” company. Fortunately for Mr. Ng, he proceeded to turn himself into a laughing stock by raising his voice at a reporter who had the audacity to ask him about editorial integrity.  I say fortunately because the attention was focused incident and his use of the word “umbrage” and how he bragged about not being a gentleman than on the main issue of how he managed to turn a profitable quasi-monopoly into a begging bowl from the tax payer. The report on Mr. Ng’s press conference can be found at:

https://sg.news.yahoo.com/sph-ceo-ng-yat-chung-question-editorial-integrity-122702142.html

 

Again, Mr. Ng is very clever. His academic credentials put him the global elite. Yet, somehow, he’s managed to turn powerful market leading businesses into loss making ones.

We always tell ourselves that we only have our human resources and that our “reserves” are to be guarded because you never know when you need the money for a rainy day. Yet, somehow, we seem determined to take our best and brightest to turn businesses with business models that zoo animals could print money from into loss making ventures. I’m not getting it…perhaps smarter readers could explain this to me.