“I’m not a rich man – everything I make is reinvested in the Company.”

I remember my Dad and I once had a discussion about money. I was still at school and he wasn’t happy with how I was spending things. He made the point that despite the good things we had around us, he was not a rich man with infinite resources. Everything he had was reinvested into his business.

This conversation summed up the importance of money. While money is not everything, it plays a vital part in most of what we do. Money is not the root of all evil – it is the root of most things and business people, including the ones that are doing well, will always remind you that whatever surplus they earn has to be invested back into the business. Hans Hofer, the founder of Apa Guides once said that he only made money from his business when he sold his business and did other things.

I remembered these conversations and as I started freelancing in an industry where people are expected to work for foreign multinationals, I learnt two valuable lessons. The first lesson was the fact that money is power. The guys with the money will inevitably squeeze those without. The guy who has the advantage in a business negotiation is inevitably the guy with money in the bank. It is, as they say, easier to tell someone to f** off when you have enough money to worry about not having that job or project.  

The second lesson I learnt was that there was a clear difference in attitudes towards money between those working for someone else and those who were employed. Big ticket items like posh meals, fancy wines, swanky hotel rooms and business class tickets were inevitably bought by those on expense accounts. The self-employed, including the successful ones, tended to be a little more conservative with their spending. It is inevitably easier to spend someone else’s money.

These lessons I took from the world of business seem to apply to electoral politics. The winner of any given election is inevitably the party that has the resources to spend. American elections are particularly well known for this. Candidates need to raise hundreds of millions to get past the finish line.

It isn’t much different in the Westminster System, where its often said that elections are lost by governments rather than won by opposition parties. Singapore’s government, for example is pretty good at dishing out goodies before an election.

It has also has been particularly good at buying over potential opponents. Our scholarship system is designed to bring bright and potential trouble makers onside. Two of our more prominent ministers (Tharman Shanmugaratnam and Vivian Balakrishnan) are examples of two bright sparks, who had

However, Singapore’s ruling party has run into a few challenges recently. The first one is the fact that potential opponents in the opposition are increasingly financially independent like former Worker’s Party Member of Parliament, Chen Show Mao, who was a partner at David Polk & Wardwell, a law firm with over a billion in revenue. Telling someone they can afford a condominium in a few years of working for you just doesn’t quite have the same effect on a man who is already living in a condominium.

The second challenge comes from an attitude towards resources. At the end of the recent election, the Prime Minister announced that Mr. Pritam Singh, leader of the Worker’s Party would be given the title “Leader of the Opposition,” which would be recognized office in the apparatus of the state which comes with a salary and staff.

This is office is found in other Commonwealth Jurisdictions like the UK, Australia, New Zealand, Canada and India. However, in the Singapore context this was revolutionary in the sense that it was official recognition of “opposition” parties as a legitimate force. The cynics also argued that it was a sign of taming the Worker’s Party with an effective bribe.

However, Mr. Singh threw a wrench into the works by donating half of his salary increase. This announcement instantly brought him into the cross hairs of one of the ruling party’s most prominent trolls, Mr. Calvin Cheng, who complained that the Prime Minister’s donations didn’t get the good press that Mr. Singh’s was getting:

http://theindependent.sg/calvin-cheng-asks-why-pm-lee-doesnt-get-the-recognition-pritam-does-for-donating-half-his-lo-salary/

To make matters worse, Ms. Ho Ching, the Prime Minister’s wife, CEO of Temasek Holdings (Singapore’s Family Office), and the only person whose salary is a state secret joined in the fray:

https://www.asiaone.com/digital/ho-ching-and-calvin-cheng-take-pritam-singhs-donation-declaration-netizens-respond

Mr. Singh has clarified that he wasn’t giving away half his salary but half his salary increase:

https://www.straitstimes.com/politics/wp-chief-pritam-singh-clarifies-that-he-will-donate-half-his-salary-increase-not-half-his

Why are people associated with the ruling party getting upset by Mr. Singh’s donation? The obvious point would be that it doesn’t make them look good. The act of forgoing the salary increase (which is considerably less than the lowest paid political office holder) has started what the Malay Mail described as a potential charity war and made Mr. Singh look better than the ruling party office holders:

https://www.malaymail.com/news/opinion/2020/08/02/singapores-opposition-leader-launching-a-charity-war/1890250

The less noticed and talked about point is that Mr. Singh probably had no choice in donating his new salary increase. If you look carefully at what Mr. Singh has said he would donate to, you’d note that it is primarily towards grassroots causes in the areas that his party controls.

 

 

The Worker’s Party is playing a long-term game. Strategy is simple – win seats, keep taking care of constituents to stay elected and then challenge for seats when you have enough strength. Unfortunately for Mr. Singh, his options of executing that strategy are particularly limited in as much as the main source of funding comes from the government, which is controlled by the ruling party, which unashamedly works on the principle of delaying funding to wards that it does not control.

Hence, Mr. Singh has to find different ways of funding the programs that his constituents need. The donation of his salary increase can be seen in the same light as a small shop keeper investing a windfall back into the business.

It’s different for the ruling party in as much as it controls official purse strings. Ruling party members of parliament (MPs) can afford to behave like executives on a generous expense account because getting the money is simply a question of following official rules on accountability.

Someone who comes from a position where he does not have to find ways and means of creating a budget will not be able to understand the motives of someone who is operating in a system where he or she has to get creative about raising the money.

While it will be sometime before the Worker’s Party will be in a position to fight for the government, the lack of resources is inevitably good for it. Its MPs will be trained to think of their wards like microenterprises with limited resources. This mindset will produce people who should be able to come up with creative solutions to the more complex problems of the modern age.

Hopefully, a stronger opposition will also help improve efficiency in the government. One can only hope that the increase in dissenting voices will get ruling party MP’s to think more creatively in order to get things past parliament. In business, big conglomerates like General Electric have started to work on the principle that they need to behave like smaller enterprises. Hopefully the same will happen in politics.    

A Disreputable Son

I got to confess that I am an unsuccessful son of a very successful man. My father was at one stage, one of the top advertising film photographers in town. His success was such that it reached the stage where hiring my father was considered a higher status symbol than flying in an expatriate to do the job. I, by contrast have had a rather different checkered career path. Whereas my father went from rags to riches, I went pretty much the other way. I think of the “horny aunty” who asked if I was a reformed Yellow Ribbon Criminal because the fact that I worked as a waiter and spoke the way I did, did not quite add up. You could say that I am a “disreputable” son.

I bring this personal discussion up because it seems that I’m not the only so called “disreputable” son walking around. In the five years I’ve worked in the insolvency industry, I’ve noticed that there are plenty of them around. There are a number of boxes of documents that I’ve read through, which were once thriving enterprises that were started and built up by a tough, street wise entrepreneur, that turned south after the old man died and left things to the much better educated son. Whenever these boxes ended up on my desk, I’ve often found myself asking “what happened?” How did an enterprise go from thriving and unbeatable to a box of documents for me to go through?

Succession is what you’d call the single greatest challenges facing family businesses. How do you ensure that your good work stays and grows when the main qualification for your successors is family ties? It’s obviously succeeded as many of the greatest fortunes come from family businesses that have lasted generations. However, more often than not, a thriving enterprise ends up as a box on my desk.

With the prominence of family businesses on the global stage, it’s worth studying the things that make them tick and the things that screw them up. I live in a nation that is, in many ways, the classic family business. The current Prime Minister is the son of the Founding Prime Minister and he is also the husband of the CEO of one of our sovereign wealth funds. Our national story does offer some guidelines on what to do and what not to do.

There was never any doubt that our current Prime Minister would become Prime Minister. It was only a question of when. In fairness to the late Mr. Lee Kuan Yew, he generally demanded high standards of the people he chose to serve him and there are enough accounts to show that he made it a point that his family were not to cash in on his political office the way the families of his contemporaries in Malaysia and Indonesia had done. The current Prime Minister needed to have the brains to get into Cambridge (where he was regarded as a brilliant mathematician) and when he was in National Service, he did go through basic military training (BMT) and Officer Cadet School (OCS). He did not get 12-year deferments to study soil as a matter of national security.

Our Prime Minister was brought up knowing what there were expectations for him to perform. In a sense, the original Mr. Lee “trained” him up by making him go through national service, getting into Cambridge and when he entered politics, he did win his seat in a single member constituency (SMC).Before taking the top job, he did serve as his father’s successor’s deputy. In a sense, he was given time to grow into the job and we were prepared for him to take over.

The obvious comparison is Saudi Arabia, where the world knew King Salman would be the next king after his brother, King Abdullah died in 2015. What we were not prepared for was Mohammad Bin Salman, who came out from nowhere to be given a range of portfolios and before we knew it, there was a 30 plus something with no prior experience of running a fire hose, running the entire country.

However, while our current Prime Minister has been a competent enough manager, he’s been nothing. Unlike his predecessor who called for a “Kinder, gentler Singapore,” or his father who went through the independence struggle with the British and the Malayan Federation, our Prime Minister has never once articulated his vision.

At best he’s been guided by GDP growth figures in the same way that a CEO of a commercial company has been guided by sales targets. If there is a criticism to be leveled at this Prime Minister, it is that he’s been a little too preoccupied with the growth statistics than what those growth statistics mean on the ground. His signature policy of opening the floodgates on immigration was the prime example. It brought growth but it also brought a host of other issues, which Singapore is still trying to cope with.

Part of the responsibility with this, lies with the Old Patriarch. The younger Mr. Lee had to contend with the old one in his cabinet as “Minister Mentor” and somehow there was a never a chance to stamp his own mark onto the government. As is often argued, the problem with brilliant founders is that they never know when to let go.

One of the greatest causes of failure in families is the failure to let go. While Singapore has not been run to the ground and I don’t believe its in any danger of going down the tubes anytime soon, the unwillingness to let go has allowed the things that set Singapore apart to quietly vanish. Unless a new leader with a passion to set out a vision emerges, Singapore will decline.

Just as I started talking about my personal experiences, I shall end on them. I’m grateful my father allowed me to do my own things. All though I’ve not been the roaring success he was, my success and failures are mine. I was not molded to take over something that was not meant to be mine. I wonder how many family businesses might have survived if the founder had let go and allowed his successors to be their own people.