State of the University’s Address by the President

Tan Sri Dato’ Dr Abu Bakar Suleiman


University Day

Wednesday, 28 April 2010

Auditorium 2, 4th floor, Bukit Jalil Campus

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At the beginning of 2009, we were faced with a great deal of uncertainty, and we were cautions in planning, in case the unexpected occurs that would affect us adversely. In fact 2009 turned out to be another very successful year for IMU. For this I am deeply appreciative for the dedication and hard work contributed by everybody at IMU, that had resulted in a successful 2009.

The economic environment remains fraught with uncertainty, and challenges abound. However we have all worked hard and successfully to put IMU in a position of considerable strength that can allow us to attain greater success and scale greater heights.

We have relooked at our Strategic Plan and reinforced the direction that we can take over the next few years, and have identified certain targets to be achieved. We will need to look at developing a system of measurement to ensure that we are progressing in the direction and at a pace that we have planned.

The main areas that IMU will work on remain education, research and health services. Education has been our core since the beginning, and health services will be developed to support education.

In education we will continue to develop new programmes as well as redevelop existing ones. In addition to continuing developing programmes for school leavers, we need to work quickly and more effectively to develop programmes for students at work, who can take our programmes while continuing their work. This is a major thrust area for the future, and we need to be leaders in this segment.

We are all aware of the rapidly changing scene in the higher education sector in this country. In not fully understanding the strategy taken inbuilding Malaysia into a regional or international education hub by the powers that be, the seemingly chaotic scene in higher education locally is both unsetting, and potentially dangerous when quality institutions cannot be easily recognised and acknowledged in the teeming crowd of average entities. This can be confusing for the students and their parents in their quest to seek excellent institutions for higher education, when there are no means to effectively evaluate the quality of these institutions in a manner that is easily understood by them. Hopefully some efforts to address this by the government will in future prove to be helpful. IMU must develop excellence so that IMU is always synonymous with quality of the highest order.

IMU has been continuously successful for the last 17 years, and we will continue to succeed, as we have charted a future that is sensible and constructive, and we have a great track record of success. However if we are to be continuously successful and aspire to become a great university, we need to understand what it will take for us to achieve greatness.

We need to understand and accept our place in the sun. We are a small, “specialist” private, for-profit university in a market place that is open, and subject to all the vagaries of an open market. We need to earn every cent that we need to spend for whatever reason that we justify in the conduct of our business. To survive we need to be profitable, as we have been for the last ten years. To succeed in the market place we need to have our understanding of the market on a global basis and the financial catastrophe that the world is in the process of going through, and the value system that have resulted in this mess.

There is a tendency of not learning from history that we have been repeatedly doomed to repeat the disasters of history. Medical Schools are not the only one not to put any emphasis on learning history. Business schools also ignore the lessons of history. The present financial crisis did not start in 2008. Without going too far back, the collapse of Long-Term Capital Management (LTCM) in 1998 in The USA, was massive and yet no lessons were learnt from that, either by the regulators or by others in the market. The investment approach by LTCM was repeated in hundreds and thousands of hedge funds resulting in massive failures ten years later. Why is this?

We would have read of the bail out of Wall Street recently where the reckless practices of bankers resulted in catastrophic failures that threatened the world economy. Millions of businesses collapsed and millions of people lost their homes, and the future of so many families were destroyed. Billions of dollars of tax-payers funds were used to prop up Wall Street. Within a year Wall Street Banks have became profitable again with the support of tax-payers funds, and incredibly insensitively have spent billions of dollars doling out bonuses, while the millions of people who lost their homes and their futures are still struggling to survive. This is surely difficult to understand.

There have been consternation recently at the role of Wall Street on the crisis faced by Greece which is facing bankruptcy. Wall Street helped Greece hide some of its debts and then placed bets that the debt would not be paid!! This have not only threatened the integrity of Greece as a country but also the monetary system of the European Union. In the words of Allan Sloan, of Fortune Magazine in his column in the March 22, 2010 issue: Welcome to the real world of finance in 2010. He further explained: Wall Street makes most of its money these days speculating. It doesn’t care about the collateral damage its activities can inflict on people, companies, and entire countries – unless the reaction results in embarrassment, punishment, regulation or some combination of them.

In the way that Wall Street functions, the management put their interests ahead of that of their clients, their shareholders or the company. In addition such is the extent of their influence; they are lobbying against any proposals to more effectively regulate the financial services industry in The USA.

In 2008 as the financial crisis was unfolding, Harvard Business School, and other business schools elsewhere have come to realise that they have been at fault, and have contributed to this crisis by accepting a value system that have emphasised profits and incentives in such a manner that have been destructive and that has threatened the existing capitalist market system. Business Schools since then have been busy reviewing their curriculum and relooking at the value system that should be promoted. This would be of interest to us all!!

We can all remember over a year ago, the sense of crisis that we had over where should we keep our savings, in the banks (and which bank?) or would it be safer under our pillows? It was amazing how easily and quickly our trust in big banking institutions evaporated at the time. “Trust is like the air we breathe”, Warren Buffet said, “when it’s present nobody notices. But when it is absent, everybody notices.” Trust allows us to function in times of uncertainty. How about the health sector where our students will enter upon graduation?

Trust

In the April 2010 issue of the ISQua (International Society for Quality in Healthcare) Bulletin, Christopher Cornue reported on his interview with Steven Covey, after Covey made a presentation, on the importance of trust. Stephen Covey discussed some sobering statistics, and observed that this reflected significantly about the issue of trust in healthcare. He cited that 34% of people believe that others can be trusted. In Great Britain, 29% stated they trust others, down from 60% a few decades ago.

In healthcare, 27% of people trust healthcare leaders, down from 73% many years ago. Only 28% trust hospitals. This reflects a grim picture for healthcare and its leaders. Is this a fair or unfair representation of the healthcare industry?

Steven Covey suggested that healthcare leaders have the ability to impact change on significant levels through the establishment of trust in healthcare organisations. He felt that “the ability to establish, grow, extend and restore trust with all stakeholders (patients, families, colleagues, providers and communities) is the No. 1 leadership competency in healthcare today”.

As an organisation we need to consider these issues carefully. Just as Business Schools have been reviewing their approach and priorities in emphasising the correct values in their education programmes, we clearly need to do the same to ensure that the correct values are promoted and emphasised. Indeed many medical Schools have been doing this for some time in putting greater emphasis on the education of professionalism and ethics, and we have been doing the same at IMU.

However we really need to do much more in these trying times. We are living in times where there is a moral crisis in capitalism over corporate greed and irresponsibility, at a scale that is truly mind boggling! The commoditisation of medicine and healthcare have also resulted in a loss of trust of doctors and hospitals.

We need to understand also that in this globalised world that is increasingly transparent, where information travels at the speed of light, it is difficult to hide your shortcomings. It is also difficult for organisations to differentiate themselves through their products or services alone. No matter how good your products or services may be, chances are that somebody would quickly copy it, and sell it more cheaply. It is more important for organisations to compete at the level of behavior, on who has the most trust.

Can the impact of good behavior be measured? Jeffery Dyer from Brigham Young University and Wujin Chu from Seoul National University surveyed 350 buyer/supplier relationships involving eight automakers in the United States, Japan and South Korea and found a direct and dramatic relationship between trust and relationship costs. The least trusted buyer incurred procurement costs six times higher than the most trusted. Dyer and Chu also studied the relationship between trust and certain value creating behaviors, and concluded that the investments trading partners make to build trust often simultaneously create economic value, beyond minimising transaction costs, in the relationship.

We need to strive to build the reservoir of trust that our people and our stakeholders have in us as an organisation. It will require self reflection and hard work on our part to build teamwork in this hyper connected world. A cornerstone of trust is credibility. If others feel that you really do not acknowledge reality, why would they trust you? An essential element of credibility is being honest, open and realistic about things.

Keeping promises, being consistent, building upon the contributions of your predecessors, acting based on principle, thinking in values term, and putting these values to work on a daily basis and pursuing activities that are worthwhile to the organisation are all that contribute towards inspiring trust in others. Working towards developing interpersonal interactions between ourselves with trust enhancing conduct will increase the value of these relationships that brings benefit to the organization. This must be a priority in our organisation.

Reputation

Reputation is one of those soft, abstract things and it the sum of a number of things:-

What you stand for, what you can be trusted to do, your track record of success and accomplishments, your credibility and the esteem that you have earned and how you have learnt from your experiences.

In our globalised, transparent world, reputation leads. It enters the room before you do, and remains after you go, either enhanced, or tarnished. It records your past, and creates expectations of the future.

To have a reputation of merit, others have to consider you to be a person of value, a good leader, a creative thinker, a dedicated worker who treats people well and fairly, and who is honest. They think of you this way because they trust you. A good reputation is built when those you encounter, colleagues, employees, customers trust you.

Who can we trust? Those who posses integrity, say what they mean, mean what they say, and consistently follow through. Acting consistently and in line with your reputation creates trust. Reputation is who you are, your character, your identity. Great companies and leaders understand that their reputational capital is as valuable as your physical capital.

Talented people prefers to work in a place that allows opportunity and resources to enable them to grow as individuals and make contributions; where there is a shared belief of what their professional aspirations and the objectives of the organizations can achieve, and where the organisation is working to make this world a better place, in a way that they identify with. This inspires them to strive hard and take the extra step. To build such an organisation we need to develop a distinct culture, a distinct character, and a distinct set of values and objectives that is accepted by all and which matches their aspirations.

Our corporate culture should be based on our value system, and we must become a values driven organisation. Our values provide space for us to behave based on what is important, according to our values, which are:-

Justice, Truth, Honesty, Integrity

Our values have texture, which are:-

Fairness, Humility, service to others.

Our culture represents the collective action of all individuals in our organisation, and all of us must understand it and everything that goes with it, so that we can collectively make it work. Our culture and the values embedded in it, will help us realise our vision of being a great organisation, and of producing graduates who will be capable of being leaders that make a difference to their communities.

In healthcare where there is decreasing trust of healthcare leaders and hospitals, as an organisation we need to ensure that our graduates understand the importance of the values that we promote, that our graduates will apply fundamental values of decency and transparency in their lives, and interact with others in ways that promote trust. They will learn that the only way to enjoy a good reputation is to earn it by living with integrity.

As an organisation our members must behave according to our values. We must accept the classic philosopher’s challenge: Live your principles. In simple language – walk the talk! We need to be role models to our students. We will develop our corporate culture, promote ethical behavior, always act according to our values.

We are in a highly competitive environment, and we will compete based on various elements. In this wired, global, transparent environment, we cannot hide bad behavior- this makes good behavior all the more important.

Can “good behavior” be an asset that becames a competitive tool in our sector of the economy? I believe IMU can “outbehave” our competitors ethically, and also outperform them by other measures.

I recently asked:

Is virtue its own reward?

Can it be profitable too?

Let us all work together to prove that this can be so.

Thank you.