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How Astra is Shaping Indonesia’s Future Leaders

HCLI Research

Published 12 November 2016

In the 70s and 80s, Indonesia was a relatively unknown entity in the West; now it’s the emerging economic powerhouse of Southeast Asia. The journey of Prijono Sugiarto, President of PT Astra International, parallels that of his homeland. He too has overcome adversity to take a leading role. Now, he seeks to pass insight and opportunities to the next generation

“I always knew what I wanted to do.” Prijono Sugiarto, President of PT Astra International, has spent nearly half his life at the giant conglomerate that, in terms of profits, revenues and market share, is easily Indonesia’s largest automotive firm. But aged 12 years old, all he wanted to be a mechanical engineer.

Growing up in Jakarta with a father who built cars and Lambretta scooters for a living, Sugiarto loved watching how a team of technicians would assemble different pieces and components together. His older brother studied mechanical engineering and Sugiarto set out to do the same himself. “You have to know what you want,” he says. “I was a young boy, but I was so determined to become a mechanical engineer.”

This determination was tested when his father urged him to study medicine or anything other than mechanical engineering. However, he was adamant to stay on his own course, replying, “You can’t force me to do something that I may regret one day.” Offered the chance to study one of three degrees in West Germany — in aeronautical engineering, architecture or mechanical engineering — the choice was clear. He rejected the first two options without any hesitation in favour of mechanical engineering.

Challenging ignorance with excellence

Life as an Indonesian undergraduate in Germany in the late 70s and early 80s could be challenging. Unlike today, the Indonesia of 40 years ago was on few peoples’ radar. Sugiarto had many conversations along the following lines:

“Where are you from?”
“I’m from Jakarta, Indonesia.”
“Indonesia. Where’s that? What do they do there?”
“Do you know about Borobudur or Bali?”
“I know Bali!”
“Bali is part of Indonesia”

Such conversations hinted at an undercurrent of racial intolerance in West German society. During the 1970s and early 80s, most immigrants to West Germany were European or North African, and Sugiarto recounts that in those days many Europeans seemed to look down on an Indonesian student.

The only way he saw to overcome this was to be better than his peers. “One thing I learnt about the Germans,” he recounts “is that they won’t look down on you if you’re smart or extraordinary. That’s why you have to be the best in your class.”

This refusal to accept anything less than the best saw Sugiarto follow his engineering degree with an MBA. However, in a curious turn, given his impressive qualifications, he joined a Mercedes dealership in Germany as a mechanic. He was so overqualified for the role that the Mercedes HR manager even asked him: “Why would you want to do this?”

“I have two degrees,” he responded “but that does not mean I know everything.”

A year later, Sugiarto returned to Jakarta as a manager for the German automobile manufacturer Daimler-Benz. He credits that one ‘hands-on’ year as a mechanic as preparing him for this new managerial role.

Gently upsetting hierarchies

Indonesia has a traditionally hierarchical culture of deference to age and seniority. As a young manager, Sugiarto now had the challenging scenario of giving advice and direction to staff members who were older than him, in some cases by nearly two decades.

This forced Sugiarto to become more mature and appreciate the value of mutual respect. “Give advice politely and people realise you’re someone who understands, is knowledgeable, and isn’t arrogant — that’s really important in Indonesia,” he says, recalling the lessons learned. “Do all of that and they listen to you.” Sugiarto believes that the process of constantly questioning himself, and asking questions such as “Did I give the right advice? Have I done it right?” ultimately sharpened his decisionmaking abilities.

Leading the next generation

Sugiarto joined Astra in 1990 as president of Tjahja Sakti Motor (BMW), and from 2001, he became a member of Astra’s board of directors, responsible for different portfolios.

Just as Sugiarto had offered advice to his older colleagues, he also began to look at the younger employees and wonder if there was more he could be doing: “I started to ask myself, ‘What is my job really about?’”

“When I was the CEO of BMW at Astra,” he says, “my job was — in the language of football — ‘to score the goals’. To achieve the highest possible market share, to have the most dealerships and the least account receivables.”

Increasingly, however,

he began to think that he should focus less on driving these business objectives and more on nurturing young, talented Indonesian leaders.

“Indonesians typically shy away from global exposure because of the language. So I’ve sent 15 to 20 people to the INSEAD business school campus in Fontainebleau, France, precisely for that reason: to give them exposure to global situations.”

He deliberately wanted to take them out of their comfort zone and ensure that they were not content with merely being extremely good in Indonesia. Part of this drive comes from the fact that he himself never had these opportunities.

“In my last 25 years at Astra, I only attended two training days, and one of those was ‘Seven Habits of Highly Effective People’,” he recalls. “You can buy the book for that!” Instead, he now has the chance to give the next generation of Astra leaders opportunities to learn and develop.

While the Astra board of directors are all aged in their fifties, the company’s management are in their forties; young for such senior positions. Yet, Sugiarto is already setting his sights on the next generation. “My main job is grooming the future leaders of Astra. So I tell the current management what I told their predecessors five years ago, ‘Please help me groom the next leader who will succeed you.’”

Roots run deep

Today, Sugiarto is courted by politicians, financiers and the global business elite. However, he doesn’t forget where he came from. While his father had wanted his son to study medicine rather than mechanical engineering, he was still the person Sugiarto wrote to as his degree came to a close and he wanted counsel on what to do next. His father suggested studying business. It was this sound piece of advice that would lead Sugiarto to taking his MBA.

“I think that was one of the best pieces of advice I ever received. Because as it turned out I only worked as a mechanic for a year, while I’ve spent the rest of my career as a businessman.”

This article first appeared in HQ Asia Issue 9 (2015).

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