The Wall Street Journal, May 25, 2009
Scripture Provides Guide for Long-Term Decisions; Valuable in a Downturn
By COSTAS PARIS
Tan Sri Francis Yeoh, managing director of YTL Corp. Bhd. and one of Malaysia's most prominent business personalities, is a religious man who makes every effort to practice his Christian values in life and business. Under his stewardship, the YTL group has grown from a single entity in Malaysia in 1985 to seven listed companies, making it one of Malaysia's biggest conglomerates, with operations at home and abroad.
Mr. Yeoh's grandfather left Fujian province in China in 1920 with just a few dollars and a bag of clothes. He landed in Malaysia, worked hard and opened a timber business. His son Yeoh Tiong Lay started a construction company called Yeoh Tiong Lay Building Co. in 1955, later shortened to YTL. Its early construction projects in Malaysia were military garrisons, hospitals and low-cost housing.
At the age of 16, Francis Yeoh was already learning the business at the company's construction sites on weekends and holidays. As the eldest of seven children, he offered to drop out of school, where he was the head boy, to help his father. The offer was rejected and Francis went to Kingston Polytechnic (now Kingston University), in London, earning a degree in civil engineering. On his return to Malaysia in 1978, at the age of 24, his father appointed him managing director of YTL.
During the past 30 years, the YTL group, whose principal activities are now in water supply and treatment and power generation, has also moved into other activities such as hotel and resort management, information technology, manufacturing, and cement, with acquisitions such as PowerSeraya Ltd., a major supplier of electricity in Singapore; Wessex Water Ltd. in the U.K., and the Ritz-Carlton hotel in Kuala Lumpur.
Yeoh family members continue to dominate the YTL board, holding eight of the 13 seats. The extended Yeoh family's net worth is estimated at US$1.7 billion, which would make it Malaysia's sixth richest clan. Shares of YTL Corp. and six other entities in the YTL group are listed in Malaysia, while the parent company is also traded in Tokyo. And a YTL real-estate investment trust trades on the Nasdaq stock exchange in New York.
An avid lover of the arts, Mr. Yeoh, 56, is president and patron of the Kuala Lumpur Symphony Orchestra Society and is actively involved in philanthropy. Costas Paris interviewed Mr. Yeoh in Singapore.
WSJ: Who gave you the best business advice?
Mr. Yeoh: The best business advice I've received came from God's scriptures. I am only a steward of God's wealth. Knowing this means that there is a lack of personal ego in the approach that YTL takes to business decisions. We practice what we preach and look to develop good ideas so that in every down cycle, such as we are currently seeing in the global economy, we have cash available to be able to expand the company. Now we have reserves to invest in excess of US$3.4 billion.
WSJ: What advice would you give to someone starting out in your field today?
Mr. Yeoh: Many CEOs have a short-term, quarterly-results-oriented outlook. At YTL we have built businesses that on the surface may look diversified. However, linking them all is the central common denominator, which is our engineering skill set. Staying focused and having a long-term view means that we have a balance sheet where more than 70% of our income is recurring, which is one of the reasons I can sleep well at night.
WSJ: Do you have a favorite business book?
Mr. Yeoh: I read and enjoy Warren Buffet and the usual collection of business-strategy books. I particularly like W. Chan Kim's "Blue Ocean Strategy." But the book I value the most is the Bible. Many of the best business practices we adopt as a [corporate] culture tend to be faith-based, and are found in the Scriptures.
WSJ: What's the one thing you wish every new hire knew?
Mr. Yeoh: New hires must master what we call the three languages: the language of God, the language of man and the language of machines. The language of God means integrating your character with God and being uncorrupted.
The language of man is the language of global business. You have to articulate, especially when you're a leader and have to motivate your people. It could be Mandarin in China, it could be English in Britain, and it could be Indian in India if you do business there.
Finally you have to master the language of machines, which is computer-based technology or machines that enhance your business productivity. At YTL we focus on these three characteristics and as a result have very little turnover of senior staff. And we are mindful never to over-hire so as to avoid any retrenchment cycles.
WSJ: Is there a difference between how you work in Asia and the rest of the world?
Mr. Yeoh: We tend to do very well in economies that have the rule of law, transparency and a sophisticated regulatory framework. So in that context, Malaysia, Britain, Australia, and Singapore and economies like the U.S. are territories we are very comfortable with.
WSJ: What was the toughest decision you've had to make as a manager?
Mr. Yeoh: At YTL, any decision is subjected to rigorous scrutiny of the board of directors. If a deal gets through them it comes to me and I will still approach my father for his counsel. When the company was still young, one director [a Yeoh brother] came to the board with an idea to invest into the latex glove business. Rather than a core business built to last, it was an opportunity to make huge profits -- or so we all thought. It very quickly came to nothing [when the over-invested global latex glove industry faltered] and we closed the business.
As a reminder to us all, we still keep the empty tanks [once filled with liquid latex for making gloves] in our [so-called] museum of mistakes. It reinforces the need to stay focused on our skill set, which is based on engineering. The same brother has moved on to build one of the best and profitable cement companies in Asia, YTL Cement.
WSJ: Would you recommend someone starting out in your field obtain an advanced degree, or learn on the job?
Mr. Yeoh: I had to set a very high bar for members of our family. I insisted on an honors degree in engineering or similar degrees related to our industry. I didn't want any molly-coddled sibling coming in. I didn't want nepotism, cronyism and all that stuff.
So most of them have graduated or are graduating from the best colleges, such as the Imperial College London, the University of Cambridge, the University of Oxford, the University of Nottingham, the London School of Economics. These are good signs.
Write to Costas Paris at email@example.com