Soedarpo: from revolutionary to family business leader

Soedarpo Sastrosatomo had a fascinating life that included politics, war and the formation of Indonesia's largest shipping company. His daughter, Shanti, talks to Bruce Love about her father's life and her role in continuing his businesses

While the world watches closely as China and India lead a South East Asian wave of economic growth, and Hong Kong, Shanghai and Singapore duel for the title of premier Asian economic hub, other regional players, such as Indonesia, prefer to continue their equally impressive growth outside of this harsh spotlight.

For centuries, the rich resources of these countries drove much of the economic success of their colonial masters. For many local families, it was only when the political balance turned that they were able to begin to take control of their own destinies.

Soedarpo Sastrosatomo, founder of Soedarpo Corporation and multi-million dollar Samudera Indonesia Group, is one such individual with an extraordinary story.

From the Japanese occupation in World War II to revolution against Indonesia's Dutch colonial government and the controversial reign of President Soeharto, Soedarpo's life was intimately tied to the fortunes of his homeland ? a country with a rich and colourful history.

When his daughter, Shanti Poesposoetjipto, speaks of her father's accomplishments, there is a distinct sense of pride mixed with sincere humility in her voice. His passing late last year at the age of 87 was a time of sadness but also a time to reflect on an extraordinary life.

Born in 1920, the son of a civil servant who worked in the state-run opium trade, Soedarpo's early years were spent in North Sumatra and the small province of Yogyakarta. He was attending medical school at the outbreak of World War II and the Japanese occupation of Indonesia. At first, the Indonesians were sympathetic to the Japanese invasion, seeing it as a liberation of Dutch colonial rule. However, it was soon clear that the Japanese had no intention of aiding the plight of the Indonesian people. In this time of political and social upheaval, Soedarpo formed strong nationalist opinions that eventually led him to fight for his country's independence in Indonesia's post-WWII revolution.

"My father and his friends were only in their 20s, fighting for the freedom of their country. They were instrumental in the revolution," says Shanti.

His efforts to support the fledgling Indonesian republic earned him a diplomatic post, and in 1948 he was tasked with lobbying Washington and New York while Indonesia tried to gain acknowledgement and acceptance from the United Nations Security Council. At the time, Indonesia was involved in a fierce battle to wrest itself from the shackles of Dutch imperialism, and the young nation still needed to obtain recognition as a sovereign state in the eyes of the rest of the world.

"Once the fighting ended, my father was assigned to the US as part of a delegation of Indonesian observers for the newly created country. One of his duties was managing the finances of the Indonesian delegations that were sent to New York to lobby the United Nations for recognition of statehood for the new republic," says Shanti. "The British and the Dutch were still poking around in Indonesia and most businesses were still run by Europeans. The new national government was in a precarious position and it was crucial that it proved itself on the international stage."

In 1950, Soedarpo was posted to Washington as a diplomat in the newly opened Indonesian embassy. On behalf of the government, he obtained two buildings in the American capital ? an embassy close to downtown Washington and a suburban estate for the ambassador's house. For the next three years he was deeply involved in the affairs of state at an extremely high level.

"He was exposed to Wall Street and American politics at a very young age, and this was very revealing to him," says Shanti, who believes her father refined his negotiation skills and gained a keen understanding of how Americans conducted business through his success in this diplomatic mission. As a result, on his return to Indonesia he shunned further government appointments and decided to enter into business.

"He was quite visionary as a young fellow," says Shanti. "When he returned to Indonesia after his diplomatic service, he was widely acclaimed for the work that he had done. But he was not interested in working in the bureaucracy of government."

Instead, Soedarpo quickly set up his own distribution business and secured the import licenses and contracts for Remington's typewriters and office machines, and Radio Corporation of America.

Soedarpo was convinced that in a country such as Indonesia ? with its population dispersed over hundreds of islands ? distribution was a valuable proposition. "His strategy was that if you could master distribution in Indonesia, then the country would prosper," says Shanti.

By 1958, Soedarpo had also secured distribution rights to Univac ? the forerunners to today's office computers ? and by the early 1970s, when Shanti graduated from university, her father put her in charge of the company's implementation service.

"I joined the company in 1974 after graduation," says Shanti, who believes her father guided her into the role because of her aptitude for technology. "I really liked it. When I was younger I used to toy around in my father's electronics workshop. So when I graduated, I asked him what plans he had for me. He had recently set up a computer service bureau and thought I should join that outfit." Shanti had studied computer science at the faculty of electronic engineering at the Technical University, Munich. The bureau's aim was to provide IT and computer services for the rest of Soedarpo's businesses, as well as other Indonesian companies.

"During the early 1970s, computer prices were steep and installation was expensive," says Shanti. "My father's policy was to run the business on a commercial basis. We had to convince his other companies of the importance of a computer infrastructure and then deliver on our promises to help them do business better."

Shanti says if her computer service company wanted to work with one of her father's other companies, she had to go through a tender process: "I would not get the tender straight away. I would have to fight for it."

She believes that her father's method of throwing her in at the deep end was a valuable lesson in business and her new responsibility allowed her to gain a deep understanding of her father's holdings and the business process in general.

For the first time, Shanti was mixing with the chairmen and CEOs of her father's businesses on a level playing field. To implement computer systems for them, she had to delve deep into the organisation and investigate how the business operates.

"Today we call it business process. It gives you an inside view. Through running the computer company I was literally learning a variety number of businesses ? oil, insurance, banking, trading, even government operations," she says. "People got to know me without having to be introduced as the daughter of my father. They got to know me as somebody who was professional."

Over the years Soedarpo diversified his holdings, finding a range of different organisations, including land transportation firm Samudra Perdana, insurance company Asuransi Bintang and bank Bank Niaga. By 1986, Soedarpo led 21 companies.

Shanti says that even when they were young, Soedarpo exposed her and her sisters to his businesses and there were valuable lessons to learn: "He only had three girls. He didn't have any boys. So we were always tagging along. Wherever he went, whether it was commissioning the building of a tugboat, or opening a bank, he insisted we come. We would join him in inspecting boat construction, or when a ship was anchoring we would be taken along to the harbour and meet the captain. I think his aim was to make us feel part of the business and to prepare ourselves for the responsibility we would one day have."

In a country that throughout the latter half of the twentieth century was marred by corruption allegations, Shanti says her father was very insistent when drawing the lines between business and personal assets.

"Before I ever knew what good governance was, I already had it ingrained in me. Father was very strict about governance. We had a corporate car and a private car. Only the private car could be used for personal use. This was the environment in which I grew up."

Once Shanti was working in the business, and started to take a deeper look at what each operation was doing, she gained a newfound respect for the way that her father conducted his affairs. "I think his ideas about what a family business was were very different from some of his contemporaries. It was a good model for best practice and how to run a responsible organisation."

By coincidence, in 1976 Shanti had become involved with LPPM ? a management school in Jakarta that was doing research into Indonesian family business. In the years that followed, she became convinced that her father's governance philosophy could help other family businesses, both in Indonesia and further afield. Since then, she has spoken on countless occasions and guest lectured on the subject of family business governance at home and in Japan, Taiwan, Singapore, Malaysia, the Philippines and Australia.

Shanti says now more than ever, Asian companies need to focus on better governance if they are to make the most of the current economic climate that seems to be favouring the region over much more mature markets. She believes many businesses in the region will need to make fundamental mind shifts if they are to be successful on the international economic stage.

"My parents were diplomats, and as kids we were forced to speak up and voice our opinions. But this is not the culture in Asia. The idea of communal agreement is central to many Asian cultures, and nobody is allowed to speak up in dissent. This may have to change in some way."

However, she believes the onus is not just on Asian companies: "American and European institutions have to come to better grips with Asian culture, and even with so much interaction at present, they still have a long way to go."

One spark of hope for Shanti is US Senator Barack Obama's bid for the American presidency. She notes that Obama grew up in Jakarta and as a result has a very open view of the region. His mother had met her Indonesian husband while studying in Hawaii and then moved with him to Indonesia when Obama was a child.

"His comments and rhetoric about Asian culture and its place in the world is totally different to other Western politicians," she says. "It seems more sincere, genuine and reasonable. It is very hard for an American who has never been abroad to understand Indonesia or Asia in general. Obama is a classical example of the new breed of American who is better attuned to world affairs. It is these people who will prove to influence politics and business to a greater degree in the future."

According to Shanti, many of the new generation of business leaders will come from the "ex-pat" community of Asians who grew up in the US or Europe: "In America and Europe there are many Asian immigrants who are better educated and residing in their adopted countries. But now a lot of these people are getting the opportunity to come back to their countries of origin and take part in Asia's boom. They have an affinity with Asian culture, but they are also able to relate to Western culture and business practices."

She believes that the successful companies of the future will be those that successfully integrate the lessons they learn in Asia into their global operations.

"Many of the people who are working for American or European companies in places like Singapore, Hong Kong and Shanghai now have a better position in their company's headquarters because they understand the Asian markets better. If you went back to the 80s and 70s, these people always had a problem dealing with headquarters because they understand both worlds but were not themselves understood or regarded highly.

"You are going to have a lot more Asian-led global initiatives on the world stage in the decades to come."