GROWTH STRATEGIES: COMPOSITE MODEL

SLID BOARD LEADERSHIP TRAINING

SLID DINNER THEATRE MEMORIES FROM BROADWAY

SLID ENTREPRENEUR’S FORUM: DARING TO BE DIFFERENT

Volume 13 | Issue 04 | December 2013

WHAT DO LEADERS AT GREAT WORKPLACES DO? p.16

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THE IMPORTANCE OF MANAGING CRISES AND PROTECTING YOUR CORPORATE REPUTATION

SLID NEWS AND EVENTS

SLID CEO FORUM: WALKING THE TIGHTROPE

HARVARD MANAGEMENT TIPS

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SLID ENTREPRENEUR’S FORUM: DARING TO BE DIFFERENT

The interactive panel discussion featuring some of the country’s biggest entrepreneurial success stories was

organized by The Sri Lanka Institute of Directors in November this ye-ar. The event was created as a platform for aspiring start-ups and enterprisers to be enlightened as to the genesis, process, pitfalls and benefits of entrepreneurship. The panel was moderated by Daily FT Editor Nisthar Cassim, and featured Kapruka Fou-nder/CEO Dulith Herath, Softlogic Holdings Chairman/ MD Ashok Pathirage, Expolan-ka Group CEO/ Director Hanif Yusoof, and ODEL CEO/Founder Otara Gunewardene. The ballroom of the Hilton Residencies was packed to capacity, and extra seats had to be moved in to accommodate the large gathering. The session was kicked off with Cassim presenting a few video clips in relation to entrepreneurship and getting the audience geared for what was to come.

Q: What drove you to be an entrepreneur?Gunewardene: For me it was a chance. I never intended to be in business. I always wanted to work with animals. It was in the interim of me finding something to do that my father suggested I try business whilst I modeled. I started procuring

clothing from factories and selling it to my friends, and I started to love what I did. From that day to this, I love what I do and if I stopped loving it, I’d make a change.

Yusoof: My father was a businessman, who ran the ODEL of the 60’s/70’s. In the 80s we went through a financial crisis. I was doing my OLs and I wanted to help out. I started by assembling radios and typing documents in Fort. I failed miserably as a fashion designer and a nightclub photographer. I’ve never had a professional job or been on the other side of the interview panel.

Pathirage: I worked for a corporate for 9 years. I had joined when I was 18 and was fascinated by how the corporate system worked. I realized then that I wanted to start something of my own. Using about Rs 1 million from my EPF, and together with about 7 other friends of mine, we started something up. We realized soon enough that we had a lot of responsibility although we didn’t take things too seriously.

Herath: I had it in my blood from my childhood. The passion I had stems from my addiction to technology. While kids my age were playing cricket, I was in my room making a robot. And to this day I still haven’t held a cricket bat!.. I started selling computers at 11 and had enough money of my own by the time of my OLs to buy

my own car. I went to the States to pursue artificial intelligence then started working for Microsoft. It was fairly difficult to work alo-ne, without a bunch of managers to help out.Q: What were your biggest challenges? Pathirage: In 6 months we built businesses that we could run in the long term. As we grew bigger, we needed funding from other sources such as banks etc. it’s usually very difficult for young entrepreneurs to get funding from banks. We didn’t reach 30 billion in a year. We started off as a soft ware company and expanded into electronics.

Yusoof: Normally people start businesses to make money. I started mine to get out of debt. When you have failures, you have your share of ridicule. No matter what people said to me, I did not break relationships. Even now I treat my customers like celebrities. I was doing freelance ticketing back then, and got a lift from a family fri-end on a scooter. He offered me a salary and capital to start ExpoLanka Freight, and that’s where it all started. It took me several years to settle all my debts.

Gunewardene: I borrowed 50 dollars from my mother and brother, and manag-ed to get some clothes on credit from manufacturers, so I managed to start up without really being in debt.

The Panel from the left, Dulith Herath, Ashok Pathirage, Nisthar Cassim, Hanif Yusoof and Otara Gunewardene

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SLID Entrepreneur’s Forum

SLID POWER PAGES

By Kinita Shenoy

For me there were a few challenges - after a few years in Dickmans Road the shop burnt down and I lost everything. The main thing is not to get disheartenedQ: The current perception is you need contacts to get into business. Back then, was it also an issue? Yusoof: You need to know at least one or two people in the beginning, but it really is about delivery.

Pathirage: I worked for a corporate initia-lly, so I had already a few contacts....about 9 years in the sector, so obviously I had reached a certain level by then. But of cou-rse, people can give you business and if you don’t deliver, you’ll lose them. Q: There’s a tendency toward emplo-yees leaving organizations and taking clients with them. How has this aff-ected you?Pathirage: today we are a larger company so it doesn’t really affect us. We also need to know how to handle and protect our agencies to protect what we have.

Herath: I believe in the innovation that drove my business. Of course people cou-ld try to copy or recreate our model but you need to keep moving, and stay one step ahead. Imitations will not meet the standards of innovation. Q: Did you have any role models growing up?Yusoof: There was this one book that ch-anged my life just after I got married - ‘The World’s Greatest Salesman’. It advocated saying these 7 lines of affirmation in the morning and at night, and to that book I owe everything I am.

Pathirage: I don’t have any particular role models as such, but of course there are great stories to emulate such as Sir Richa-rd Branson etc.

Gunewardene: Definitely, there were different people that have helped and influenced me. I did learn things from various sources, taking parts that applied to me. Q: We have the new wave of exe-cutive education after which many people think they can start up a business. What is your take on it?Pathirage: Of course it’s good to have a proper education, but you can’t just create entrepreneurs, they have to be born with that drive.

Yusoof: With formal education, you learn so much and forget so much. Education would have possibly helped me make informed decisions, but I can’t tell you what the other side of the coin is.

Gunewardene: I actually don’t quite believe in it. I was terrible at studies throu-ghout school and university, and it helped me not get structured into what you need to be as a person. I think I’m a good example of someone who had a Biology background and now I’m running a PLC. I think especially in today’s world, there are lots of ways in which you can educate yourself and switch fields easily.

Audience Q: Every successful person has a painful story. What was yours? Herath: Kapruka was recently framed as the e-commerce company involved in a big liquor racket in Sri Lanka. Despite the fact that the story was false, that sort of thing really puts you down. It made me doubt everything for about 10 minutes - should the company continue, do I want to stay in the country etc. But it’s just 10 minutes, after which you have to get back up and run again.

Pathirage: The worst bit for me was probably seeing the initial share price after listing my company!

Yusoof: Maybe buying the wrong company simply

because I liked the view from the window.

Gunewardene: There is no one single painful experience - there were so many things over the years that were painful at the time and made me want to give up. But when I look back now, I’m glad they happened. Because what you’ve learnt from your pain is so much more important that it’s not painful in the long term.Q: When you went public, you had different styles of doing business and management. Yusoof : I’m a jack of all trades but I have all the masters. I’m impatient and I insist on having things my way. Corporate governance has now come in, and made large changes. But change is necessary and we make it work.

Pathirage: With us, from day one, our intention was to build a company that we hoped to one day list. So we developed the company in that way, with those rules and methods.

Gunewardene: It was a huge change for me, because our method of working be-fore listing was quite ad hoc. With a board, there needs to be a lot of justification of expenses and ideas and focus on the bottom line. So now there has to be a balance of how the organization is run - between the balance sheet and creativity. For ODEL it seemed like it was the right time, a total benefit that helped grow the company and see the potential in the years ahead, including taking the business international.

Pathirage: Our job is market capitalization in the

long term. We need to of course be mindful of the market. As long there is some control, we would continue that journey. Q: Dulith, are you looking at listing? Herath: At the moment, I plan to hold on as much as I can! I also have quite a few ideas I want to see implemented before I relinquish control. So as of this moment, no.Q: Assuming that you have a succe-ssion plan, can the momentum be maintained? Especially with a profe-ssional CEO?Gunewardene: It is a challenge to bring people in and take over a large chunk of what I do because the business should not

be so dependent on one person as it is un-healthy for the business in the long term.

Yusoof: Previously, it was very centric on me. So I slowly gave sectors away to other people. So I believe that other from the excitement and creativity, I don’t want to be voiceless but noiseless.

Pathirage: Healthcare for example isn’t my personal handling anymore, so I’ve given it to professionals to handle. But things like retail I keep to myself as they are my dream areas so to speak.

Herath: It’s far too early for me to worry about succession, and even delegation is quite difficult for me - it’s a weakness

that I’m working on! Q: What would you like to be remembered for?Yusoof: Being instrumental in creating a hub out of Sri Lanka.

Pathirage: Possibly the healthcare side, the feeling that we’ve been able to make a real difference there. Of course it is a private sector enterprise and the aim is profits but we also cover the procedures and healthcare for some individuals who cannot afford it and hold programs for the less fortunate. Q: If you could give just one key bit of advice for budding entrepreneurs, what would it be?Gunewardene: Follow your dream reg-ardless of external pressure and skeptics.Yusoof: Don’t listen to negative voices. Just start! The main thing is to just get going.

Pathirage: Stay positive regardless of comments and dissuasion.

Herath: You will always need a team to start going. Without a team, you can’t take things forward. On that positive note, the panel discussion drew to a very successful close. The session was opened to the floor for those attending to share ideas and question the panel as to any doubts and to ask for further advice on particular situations.

The Power Evening was sponsored by Sampath Bank, the Print Media Sponsors the Daily FT and the Daily Mirror, the Electronic Media Sponsors Yes FM, Legends FM and MTV Sports whilst the Creative Partner was Bates Strategic Alliance.

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SLID Entrepreneur’s Forum

[ 08 ] DECEMBER 2013 SLID POWER PAGES

SLID CEO FORUM: WALKING THE TIGHTROPE

The panel from the left Ravi Dias, Husein Esufally, Moderator Shamindra Kulamannage, Felicio Ferraz and Dr. Hans Wijayasuriya

The SLID CEO forum 2013, featur-ed a lively panel discussion highlighting the delicate tightrope that the CEO’s had to tread

by juggling multiple tasks whilst running their companies, handling their boards, customers and employees and molding strategy and direction.The panel consisted of Ravi Dias - MD Commercial Bank, Husein Esufally - CEO Hemas Holdings, Felicio Ferraz - MD/CEO Ceylon Tobacco Company and Dr. Hans Wijayasuriya - CEO/ Director Dialog Axiata. Shamindra Kulamannage served as the moderator.Touching upon the diversity of the panel, Kulamannage asked the members to define their own unique leadership style. Ravi Dias said his approach involved a lot of interaction, adding that “a willingness to agree to disagree makes team work easier. It is important to understand both your role and that of the board.”Esufally said that his role has been predominantly entrepreneurial, initially with a lack of formal structure or training. He relies on personal communication rather than emails and also like to get a first hand feel by walking around.Dr. Wijayasuriya attributed the rapid growth of Axiata to a mix of inclusive innovation and successful competitive strategy. Ferraz agreed, adding that leadership was also about managing various competing demands. He added “As a

listed company, we need to balance the stake holders. The people and the method are both key.” Discussing the unique challen-ges of a family company, Esufally asserted that making the transition from management to ownership is one of the defining features of whether a family business can transcend a generation. He added that ma-naging both the family and the company requires a great deal of understanding, and there needs to be a separation between the role of a manager and owner.Managing multiple stakeholders

Addressing Commercial Bank CEO, Ravi Dias, Kulamannage queried, “As part of such a systemically important bank, you have to handle a variety of stakeholders. Which of these relationships is the most challenging?” Dias responded that unlike the other panelists, his company as a bank, was in a slightly different situation, as depositors bring in far more than inves-tors. With over 3 million customers, it is difficult to pinpoint which is the most challenging although each is equally important and requires a fair amount of focus.Dr. Wijayasuriya explained that “It is important to continuously review one’s perception and understanding of one’s bu-siness, consumers, competitors and partners in order to react quickly to changes in the environment, in redefining and restructuring one’s strategic

relationships in a timely manner.”Ferraz said that it needed to be handled with care. An audience member posed a question to Ferraz from a human point of view; “You highlight the risk factor to your consumers- but is that enough? The product is harmful to the end consumer, irrespective of whether he chooses to use it or not.”The CTC head responded, “we are tell-ing the consumers exactly what they are getting. There is risk involved, but there is also pleasure. “A life without risk would you call life?” There are health risks all over. Air pollution, for example, kills more than 2.5million people a year.”The moderator questioned the Hemas CEO, “discussing the transition underway, howdo you prepare your succession plan?” Esufally thoughtfully responded “Keeping talented people on our shores is a huge problem, as people look for bigger markets or better opportunities. Knowing that you will lose good people is a reality you have to face.” Further questioned whether an external, merit-chosen CEO would find it intimidating to have significant shareholders (group family members) under him, Esufally replied that family members would be directing strategy.

The CEO’s biggest challengeThe conversation then turned to each of the CEO’s biggest challenge in their career span. Commercial Bank CEO Dias discussed the

SLID CEO FORUM:

By Kinita Shenoy

[ 09 ] DECEMBERSLID POWER PAGES

travails of being at the top. He explained that the bank’s success had come through processes, keeping customers happy and transaction costs down. Esufally agreed, adding that building world class businesses when you are a conglomerate is a challenge. Weighing in to the discussion, Ferraz mentioned a previous boss in another region, who was not used to direct distribution, and insisted on third-party distribution which would cut down 70% of employees. Ferraz described his dilemma, and how he overcame it, by suggesting that almost 90% of the laid-off employees could move to the third party distributor, who would now be in need of their skills in their expanded operation. Dr. Wijeyasuriya in his capacity as the head of Dialog Axiata, stated that the 2007/8 era was the most difficult challenge he had encountered. “It was a perfect sto-rm. We had just completed an aggressive phase of expansion and diversification in-cluding three acquisitions. Starting at a 10 billion profit in 2006 and 2007, we swung to a 9 billion loss in 2009, a major shock to the system which called for the reengineering of the business at multiple levels. Kulamannage continued; “Both Dialog and Commercial Bank have been voted at the top of their game. How do you sustain your performance and keep the others at bay? What is your competitive advantage?”Dias responded stating “We have to ke-ep meeting the customers’ demands, esp-ecially when standards keep improving. The service needs to always be at the top, while we keep our costs down. In this way, we have arguably one of the best cost income ratios in the business. Dr. Wijaya-suriya agreed on some points, adding “I would put it down to focus on key success criteria and a deep understanding of the consumer.”

Gauging short-term successThe moderator then brought in the concept of looking at success in the short-term. How can a firm’s success be gauged on a daily/weekly basis? Esufally answered “You can differentiate lead indicators from lag indicators. Most CEO’s have one or two aspects- mostly gut instincts that tell them how things are going on a daily basis.”Dias responded differently stating that “….timely remedial action could be taken by monitoring the progress on a daily basis.”In terms of the CTC, Ferraz responded that they do track volumes, cash flow, Global brands and profit which are checked monthly and every quarter. Ferraz added that it is not only volume but profit, and whenever there are direct distributions, they check the daily sales.

Building the dynamics of a good teamThe discussion moved along to human resources; “How do you build or choose a good team?” Dias replied that it’s irrelevant who the CEO is as long as the team is great. Dr. Wijayasuriya elaborated that “Diversity is the key for success.” Esufally discussed the importance of goal making and setting long term goals and helping each individual staff member acquire the knowledge and expertise via training etc. Agreeing with Dias’ point Ferraz added “I don’t think the CEO is the most important- he is just the biggest facilitator. The biggest role is the bottom of the pyramid….”

The importance of failureKulamannage then veered the discussion to what a CEO’s approach to failure should be.

Responding first, Dias mentioned that failure should be taken “in our stride, and see whether other areas can compensate for one area’s loss and the ultimate goal should be to win the war, even though battles may be lost.”Dr. Wijayasuriya added that “it is important to acknowledge failure for what it is and also to hold yourself accountable for the failure …. While in the sequel always attributing success to your team.”Ferraz looked at failure by comparing the differences in cultural mindset and stated that Sri Lankan and Indian leaders are afraid to address failures whereas US leaders publicly discussed them almost as a mark of pride of what they had overcome. He also stated that people learn more from failure than success. Esufally concurred, saying “No failures means the person has taken no risks. And risk is necessary in business.”Handling the CEO-employee relationshipThe panel moved on to discuss the role that the employees’ differing viewpoints played in the CEO’s final decision. Esufally answered first, “You always have to take other people’s viewpoints into account, but as a CEO you have to make the final decision.” Ferraz simply stated “you must treat others like you would like to be treated - be the boss you would want to have.”“Do you consider yourselves entrepreneurs whilst facing a new project?” asked Kulamannage. Dr. Wijayasuriya answered that an entrepreneur was generally defin-ed by an innate appetite for risk and the ability to create something big from scratch. Esufally said that from his perspective, it is important to encourage and manage the spirit of entrepreneurship, adding that it is the job of the board to put a few shackles on. Ferraz added, “We try to imbibe the entrepreneurial spirit in the business, and give employees the ability to carry out their enterprising inclinations as much as possible.The elusive work-life balanceAn audience member questioned the panel as to how they managed to balance their incredibly stressful role as a CEO and their personal

lives, and the impact they have on each other.Dias responded that people need to switch off, even though it may not always be practically possible. Esufally suggested sports as a great way to unwind and de-stress. Dr. Wijesuriya took a more theoretical point of view, advocating the differentiation between stretch and stress. Stretch is working harder……whereas stress is mental pressure….And the key is to delegate to reduce stretch and create space…. Hence reducing stress as well.”

Walking the tightrope“Does the role of the CEO get lonely at the top?” questioned the moderator, top which the panel lightheartedly replied that their jobs weren’t so bad. Dr. Wijesuriya wrapp-ed up the panelist’s session by stating that “walking the tightrope is by definition a balancing act-ranging from decision making to managing through a balanced scorecard and keeping away from extreme actions and positions.”The Forum was sponsored by Senok Automobiles, Ceylon Pencil Company, Chatham Luxury Watches, IronOne Tech-nologies, whilst Yes FM, Legends FM and MTV sports joined hand with SLID as the ‘Official Media Partners.’

SLID CEO FORUM:

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Why SLID?■ Network: Regular events allow Members to network with the SLID fraternity and other senior level professionals from a wide spectrum of organizations. ■ Medium of knowledge: SLID events are renowned for the high profile speakers delivering time critical information.■ Advisory body: The Technical Advisory Committee stands ready to assist Memb-ers with business and technical queries.■ Be Heard: Represent your views as a united front on existing and proposed policy, codes, legal and regulatory aspects related to boards and directors, to government and statutory bodies.■ Stay Current: The Quarterly SLID Maga-zine, Power Pages and the disseminated information on contemporary topics relevant to directors keep you informed.Keep Your Edge: Accelerate your professional development with SLID’s range of educational services, including seminars, conferences, workshops, e-enabled learning and publications, transforming you to a dynamic business leader. For more information simply log on to www.slid.lk or call us on 2301646 - 8.

“One - 2 - One Membership Campaign”We thank all those Members who respon-ded to our request to help grow our Mem-bership with the “One-2-One Membership campaign.” We intend to continue our campaign to achieve our target of 100 new Members for this year. We urge you to encourage your friends and colleagues to join SLID and connect with Sri Lanka’s largest community of business leaders. There is much to learn from the knowledge and experience of your fellow peers, and to expand your corporate and professional reach at SLID. Welcome to our new MembersWe warmly welcome the following new members who joined the SLID in the last quarter this year. We look forward to your participation at our monthly programmes. 1. Mr. Hemantha Naomal Abeyese-kere, Dynamic AV Technologies (Pvt) Ltd2. Mr. Felician Sanjeeva Abeygoonewar- dena, Mountain Hawk Express (Pvt) Ltd3. Mr. Channa Prasad Abeywickrema Gu nasekera, South Asia Gateway Terminals4. Mr. Terence Sittampalam Arulanandan, Finlay Insurance Brokers (Pvt) Ltd.5. Mr. Bathiya Bulumulla, Elpitiya Planta- tions PLC6. Mr. Rajitha Shirendra Cooke, Suren Cooke Agencies (Pvt) Ltd7. Mr. Sheran Cooke, Suren Cooke Agencies (Pvt) Ltd8. Mr. Savantha Rishard Sproule De Saram, D L & F De Saram9. Mr. Millan Christopher De Silva, Milcris (Pvt) Ltd10. Mr. Nishantha De Silva Mohotti, Finlay Rentokil Ceylon (Pvt) Ltd11. Mr. Ajith Nissanka Dias, Jewelex Trading (Pvt) Ltd12. Ms. Sulochana C. Dissanayake, Power of Play (Pvt) Ltd13. Mr. Tissa Nabdara Ekanayake, The Finance Company PLC

14. Mr. Parakrama Bandara Jayatissa, Mid land Retreads (Pvt) Ltd15. Mr. Saman Chandima Karunanayake, The Paint Shop Panadura (Pvt) Ltd16. Mr. Ali Ahlam Nawaz, Alliance Finance PLC17. Mr. Jayantha Atul Panabokke, Ma-haweli Reach Hotels PLC18. Ms. Anitra Krishien Charindri Perera, Alethea International School19. Mr. Charaka Prasanga Perera, Stafford Motor Co. (Pvt) Ltd20. Mr. Rusi Pestonjee, Abans Ltd.21. Mr. Suresh Rajendra, Asian Hotels and 21. Properties PLC22. Mr. Sunimal Senanayake, John Keells 21 Hotels PLC23. Mr. Panduka Weerasinghe, Browns Real Estate (Pvt) Ltd 24. Ms. Kalindi Tania Weerasooriya, Resou- rces Development Consultants (Pvt) Ltd25. Mr. Kamal Jayantha Yatawara, The Fi nance Company PLCSponsorship opportunities at SLID eventsCorporates are welcome to sponsor the SLID events organized through the year.A copy of our Sponsorship Polices laying out the benefits your organization would re-ceive for the different sponsorship packages are available on the SLID website www.slid.lk or you may call the SLID Secretariat on 2301646/8 for more information.Upcoming SLID events:■ 30th January 2014 - Chairmen Forum at the Ivy Room, Cinnamon Grand, Colombo from 5-7pm - Registrations & refreshments from 4.30pm.■ 16th February 2014 - SLID takes Governance to Jaffna.■ 27th February 2014 - Launch of the SLID Director Training Course. ■ 27th & 28th February 2014 - SLID Director Training Course, Four Modules, spanning two full days at the Ivy Room of the Cinna mon Grand, Colombo.

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Publication of the Sri LankaInstitute of Directors (SLID)

Volume 13 | Issue 04 | December 2013

EditorA.R. Rasiah

CEOLilani Perera

Secretarial AssistanceRochelle Alahakone Kasthurie MuniyandiSulochani Fernando

© The Sri Lanka Institute of Directors

Comments and views in this magazineare those of the individuals and

are not of SLID.

Published byThe Sri Lanka Institute of Directors

No.8, Rheinland Place, Colombo 3.

Tel: 2301646 - 8Fax: 2301648

E-mail : iod@sltnet.lkWeb : www.slid.lk

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SLID DINNER THEATRE : MEMORIES FROM BROADWAY A SPLENDID PERFORMANCEIt was a tremendous success! The Sri Lanka

Institute of Directors (SLID) staged a Dinner Theatre recently at the Kingsbury hotel, which

was attended by the crème de la crème of the corporate sector who were kept spell bou-nd to an evening of grand entertainment. Veering away from the usual panel discussions, and seminars etc “Memories from Broadway” was an elegant evening of mus-ic, dance and cocktails.

While the six course sit down dinner took place, the diners were treated to a series of dazzling performances by the Workshop Players headed by theatre veteran Jerome L. De Silva. The group known for their acc-laimed performances of Broadway kept the audience glued to their seats with ex-cerpts from popular hits such as Evita, Les Miserables, Cats, Lion King, Oliver, the So-und of Music and Jesus Christ Superstar. Jerome himself delivered a stunning solo performance of Edelweiss which had the audience joining in lustily.The event was compeered by none other than Arun Dias Bandaranaike who handled the proceedings expertly.

The funds received from the dinner theatre will be utilized for SLID’s endeavor in taking the message of Corporate Governa-nce to the provinces. The Institute which was set up in 2000 as a forum to serve the corporate and professional development needs of Company Directors is today re-garded as the authoritative focal point on boardroom governance in Sri Lanka. It has a diverse membership of 550 professionals and directors from blue chips, quoted and unquoted private companies, family businesses and entrepreneurial ventures. It organizes many programs focusing primarily on the topic of Boardroom Steward ship. These programs are held on a month ly basis mainly for the corporate fraternity of Colombo. However with the growing dis-parity between the corporates in the Wes-tern province as opposed to the others SLID has begun to expand its target group by organizing seminars on ‘Conducting Business Responsibly’ in other provinces, totally free of charge. Over the last three years the Institute has organized six such seminars in Kandy, Ratnapura, Trinco malee, Beliatta, Killinochchi and Gampaha. It hopes to conduct a

similar program in Jaffna early next year.

The Principal Sponsor of the evening was the IWS Holdings Group, a conglomerate which consists of the official impor-ters and distributers of the Porsche and Jaguar. The Gold Sponsor was Citibank whilst Nations Trust Bank American Ex-press Cards and Havelock City were the Silver and Bronze Sponsors respectively. The Commercial Bank of Ceylon also joined in as a sponsor of the evening. Partnering SLID further in this endeavor were Bates Strategic Alliance as the Creative Partner, DUC Technologies as the Technology Partner, Coca Cola as the Beverage Part-ner and Kingsbury as the Hospitality Part-ner. YES FM, Legends FM and MTV Sports were the Media Partners.

The dinner theatre was coordinated by ‘Magical Moments Event Company’ which did an excellent task of ensuring the event ran with clockwork precision.

SLID DINNER THEATRE

Master of the house

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SLID Chairman Pravir Samarasinghe

SLID DINNER THEATRE

Mr. & Mrs. Abbas Esufally Mr. & Mrs. Deva Rodrigo

Aroshi Perera, Lilani Perera & Shiromal Cooray

Mr. & Mrs. Ronnie Peiris

MEMORIES FROM BROADWAY

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SLID DINNER THEATRE

German Ambassador Dr. Morhard & Mrs Morhard Mr. & Mrs. Asgi Akberally

Rohini Nanayakkara, Arthur Senanayake & Sanjiv Gardiner

Mr. & Mrs. Harsha Cabral

Prakash Schaffter & A. R. Rasiah

Edelweiss 1

MEMORIES FROM BROADWAY

Mr. & Mrs. Ravi DiasMr. & Mrs. Felicio Ferraz

Mr. & Mrs. Mahen Dayananda, Mr. & Mrs. Chrisantha Perera and guests Mr. & Mrs. Hiran Cooray

Mr. & Mrs Sujeewa Rajapakse

Lakshman & Dhara Wijayatilake

Arun Dias Bandaranaike

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SLID DINNER THEATRE

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MANAGING CRISES AND PROTECTING YOUR CORPORATE REPUTATION

Sri Lankan companies have long been complacent in recognizing their vulnerability to a crisis and have thus

remained unprepared to deal with such an eventuality, ending up handling it poorly when it happens, due to lack of preparedness, professional resources, experience and skills. The result is damage to the company’s reputation and future operations. We have seen a spate of such incidents locally in recent times, where unaddressed issues and badly handled crises have blown up into fiascos.

Recognizing that risk is a fact of doing business, and that no company is immune from product or service failure is a start. Recognizing that the company’s reputation is its most vital asset, far beyond the bricks and mortar ones, and being proactive to safeguard and nurture it, is the complement. Corporate reputations are increasingly vulnerable in today’s world due to a number of developments.

With the advent of active regulatory bodies and an alert and investigative business media, companies and what they do - right and wrong - are constantly under the microscope and make the news. This may be prodded by zealous activists, disgruntled customers, concerned local communities or even aggressive competitors, who may make life difficult, unless the company has taken steps to deal with such gro-ups, which the company should recognize as de facto stakeholders. Companies

are today required to comply with good ethical, social and environmental practices, and lapses in any of these areas leave companies vulnerable. Organizational cha-nges, unaddressed and contentious issues, as well as unforeseen events have the potential for turning into crises.

To avoid the detriment that crises brings, companies may seek to put in place a crisis preparedness programme which assesses and addresses risk factors and also assembles the resources that would be needed in an unforeseen or adverse eventuality. Such resources include a trained internal operations team and company spokesperson as well as a professional consultancy which can provide the training and expertise necessary and be there to support and deal with the media and other affected stakeholders.

The more enlightened companies would take further steps to build an ongoing corporate public relations capability, using both internal and external resources, which would enact a proactive stakeholder relations program-me with vital groups including the media.

Safeguarding the corporate reputation and warding off harm to company operations is best achieved through a sustained, strategic public relations programme and a crisis preparedness programme with inve-stment in high-calibre internal and external resources.

The writer, Nimal Gunewardena FCIM MCIPR, is Chairman & CEO of Bates Stra-tegic Alliance and Strategic Alliance PR, exclusive affiliate of Burson-Marsteller, a leading global PR network. He is a member of SLID.

By Nimal Gunewardena

CORPORATE REPUTATION

WHAT DO LEADERS AT GREAT WORKPLACES DO ?

Recently I was invited to address a group of managers on building a great workplace culture. Led by their CEO they paid

rapt attention to what I had to say. “You all know who your CEO is. Do you know that you have a Deputy CEO too?” I asked. They were surprised. It was the first time they were hearing about this Deputy CEO. “Unlike your CEO who can only be present in one place the deputy CEO has no such limitations. The deputy CEO takes over whenever the CEO is not present in the room.” “Who is this deputy CEO,” asked one manager. “His name is Culture,” I replied. “Culture takes over when the CEO leaves the room,” is one of my favourite quotes from an HBR blog by Frances Frei and Anne Morriss. Most of us know that Larry Page is the CEO of Google. Who is the CEO of Apple after Steve Jobs? Some of us will recall it is Timothy D. Cook. Google and Apple are two of the most successful corporations of this century. The first features in our list of best workplaces, the second does not. Let me test your knowledge of CEOs further. Who is the global CEO of Johnson and Johnson and American Express? Chances are you will strain to remember. Why? Is it because they are less successful? On the contrary both feature prominently in Jim Collins’ “Built to Last” - an international best seller that features only companies that have successfully delivered consistent business results over long periods of time (more than 60 years). What is the difference between an organization which is built to be successful for a very long time, as opposed to some who are very successful for some time? Culture becomes the CEO in these organizations! Johnson and Johnson have institutionalised their culture in the form of their Credo and AmEx calls their values the Blue Box values. They are led by

able CEOs who do not have to build the culture on their personal brand. What characterises some of these leaders who may not be media darlings but who have a track record of creating great workplaces which are also outstanding sustainable businesses? We have studied thousands of workplaces and some of the characteristics that stand out are: 1. An employee is as important

as a customer - When Google founders sat do-wn to write down their core values the first value that came to them is “We want to work with great people.” Everything else is a derivative of that. Even an “average” employee is important for these leaders, just as an “average” customer is. “I feel like an equal,” is what their employees say, re-gardless of their position in the organization. 2. Willingness to share wealth

All employees in Google and Intel are entitled for stock options, as are employees of Mindtree and HDFC. In a recent Best Work places Conference

Kishore Musule, foun-der of Classic Stripes considered his willingness to share wealth as one of the key reasons for the unique culture of this

global leader in automotive graphics. 3. Mind set of humility and gratitude Jim Collins defines these “Level 5” leaders as those who will create superb results but shun public adulation, and are never boas-tful. They are described as modest. An example of such a leader who epitomized humility is David Packard, the co-founder of Hewlett-Packard, who, in Jim Collins’ words, defined himself as a HP man first and a CEO second. 4. Self-awareness and a rock

like commitment to walk the talk What stands out about the leaders in great workplaces is their ability to seek out all reaso-nable questions and give a straight answer. HCL Technologies based in India has more than 80,000 employees. The annual 360 degree for their CEO Vineet Nayar (Vineet recently moved to a new role within the Group heading a social Foundation) and his managers is done by all employees. Thousands of employees opt to give Vineet feedback. Nayar puts his report on the intranet. In fact, you will probably get his 360 reports if you search online!

5. Demonstrated caring Leaders at great workplaces take tough business decisions while constantly demonstrating their respect for their people. It is not that Google and Intel has not let go of people during downturns. It is how they do it that makes the difference.

6. Involving people 99X is a company in Sri Lanka whose annual objectives are run by Initiatives owners (anyone can volunteer) where they have total freedom to decide how they need to run the initiative and report directly to the CEO. The company has no team leaders and is completely managed by self-managed teams. IFS in Sri Lanka have not found the need to have a HR function; their managers are passionate about their people.

7. Willingness to have fun Last but not the least these leaders do not take everything seriously all the time, least of all themselves. As Jeff Bezos the founder of Amazon.com (and now the owner of Washington Post) says, “Work hard, have fun and make history.” Achieving two out of three is not an option! To sum up, leaders at best workplaces treat every interaction as an opportunity to build trust - internally with employees and externally with other stakeholders.

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LEADERSHIP

Prasenjit Bhattacharya is the CEO of Great Place to Work® Institute India and a Director at Great Place to Work® Institute, Sri Lanka. Views expressed are personal. You can post your comments and join the discussion in Prasenjit’s blog http://inkfromprasenjit.wordpress.com/. Prasenjit can also be contacted at prasenjit.bhattacharya@greatplacetowork.com

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GROWTH STRATEGIES THE COMPOSITE MODEL

Dr. Ranjan Madanayake, DBA, CPM, FSPMgt, FSBP, MCInstM, RPM, MMA, MNZIM, MIM (SL), MSLIM, FCPM. Author Strategic Marketing Plan - The 12 ‘P’ Model, Sri Lanka. Author PCM Course Book, Sri Lanka Institute of Marketing. Co-author The Marketing Collectibles, New Zealand & Malaysia. Co-author Marketing Skills in Management, India. Marketing and Management Consultant

Beautiful synchronized music doesn’t emanate from a single instrument but a collection of them; wind instruments,

percussion, strings are some of them. Business strategies are also similar, like the individual instruments, and wh-en they are brought together, they become robust and create competitive advantage and help achieve business and organisational goals. Every company would have the desire to grow if there is an opportunity. Depen-ding on a single business unit or fewer products may expose a company to grea-ter risk of competitive pressure. Hence, growth is a desirable endeavour for busin-ess or organisational sustenance. Different authors at different times have proposed and published different growth strategies and they are like parts of music or a painting. The attempt of this unique model is to bring them together as a composite model that would provide the total melody or the complete painting. GROWTH STRATEGIES GRIDThe growth strategies composite model that embodies different strategies is as follows:The many references that are available, points to the above four important strategic directives in determining Growth Strategi-es for Business Units in large organisations or even smaller ones. Each of the four above is described below. INTENSIVE GROWTH FOR

EXISTING BUSINESS UNITSThis is an ambitious strategy where the company or its business units determine that the way forward to grow is through intensive growth. The components of intensive growth are:• Market Penetration• Growing Current Markets • New Market Development

Market Penetration.

As asserted by Igor Ansoff (1957) a company can grow by selling more of its current products to the present markets. This means that the company must sell its present products to more people within that target market. Let us say we are selling Malt biscuits to 27% of teen-agers and young adults who are our target market, the attempt must be to enhance that to 30% or 35% as appropriate.

Growing Current Markets. This means making present users to buy more of the present products of the business, which

are hitherto not purchased. The SBU that sells a refrigerator can also try to sell a TV or other white goods it has to that same customer if there is a need for such. Simi-larly, the company that sells a bar of toilet soap can sell its shampoo to the same customer and achieve customer growth. By doing so we have the opportunity to grow current markets.

New Market Development. The SBU can target markets it is not currently supplying, such as a new geographical area within its national boundaries or target markets over seas, outside its national boundaries. In a market extension strategy it can also target market segments or niche markets its currently not supplying. An MNC that marketed a baby shampoo extended it to the dads, implying ‘if it is good for baby it is good for dad as well’; this is a segment extension. Their IMC showed a dad and kid using the same shampoo together. INTERGRATIVE GROWTH FOR EXISTING BUSINESS UNITSSales and profits of a business can be increased through vertical or horizontal integration (Kotler et al 2012). They are: • Forward Integration• Backward Integration • Horizontal Integration

Forward Integration. The company can take over a function in the value chain that may now be handled by marketing intermediaries, such as distributors, franchisees, wholesalers and retailers etc. Singer in Sri Lanka does not have any intermediaries as was done before, they have their own Showrooms Island wide and market their household and other white goods direct to their customers. This also augurs well to implement and control their installment payment plans.

Backward Integration. On the contrary, company can take over a function in the value chain that is currently handled by a supplier. MAS Group that produces linger-ie for Victoria’s Secret stopped outsourcing and produces several components requir-ed for the end product themselves through their own subsidiaries. The money stays wi-thin the Group, brings additional growth and it is an assurance that they can get these important components just in time (JIT).

Horizontal Integration. Acquisitions, Mergers and Strategic Alliances could render growth. Singer in Sri Lanka acquired another famous company, which manufactured a popular brand of refrigerators. They have now used that competitive ad-vantage to launch additional flanker lines through that acquisition.

GROWTH STRATEGIES

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Many companies in the recent past merged with others to create competitive advantage for themselves and stay ahead of competition. Si-milarly, companies have negotiated strategic alliances with other companies to strengthen their competitive position. INNOVATIVE GROWTH FOR EXISTING BUSINESS UNITSInnovative Growth in an SBU is about how it can develop new initiatives for its current cliental through its current business unit. They are: • New Product Development and Line Extensions• Product Improvement or Enhance ments • Re-positioning Existing ProductsNew Product Development and Line

Ex-tensions. Unilever who marketed Fair & Lovely fairness cream for women found an opportunity when their market insights pesonnel reported that the husbands and brothers of the female users dipping into their Fair & Lovely fairness cream. They promptly launched Fair & Handsome fairness cream for men. Shampoo comes in 50ml and above PET bottles, but Cavin Kare of India, realizing that the low income consumers would be persuaded to buy if th-ey could market a single use product laun-ched a line extension, the shampoo sachets.

Product Improvement and Enhancements.

Nespray 3+, targeting growing up kids over 3 years has incorporated Forti-learn a unique

combination of Prebio 3, Cal-cium, Iron, Essential Fatty Acids and other nutrients. This improvement

and enhancement meets every mother’s need of a su-perior growing-up milk that will support her growing child’s nutritional needs. This im-provement enhanced the quality and therefore

the image of the brand significantly. Re-positioning Existing Products.

This can change the destiny of a brand. In Sri Lanka Horlicks Malted Milk was positioned as a convalescent’s drink whilst Nestomalt, which was also a malted milk, suffered the same fate. Therefore, Nestle chose to re-position Nestomalt as an energy drink kno-wing well that it provides high energy and attracted a huge following of customers. DIVERSIFICATION GROWTH BY SETTING UP NEW BUSINESS UNITSDiversifying from a company’s existing business units to other areas is another option for growth. They are:• Concentric Diversification• Horizontal Diversification• Conglomerate Diversification

Concentric Diversification. The company could setup a new business unit

to produce new products that apply similar technologies and serve existing markets. A dairy farm that markets sterilized dairy milk can setup

a new business unit to produce RTD flvoured dairy milk. Vanilla, Chocolate, Strawberry and

Mango flavoured milk drinks are popular among the young.

Horizontal Diversification. In this option the company will setup a new business un-it to produce a technically unrelated product but appeal to the current market. We can take the above example of the company that is producing sterilized dairy milk and RTD flavoured dairy milk drinks and set up a new business unit to produce different varieties cheese such as Cheddar, Slices, Blocks etc., using dairy milk as its main raw material.

Conglomerate Diversification. This is an opportunity for the company to look at a business unit that uses no similar technology, product or market and diversify into a totally unrelated business. Taking the sa-me example of the dairy farm, it can setup a good tourist hotel in the vast extent of green fields that cattle graze and provide a salubrious experience to the visitors. Growth is necessary for a company; th-erefore, growth strategies are crucial. How ever, the right growth strategies must be pursued where there is market growth and industry attractiveness.

References:Igor Ansoff, (1957), http://tutor2u.net /business/image Ansoff%20Matrix%20w 500.gif Kotler, P. Keller, K. L. Koshy, A. Jha, M. (2012) Marketing Management, A South Asian Perspective, 13th ed. Dorling Kindersley, India Wheelan, T. L. and Hunger, D. J. (2010) Concepts in Strategic Management and Business Policy, 12 ed. Dorling Kindersley, India

GROWTH STRATEGIES

By Dr. Ranjan Madanayake

HARVARD MANAGEMENT TIPSWhere Your Company Shouldn’t Compete The first step in setting a winning strategy for your company is deciding where you will do business. But you need to be careful in these choices. Here are two places you should avoid: Your biggest competitor’s space. It’s te-mpting to take on your strongest opponent head-to-head. But most often their market will be essentially a walled city. Instead look for competitive areas that enable you to attack from unexpected directions, along the lines of least resistance.The white space. Being a first mover in unoccupied territory is an attractive position. But remember that there is only one true first mover, and all too often that space is already occupied by a formidable competitor that you probably don’t see or understand.Consider the Risks in Your Business Case A good business case addresses the question, “What happens if we take this course of action?” But chances are that not everything will go as planned. Be sure to consider the risks to what you are proposing and what will happen to the project’s value if you’ve made the wrong assumptions. Most people focus on threats: What if the vendor doesn’t deliver on time? What if the cost of raw materials goes through the ro-of? What if you aren’t able to hit the laun-ch date? But you also need to consider opportunities: How can you get a higher return on investment or a faster payback? Can you complete the project sooner? Can you put your best team on it? Think about each assumption you’ve made and how it could change. 1 Minute Trick for Better Negotiations How do you negotiate better? Simple: Beforehand, take a minute or two to focus on what you have to gain and what you hope to achieve and banish all thoughts of what you might lose. List everything you hope to accomplish and the ways you will benefit if you are successful. Re-read this list just before the negotiation begins. Throughout the exercise, it’s important to try not to focus on what could go wrong. Great negotiators stay focused on their ideal target, despite the risks they face. With practice, this focus-training will be-come easier and, eventually, automatic.Find a Champion for Your Business Case When preparing a case for a new project or initiative, be sure you have someone at a senior level who will lobby for it. Look at each member of the committee: Whose goals and concerns will your project most directly address? Reach out and ask what his or her department is trying to achieve in the coming year. Get a sense of what big projects are under way and which efforts need more support. Explain how your initiative can help fill in gaps or address trouble spots. Of course, having someone influential on your side does little good without a strong case that meets a business

need, a solid project concept, and well thought-out financials. If any of those elements are missing, even a powerful champion can’t help you

Make Good Decisions Faster A simple approach can help replace your slow deliberations with fast decisions. Try this framework: • Know your ultimate objective. The biggest hurdle to fast decisions is criteria overload. Of the seven or eight possible objectives you would love to meet, which one or two will make the biggest impact? Consider which stakeholder you least want to disappoint - which goal would they care about most?• Get a second opinion. Asking one other person can broaden your frame of reference and help eliminate judgment errors. Plus, the act of explaining your situation anew often gives you fresh insights.• Do something. Select one option while letting go of all the other “good” ones. No amount of deliberation can guarantee that you have identified the “right” option, but remember: The purpose of a decision is not choose perfectly, but to get you to the next decision.

.Two Unconventional Questions to Ask a Job Applicant Gauging a potential employee’s skills and suitability is tricky when you don’t have much time. But there are ways to take in-terviewees out of their comfort zones and encourage the kind of candor that will ena-ble you to find the best

fits. Try using these takes on standard interview questions: “What don’t you want to be doing five years from now?” Asking the question this way forces an applicant to think on his feet, revealing a lot about his adaptability.“What would you say is the biggest mis-perception people have of you?” Top candidates will have a high level of self-awareness and won’t have trouble ans-wering this. They’ll also understand that perception is reality in many cases, and may already have a plan to address it.

Be a Work-Life Role Model Everyone struggles to find the right balance between work and life. As a manager, how you personally handle this challenge influences your team members. They are looking to you for signs of what they can and should do. Here is how you can set a good example: Be open. Talk candidly about your own challenges and strategies for fitting together your work, family, and personal life. Let your employees see you as more than just a person who works.Appreciate others as whole people. Respect the fact that everyone you work with has a life beyond work. Encourage people to talk about their non-work acti-vities with colleagues.Be willing to experiment. Ask people ab-out what would help improve their ability to achieve work results while also increasing their well-being beyond work. When employees are involved in desig-ning and implementing solutions, they’re more committed to making them work.Avoid the Pitfalls of Positive Feedback Praise should motivate your employees, but in some cases it does just the opposite. Here’s how to make sure positive feedback actually works: Don’t cushion the blow. Don’t routinely say

HARVARD MANAGEMENT TIPS

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With Compliments HARVARD MANAGEMENT TIPS.....

HARVARD MANAGEMENT TIPS

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something ‘nice’ before giving criticism. Doing so conditions people to hear positive feedback as a hollow preamble to your real message. Lead instead with your investment in the relationship and reasons for having the conversation.Praise effort, not personal attributes. Intelligence, talent, or abilities are mostly innate and cannot be actively replica-ted. Instead, compliment effort and explain exactly what actions prompted your approval. If you are specific, you’ll reinforce the desired behavior.

Build a Climate of Trust Humans read body language and facial expressions to discern if others are trustworthy, but some situations like change or confusion prime us for distrust. In the absence of information, the brain works overtime. After all, were programmed to anticipate harm and protect ourselves from it. But even when your team lacks clarity on a situation, you can still build a trusting environment. Think about a time when your boss and a colleague starting meeting regularly and you didn’t know why. You probably started wondering if you’d been left out of an important project. Leaders can shift people’s thoughts away from threats by fostering an open, transparent environment in which everyone shares and discusses as much as they can about what’s really going on. This sends a strong signal to everyone’s lower brain that ‘trust is in the air.’

Help Your Company Cut Back on Email You cannot control how many emails you receive, but you can control how many you send. In a recent study, one firm’s workers followed suit when their executives reduced overall email output. You can spark a similar reduction and improve efficiency across your organization by doing the following: • Choose the right medium. Consider whether your communication merits a phone call or in-person meeting, where vocal tone and body language provide real-time feedback on how clearly a message is being understood. • Be deliberate. Don’t forward messages unless strictly necessary, and limit the number of recipients on each outgoing note. • Make it real. Set a target for reducing the number of messages you send. Include it in your performance goals to keep yourself honest.

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