Business with A Conscience

Tata companies are known for their unique way of doing business with a conscience. Is this approach relevant in the current global scenario?

Natural rights philosophers aver that the primary role of governments is to protect the rights of its people. However, throughout history, governments have deprived people of their rights more often than they have protected them. We are living in an age when governments believe that it is their duty to do what is politically expedient, even to the detriment of what is morally right.

There is ample evidence indicating that, even in civil society, the rich minority has been getting richer while the poor masses have slumped deeper into poverty. Probably the primary reason for this trend is that the rich have access to privileges that the poor do not. But public eruptions from New York to Cairo to Shanghai are a visible manifestation that we have reached the tipping point.

Against this global backdrop, it has been convenient for business leaders to follow the government’s lead and adopt an ‘every man for himself’ approach to doing business. And look at the ramifications: Corporate bullying prevails, with small firms being at the mercy of larger ones. The blatant disregard of consequences has led to Mother Earth being ravished for fleeting gratification. With economic activity playing an increasingly significant role in our social fabric, such an attitude in business threatens the orderly existence - nay, the value system itself - of the society that we live in. The pursuit of wealth has become the raison d'être, outpacing the pursuit of happiness by a wide margin.

There is a compelling need for an alternate paradigm: business with a conscience – always doing what is morally right despite the obvious temptation of what is financially lucrative.

Which business organization would steadfastly stand by its stakeholders when they gain nothing monetarily by doing so? Which company would choose to do the right thing, when doing otherwise would make it twice as large? Nowadays, which company goes beyond mere adherence to law on matters of environmental conservation and labour rights? Wait, those were not rhetorical questions. That’s how the TATAs do business - with a conscience!

Don’t get me wrong. Profits are as important to the TATAs as nourishment is to a human being. But just as food is not the primary reason for living, profits are not the be-all and end-all of business.

What exactly do we mean by business with a conscience? It actually extends well beyond the spectrum of moral dilemmas that ethical organizations are frequently faced with nowadays. It means treating employees as humans, and not mere resources; it involves nurturing your employees for their own sakes. It includes giving back tangible and intangible wealth to the communities that we serve. It encompasses helping the underprivileged. It means giving fair consideration to all your stakeholders. It is in evidence when you give your small supplier a fair deal when a less conscious buyer could have squeezed him dry. It includes addressing the needs of those at the bottom of pyramid. It necessitates reducing your ecological footprint. The TATA way means doing the right thing, come what may.

In short, it is a way of doing business while simultaneously playing your part (as Ralph Waldo Emerson put it) “to leave the world a bit better, whether by a healthy child, a garden patch, or a redeemed social condition”. And isn’t that approach more relevant today than ever before?

(This essay was one of five prize-winning entries in the essay writing competition of TATA Quotient.)

Cost Management: Thoughts from Titan

1. The emphasis of cost management should be on rationalizing costs, not on cutting them indiscriminately. We need to question each major outflow and ask, “What returns will I get from this expenditure/ investment? Can the money be used more productively? Can the desired results be obtained at a lower cost?”

2. A greater focus on costs can be achieved by cross-functional teams (CFTs) – consisting of enthusiastic influencers. Such teams work best when the members are empowered and motivated. One way of accomplishing this is by factoring the results of cost management into participants’ Key Result Areas.

3. Demonstrate organisational commitment to cost management. For example, Titan’s Managing Director recently launched “WOW” (War on Waste) and conducts monthly progress reviews with CFTs. During the initial meetings, participants brainstormed and generated initiatives with potential to save costs. These are then discussed and the initiatives with maximum saving potential are selected. Later, responsibilities and timelines are assigned, and results are reviewed on a periodic basis.

4. Cost reduction is not ‘Finance’s baby’; it is an organisational priority. Nevertheless, Finance professionals must be involved in operations to be able to enhance cost consciousness. This can be achieved by focusing attention on costs, analyzing cost data and sharing relevant information with CFTs.

5. Accountants can also help focus attention on costs by interpreting them intelligently. Examples from Titan’s watch manufacturing plant in Hosur:
(a) The Machine Hour Rate of Precitramme equipment was high because it was not fully utilized. The fixed costs were spread over a lower number of hours. This pushed up the cost and retail price of Titan Edge (“the slimmest watch in the universe”), thus suppressing demand for the watch. After we adopted a ‘variable cost MHR’ for costing and pricing decisions, the watch became an overnight success.
(b) In-house vs outsourced decisions: Similarly, the Manufacturing team used to outsource certain watch components because the in-house manufacturing cost appeared higher. However, when one looked only at relevant costs, it made sense to utilize existing machinery to manufacture those components in-house. Our cash outflow was thus reduced.

6. Even ‘Overheads’ need to yield some benefit: Before Tanishq’s business picked up, diamond-setting capacity (a labour-intensive process) was surplus, classified as ‘employee cost’ or overheads. Hence, the cost of stone-setting was not factored into the price of jewellery. We were losing a big opportunity. Later, realizing our lapse, we rectified prices and also looked at cheaper mechanized processes. This improved our gross margins on studded jewellery significantly.

7. Constantly review your assets and, when times are good, clean up your Balance Sheet… Release cash by liquidating non-moving/ slow-moving items. Tanishq’s retail businesses achieved this by constantly reviewing its current assets. Slow-moving jewellery designs were redeployed to other Tanishq showrooms. We also had road shows, exhibitions and ‘Best Deals’ counters - wherein jewellery was sold at attractive discounts. Many of Tanishq’s promotions were a resounding success. When all else failed, we even melted jewellery!

8. Identify the core problem and explore every opportunity to solve it: Initially, Tanishq used to buy gold bullion - 80% of our material cost - on spot basis, resulting in outflow of scarce funds and exposure to price risk... In the early 2000s, Titan was a cash-strapped company. We gradually started buying gold on credit from foreign banks (lower interest, open price) and operating on the forward market. These mechanisms reduced the company’s net capital employed and interest cost, boosted Return on Capital Employed, and helped hedge the gold price risk.

9. Contrary to popular logic, paying creditors late is not good business: When Tanishq approached diamond merchants to negotiate prices, we realised that we had been short-sighted by delaying their payments. The suppliers’ interest cost (higher than ours) had been loaded onto their normal prices, based on our longest-delayed payment… By agreeing to pay suppliers in time, we got significantly lower purchase prices, which helped us to further improve our margins.

10. When Excise Duty was introduced on branded jewellery, it came as a big burden in a low-margin business. We were already at a disadvantage vis-à-vis the local jewelers. To mitigate this risk, Tanishq established a manufacturing unit in an excise free area (Uttaranchal).

11. Advertising: Some Marketing people lack business acumen but they do have an important role to perform. Tanishq faced a three-fold problem:
(a) The proportion of money spent on producing advertising was excessive, relative to mass media spends
(b) Product ranges were launched without proper cost benefit analyses and
(c) Service providers’ rates had not been adequately negotiated down.
We needed to encourage the Marketing department to spend on advertising that reaches the customer rather than on production costs.
We also used Public Relations and press releases judiciously; these are a lower-cost and more credible medium than advertising.

12. People drive businesses... But when salaries are undifferentiated, good performers have no motivation to give off their best and they will seek more remunerative opportunities. Titan faced such a situation that also resulted in a costly attrition problem. So, the company revamped salaries, paid rates closer to best-in-market and demanded superior performance. Titan also introduced a package wherein 30% of earnings (even higher for retail staff) was linked to performance. This improved morale, efficiency and output.

13. This was preceded by an attractive VRS package that eliminated ‘deadwood’/ redundant employees, who had been a drag on the organisation.

14. Challenge employees to justify their existence, to measure cost savings relative to their salaries. For instance, I once negotiated with a credit card ‘acquirer’ (who placed electronic data capturing machines at our stores) for a reduction of 0.10% (10 percentage points) in their commissions. This resulted in savings for Tanishq that were more than my annual earnings.

15. One radical rule introduced in Tanishq was that domestic air travel could only be on discounted tickets, which were available for nearly 50% less than normal prices. This is a small item, but it resulted in lowering costs and better planning of activities. The most significant benefit was that people became aware that such cost-saving opportunities exist.

16. For greater involvement across the organisation, invite ideas from employees and announce rewards for suggestions that are successfully implemented. When ideas and winners are recognized (intranet, public felicitation), it could motivate others to come forward.

Hotelier’s Guide to Success

An eye-catching poster outside the Chairman’s office at Aitken Spence Hotels reads: “The key to happiness is having dreams; the key to success is making dreams come true.”

So, how does Aitken Spence Hotel Managements (ASHM) intend to make the ‘third dimension’ dream come true? The Sunday Times FT spoke to Anil Udawatte, Director – Sales and Marketing, to find out. Explaining the background, Udawatte said, “Our Director, Gemunu Goonewardene, came up with the health dimension concept and we sounded out the head chefs, who found it exciting.”

Wouldn’t a concerted, Tourist Board-backed effort have had the potential for greater success? “As a commercial organization,” explains Udawatte, “we have to be commercially responsible. If everyone had been involved, things would not have been as smooth as just one company taking the decisions. ASHM now has the first-mover advantage. We will make a start and we would like everyone to get onto the bandwagon.”

ASHM has ten properties in Sri Lanka, of which Kandalama and Ahungalla are Heritance brand properties. The company has five properties in the Maldives. This month, it also opened two in India - a 68-room hotel in Trivandrum and an 18-room boutique property in the Andaman Islands.

Speaking of the target audience, Udawatte says, “We are initially targeting Sri Lankans and will gradually take the promotion across the world.” At the Heritance properties, 75% of the guests are foreigners, and 25% are locals. However, the company is focusing on the domestic clientele first “because it typically takes longer for foreigners to get accustomed to our cuisine.”

“Over the coming month,” says Udawatte, “we will implement a special buffet corner with indigenous cuisine, in addition to the existing buffet. This will be kicked off at our Heritance properties”, where occupancy is currently at sub-40% levels and rooms are available at LKR 8500 (approx US$ 77) per day.

Upmarket, widely-traveled tourists from the West look for authentic experiences when visiting countries on holiday. Their palate adjusts to cuisines from Thailand, Vietnam and India. However, Sri Lanka is not attracting these top-end customers at the moment. “What we do get are low-end tourists who prefer cornflakes, butter and jam, cheese and cold meats. We are basically serving Western food to Westerners,” says Udawatte. “On the contrary, Indians promote their food well. There, 75% of the buffet is Indian, with very little cold meats and salads.”

Talking of the ‘third dimension’ promotion, Udawatte says, “Most people in Colombo do not know how to prepare authentic Sri Lankan cuisine, what spices and ingredients to use and what benefits can be derived.” The promotion will be backed by in-room publicity on TV channels, with menu cards detailing the health benefits. Over time, ASHM will also advertise this USP with ‘healthy weekend’ packages.

“You have two options,” Udawatte concludes, “Either you can eat or you can dine. Eating can be done anytime, anywhere, even on the wayside. But fine dining will never go out of fashion.”

MASsive Feather in Lanka’s Cap

The World Business magazine has ranked ‘The Brothers Amalean’ among Asia’s Top 20 progressive individuals. Mahesh, Ajay and Sharad Amalean are the founders of MAS Holdings, a multinational operating 28 facilities across seven countries and employing over 40,000 people.

The Top 20 list includes some of the continent’s prominent businesspeople who are notable for their forward-looking approach. The philanthropic nature of these businesspeople has also been acknowledged. Philanthropy is essential in Asia, the article observes, where “governments… lack sufficient resources to do all that should be done to take care of society’s most vulnerable”.

The Amalean brothers have been recognized for their progressive leadership in running a professionally-managed and responsible private entity. They have done this while adhering to the core values of honesty, integrity and fair play.

The nomination of the Amaleans, ranked 14th, is even more creditable because this listing is not restricted to businesspersons. The magazine has assessed the entire spectrum of individuals who are driving Asia forward, from country leaders to business people to reformists. The list identifies those who are helping to bring about rules-based civil societies and those advancing the cause of better governance – be it in business or government.

Other South Asians featured on the list are Narayana Murthy (4th), Muhammad Yunus (6th), Ratan Tata (12th) and Pushpa Kamal Dahal – alias Prachanda (20th).

The Citation:

Mahesh, Ajay and Sharad Amalean, Sri Lanka

The three Amalean brothers founded MAS Holdings - a Sri Lanka-based intimate apparel maker - in 1986. It is the largest supplier to Victoria’s Secret; other customers include Gap, Marks & Spencer, Tesco and Reebok. In March 2007, MAS announced plans to launch its own brand this August.

The company has seventeen plants in eight countries and 35,000 employees. But what’s remarkable about it is its home-grown corporate social responsibility (CSR) programme. Women comprise more than 90% of MAS’ employees and so the company established the Women Go Beyond programme to educate and empower its employees. A beauty, health and hygiene certificate is offered, and there are classes on reproductive health, domestic violence and traditional crafts. Nearby schools and hospitals are funded and scholarships are awarded.

MAS set up its plants in rural locations near villages so that women would not have to leave their families to find work, and all employees must be aged at least eighteen. (In contrast, Chinese factories can take on employees as young as fourteen.) The company also invests in developing clear career paths: its Ready to Unleash programme aims to guide graduates into the company and on to management levels.

MAS has faced intense competition from China. The international Multi-Fibre Agreement, which ended in 2005, ensured that at least some of the West’s clothing and textiles are sourced from smaller developing countries. Since then, the Amaleans have shown that it is possible to compete with sweatshops in China by emphasizing their CSR programme, which has made MAS a more attractive source for retailers with ethical buying policies.

End of the Beginning? VL

You also have hinted at the deteriorating atmosphere there. From what I have been hearing, the superlative financial and market performance is covering up a deeper malaise.

This is a bad sign - Once employees cease to enjoy their work, it represents the end of the beginning. I do not think I will enjoy working in Tanishq as it is today. I often think back to the days of Jacob Kurian: He used to skin us, but there was a passion for Tanishq that is sadly lacking today. Even those who had it have lost it!

Can you think about what has brought about this change?

Channel Head - Modern Retail

AA: Have put in my papers here… Am joining Hutch in Mumbai as Channel Head - Modern Retail. Hutch basically wants to set up a new channel for sales and service in modern retail that is developing - malls, multiplexes, hypermarkets…

Have wanted to head back to Mumbai for sometime now… Work has also been getting boring, had not been enjoying what I was doing for some time now… This place has changed…

Saw your blog - you seriously should explore a career as a writer/ columnist… else in Marketing… You will be rocking!!

AM: Mumbai is definitely a good city. If I was any younger, I would have added, ‘because of the pace of life’. Now, I’d say 'despite it'… All said and done, Bangalore softens you up – especially around the midriff...

I still have no clue when my return will happen – It’s in the hands of the Tata Group’s liaison and legal departments. I’m just lying down and enjoying it..!

On Becoming Future CFO of Titan: AS2

I was impressed with the breadth of areas covered in your excellent CV. I found it very interesting - and wouldn’t be at all surprised if you progress to become CFO of Titan some day, if you stick around long enough!

Change Mindset or Face Extinction!

The K Sivagananathan Memorial Oration was delivered this week by Dian Gomes, Group Director at MAS Holdings. In a stirring speech on ‘Aligning Organisations to be World Class’, he said, “If you want to change people, change their mindsets through emotion… They may forget what you said, but they will never forget how you made them feel.” Quoting Mark Twain, he said that people learn through the heart, not the eyes or the intellect.

Gomes said that, at Harvard, he had learned some really sophisticated management concepts from case studies of Microsoft, Coke and Hewlett-Packard. But the most important management lesson that he has learnt is that emotion can drive people. Emphasizing the need for change, he said, “Organisations don’t act; people do… If you don’t change, you’ll become a dinosaur!”

Variously described as a boxer, a writer, an art connoisseur, Dian Gomes is very obviously a people’s person. He is possibly the only Sri Lankan to have been profiled by Wall Street Journal and has a reputation for not taking ‘No’ for an answer.

Talking about MAS’ adventure training, Gomes described how management teams are sent to the jungle, where everybody shares a tent. But this is not a holiday trip: On their return, participants have to – among other things - describe their learning experience, list the new friends that they have made and prepare action plans.

In his oration - replete with anecdotes and video clips that illustrated his point - Gomes narrated how, on a raft expedition in a boat made of barrels, he dropped the oars down. He was faced with a volley of obscenities from his ‘co-passengers’ that caused him to pick up the oars again and row. This experience taught him that leadership is situational… On that boat, he was not the Chief Executive!

Gomes ridiculed the habit of competing with the neighbour’s car, the cousin’s examination results and the colleague’s sari. “Compete on the right things”, he exhorted. Going on to describe the unifying power of competitive sports, he indicated that 45 MAS employees represent the country at international events. This includes three cricketers who will be at the World Cup 2007 - T M Dilshan, Farveez Maharoof and Malinga Bandara.

Talking of the Slimline boxing phenomenon, Gomes indicated that MAS has broken the Army’s twenty-year dominance of the National Boxing Championship. MAS has won the championship four times during the 2000-2006 period… “Take away the fear of failure from employees and give them courage instead”, he encouraged.

Speaking to Sunday Times FT after the event, Gomes attempted to quell apprehensions about inadequate succession planning at MAS Intimates. “I have at least 3 people who are being groomed and can take over my role over a two or three year period: Nathan Sivagananathan (currently Chief Executive Officer) and a couple of people who are lower.” Nathan is the son of K Sivagananathan, whose memory was being perpetuated that evening.

In addition, MAS Intimates has spent nearly US$ 1 million on employee training and development during the past year. Fifty employees have been sent for INSEAD programmes and to the National University of Singapore for training, Gomes disclosed.

MAS Holdings' Own Label in August-07

Decides Against Buying Vanina Vesperini Brand

Sri Lanka’s US$ 2.5 billion clothing industry finally seems poised to make the transition from tailoring to also building brands. This is a subtle but very significant move. It is common knowledge that margins at the front end of the value chain, viz in retailing, are more attractive than manufacturing margins. However, exporters have steered clear of investing in building or acquiring brands, preferring instead to invest in less risky fixed assets. Until now…

Ajay Amalean, Managing Director of MAS Corporate Solutions, revealed that MAS Holdings intends to launch its own signature lingerie label in India. The launch is scheduled for this August, perfectly timed to capitalize on India’s Diwali season, which is characterized by high retail spending.

Amalean added, “India is a growing market and the Indian woman deserves better… Our basic philosophy is to cater to customers’ requirements.” He was speaking exclusively to the Sunday Times FT on the sidelines of an event recently.

“And what about the Sri Lankan woman?” we queried… The same label will be launched locally during October/ November this year, in time for the Christmas shopping spree. Amalean also indicated that some marketing elements would be in place by May, at which time he would be willing to disclose further details.

MAS was, until recently, in talks with Vanina Vesperini of France to buy her brand outright. However, Amalean disclosed that MAS has shelved that plan since, finding it infeasible. “We have decided against buying the brand”, he disclosed, “but will use her skills as and when we need designs.”

MAS Holdings, the largest supplier to Victoria’s Secret, has a presence in eight countries. With a turnover of US$ 700 million, it is Sri Lanka’s largest intimate apparel manufacturer. It has forged an international reputation for making upmarket lingerie.

On Victoria's Secret: SV

This evening, I have to report on a speech titled ‘Aligning Organisations to be World Class’ being delivered by the managing director of one of Sri Lanka’s largest companies. It should be interesting because the company, MAS Holdings, is an amazing success story. They supply a sizeable chunk to Victoria’s Secret, and have some amazing HR practices. They also, like Titan, are aspiring to be a US$ 1 billion company by 2009-10.

Hayleys and the Three Wise Men

Collectively, these three wise men of Hayleys have logged in 114 years of experience with the company. Therefore, when Rajan Yatawara – Chairman and CEO, who retires at the end of this month, N. G. Wickremeratne – Chairman designate and A. M. Pandithage - Group Director shared the story of Hayleys’ success with a select gathering last week, it was an evening to remember.

At the recent CSR awards ceremony, Hayleys had been selected as the Best Corporate Citizen for the third successive year. The session of ‘Knowledge Sharing with the Best Corporate Citizen of Sri Lanka’ was organized by The Sri Lanka Shippers’ Council, an affiliate of the Ceylon Chamber of Commerce. Starting off the proceedings, Yatawara exuded a paternalistic sense of pride in the organisation that he joined in 1966. He reminisced about the pioneering days of 1973 when Haycarb imported three kilns “to make charcoal in a modern fashion”. The onus of making a success of the project fell upon his able shoulders.

In his anecdotal style, Yatawara led the audience on a walk down memory lane of Haycarb’s checkered history. He emphasised that the company really began to grow only after they attempted to transform themselves from a commodity trading business to a value addition business. He described encounters with uninterested governments and inebriated clerks, with incomprehensible formulae and quality standards that were conspicuous by their absence. He spoke of various project reports that Hayleys toyed with before shelving them – toothpicks and clothes pegs! - and one that saw the light of day - rubber gloves.

The tempo changed from flamboyant nostalgia to fact-based analysis when Wickremeratne took the podium to speak on the impact of the macro economic environment and government policy on export growth. The fundamental reason why ‘we’ need exports, he said, is to earn foreign exchange to pay for imports.

Wickremeratne also described how dramatically the composition of Sri Lanka’s imports has altered over the past decades. Consumer goods constituted over 60% of the country’s import basket in 1960. However, with some degree of self-sufficiency having been achieved in consumer goods, the country’s imports are more in the nature of ‘intermediate goods’ now.

According to Wickremeratne, Sri Lanka’s post-independence economic history has had three distinct phases. The 1948 to 1956 period was when the commodity boom ensured that tea and rubber exports were more than adequate to fund our imports. However, declining commodity prices during 1956 to 1977 led to large and unsustainable current account deficits – and import restrictions.

The post-1977 era was when the late J R Jayawardene changed the orientation of state policy and had the foresight to lay the foundation for a liberalized economy. However, subsequent developments have resulted in other Asian countries (who started later) forging ahead and stealing a march over Sri Lanka.

Broadly, Wickremeratne clustered the country’s economic problems into two sets: (a) low capital formation due to a plethora of reasons and (b) an artificially over-valued exchange rate that puts Sri Lankan exporters at a price disadvantage. He suggested that containment of inflation, and “reduced influence of state” on the currency and labour markets would remedy these problems to a significant extent.

With Sri Lanka’s strategic geographical location, the transportation sector will continue to be of paramount importance to the country - as well as to Hayleys - in the future. Pandithage, the Chief Executive of Hayleys Advantis, went on to conduct a virtual SWOT Analysis of the sector as it exists today. In an overview that was brilliant for its comprehensiveness, he indicated what would be required for the country to continue to garner a sizeable chunk of future transportation business. He also spoke of the new gateways and investments expected under the ‘Mahinda Randora Infrastructure Development Initiative’.

Pandithage highlighted the criticality of Colombo South Harbour to Sri Lanka, as well as the strategic fit of the Southern International Airport at Weerawila. Talking of competition, he said that Sri Lanka currently has the upper hand on productivity. He emphasised, however, that infrastructure needed to be enhanced to counter moves of competing ports like Vallarpadam (Kochi), Jebel Ali Free Zone and Port Klang Free Trade Zone.

"Lead with Consciousness” – MPW

• Innovate: You cannot survive tomorrow with yesterday’s tools
• ‘Sathosa’ was a mistake; we didn’t anticipate political change

COLOMBO: The fact that leadership and management play a vital role in organisations is self-evident. However, while delivering the keynote address at the 18th LBR-LBO Forum this week, M P Wickramasingha, Chairman, Ceylon Biscuits Ltd, exhorted CEOs to go beyond these. He asked the gathering of corporate high-flyers to evaluate and change its attitude towards everything, including business rivalry. Providing an example of what is possible, he said, “When we won a contract from the Education Ministry, we took two-thirds and gave one-third to the competition!”

Leadership, according to Wickramasingha, involves not merely seizing every opportunity that arises, but also proactively creating opportunities. “Leaders are made”, he opined, “Some might have the latent talent, but everybody can develop in areas in which they are not naturally gifted.”

The essential attributes of a good leader are confidence, willingness to accept challenges, and an ability to inspire others. However, all these would come to naught, Wickramasingha said, without vision. In an interesting comment, he said that the vision of Singapore’s first Prime Minister, Lee Kuan Yew (1958), was that Singapore should become like Ceylon!

“Remember that the first 3 letters of management are MAN – and man is a creature with emotions, preferences and weaknesses”, advised Wickramasingha. Besides, it pays to have a committed workforce, he said, because then there would be less labour disputes. He regretted that, as organisations expand, workers become isolated, factories get automated, and the human touch is lost. He advises that management’s attitude should be genuine and called for the introduction of ethics in all dealings with staff, to preserve that human touch.

Wickramasingha defines Consciousness as ‘awareness or knowledge’, and said that learned scientists are recognizing a new era of consciousness. The application of consciousness in management sometimes results in ‘gut feelings or promptings that come either from within oneself or from higher dimensions’.

Holding up old-time carpenters and masons – who used to take immense pride in their work - as a shining example, Wickramasingha asked the gathering to “Strive for perfection. Pay attention to details. Work not only for financial benefits, but also for the satisfaction and pride that come from a job well done… Strive for material growth and self development together.”

Wickramasingha stressed the need for innovation and change, cautioning that “You cannot survive tomorrow with yesterday’s tools... Sony, for example, has an obsolescence plan for products that it introduces.”

Talking of the “unimaginable possibilities of the human mind”, Wickaramasingha said that he meditates regularly. “Try brain stilling instead of brain storming”, he suggested. “Learn to be introspective, to look down at yourself from a pedestal.”

In response to a question from the audience, Wickramasingha exhibited remarkable candour when he admitted that he had made a lot of mistakes along the way. “Sathosa was one of them. We didn’t anticipate the quick political change – and what one government did, the other undid.” Ceylon Biscuits Ltd intends to make an initial public offering (IPO) of equity shares. “That’s a board decision,” Wickramasingha said. Speaking exclusively to the Sunday Times FT later, he said that the IPO would hopefully take place this year, “if nothing (adverse) happens to the stock market.”

On International Anti-Corruption Day

“Happy Anti-Corruption Day, Dad!”

“Same to you, Son… Did you know that today is three years since the UN signed the International Convention against Corruption? My guess is that several persons in positions of power, in many countries, have been caught demanding bribes and have been punished since."

“They were asking for it, Dad! Power corrupts and absolute power corrupts absolutely.”

“I would say that the bribe-giver is as guilty of corruption as the receiver, Son…”

“They will pay for it! Tell me something, Dad – How did the word ‘red-handed’ originate?”

“It has some gory origins, Son, dating back to 15th century Scotland… It refers to the act of catching a murderer in the act, with red blood still on his hands.”

“Ughh! Then, what was that other new word you used last week, Dad - ‘Ethical’… What does that mean?”

“In the world of business, ethics is a phrase that keeps popping up nowadays, Son. It refers to knowing what it right or wrong in the workplace and doing what's right. All may be fair in love and war, Son, but not necessarily in business.”

“You mean there’s a right way in business too, Dad? You could have fooled me.”

“Of course, Son – There is a right way, and it’s not always as easy and clear-cut as your Arithmetic sums. Let me give you an example: Suppose a steel company makes a batch of steel that is less durable than its products normally are, although the steel is above industry standards, what should it do?”

“Why, sell it, of course, Dad.”

“I might agree with you on that, Son… But think deeper into the situation - Should the company tell its customers about the difference in quality? Should they sell this batch at a discount to its normal price? Should the sales team be told about the lower quality, so that they in turn can keep buyers informed?”

“Gee, Dad – Tough questions, like the steel itself.”

“Yes, they are, Son - and there is no concrete right or wrong answer in this case. It’s not all black and white, but many shades of grey. What is right and wrong sometimes depends on the industry context and how far the society has progressed along the road of business ethics…”

“Give me more examples, Dad.”

“Supposing an oil tanker belonging to a shipping company accidentally spills crude oil into the ocean, resulting in a minor ecological disaster. Despite that, at the annual shareholders meet, the management declares the highest ever profits and dividends in the shipping company’s history. They dismiss protests against the ecological damage as ‘outpourings of fanatics’. Has the company performed well, Son?”

“They have definitely not, Dad. That was an easy one to answer.”

“Yes, Son – That’s because, as Sri Lankans, we tend to be naturally conscious of our ecology… Now, let’s look at ethics at a transactional level. If the president of a company places an order for computers from the company in which his son is working – and the son ends up getting a commission. Is that fair, Son?”

“I would call it a conflict of interests, Dad.”

“Attaboy! If you were working in such an organisation, what would you do? Sometimes, employees fear for the consequences of reporting wrongdoing. But ethics ought to over-ride all else. There’s a phrase that has gained currency in today’s world: The ‘Whistle Blower’. He is a person who draws attention to wrongdoing within an organisation.”

“Imagine the cacophony in organisations with many whistle blowers, Dad! It would be deafening…”

“Insider trading on the stock market is another common unethical practice that has given equity trading a bad name, Son.”

“So, what needs to be done, Dad?”

“We need to clean up our act, Son. Let’s see what we can do to make business in this country even more responsible and respectable. We need to start thinking and talking about these things. Now is as good a time as any to progress further along the road of business ethics.”