Pragmatic leaders

I was part of a team that organised a felicitation event that had a complicated and curated, sequentially numbered seating and dining arrangements for 150 pax. The Chair of the Organising Committee was Nihal Fonseka (ex-CEO HSBC, DFCC) and when inspecting the room before the event, I noticed him physically counting the chairs at the head table although detailed plans had been made available to the hotel. He found that there was an extra chair at the head table. Had he not counted the chairs, we would have had a major issue not only with protocol and people, but also with food choices. This seemingly innocuous action, was the attention to detail that had a material impact on the overall success of the event.

“I do sometimes go overboard with attention to detail. This stems from a realization quite early in my working life that in SL, there is no shortage of good ideas, plans and policies but quite often objectives are not achieved because implementation breaks down due to lack of attention to detail and follow up. I delegate but don’t abdicate” - Nihal Fonseka

Danaher and the HBS Model

I had the opportunity to follow a lecture on the importance of implementation by Larry Culp, who was the CEO of Danaher Corporation from 2001 to 2014 and led the growth of the company’s market capitalisation from US$9.7 billion to US$ 50 billion. Culp’s management success was known to be his attention to detail and his ability to identify what problem needed to be addressed and to delve into it in depth. In order to scale this management style, through a multinational organisation, he devised DBS – the Danaher Business System.

“exceptional PEOPLE develop outstanding PLANS and execute them using world-class tools to construct sustainable PROCESSES, resulting in superior PERFORMANCE” Danaher, 2023

The Premadasa Era

Nihal Fonseka mentioned that he admired President R. Premadasa for his ability to implement plans and drive execution. As CEO of DFCC he had an inside view into governance in this era, as did I at a much lower level, working under Dr. Romesh Bandaranaike in the restructuring of plantations. Did President Premadasa follow the DBS Model?

People, Performance, Plan and Process

President Premadasa had the all-powerful and then youthful R. Paskaralingam working under him. Paskaralingam would chair meetings of the plantation sector commencing at 8 pm and had the ability to understand the cause of the problem and not just articulate a solution but ensure that the solution was implemented. Within this team, there was plenty of brain power. Faiz Mohideen was Secretary to the Treasury, an amazingly precise, decisive and articulate manager. He was supported by K. Shanmugalingam and Dr. Anura Ekanayake. Our team was led by Dr. Romesh Bandaranaike, one of the most intelligent people I have ever met and one of the best leaders I have encountered. Dr. Rohan Fernando was part of this team, as were Gayan Samarakoon, Ravi Jayathileke, and Nalin Karunathileke. These were all people that had amazing vision and the ability to develop great plans. But what made the team spectacular, was their ability to drive execution with great attention to detail. Dr. Bandaranaike as team leader would check legal agreements and ‘blow-up’ if a coma was in the wrong place. All the listed individuals went on to achieve significant success in their careers, underlining that in the Premadasa era, he had a strong team of people.

A team of strong people will always drive performance. However, in order to do so, they need a plan and a process. In terms of the example cited, the plan to divest plantations was made at the highest levels of Government and handed over to the implementation team. This team devised their strategy of implementation which was to initially give the plantations out on a management contract and later longer-term outright privatisation.

The process followed was of monthly meetings, with formal agenda’s, performance reporting and tight monitoring of committed targets. Everyone in the system was responsible for delivering on time and the system highlighted non delivery.

The result was that the plantation privatisation was implemented in record time by an extremely small team.

In similar fashion President R. Premadasa implemented the 200 Garment Factory scheme, which today counts for US$ 5 billion worth of exports, Sri Lankan companies that post billions of dollars of turnover and are considered global leaders in garment manufacture.

Had Premadasa lived, industrialisation in Sri Lanka would probably have developed and we may have been in the economic position that Vietnam now enjoys. The key was his ability to drive implementation, through People, Process, Planning and Performance.

The Wickremesinghe Era

If one were to evaluate President Ranil Wickremasinghe in terms of the DBS, the current President has clearly articulated a well thought out and logical plan for the development of Sri Lanka.

His plan addresses the core issues that have brought our economy and people to their knees. That is our persistent Fiscal Deficit and Trade Deficit. The President has addressed the Fiscal Deficit in terms of an aggressive drive to increase tax revenue and a strategy to reduce Government revenue through the restructuring and sale of State-Owned Enterprises (SOE’s). Attracting FDI and enhancing the Ease of Doing Business (EODB) in Sri Lanka are identified as key enablers of his strategy. Increasing exports is a linked pillar that requires FDI and improved EODB.

This analysis will evaluate to objectives of President Wickremesinghe, in terms of the DBS model – the strategy to sign an IMF Extended Fund Facility (EFF), and the sale/restructuring of State-Owned Enterprises (SOE’s).

IMF

Sri Lanka’s negotiation of her 17th IMF bailout has been successfully executed. People were appointed to tasks and these people were competent to perform the entrusted tasks. A plan was established, and this plan was implemented, through a process of timelines set by and evaluated by the IMF. Sri Lanka now stands ready to obtain the IMF assistance sought. This shows that when People, Plan and Process are in place, Performance can be ensured.

One could argue that we could have negotiated better with the IMF. We could have pushed more aggressive SOE reform instead of such aggressive tax reform. Whilst not commenting on this, we could broadly say that the IMF implementation was positive.

SOE Reform

A team of very competent people have been appointed, led by a respected business leader with an established record of success, appointed by the President. This team have developed a SOE reform plan, and the plan has been clearly articulated in the media and made public.

The question is whether there is a process in place to ensure the people entrusted with implementing the plan can do so, and is there a performance criterion defined?

In terms of Process, is the Government aligned towards the plan of privatisation and restructuring of SOE’s? As a counter example, Premadasa’s Government was aligned on the Garment Factory programme. Has the strategy been discussed transparently and has consensus been negotiated? Will the Opposition support the programme? Can Chambers play a more active role in obtaining the required consensus?

Is there a defined performance criterion? Is there a timeline by which selected SOE’s need to be privatised? One could argue that if there is no clear process, then there can be no clear timeline. Thus, a strong team of people with a solid plan may not be given the assistance they need to achieve their task. This makes the problem here more fundamental than attention to detail.

Other key areas

Below is a list of strategies that are crucial to the achievement of the implementation of the economic plan articulated by President Wickremesinghe;

Increased FDI

Improved EODB

Increased exports

Reduced Government expenditure

Geopolitical plan

In the above listed areas, there can be people and plans in place to deliver desired objectives. But, is there a process in place? And without a process, can there be Performance measures? And is the reason for the lack of a process, the lack of political consensus on the strategy? Is it that the politicians are looking for their own strategies to come into power, and not looking at the nation and resolving her economic challengers? And again I ask, is there a greater role that business leaders and trade chambers play, to drive consensus within the arena of politics?

President Wickremesinghe has always been reputed to have a clear vision to drive the Sri Lankan economy and been identified as a leader who has a plan for the country. He is also accepted as having the intellectual depth to identify the critical issues that must be resolved to drive his plan. He understands geopolitics and is well equipped to negotiate support of other nations.

Many commentators’ question President Wickremesinghe’s ability to drive implementation. From this analysis, the key requirement to drive implementation seems consensus and a defined process. This needs political consensus on key economic issues. Thereafter, a Premadasa style drive towards detailed implementation.