‘Explore opportunities in times of crisis’:
Corporates need to be tough to face challenges
Corporates need to be tough in anticipation of tough times and
explore opportunities in times of crisis. Director/COO, Richard Pieris
and Company Pravir Samarasinghe said businesses today have to make tough
decisions to survive in tough times. Corporates need to take hard
decisions such as rationalizing their product portfolio.
Companies need to identify what businesses they should stay in and
what areas they should move away from. Delays in execution of
unprofitable businesses will have an adverse effect.
He was speaking at the Panel Discussion and presentation on “Tough
Times-Tough Strategies” organized by MTI Consulting on Wednesday.
During the economic boom businesses diversify into various sectors
without focusing on the profitability of the business. These businesses
have to suffer during recession.
During recession companies need to focus on capital management and
this will help organizations to change their cash flows and results can
be achieved quickly. Working on the cost structure is important for
companies when dealing with tough times. Companies can convert fixed
cost into a variable nature where they could outsource some of their
operations, he said.
In the economic downturn there will be uncertainty in the minds of
employees and companies need to handle this carefully by being more
transparent to the employees. Companies should educate employees on the
current situation of the company, he said.
CEO MTI Consulting Hilmy Cader said the low fuel cost, end of the war
and IMF intervention are some of the positive trends in these tough
times. Companies could respond to these tough times by using the Chop
and Cripple approach and Trim and Fit approach.
In “Chop and Cripple”, companies may adopt a wait and see approach
and these companies will have a panic mood.
In the “Trim and Fit” approach the company will focus on what really
went wrong and it will recognize ignorance. It will also seek
opportunities to invest.
Senior management involvement and commitment is important in dealing
with tough times. The Company also needs to focus on locking the high
performers in the company through a performance based rewards system
during tough times, he said.
CEO, DFCC Bank Nihal Fonseka said the recession period gives more
time for Corporates to think on “what you could do to go through the
tough time”. It will also give a great opportunity to get ready for the
It is important for companies to identify what customers need during
the recession and cater to those needs. Today in the local financial
industry, customers are looking for a high degree of assurance on their
capital unlike earlier when they looked for high returns on their
investments, he said.
Chairman, Unilever Sri Lanka Amal Cabraal said, “We at Unilever
follow the simple philosophy - business as usual is growth; business
unusual is cost”. We are more into the “Trim and Fit” approach to
respond to tough times. Being closer to the customer will help
organisations to identify opportunities in the market.
We believe that bad times will not last long and we need to get ready
for good times through managing the present time, he said.
Chairman, Hemas Holdings Lalith de Mel said in tough times customers
cut their retail spending, such as dining at restaurants.