MTI Consulting

Based on extensive research of how businesses have responded to crisis, MTI has launched the ‘Trim and Fit’ - a performance-driven consulting solution to help companies prevail (not just survive) during tough times and seize upside opportunities.

Hilmy Cader, CEO of MTI Consulting said, “A common feature of all financial crises that the world has faced over the last 371 years (from the Tulip in 1637 to Great Depression of 1929 to current Global Financial Crisis) is the collapse of some of the strongest companies that enjoyed meteoric rise in the good times.

Hilmy Cader

The way in which companies respond to the crisis, is what separates the ‘living’ from the ‘departed’. Most organizations tend to indiscriminately cut costs, freeze all forms of developmental work and adopt a ‘wait and see’ approach. By contrast, the Smarter Companies (we call them ‘Trim and Fit’ companies), while being prudently cautious, use the crisis period as an opportunity to critically evaluate every aspect of their businesses, challenging every dollar and every stroke of work as to the value added. They also see the upside of acquiring low valued assets, strengthening their market position (given lower level of competitive / marketing activity) and gearing their organizations for the upturn.”

During the analysis phase, the risks are assessed, stress tests are carried out and the upside opportunities are assessed - all of which provides the inputs for the core strategizing phase.

This starts with aligning the strategy to meet specific tough times conditions (specifically in terms of rationalizing and de-slacking the business model), followed by taking the ‘fat’ off the processes, before developing a lean structure - all of which is finally driven by ensuring staff are motivated (through win-win initiatives like Performance-based Pay).

Explaining two key features of the model, the CEO of MTI said “Trim and Fit looks first at cost rationalizing based on Vertical Costs (based on a Value Chain P & L) - as opposed to conventional horizontal cost cutting, which runs the risks of cutting off the ‘veins and arteries’ of the business model.

Most importantly, the head count is considered as a last resort (only after the slack in the Strategy, Processes and Jobs are taken out) and even if head count needs to be cut, retrenchment is the last option.”

The final phase of realize is intended to swiftly implement the changes - in keeping with the Trim and Fit philosophy of ‘Direct-2-Bottomline Impact’. This is achieved through the following measures:

• An inclusive and interactive process that see key internal stakeholders being part of the analysis and solution development process, via consulting workshop and consulting clinic
• Based on strong analytics as the foundation of the solution
• Extremely lean and effective documentation, with the focus being on Straction (converting strategy to action) and swiftly to implementation
• Given the above, ensuring rapid and condensed project timing
• Internal marketing and sensitivity appreciation to ensure smooth executions
• Implementation audits by MTI to ensure it is being effectively implemented.

Net-take

• Be tough in anticipation of tough times
• If not, be ready for tough decisions (surgery may be inevitable!)
• Seize the downturn opportunities.

Despite concerns about the global economic outlook, Sri Lankan businesses seem confident that the local economy and their own businesses will perform even better in 2012. However, there are some underlying concerns with regards to FDI, Inflation, Balance of Payment, Interest Rates and Governance. This is the essence of the 2012 CEO Business Outlook Survey conducted by MTI Market Research (www.mtimarketresearch.com) . The survey covered over 100 Sri Lankan CEOs from diverse sectors.

Global Worries
75% of the respondents feel that in 2012 the global economy will either remain depressed (66%) or further slide (9%).  The Euro Zone and North America, which together represents 58% of the global economy still represents 46% of Sri Lanka’s exports, therefore reduced consumption levels in these markets is likely to impact Sri Lanka. In this regards, Sri Lanka’s strategy of export diversification to Asia and other emerging markets is a prudent move, but requires significant market development to convert the intent to export earnings. The fact that even the BRICS have started to downward revise their growth rates and resorted to devaluation is certainly a concern for emerging markets like Sri Lanka.
 
Tea, which is Sri Lanka’s second highest export earner (US$ 1.4billion) depends significantly on the Middle East, Russia and the neighboring former Soviet States. Most of these markets are likely to see a continuation of the socio-political challenges, the only consolation being that tea is an integral part of the staple diet.
Above all, another 2008 style global financial crisis remains the biggest short term threat to the global economy

Top 6 Challenges to the Sri Lankan Economy

Sri Lanka will march on!
By contrast, almost 90% of the respondents feel that the Sri Lankan economy will either stabilize (65%) or even accelerate (24%). This certainly is an encouraging sign of optimism and comes on the back of 2 ½ years of exceptionally high economic growth, the tangible results of this has been experienced across most sectors.

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75% expect the global economy to remain depressed 
yet 90% feel that the Sri Lankan economy will stabilize or  accelerate

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The fact that 75% expect the global economy to remain depressed or slide further, yet almost 90% feel that the Sri Lankan economy will stabilize or accelerate, is an interesting paradox! While the optimism of the local business community (even in the face of global challenges) needs to be commended, we should not lose touch with global ‘ground reality’.
 
The silver lining for Sri Lanka would be the strength of our apparel industry (that caters to some of the world’s top brands, while making remarkable progress in moving further on the value chain) and the tourism industry that benefits from the end of the war, the relatively undiscovered product (in Sri Lanka) and relatively low expectations from the first time traveler to the Island
 
Sri Lankan businesses expect an even better 2012
Interestingly, 58% expect their business to do better in 2012 compared to their performance in 2011, while another 31% expect the same level of performance as in 2011. Only a minority of 11% expect a slide in 2012.

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58% of Sri Lankan businesses expect 2012 to be better than 2011 31% expect it to be the same as 2011

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Business Challenges

HR retention is viewed as the single most weighing issue with a consideration of 17.5% of the respondents reflecting HR related matters as their main business challenge. High utility costs (14.6%) and Expansion (13.6%) are also considered as a challenge to businesses in the next 12 months. At the same time, adding on to the bottom line worries of the decision makers is the challenge of profit generation (12.6%).

In 2012, the main Business Challenge will be

Ground Reality – verbatim response from some of the CEOs

•       To recruit the right caliber of employees to cater to our expansion plans.
•       Retain customers, staff and innovate our business.
•       To manage costs to ensure good margins.
•       Rising interest rates, volatile commodity prices and increasing electricity tariffs.
•       Financial stability in the Middle East and Europe.
•       Depressed economies resulting in less buying power.
•       Strengthen the fundamentals and take off to next level.
•       Cost of borrowings to remain at present levels.
•       Ability to respond  fast to changing needs in the market

MTI Market Research  (www.mtimarketresearch.com), which is a subsidiary of MTI Consulting, was responsible for the extensive market research that was conducted among users, non-users and the channel community.
MTI Market Research, which has thus far been exclusively focusing on all of the research needs of MTI Consulting, now operates as and offers the full suite of market research services on a stand-alone basis. This includes U&A studies, Product / Concept Testing, Brand Equity Measurement, Advertising Tracking, Customized Retail & Channel Audits, B2B Studies.

Daily FT commends MTI for Strategy & Research

Daily FT, Sri Lanka’s  first and only dedicated business newspaper,  has just completed a major strategy review and strategic directional planning with MTI Consulting
“Within just 2 years, the Daily FT has proved to be the main source of business news for Sri Lanka’s corporate sector, with a growing customer base. When we started 2 years ago, MTI Consulting helped us with our strategic thinking process and provided the much needed strategic clarity at stage. 2 years on and growing very fast, we felt it was prudent to carry out a strategic review of the Daily FT and develop strategic initiatives  that will help us propel even further. The current study and recommendations has once again proved to be very effective” said Sujan Wijewardene, Director of the Wijeya Group that also publishes the Daily Mirror, Sunday Times, Hi and many other local language publications.

MTI CEO Hilmy Cader at the presentation with the representatives of Daily FT, Wijeya Group, MTI Consulting and MTI Market Research 
Speaking at the final presentation, the CEO of MTI Consulting said “In an industry that is generally not a high user of consulting and market research,  Daily FT’s decision to engage in it have proved is a prudent decision and is paying off. With the post war optimism in the country and changing lifestyles and mind-set, Sri Lankan media organizations need to use more formal research as a means of tracking, understanding and responding to these changes