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.
HilmyCader, 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.
HilmyCader
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!)
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. 75% expect the global economy to remain depressed
yet 90% feel that the Sri Lankan economy will stabilize or accelerate
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. 58% of Sri Lankan businesses expect 2012 to be better than 2011 31% expect it to be the same as 2011
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
The World’s leading fine paper brand Conqueror represented by Sri Lanka’s premier paper and printing solution provider Papyrus Papers (Pvt) Ltd has unveiled plans to scale up the Sri Lankan operations, commit significant investment and retained the services of MTI Consulting.
Speaking at the launch of the strategizing process with MTI Consulting, Ashan & Michelle Abeyesundere, Directors of Papyrus Papers expressed the need to further strengthen the company & to gear-up to optimize on Sri Lanka’s projected growth trajectory & thereby to determine a strategic road map for the future of the business whilst maintaining a premier position.
Left to Right: Ralston Bartholomeusz, (Managing-Marketing and Sales, Papyrus) ChrishanieAlgama (MTI Consulting), AshanAbeysundere (Managing Director, Papyrus), HilmyCader (CEO, MTI Consulting), LakpriyaWijenayake (Manager: Accounts), RezmiyaNiyas (Asst. Manager-Supply Chain, Papyrus), Ashan De Silva (Asst. Manager, Marketing, Papyrus)
Correspondingly, Mr. HilmyCader, MTI Consulting CEO stated that “given the well-entrenched position of the company and its value proposition, Papyrus is poised for quantum growth and this exercise should help them to critically evaluate the business environment and develop high growth strategies”
The Finance Company (TFC), having successfully turned the corner in 2011 under new management, have selected MTI Consulting to work carry out a strategic audit based strategic directional plan.
Speaking at the signing ceremony, the Chairman of The Finance Company, Mr. PreethiJayawardena outlined the ambitious plans for TFC and went to state “After the debacle we faced, 2011 was a consolidation and turnaround year for us, which we have effectively achieved. Now we look to 2012 and beyond via a well strategic planning process that will clearly position TFC at the pinnacle of the industry”
The Strategic Planning Process for TFC will be based on the internationally and locally proven models and methodologies of MTI Consulting.
Left to Right : Mr. KamalYatawara – Director / CEO (TFC), Mr. DinalWijemanne - Non Executive Director (TFC), Mr. M. PreethiJayawardena – Chairman (TFC), Mr. Hilmy Carder – CEO (MTI Consulting), Mr. KapilaLiyanage (MTI Consulting), Mr. T. B. Ekanayake – Executive Director (TFC)
The local economy is thriving at present while the global economy is challenging and therefore to face the competition effective insights and intelligent decision making is critical said head of MTI Consulting HilmyCader.
He said to have effective insights and make intelligent decisions market research is a must as it gives you the understanding of the consumer behaviour and response.
Today, the market has a greater choice of brands, products,media, channels, financing and new social operating systems such as yahoo, skype,google. Therefore, market research is a must to face the challenges be it an individual or a business. Today there are challenges in every facet of life which includes confusion, chaos and change. It also encompass changing perceptions and attitudes which includes ethics, governance, conflict, environment, individualism, social integration and lifestyle.
Due to the global economy undergoing a recession there is a change in the buying hierarchy as well as in the buying and usage drivers. Cader said that the buying hierarchy has undergone tremendous change within the past 15 years and today frugality is fashionable while value is in vogue
Any business has to understand individuals but very little measurement and marketing research are being done. Marketing as a discipline goes unaccounted but due to the frugality of the people's lifestyle, integrated research has to be done where you look at the lifestyle of the individual and try to fit the product rather than looking at one category.
He said most often companies engage consultants and do research but it sits idle and doesn't contribute to the bottomline of the company but when our company is engaged in research, we ensure that we get all the people of the organisation engaged in the process.
We even get the senior management to work in the counters this gives them first hand experience of customer behaviour. Cader said LOLC got their services and now is the third most profitable company in Sri Lanka.
He said start with a simple question but as the environment is dynamic the research should be flexible and most importantly it should deliver results and contribute to the bottomline. Cader said that the senior management of the companies that they undertake to do market research are very understanding and flexible. I experienced it when I was initiating the workshop for the Seylan Bank the top management including IsharaNanayakkara and AjithDevasurendra who were there contributed positively to the discussions sharing their ideas as well.
He said that use of market research as a risk management tool has increased but still it is on the low side and there is much more potential in this area.When questioned about the frugality of Sri Lankans, Cader said that they are not frugal at present but with what is happening in the west it is bound to happen in Sri Lanka in the near future. SG
“There is unprecedented economic opportunity in Sri Lanka. However, there is a need for more effective
insights and intelligence in decision making” said HilmyCader, CEO MTI Consulting (Pvt) Ltd at a media
roundtable recently.
Cader went on to say that uncertainty exists in any market, and consequently any action in such a situation
involves an element of risk. Companies who get the best results will naturally be those that mitigate such
risk by making informed choices and this is the central role of market research.
“Consumer behavior is not going to be the same. There are deeper seated concepts here which have an
influence on attitudes and consumer perceptions. Businesses need to understand this and dig deeper
into the mind of the consumer”
As an example of such attitudes Cader cited the emerging trend in some countries where consumers
constantly seek more value for money.
“Due to the economic crisis, frugality has become fashionable although maybe not in Sri Lanka yet. Value
is in vogue.”
Cader went on to advocate extensive market research to be followed by a process of radical, disruptive
innovation. He emphasized the need for companies to abandon an incremental approach to business
strategy in response to market research
.
CleanCo Lanka, providers of nation-wide ‘Drive Green’ vehicle emissions testing, completed an business performance consulting initiative with regional business strategy consultancy MTI Consulting.
The extensive project covered corporate risk, governance and marketing communication strategy was augmented by a comprehensive business process engineering initiative. During the course of the project the CleanCo teams were engaged through a series of consulting workshops and clinics involving wide cross functional involvement. Primary research was also undertaken on customer and market conditions. The project was aimed at preparing the business for the next level of corporate performance, in line with shareholder and other stakeholder expectations.
CleanCo CEO HuzefaAkbarally said: “This project has provided us with the strong framework for driving improved performance – not only by helping with next-level business processes, but particularly by engaging our team in defining how they will drive our growth.”
Commenting on the successful outcome of the project, MTI’s Project Consultant YusufIsaam said, “Team engagement and focus on actionable initiatives has been MTI’s core focus - the team is well poised as CleanCo builds on the strong platform of solid technical capabilities, business fundamentals and ethics.”
CleanCo Lanka, an associate company of the Akbar Brothers Group, are the operators of the Drive Green Vehicle Emission Testing Service, operating over 50 Test Centres across Sri Lanka. MTI Consulting has delivered 400 client-specific projects in 40 countries since 1997. MTI provides comprehensive strategy consulting solutions for Strategic Planning, Re-Structuring, Process Development, Marketing Strategy and is augmented with specialist consultancy business areas in Corporate Finance, Market Research, Human Resources and technology.
Photo Caption: CleanCo Directors with MTI Team – L to R; AsgiAkbarally, Executive Director - Akbar Brothers Group, HuzefaAkbarally, CEO - CleanCo Lanka, HilmyCader, CEO – MTI, YusufIsaam – MTI Project Consultant, KapilaLiyanage, Business Lead – MTI Corporate Finance
Companies hoping to go public need to clearly identify the challenges and opportunities available through a public listing. The MTI IPO Forum will offer an opportunity for IPO hopefuls to take learnings from successfully listed companies, while also drawing on the experience of companies that have recently ventured into the IPO domain.
The MTI IPO Forum, organized by MTI Corporate Finance will be held on Thursday 4th November at the Taj Samudra Hotel
The forum will feature corporate leaders including Dr. Anura Ekanayake, Chairman - Ceylon Chamber of Commerce, Mr. Asgi Akabarally, Director - Akbar Brothers, Mr. Asite Talwatte, Partner - Ernest & Young, Mr. Maithri Wickremesinge, MTI Legal Consultant, Mr. Malinga Arsakularatne, CFO - Hemas Holdings, Mr. Maninda Wickremasinghe, Country Head - Fitch Ratings, Mr. Nishan Fernando, CFO - Odel, Mr. Ranil Pathirana, Finance Director - Hirdaramani, Ms. Surekha Sellahewa, CEO - Colombo Stock Exchange, Mr. Trevine Jayasekara, Group Finance Director - Brandix Lanka and Mr.Vajira Wijegunawardena, Director - SEC. MTI Corporate Finance Business Lead Kapila Liyanage, MTI Associates Deshal Pandithage and Niroza Hussain will also be featured in the Forum.
The decision to go public is a result of various organizational objectives such as expansion, maintaining financial leverage, entry into new markets, exposure to other investment opportunities, retaining the best pool of management resources. Such a decision could also crop up due to regulatory requirements. On the other hand, a large group of companies may list one of its smaller subsidiaries in an IPO to ‘test the waters’ of a public listing.
Achieving such objectives will require access to various sources of capital and also create multiple financing alternatives such as equity, convertible debt and better rates on bank loans.
Prior to the actual listing application, a company needs to look at its long term strategic direction, looking at the challenges and opportunities available, and map out the action plans to overcome these challenges and optimize on the opportunities. This will also convey a clear message to potential investors on the actual returns they will receive on their investment in the long run. The valuation of the company will also reflect the strategic initiatives undertaken by the company
‘‘Listing takes a company to the next level. Once the need to go public is identified, a company must clearly map out its strategic direction, before moving ahead with listing. The most successful public companies are those who have understood this prior to listing’’ says Deshal Pandithage – MTI Corporate Finance Associate.
MTI Corporate Finance is a recently launched subsidiary of the Global Management Consultancy MTI Consulting. MTI Corporate Finance offers a full range of Corporate Finance Solution in the major domains of Corporate Funding & IPOs, Incorporations & Acquisitions, Asset Management, and Governance & Compliances.
MTI Corporate Finance aims to assist its clients by preparing them for an IPO through Strategic Advisory & Risk Management Audits, Valuation & Prospectus Development and the actual Application & Listing Process. The Unit is backed by a team of Corporate Finance Specialists with extensive experience in IPO Facilitation and related Finance Solutions.
Inspired by their success and confident in the future in Sri Lanka , MTI Consulting have scaled up their Sri Lankan operations by doubling the strength of their consulting team. MTI sees the demand for high quality, bottom-line driven business strategy consulting increasing, as Sri Lanka is poised to follow the business development lifecycle of the Asian Tiger Economies like Malaysia and Thailand
"After a long and diligent search process, we have hand picked 5 extremely talented consultants with a passion for consulting - which is the most important differentiator that MTI looks for. Our new team brings a mix of professional, consulting, industry and academic experience from the UK , Australia , India and Sri Lanka " said Mr. Lasantha Abeywickrema the Director / Senior Consultant of MTI Sri Lanka
" Sri Lanka is a very important market for MTI for business and personal reasons and we are committed to make Sri Lanka a model market for the MTI world. The new Consulting team will be subject to the 'The MTI Way' an intensive training and cultrailsation process that grooms MTI talent" said Hilmy Cader , the Bahrain based CEO
MTI's services have bees used by Sri Lanka's leading blue chips such as Hayleys, MAS Holdings, Delmege, Ace Cargo, Bank of Ceylon, SriLankan Airlines, DIMO to name a few. In the last 6 years,
MTI Solutions have been used clients in 25 countries across 37 product /service categories
The new MTI Consulting Team includes:
Roshange Wickremesinhe ( BSc , UK and Post Graduation in Consulting, Business Administration and Finance) has worked in the UK for Pepsico International, Body Care International, Technology Providers Asia and in Sri Lanka served as CEO of Net Media International and E-Business positions with Bartleets Group. Roshanga will focus on MTI's B2B solutions for high value products and services.
Thanuja Tiilekeratne (ABE, Dip M, MCIM - UK ) has just returned from Australia with a MBA from Queensland University of Technology. In Sri Lanka , his experience portfolio includes: Mobitel, Ceylico, JWT and Ceylon Biscuits. Thanuja's focus shall be on brand marketing and integrated marketing communication
Sanjeev Abeynayake is a double masters degree holder (MBA and MCOM) where he studied at the University of Wollongong in Australia and his first degree at the University of Pune in India . Sanjeev brings a wealth of research and Marcom experience from A C Nielsen and JWT. Sanjeev will spearhead the Customer Insights and Brand Communication initiatives
Dhanushka Jayakody , MTI's home grown talent, steps into the Consulting Team, armed with a Dip M from CIM (UK), in his final stage of the University of Wales MBA and consulting experience in Sri Lanka and Oman, working on projects for SriLankan Airlines, Ace Cargo, MAS Holdings and EDB. Dhanushka will work on business strategy consulting and strategic planning assignments.
Ruvantha Jayasinghe (fully qualified CIMA and just completing his MBA from University of Wales ) spent the last 3 years at KPMG Consulting working on several large scale consulting assignments, in addition to his role as a visiting faculty for CIMA. His previous experience includes American Express Bank and Paints & General Industries. Ruvantha's focus shall be on business analysis and strategic decision analysis.
"While all our consultants will have their core competencies, in keeping with The MTI Way they will do so within an integrated business strategy perspective, focussed on the bottom-line. Because that is what matters finally and that is what we have successfully delivered to our clients in 25 countries" said Hilmy Cader .
PHOTO: Hand-picked to conquer the exciting and challenging world of consulting, a new breed of strategists: From Left: Thanuja Tillekeratne, Roshanga Wickremasinhe, Ruvantha Jayasinghe , Dhanushka Jayakody and Sanjeev Abeynayake
MTI Consulting teams from the SAARC and Gulf Regions have selected Sri Lanka for the venue of their Regional Forum. In order to capture Sri Lanka’s heritage, the Regional Forum will be spread across The Beach – Negombo and The Cinnamon Lodge - Habarana.
With about thirty participants from the global operations, the MTI Consulting team is a melting pot of ethnicities, races and nationalities.
The benefit of the Regional Forum explains, Suanthri Abeysundera, MTI Sri Lanka Country Manager is that, “many of us are embedded with our routine work that we forget to focus on learning.” The Regional Forum allocates valuable time for personal development. Training is important in order to create a culture for continuous improvement and learning.
MTI recently launched out into specialist consultancy business areas in Finance, Legal, IT, HRM, Branding and Supply Chain.
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