LESSONS FROM MY CAREER: SYNTHESIZING MANAGEMENT THEORY WITH PRACTICE – PART 11

The initiation

The last episode dealt with my becoming the General Manager of the Co-operative Management Services Centre (CMSC) and the initial challenges of the job. Studying the origins and principles of co-operatives was helpful, and was a wonderful experience. I learnt about the Rochdale Pioneers who started the concept during the industrial revolution in UK where poverty was rampant. The idea spread throughout the world. Sri Lanka was one of the early countries in Asia that adopted the concept.

Village co-operatives in Sri Lanka, managed by prominent people in the area they were located in, were very successful. When the war erupted and the retail distribution system almost collapsed, the village co-operative stores became most useful. The Governor General had ordered the Commissioner of Co-operative Development to set up co-operative stores in every village almost overnight. The Commissioner refused because he had to teach Co-operative principles before starting such a mission. The Governor General had shot back, “Are you telling me to ask the Japanese to halt the air raids until you have taught everyone co-operative principles?” Co-operative shops were established overnight, and today, most board members of co-operatives have no idea of the principles governing them but have used them as the first step in their career in politics.

I learned about the pre-amalgamation era, where all independently managed village co-operatives in Sri Lanka were affiliated to a union. They were controlled and monitored by the village members, some of whom were respected prominent persons in the area and some who had retired from government service and returned to their villages. It worked well. Then came the amalgamation by Minister T B Ilangaratne, who amalgamated all retail village co-operatives and brought them under a sort of electoral division, the Multi-Purpose Co-operative Societies. According to many, this was a disaster. The village now had no engagement with the head office. The Village Co-operatives became mere “pradeshika” units or retail outlets. Having studied about co-operatives, I believe there is still scope for producer co-operatives, thrift and credit societies, but retail co-operatives may no longer be relevant in an open economy.

A shock followed by divine

intervention

A few months after I arrived at CMSC, I was in for a rude shock. Mr P K Dissanayake, the Commissioner of Co-operative Development and concurrently the Chairman of CMSC, retired from the Department but remained as Chairman of CMSC. One day, he came to the office, announced he was resigning immediately, took his belongings and left. I was there, speechless. Apparently, as the Commissioner, he had conducted some investigations regarding some Ministers who were involved in misdeeds in some Co-operatives, and the Department had made a report. These Ministers had pressurized our Minister and asked that he be not be kept in any post.

I had left a good job and come here, and now what would happen if a Chairman with whom I did not see eye to eye was appointed? For one month or so, no appointment was made. Then I met a friend who had a similar issue in his office. He related a fantastic story about doing seven bodhi poojas; his problem was solved soon after the seventh. As a last resort, I decided to try this. A week or two after my seventh bodhi pooja, I heard that a new Chairman was appointed. I was so relieved because he was a highly respected retired civil servant; B P V A J P Senaratne (popularly known to his colleagues as alphabet Senaratne). Many commented that the Institution will increase in stature because of the calibre of the new Chairman.

A month or so after his arrival, the new Chairman caught me one day, grilled me about my background, and declared that had he known that his General Manager was from the deep south, he would not have accepted the post! Especially during the colonization programs, it was people who came from my village area who gave him the biggest headaches. They were scoundrels, murderers and thieves, he said. Next, he related the story of how he came to be Chairman at CMSC. Being the Chairman of the Planned Parenthood Federation (IPPF) for the Indian Subcontinent, headquartered in Colombo, he was informed that the IPPF was being wound up. Accordingly, all the staff had been terminated, and the files and documents cleared.

Only some unused stocks of paper had to be returned to the Ceylon Paper Corporation. He had brought them in his car with the Administrative Officer (AO). He was parked on Union Place while the AO attended to the return matters. Just opposite was the Food Commissioner’s office, and he thought he would visit his former Deputy, Mr M. D. Pieris, who had taken over as Food Commissioner on his retirement. He found that Mr Pieris was no longer the Food Commissioner but now was the Secretary of the Ministry of Food & Co-operatives, which was in the same premises, and fortunately, he was in office.

As he walked in, Mr Pieris had asked him, “What are you doing now?” The answer was “I have just been rendered unemployed”. Immediately, Mr Senaratne was offered the position of Chairman of CMSC. When he related this story to me, it immediately dawned on me that my Bodhi poojas had worked. I did not tell him that. It was too much of a coincidence. I genuinely believe that some divine power had intervened.

Embarking on the Co-operative Sector Restructuring

The newly introduced VAT scheme was causing problems for the co-operatives. While most small private retailers ignored the VAT charge, the co-operatives had to diligently charge VAT from their customers, rendering them noncompetitive.

The request to the Government to refund the VAT was turned down. Instead, the Government suggested a fund for developing the co-operatives. Some of the public officers immediately met the influential politicians in the area. They asked them how the funds allocated to their co-operatives should be utilized. This was the culture. This would have led to disaster. My Chairman discussed this with the Secretary of the Ministry, and took control. There would be a Restructuring Plan for each Multi-purpose Co-operative Society, and the implementation would be monitored by CMSC consultants. By this time, we had recruited some bright young consultants who had just missed getting into the administrative service.

It was a comprehensive plan that included shedding unprofitable business ventures, retrenching staff, training staff on break even analysis, stock turnover rate and monitoring. The initial period was very challenging because the co-operatives hoped that the closed economy would return to make their lives easier. It took some time for the co-operative leadership to understand the reality. They resisted disposing of unprofitable ventures such as bakeries, printing presses, and rice mills. However, the biggest challenge came from the Co-operative Department. At a full-day conference where we presented the restructuring methodology and explained many new techniques, the last speech by a Deputy Commissioner ruined everything.

He ridiculed the displayed strategy because it would attract more thieves, he said. He criticized the expanded assortment strategy because he said co-operatives should be only for poor people. He was against the employee performance-related incentives scheme, claiming that any surplus belongs to the members and shall not be given to the staff. I was astounded. I debunked his claim during my vote of thanks, made a beeline to the Chairman’s house, and related the story. He advised me not to get worked up because he will have an answer the following morning.

He was a great strategist, and I left it in his hands. The following morning, he told me he would send his resignation to the Ministry. I could not believe what I was hearing. Once again, I will lose a good Chairman. He replied, “Don’t worry, I am confident that my resignation will not be accepted, but it will create some waves for the better. An hour later, he was summoned to the Ministry. Another hour later, I was summoned by the Ministry’s Additional Secretary, and the final result was just as my Chairman had planned. His resignation was not accepted, the Commissioner of Co-operative Development agreed to work closely with us, and a review mechanism with significant stakeholders, with the Secretary chairing the meeting, was implemented.

I learnt many things from this episode. I should have been more discreet; I should have briefed the Deputy Commissioner better, and should have been more strategic. After that, we built good relations with all deputy and assistant commissioners, had joint dinners, and invited them to our lecture presentations with experts, and so on. I developed good relations with the Commissioner of Co-operative Development, Mr Austin Fernando and we became family friends. We visited each other often since he was just five minutes away in the Summit Flats. I would go on inspections of the Co-operative Societies along with him. Relationships matter.

A New Minister takes office

When the restructuring program was going smoothly, Mr Gamini Jayasuriya, Minister of Co-operatives, resigned in protest when the Indo-Lanka agreement was signed. The legendary Dr W Dahanayaka took over. The day he took office, the Ministry staff and some of us in the periphery were invited to a meeting and so was the press. The Minister gave a long speech and reminded the audience they must bear with him because he held the record for the longest parliamentary speech. He enunciated his policies for co-operatives and specifically announced that there would be no restructuring. I looked at the Secretary, Mr M D D Peris, and he too looked at me, and gave a facial expression as if to say “our pet restructuring project is finito”

The following day, Mr Pieris called me and said we need to brief the new Minister about our program and get ready with relevant documents. We briefed the Minister for one hour or so. At the end, Minister Dahanayaka looked quizzically and asked, “So what’s the problem?” We answered, “Sir, yesterday you announced that there would be no restructuring, so we were wondering what we should do.” Giving a loud guffaw, he said, “That was for public consumption. You go ahead with your program.” He continued that, being an experienced politician, he knew exactly what the journalists would write. Naming a particular newspaper, he said, if I had just mentioned “restructuring”, the headlines next day would be ‘co-peratives to be restructured, thousands of jobs at stake’. I remember those Sinhala words even today “Samupakara prathisanskarana kere, sevakayin daahak dotta”. I always believed that there is much to learn from seasoned politicians. The restructuring went on; I used the program for my MBA policy paper, and later even received a consultancy opportunity in Malaysia.

The next episode will be on facing Black July and the transformation made by the Swedish experts.

Sunil G Wijesinha

(Consultant on Productivity and Japanese Management Techniques

Retired Chairman/Director of several Listed and Unlisted companies.

Awardee of the APO Regional Award for promoting Productivity in the Asia and Pacific Region

Recipient of the “Order of the Rising Sun, Gold and Silver Rays” from the Government of Japan.

He can be contacted through email at bizex.seminarsandconsulting@gmail.com)

by Sunil. G. Wijesinha