Features
LESSONS FROM MY CAREER: SYNTHESISING MANAGEMENT THEORY WITH PRACTICE – PART 34
My Stint at Dankotuwa Porcelain – Episode 2
The last episode described some of the interesting experiences during my first stint as non-executive Chairman of Dankotuwa Porcelain, including the privatisation. However, there was one incident I forgot to describe at that time, and I will relate it in this article.
Political interference continues
Political interference at the local level continued unabated. A particular senior minister would walk into the factory without warning at any hour of the day. The security guards were too frightened to stop him. He would speak on behalf of the workers and demand salary increases.
The company was doing well at the time, and our employees’ salaries and benefits were already well above the ceramic industry average. The management felt there was nothing more that could reasonably be given, and we stood firm. No more special increases. The union at the time was the Jathika Sevaka Sangamaya, which was affiliated with the UNP.
One day, the General Secretary of the parent union requested an urgent meeting, which we arranged immediately in Colombo. Since the factory union arrived late, our HR Manager used the opportunity to explain to the parent union official the full details of salaries, the monthly cost-of-living allowance, which increased regularly, and the other benefits provided by the company.
We were operating 26 buses to transport workers from different areas in two districts. Breakfast and lunch were subsidised, and the meals were of good quality. When the union official heard all this, he was shocked. When the factory union leaders finally arrived, he scolded them severely and told them their demands were unreasonable. They left the meeting very embarrassed.
Briefing the minister while pirith was being chanted
Despite this, the agitation continued. I realised that some militant elements had entered the union committee and were determined to create trouble and unsettle the company. Their agenda was different.
I decided I needed political support to resolve the situation and arranged to brief the Minister of Industries. He said he was very busy but suggested that I meet him at an all-night pirith ceremony which had been organised to bless the new building the Ministry was moving into.
When the Minister, Hon. Ranil Wickremesinghe, arrived, he sat on a mat in the middle of the hall, with everyone else seated along the walls. I made myself visible to him, and when he saw me, he signalled me to come forward and sit beside him. I was quite embarrassed, because even senior officials were not seated near him.
I explained the entire situation to him, which took nearly 45 minutes while the pirith chanting was underway. The monks did not look very pleased because the Minister was listening to me rather than the chanting.
When I finished, I quietly asked him whether I could leave. He smiled and said,
“It depends on you. If you want to gain more merit, you may stay. If not, you may leave.”
I took the opportunity and slipped away quietly.
The Politician-inspired Work Stoppage
The demands for salary increases continued, even though the workers already received annual increments, a monthly cost-of-living allowance, a monthly incentive, and an annual bonus. Meals and transport were subsidised.
The senior minister of the area, who was also the President of the Jathika Sevaka Sangamaya, asked the Dankotuwa Porcelain branch union to go on strike. The workers stopped work and left the factory, but remained within the administrative perimeter. They were confident that the Government would intervene and force the management to give in.
At that time, I was also the Executive Chairman of the Employees’ Trust Fund Board, and therefore had access to both the Prime Minister and the President. I met the Prime Minister and showed him the faxes we had received from concerned customers, as well as the details of the salaries and benefits our workers were receiving. He was surprised and told me firmly not to give in.
One night, the Board was invited to the Minister’s house for discussions to settle the issue. I took the other directors with me. The Managing Director joined us halfway. We were slightly nervous about travelling at night, but the journey passed without incident.
We arrived around 8 p.m., but we were called in only at midnight. I felt this delay was deliberate, as the Minister had arranged several political meetings before ours. The discussions were tough. Even when the Minister suggested a small increase of Rs. 50, my fellow directors did not agree. ‘Not one rupee, ’ one Director said. We left without reaching a settlement. As we walked out, the Minister made a veiled threat, but we ignored it.
Keeping the factory running during the work stoppage
Meanwhile, the factory had to continue operating. The main glost kiln could not be stopped suddenly. It had to be cooled gradually over about 14 days. If not, the sudden temperature change would permanently damage the kiln, resulting in a significant loss.
Managers and supervisors themselves had to do manual work to load and unload the kiln. There was also a threat that the strikers would cut off water and electricity to the managers’ quarters within the administrative area. We were also worried that the lorries parked there might be set on fire. Our Managing Director, Mr Jagath Pieris, had to drive the lorries himself into a safer area inside the factory perimeter. He later told me that it was the first time in his life he had driven a lorry.
We then briefed the President, who instructed the Prime Minister to refer the matter for compulsory arbitration immediately. I also requested that the Prime Minister send police from outside the area, as the local police appeared to be under political pressure.
At six o’clock the next morning, I was informed that three busloads of police from other stations had arrived, cleared the premises, and taken control of the factory. Our managers continued to run the operations.
This changed the situation completely. The strikers realised that their political support had weakened. At the same time, the compulsory arbitration order was issued. The newspapers reported that the strike had to be called off, and that those who refused to return to work would be considered to have vacated their posts. The SLBC morning news also carried the same announcement.
The union had no choice. They decided to march to the Minister’s house. The Minister then advised them to return to work.
He later came to the factory and told the union leaders to ask the workers to resume duty because the compulsory arbitration order had to be honoured. They refused, saying it was he who had asked them to strike, and that he himself should address the workers. He did so and then left quickly.
Before leaving, he shouted at the Managing Director,
“Tell your Directors that if my people are harassed, I will not hesitate to bomb the place.”
Discipline restored
Even after the Minister left, the union leaders continued speaking to the workers using the factory microphone. Our HR Manager courageously went forward, took the microphone, and said that they had no right to use it.
He also announced that the workers would not be allowed back until all the placards, caricatures, and effigies placed along the Dankotuwa–Pannala road were removed. Apparently, there were some very well-made effigies of me, along with placards containing language that was not fit to print. I asked for photographs, but my staff refused to show them to me.
That incident effectively ended the union’s power. Management power and discipline were restored, but we continued to treat the employees fairly and provide benefits whenever possible. The union leaders themselves were later reprimanded by their parent union, which had not approved the strike. They even had to bear the cost of the arbitration proceedings personally.
The union leader later came to see me privately. He showed me the loans he had taken to cover the expenses and asked for my help. He promised never to start a strike again. More than 30 years have passed, and he still keeps in touch with me.
After this incident, the company enjoyed industrial peace for many years.
The surprising arbitration award
When the arbitration decision finally came, we were surprised. The award stated that the management’s generosity had actually backfired. Because the company had given regular salary increases and good benefits year after year, the workers had developed higher expectations. Therefore, those expectations had to be recognised.
The arbitrator’s award was much smaller than the union demanded, and we decided not to appeal. It was a small price to pay for the stability we achieved.
The lesson – generosity can create expectations
The lesson from this experience is very clear. Many managers feel happy to give higher wages and better benefits when the company is doing well. However, the happiness level comes down to normal soon. Psychologists call it the ‘Hedonic Treadmill’. Satisfaction with a new benefit soon becomes a norm, and expectations increase. Business conditions do not remain the same forever. When difficult times come, and the company can no longer be generous, workers feel something has been taken away from them and blame management.
When Dankotuwa later faced strong international competition, some workers blamed the management for not getting enough orders. We explained the global situation, and although the younger union members understood and realised that they were on the same side as management in reducing waste and improving productivity, the older leaders still believed they had to fight management to win demands, irrespective of the international situation.
Interestingly, towards the end of my tenure, some young union leaders were even monitoring the Saudi Aramco contract price, because our energy cost formula depended on it. That showed a new level of maturity with the new generation.
A lesson I should have learned earlier
I must admit that I had seen this situation before, but I had not fully understood or internalised the lesson.
Many years earlier, I visited a tea estate owned by a very generous man. He provided his workers with facilities far better than those given in neighbouring estates, and he was very proud of his benevolent management style.
I was there with a retired Deputy Commissioner of a Government Department, a much wiser man. After listening to the owner and his boasts of how well he treats his labour, he quietly said to me,
“Giving much more than the basics will one day boomerang on him.”
Sometime later, I returned to the same estate and saw many vehicles parked there. Officials from a regional union office had come to form a union. One speaker addressing the workers said loudly,
“It is true that the owner gives many benefits, but he makes a big profit too. Therefore, we must demand more, because he can afford it.”
I was shocked by that attitude. Soon afterwards, the union presented a list of demands, and the owner was deeply disappointed. His generous style gradually disappeared. He learned his lesson.
A warning to another company
After the Dankotuwa arbitration award, I was invited to speak to the managers of a factory in the Pannala area. I learned that they were about to introduce several new benefits to workers. I told them our story and advised them to be careful.
The moral is simple. Generosity is good, but it must be balanced with long-term thinking. Several management and motivation theories also warn that once higher pay and benefits become the norm, people quickly adjust their lifestyles to that level. When the benefits stop increasing, dissatisfaction begins.
The next episode will also describe further experiences at Dankotuwa Porcelain, including my return.
Sunil G. Wijesinha, Consultant on Productivity and Japanese Management Techniques, Former Chairman / Director of several listed and unlisted companies
Recipient of the APO Regional Award for Promoting Productivity in the Asia-Pacific Region, Recipient of the Order of the Rising Sun, Gold and Silver Rays – Government of Japan
Email: bizex.seminarsandconsulting@gmail.com
by Sunil G. Wijesinha
Features
‘Lord Edgware Dies’
It has been some time since I read an Agatha Christie, the plot of which I cannot remember. So, I was delighted to find on the shelves of a friend Lord Edgware Dies, which I had a vague memory of, but no certainty about who had done it.
When I read it, I found that my memory of who was probably the killer was correct, but I could not be certain and the red herrings Christie threw in were so diverting that until almost the very end I wondered if I had been wrong.
The plot is very simple. Jane Wilkinson, who is married to Lord Edgware, tells him that she is desperate for a divorce since she is in love with a very proper Anglo-Catholic peer, Lord Melton, but Edgware refuses to divorce her. She asks Poirot to talk to him, which he does, and is surprised to find that Edgware has told Jane he is prepared to give her a divorce. This was, after he had categorically refused, through a letter, which Jane said she had not received.
That night Edgware is murdered, after Jane had been to see him, or so the butler said, and also Edgware’s secretary. But Jane had been that evening at a grand dinner many miles away, where a dozen fellow guests could swear to her presence.
There was a solution however to the mystery of two Jane Wilkinsons, namely a skilful impersonator called Carlotta Adams who, in the opening chapter had impersonated Jane Wilkinson, who had also been at the performance. But when Poirot goes to see her, he finds that she had been found dead on the morning after Edgware had been killed, of an overdose. And in her bag was a gold case, with a strange inscription, that contained the drug, along with a pair of pince-nez.
Her maid said she had written a letter to her sister in America and posted it the previous night. Poirot asks Inspector Japp to get the letter, and a transcript is received from America, and in it the name of Edgware’s nephew Ronald Marsh is mentioned; he had taken Carlotta to dinner after her performance, with which the book opens, and had then set her a challenge. Japp arrests Marsh, but Poirot is not happy and asks for the original of the letter, which the sister sends him. That shows that a page is missing, and the tear is obvious, though that raises the question as to why it had not simply been cut.
Matters are further complicated by the fact that Marsh had gone in a taxi to the Edgware house, along with Edgware’s daughter Geraldine, in the interval of an opera which had previously seemed to provide them with cast iron alibis. Geraldine had gone in to fetch her pearls so that Marsh could raise money he needed, and thus had an opportunity to kill Edgware, as did Marsh, for the driver said he had got out of the taxi while waiting and gone into the house.
Marsh explained why he had gone to the house on the night of the murder as having followed Bryan Martin, an American actor, who had been in love with Jane, whom he saw go into the house with a key. But there was no one visible when he entered, and Geraldine almost immediately came down and they left together. And Martin too has become an object of suspicion to Poirot, for he had been to see him before the murders were discovered with a story of being followed by a man with a gold tooth – a story Poirot immediately realized was false when he was asked how old the man was, and was told he was young, for young people did not have gold teeth.
A heap of French money Edgware had got for a trip to Paris was missing, but since Marsh had no need for it after his cousin’s offer of help, Poirot deduces that it must have been taken by the butler, who has disappeared. Christie has stressed that he is astonishingly handsome, unusual in a butler, and Poirot notes a resemblance to Martin, so he thinks the mysterious man going into the house must have been him.
Incidentally, later Poirot assumes that Edgware’s change of mind was because he was involved in some scandal, and I believe Christie intends us to see the cause of this in his handsome butler, though this is not specified.
Meanwhile, Poirot has asked Japp to find out the provenance of the case found in Carlotta’s handbag, and it turns out to have been made in Paris, specially commissioned, and collected by a woman with pince-nez.
But then another murder occurs—that of another guest at the grand dinner, which provided Jane with her alibi. The victim is an actor who had been bemused when Jane, at a lunch, thought the Judgment of Paris referred to the city. He told Hastings he wanted to see Poirot, but was killed before he could get to the appointment. Poirot had rushed there when told about his request, but it was too late.
Meanwhile, Poirot has tried out the pince-nez on Edgware’s secretary, but she could not see through these. It was only a chance remark heard outside the theatre that led him to try them out on Wilkinson’s maid Ellis, a spare pair that had been appropriated for the night of the murders.
Poirot then lays things out, having summoned Martin and told him that he probably suppressed Edgware’s letter, as he had been dropped by then and he did not want Jane to marry another. But after teasing Martin, Poirot says that Jane was in fact the murderer, and she got Carlotta to impersonate her at the dinner while she went to the house and killed her husband. After meeting Carlotta later and checking with her through a call that she had
not been rumbled, Jane had gone ahead with the murder – she put veronal into her drink and the case with veronal into the handbag. She forgot to take out the pince-nez she had used earlier to imitate an American. Carlotta had registered as the American in a hotel and Jane had gone to see her, and there they exchanged identities. After seen the letter, she made use of it by tearing off the page that referred to her, and the S of She, so that the person who had challenged Carlotta to impersonate her seemed to be a man.
There is a coda in which Jane, condemned to death, writes to Hastings, still full of pride at her ingenuity hoping she will be remembered.
Features
Desilt reservoirs, learn from our ancient irrigation systems
by Prof. O. A. Ileperuma
Silting of reservoirs is a major problem today affecting our hydropower production and irrigation systems. The main Mahaweli reservoirs are silted to a considerable extent reducing the water holding capacity of them. Due to poor soil management practices, floodwaters deposit large amounts of silt in these reservoirs. When the Polgolla reservoir was fully drained about two years back, one could see mountains of silt in the lower reaches of the reservoir. A rough estimate is that 50% of the total capacity of these reservoirs has been lost to siltation. This is a serious issue which affects not only power and agriculture but also flood control.
Our ancient irrigation systems ensured that desilting of reservoirs took place under royal decree where all users of the reservoirs were ordered to carry out desilting of reservoirs during the dry season. The clay thus collected was used in making bricks for the construction of great stupas which dot the landscape of our ancient kingdoms. This ensured that the reservoirs had their full capacity filled with water for the next cultivating season. Our ancient kings were clever enough not to construct reservoirs by blocking main rivers such as the Mahaweli. A classic example is the Minipe left canal where they tapped only the surface water of Mahaweli. Even the bigger tanks such as Nuwara Wewa and Parakrama Samudraya were fed with minor rivulets. There were also other ingenious features in the cascade irrigation systems built by the ancient kings, such as mud sluice canals and forest reservations between the reservoirs in the cascade system. These reservations helped trap silt and remove excess nutrients, which could otherwise contribute to increasing salinity as water flowed from one reservoir to another.
- Parakrama Samudraya
- Kalawewa
- Kotmale
A classic engineering marvel is the former Yoda Ela, which carries water from Kalawewa to Nuwara Wewa and Tissa Wewa. It is 87 km long although the straight distance between these points is only about 40 km. The gradient of this canal is about 10 cm per km or 6 inches per mile. Yodha Ela functions as a moving reservoir and feeds about 4,600 hectares of paddy lands. It is a winding canal with about 120 smaller reservoirs on its way. It was constructed during the reign of King Dhatusena around 459 AD and later expanded by King Parakramabahu by connecting more reservoirs to the network. Unfortunately, during the Mahaweli project our modern-day engineers constructed a concrete canal replacing the winding path of this Yoda Ela also called Jaya Ganga. This effectively removed the ability of the old Yoda Ela to remove silt and nutrients. The bank of this Ela has wet zone trees such as jak and areca nut growing well. They take up the nutrients from the flowing stream making the water suitable for irrigation later.
Ancient Mesopotamian civilisations depended on dams constructed along the two main rivers, Euphrates and Tigris. After continuous irrigation of their fields over several thousand years, salinity of the irrigated lands increased making them unsuitable for agriculture. People died due to famine and this clearly illustrates the danger of blocking main rivers for agriculture. There is scientific evidence that the salinity of paddy soils in the Mahaweli C area is increasing.
We saw the devastation caused by Cyclone Ditwah. The sluice gates of the Kotmale Reservoir were opened, and Kandy and Peradeniya were flooded. If the reservoir had had greater storage capacity, couldn’t the opening of the gates have been delayed? This may not be an argument that modern-day engineers would readily accept, and I am not an irrigation expert. These ideas may well be naïve. But most of us tend to think of reservoirs mainly in terms of hydropower generation and irrigation, while their role in flood control receives much less attention. The question therefore deserves serious consideration. Could restoring lost reservoir capacity through desilting help improve our ability to manage extreme rainfall and reduce flood risks?
Desilting our reservoirs should be considered a national priority.
Features
Losing out to Ethiopia
Export diversification – Missing the wood for the trees – Part III
by Gomi Senadhira
In Sri Lanka, the word “Ethiopia” is often used as disparaging slang to describe individuals or areas experiencing extreme poverty, starvation, or severe economic hardship. This linguistic habit originated in the 1980s with the Western media coverage of the devastating Ethiopian famine of 1983-85. That media coverage shocked the world but also left an outdated and offensive global stereotype that the country is permanently starving. Much has changed since then. By now, with an annual growth rate of around 9%, it is the fastest-growing economy in sub-Saharan Africa. Ethiopia has also emerged as a highly competitive exporter and is challenging not only its competitors in the region but also countries like Sri Lanka. This article is on how Sri Lanka has lost ground to Ethiopia (and a few other countries) in the GCC markets for agricultural and floricultural products.
Sri Lanka – A Pioneer in the Agriculture and Floricultural Market in the GCC
As discussed in Part II of this article, by the mid-1980s Sri Lanka had established a strong foothold in the GCC’s fruit, vegetable, and floricultural market. Geographical proximity and well-established shipping and air links gave Sri Lanka a strong comparative advantage over Southeast Asian and African nations. Thailand, Vietnam, and Kenya were not even in the market. At that time, Ethiopia was experiencing (as BBC news reports described) “a biblical famine”.
The market was not very large, but it was lucrative and growing. Trade Minister Lalith Athulathmudali as well as the Chairman of the Export Development Board, Victor Santiapillai, who visited Kuwait (and the GCC countries), recognised the market potential for these products and encouraged us to continue with our work. The minister was particularly keen to further develop links between the market for these products, exporters, and his Export Production Villages (EPVs). So, it was becoming a successful case not only for export diversification but also for transferring gains from exports directly to rural households.
From Trailblazer to Tailender
As a result, even by the beginning of this century Sri Lanka had a larger market share than most of its competitors from Asia or Africa. But since then, our competitiveness has weakened significantly. The tables below provide a comparative snapshot of Sri Lanka’s performance vis-à-vis Thailand, Vietnam, Kenya and Ethiopia in the GCC market for vegetables, fruits and floricultural products. As illustrated therein, in 2001 Sri Lanka was ahead of Thailand, Kenya and Ethiopia in this small but rapidly growing market. Since then, we have fallen behind Thailand, Kenya and many other countries in that lucrative market. If this trend continues, Sri Lanka will fall behind Ethiopia within the next few years. (See Table 1)
In the GCC market for vegetables (covered in HS chapter 07), Sri Lanka was ahead of most other competitors in 2001. As illustrated in Table 1 , Sri Lanka had failed to develop this market, while Thailand, Kenya, and even Ethiopia had very efficiently increased their market shares. The GCC is a market to which Sri Lanka can supply some vegetables, like cabbages, by sea. It appears Sri Lanka had also failed to exploit this mode of supply.
We can see a similar trend in the market for fruits. Vietnam, Kenya, and Thailand have emerged as major players, while exports from Sri Lanka have staggered on slowly. In this segment, Vietnam has emerged as a leading player during the last twenty years and the GCC imports from Viet Nam have shot up from US$44 thousand in 2001 to US$346 million by 2024. In part one of these articles, I discussed the remarkable increase of jackfruit exports from Vietnam “…just $3 million in 2015 to an impressive $236.8 million in 2023” while most of our jackfruit production rots under the trees. This explains how countries develop their markets, geographically and product-wise. (See Table 2)
Sri Lanka’s performance has been weakest in the market for floricultural products (HS Chapter 06), which groups live trees, cut flowers, and ornamental foliage. When we first entered the market in the 1980s, the market was dominated by the Netherlands, and Kenya and Ethiopia were not even in the market. At that time, we identified the Gulf states as a market where Sri Lanka could have a dominant presence due to geographical proximity. Even in 2001, Sri Lanka was ahead of Kenya, Ethiopia, and Thailand. But by now, Kenya has emerged as the dominant supplier. Ethiopia is also expanding its market share and is the third-largest exporter. (See Table 3)
Missing the Wood for the Trees
In the mid-1980s, Sri Lanka first established its foothold in the GCC market. Since then, Thailand, Vietnam, Kenya, and even Ethiopia have moved well ahead of us and have become leading players. Why did we lag behind in our export diversification efforts in general and, more particularly, in the GCC market?
The reasons are very clear. After the initial attempts in the 1980s and early 1990s, Sri Lanka has not been proactively involved in identifying, developing, and promoting new products and markets, or protecting and further developing new markets already established. The focus has simply been on traditional exports: tea, coconut, cinnamon, and garments, while other products were almost ignored. In essence, we have been and continue to focus intensely on a narrow group of products and markets, and we have lost sight of the bigger picture.
(The writer can be reached at senadhiragomi@gmail.com)
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