CORPORATE SURVIVAL INSTINCTS
de Silva Wijeyeratne, G. (2006). Corporate Survival Instincts. LMD. December 2006. Page 146.Volume 13, Issue 5. ISSN 1991-135x.
Does the private sector suffer from short-termism?
Gehan de Silva Wijeyeratne asks whether the private sector suffers from short termism
Open Minds Sustainable Leadership was the theme of this year’s conference organized by the Sri Lankan chapter of the Association of Chartered Certified Accountants (ACCA). A dazzling choral and modern ballet performance at the inauguration demonstrated that Sri Lankans can put on a show as good as anywhere in the world. It is good to be occasionally reminded how good we can be, although in my role as lobbyist for progress I am inclined to dwell more on the negatives of Sri Lanka. Delivering the keynote address was a business practitioner turned academic, Professor Leo Murray from the Cranfield School of Management.
Professor Murray delivered a very good keynote address drawn from his experience of having been at the cutting edge of business and subsequently as a trainer for businesses. It was mercifully free of theory and jargon. A bonus, as it could even be understood by the less intellectually able, such as myself. However, there were a few worrying moments. The average shelf life of a CEO he lamented, was three years. With three years to deliver, will a CEO take long term views? In Sri Lanka everybody laments that politicians are short termist and only think from one election to the next. But in this era of results by the current by year end, is our corporate sector any better?
It struck me that the issue of short termism may be much more serious in the Sri Lankan private sector than I had imagined. One example I can think of is the slow take up by the tourism industry of our efforts to popularise The Gathering of elephants which take place at Minneriya every August and September.
I am sure many others had realised that elephants were seasonally gathering at Minneriya and Kaudulla National Parks. But no one as far as I could ascertain had grasped its significance as an event of international proportions and one economically important for Sri Lanka. The Gathering is spectacular enough to fill the rooms of all the star class hotels in the north central province, if promoted effectively. In October 2002 myself and my colleagues used the Sri Lanka Wildlife eNewsletter and the Serendipity magazine for the first wave of publicity. Gradually as we piled on the publicity I stopped referring to it as an elephant migration and coined the term ‘The Gathering’. The publicity was being noticed and Michael Elias of Walkers Tours told us that he had sent photocopies of the article in Serendipity to all of his tour operators.
We had two vested interests in The Gathering. At the personal level, we wanted to avoid what had happened at Handapanagala. Many years ago a seasonal gathering of elephants took place at Handapanagala. In conflict with the sugar cane plantations and other agriculturists, the elephants were re-located and one of the most wonderful wildlife spectacles was no more. The Gathering at Minneriya may also not receive the money and support it needs from various agencies to maintain the networks of parks, reserves and corridors unless it becomes an important international event. At the commercial level, the interest was more transparent. The company I work for had plans to open a hotel in the north central province. It made sense to get everyone on board.
Around July 2005, we and also a USAID funded tourism project did a significant press blast, locally and internationally. We also approached various hoteliers with the idea of doing a standard eight page promotional brochure on The Gathering. Jayantissa Kehelpannala and Annouchka Weeratunge Fernando of John Keells Hotels readily accepted the idea. Subsequently a year later in July 2006, Chaya Village ran an aggressive campaign with full page advertisements in several local magazines to publicise The Gathering. They had now got their eye in. If a few more of the big players had bought in to the idea in 2005, more of them would have taken it a stage further in 2006. By 2007, the event would have been well on its way to filling everyone’s hotel rooms in seasonally low period.
So what went wrong? Did the other hoteliers fail to grasp the potential of The Gathering? Possibly. Listening to Professor Murray I realised that there was another reason. Short termism. The GMs of hotels, The Directors of Marketing, even the MDs or CEOs in the leisure sector may change in the space of three years. Lending their weight to an event which may take anything from three to five years to show results does nothing for the individual to demonstrate their effectiveness to the organisation and any public shareholders.
This leads to another interesting thought. The role of privately owned business for a developing economy like Sri Lanka may be understated because they are over-shadowed in the visibility stakes by the more glamorous listed companies. The privately owned companies, especially if the owners are also in the management may allow a more conducive environment for taking long terms views. Perhaps a better strategic plan for a developing economy like Sri Lanka is not to encourage more companies to list as public quoted companies. If family or owner managed business are encouraged to professionalise rather than going public, they may provide the long term focus an economy needs. The apparel industry aptly demonstrates how privately owned companies can become powerhouses by being able to think ahead. When you own the company, the CEO can count on a shelf life of more than three years.
Accountant & Banker turned wildlife populariser, Gehan de Silva Wijeyeratne lobbies for progress. E-mail him at email@example.com to subscribe to his wildlife e-newsletter.