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Seven All Black lessons for 3rd generation economic reforms


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We have been privy to very strong share of media on the All Blacks performance at the World Rugby championships 2015. A particular piece that caught my eye was ‘All Blacks have the world at their feet but could fail to realise the potential’. The parallel that my mind raced to was Sri Lanka.

We also have the world at our feet but the question in the minds of many is, are we going to let this opportunity slip by given that the third generation economic reforms presented last week in Parliament were exactly what the country required?

Let me try to draw a few lessons from the successful All Blacks rugby team to the ideas that were presented on the proposed third generation economic reforms presented.

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The All Blacks team is worth $ 132 million but now has the potential to be $ 500 million whilst Sri Lanka is valued at $ 61 billion and has the potential to be $ 100 billion within the next two years

 



Pick up 1: Right things

The All Blacks prior to the tournament was estimated by Brand Finance to be worth $132 million but now it has the potential to be a $500 million entity if it does the right things on partnerships and sponsorships.

Implication to Sri Lanka: Sri Lanka is estimated to be worth around $68 billion and has the potential to be a $100 billion brand within the next two years provided we do the right things as per the ideas presented in the third generation economic reforms presented by the Prime Minister. The challenge is that some of them will be unpopular and difficult to absorb by some quartets given that Sri Lanka is an island nation.

One remedy will be a strong iron-fisted approach which will have its limitations given the cultural ramifications. One way out of this is for the private sector and chambers to support the policymakers and be the voice to driving change, so that they become the opinion leaders as proponents for the third generation economic reforms required by the country. For this to be achieved, an internal marketing campaign might help.

 

Pick up 2: Financial governance

The Rugby World Cup 2015 became the third most watched sporting event and had the potential to get strong commercial investment by way of sponsorships and broadcast rights, just to name a few. Some of the current commercial partnerships include Air New Zealand, AIG, Bulgari, money-spinning TV rights deals and merchandising propositions which will require cutting-edge decision making that can make the All Blacks a gold mine due to its amazing track record of success at a high of 77%.

Implication to Sri Lanka: Given the strong outward driven approach by the Government with a balanced approach to the East and the West, we can target strong commercial partnerships similar to the All Blacks. One noteworthy recommendation from the third generation economic reforms proposals is the ‘Setting up of a central procurement agency’. This will instil credibility to the purchasing process of the country and drive financial governance. But the challenge is how far this can work in ground activations as South Asian countries work on a political economic business model. One way out is to get the best talent to work for the country irrespective of political colour. This again is a tough call given the island nation mentality that exists in the Sri Lankan culture but it is the only way forward if we are to make the best from the opportunities that the country is exposed to.

 

Pick up 3: Segment markets

Analysts say that if the World Cup winners are make use of its brand equity, the global market place must be segmented and commercial partnerships must be driven from a regional level. This will also require visibility, exhibition games particularly in the US and key growth regions like the Middle East where All Blacks are not very well known. This is what strategist term unleashing the potential of a strong brand.

12-1Implication to Sri Lanka: To me the pick up from the third generation economy reforms proposals was the ‘Formation of the International Trade Agency’. If such an agency existed in the last few years, we would not have had a ban of fish exports to the EU. The other related recommendation on this front was the restructuring of EDB, BOI and Sri Lanka Tourism. These two proposals alone had the potential to make Sri Lanka a $100 billion dollar economy from the current 70-odd to my mind. The signed partnership recently with India by the Prime Minister, termed CETPA I believe which stands for comprehensive economic technology partnership agreement is testimony to this fact. The Trans-Pacific Partnership proposed is another big win given the decision expected in 2016 and the relocation of industries from China to countries like Cambodia and Vietnam.

But the key is to set up the framework for a private and public sector partnership given that 78% of Sri Lanka’s economy is driven by the private sector. The challenge is how we link the SME sector or the informal business of Sri Lanka.

 

Pick up 4: Reward performance and not loyalty

Way back in 2004 the All Blacks team was in trouble with performance at an all-time low. The morale was low. Their inspirational captain Tana Umaga was threatening to quit when the culture was drunk and disorderly, says reports. In this backdrop the senior leadership met for a three-day summit and agreed on an ethos rewarding performance than loyalty. The theme was ‘Better People Make Better All Blacks’. The leadership style was changed to devolved leadership, individual personal development, learning culture, train to win but correct behaviour. Today the team has a record 77% success rate.

Implication to Sri Lanka: Looking back at the weekend papers, the situation we are up against in Sri Lanka was not what the voters wanted on 8 January. I guess the time has come to attract the ‘Best Talent to make a Better Sri Lanka,’ instilling the third generation economic reforms proposed. It’s a window we must make the best.

At the Sri Lanka National Day celebration at Expo 2015 in Milan, the strongest endorsement that Sri Lanka received was when the Managing Director for Calzedonia Marco Carletto shared the success story of his company Omega Line in Sri Lanka. Omega Line has five factories with 12,000 people employed by the company and has operated in the most difficult time like the war. His ethos was that best talent in Sri Lanka had made his company one of the best in Italy.

The company Calzedonia is a classic example of a company linked to the global value chain operating its production out of Sri Lanka. It made an impact on the 158 strong business and press community of Italy. The event was a joint effort of EDB, BOI, Department of Commerce, Sri Lanka Tourism, SriLankan Airlines, National Gem and Jewellery Association and Craft Council which are business models that need to be replicated globally by Sri Lanka.

 

Pick up 5: Go back to basics

The 2004 turnaround of the All Blacks was in fact referred to as the ‘Rebirth of All Blacks’. The strategy developed was backed not only by the policymakers but also the private sector that was linked to the game of rugby in New Zealand. The strategy got teeth when the Government instilled technology to the overall development strategy of the team. This included technology driven muscle assessments, fitness tests and performance measurements. The science that was embedded to the All Blacks ritual was called “new Hakka,” which was inclusive in nature. Hence the success was not just the game of rugby but the nation in its entirety.

Implication to Sri Lanka: Given that Sri Lanka is an agricultural country the setting up of the ‘National Agricultural Authority’ is a winning idea, especially the 2,500 State rural development centres which are formed with the cluster of villages. The linkage to the ‘Agro Marketing Authority’ will mean the total value chain is partnered. Now the challenge is how the demand chain absorbs technology so that the post-harvest loss of 40% can be mitigated due to the poor logistical system. This proposal will require some fleshing up, that can ideally be partnered by Sathosa, Keells and Cargills. I guess the new blood introduced to CWE and Sathosa can support the national agenda.

 

Pick up 6: Leadership by group

Central to the All Blacks victory in 2015 was the development of leadership skills of the team. The thinking that went in during the last decade was ‘One captain, 14 leaders’. When the sports analytics revealed their findings, the practice of such training emerged. The leadership by each member was seen in different quartets which made the team a strong contender even before the final. This is what inclusive leadership brings into the formula to my mind.

Implication to Sri Lanka: Reducing the budget deficit to 3.5% was a very clear directional policy. Now selecting the winning sectors are key. In my view industry and commerce together with tourism will play the pivotal role. The setting up of the 11 economic zones will chalk the strategy. As the originator of the Atchchuveli Industrial Zone way back in 2009 when I was working in the UN, the problems with economic stones is that the incubation period is a minimum three years. When we launched the Industrial Zone in 2014 and the number of SMEs operating in the system ticking the Jaffna economy was at snail pace, which is the challenge of driving the industrial development agenda. Unless the demand chain is already established like what we saw in the ’80s in the apparel industry wave. In the latter the impact to the economy was quick given the demand chain already in existence. Hence unless the FTAs are in place together with markets like EU being already 100% accessible with facilities like GSP+, we will not be able make it a strong driver of the economy in my view.

 

Pick up 7: Leave a legacy

An interesting ideology that was revealed post the 2015 Rugby World Cup being hoisted by New Zealand was the “leave the jersey in a better place” saga. The idea was that the Maori genealogy “Whakapapa” means add to the legacy in everything they do. This drove the team to a higher purpose performance. I guess the winning medal that was gifted to the young boy who cut through security was apt to this ideology.

Implication to Sri Lanka: Given the legacy of the UNP in 2002-2004 where the economy was turned around and the past economic turnarounds that were made by injecting painful but positive reforms in 1970s by J.R. Jayewardene, in the 1980s by R. Premadasa it would be in keeping to say that 2015 third generation reforms have a strong propensity to yield results. But we need to keep in mind that the competitive landscape is different given the high digitalised environment in which we live and the coalition Government that is in play. But the fact is that Sri Lanka is at a tipping point for success just like the All Blacks brand.

[The writer headed the National Council for Economic Development (NCED) in the Ministry of Finance and thereafter served the United Nations for a five-year tenure.]


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