Top women leaders share insights on navigating headwinds amid pandemic

Q: How did you manage the third lockdown individually and as corporate leaders? What were the key learnings?

The key focus was to have the services uninterrupted, while ensuring the safety of our teams and customers. Although we have been investing heavily on our technology for a long time, we didn’t see maximum usage on those platforms. The pandemic was a blessing in disguise as a lot of our customers started utilising those platforms and it became quite easy for us to continue our services. In terms of our staff, we were able to facilitate distant work or work from home culture immediately. Going forward, the organisations need to become more agile and that is a key strategy our banking is looking at. 

Q: If the pandemic remains permanent, can it be cited as an excuse to underperform at management level?

Pandemic is a short-term disruption in our work style — maybe delivery or the mechanism has been changed. The Q1 results show that banks have done fairly well and the reason is because we continued to serve our customers. Obviously, the businesses are stressed and there is an impact on our profit and loss and our balance sheet. We restructured our facilities and were helpful. I believe it is a transitional period and we can come out well. So, underperforming is not an excuse.

Q: Although you said services were continued, banks did close down for a few days.

The finance sector was considered as an essential service and travelling was allowed during the first and second lockdowns, but we were stopped from opening branches in the third lockdown and were not considered as an essential service due to the sudden outbreak in COVID-19. We had to abide by the country’s rule and it was not that the banking industry closed. Thereafter the regulator got involved and we served the customers and allowed them at branches.

Q: What was the most challenging leadership skill that you faced in managing the pandemic?

 We are a systematically important bank, managing Rs. 3 trillion assets with over 4,000 employees and three million clients. Protecting these 4,000 employees was our prime focus. When the Government declared finance as an essential service during a pandemic, our employees had to report to branches. The move caused a lot of employees to debate on their job role while some were allowed to work from home. I personally had to explain sometimes and made them realise that we have to drive the economy. If the banks too stopped operations, there wouldn’t be any transactions. 

We managed to do both local and foreign transactions. Responsiveness is the key. We assured safety and health of our employees and later they too felt proud and found their service mattered to the country at large. In terms of the customers, we have tech savvy new generation customers and old age brick and mortar customers that enjoy engagement at branch service. However, during the lockdown we rented vehicles from a firm and delivered cash for those old age customers to their doorstep, as they too matter to us. We activated our call centres and did the cash delivery mechanism.

Q: Is Sri Lanka in a forex crisis? What is the exact situation? What is the impact on money printing?  

There are two factors. Tourism is a key sector that earns foreign exchange for the economy. As a result of the Easter Sunday attacks followed by the pandemic the industry which drew about $ 4 billion per annum was adversely impacted and for the past three years the economy has been deprived of over $ 12 billion. Secondly, if not for the pandemic, we could have borrowed from the international market. I don’t know if crisis is the right word, but I’d say it’s transitional and we have to manage. 

What banks do here is, we prioritise payments, we manage our inflows and outflows on a daily basis and we try to give the benefit of it to the majority. Government too knew the pandemic will lead to difficult times and it has now reached there. I believe the country will open up soon with all health measures in place and when international travel starts the foreign inflows will come in. I hope that we can expect a higher number of tourists during the December-March period to start with and we might even be better in managing the situation.

As of today, even the economic superpowers have to print money. We can’t simply blame the Government for printing money. The Government mechanism to collect revenue was stopped, they could not demand to collect taxes given the difficult times and the expenditure too increased with additional costs incurred on PCR test kits, quarantine facilities, vaccination. If there was no liquidity in the banking system at the time the pandemic hit, the situation would have been worse than what we have seen today. The country had to print money for the continuity or we could have seen people coming to the roads.

So, infusing that amount of money to the system was inevitable and the right decision given the situation. The banking industry is heavily liquidated and this also showed the strength of the system. Had we gone for a liquidity crisis and people rushed to withdraw money, the country would have gone into another chaos. We need to understand that the Government has tools to manage and they will impose inflationary measures too to control the situation. 

Q: The tourism industry has over Rs. 300 billion loans to repay. Is it a fool’s wish to expect banks to write it off or can banks really help the sector to overcome the debt?

The tourism industry is not dead and we are hopeful for revival. However, we are considered trustees of the public money and stability of the banking industry is also important. We are dealing with public money and all these stressed assets are now reflected in the banks. This country has to survive by bringing in tourists and be optimistic. In the interim, we have been supportive to the industry with several extended moratoriums; but the question is when will they be fully recovered to start servicing those debts. If the Government guarantees for the funds, we can consider — but otherwise it is not possible as we are liable to the public money.

 Q: If you get invited to meet the President and Cabinet of Ministers, what is the one advice you will give?

 Policy inconsistency has categorised Sri Lanka as one of the most expensive countries to operate a business. Stability on policy is the key to support the economy and the SMEs. They are an integral part of the ecosystem to drive growth.

Q: How did you manage the third lockdown individually and as corporate leaders? What were the key learnings?

Kasturi: The learnings evolved from first lockdown to the third one, but the biggest was having a purpose in the centre in all we do. During the first lockdown, the key learning was to break down the decision making to the lowest

levels and empower them. Place trust in them that they will do it the right way. We empowered them to make decisions because they are the closest to the consumers and to the heart of the problem. As a result, those problems don’t come up too much now. The other key lesson is that uncertainty is the new normal and the biggest enemy. We set medium term targets and we invested in growth. 

The pandemic also brought all employees together that used to work in silos. Cross business teams volunteered and covered shifts for others. It is important to trust people at the bottom, empower them, focus on growth, push them to think new even during uncertain times and keep the purpose in the centre. 

Q: If the pandemic remains permanent, can it be cited as an excuse to underperform at management level?

 We need to invest to grow. In my perspective, pandemic or any disruption to the ecosystem also brings in opportunities because you need to understand what the new landscape is. With regards to the FMCG sector, you have to understand the consumer. Our consumers’ spending power has reduced and changed. Their priorities have changed, consumption patterns have changed and ways of entertainment have changed. As corporates, if we closely observe the consumer and create products to solve their problems — there is growth. In terms of the healthcare sector, consultation and access have changed to digital ways. 

During these trying times, we have to invest and think progressively. Given our economy, the SMEs are the ones who struggle. It is easy to say invest and grow, but to access capital at that level is tough. As a conglomerate, we are exploring opportunities to support such SMEs with partnerships. During uncertain times, consumer patterns and priorities will change, but they will still consume. So, it is important to manufacture or cater to relevant products.

Q: What was the most challenging leadership skill that you faced in managing the pandemic?

When the Group decided to appoint me, I had plans on how to take Hemas to the next level. I have spent five to six months planning and then COVID hit — the entire landscape changed. As a corporate leader, it was challenging to reset my mind. I had to look at the new cards and how to play them accordingly and leverage them. Finding the silver lining and pushing the people was challenging. From a personal perspective, people find me bold, courageous and want to excel even during uncertain times. It took a couple of months for my leadership team to let go and dream big again, but we nailed it in the past one year. 

The team innovated more products than they did in the last so many years. We launched five to six new products in Sri Lanka as well as in Bangladesh. Your personal values can get reflected in your organisation and also align to it. As a human being, I can’t watch a community struggle and be as a business. I gave leadership to support any community that was in need during these difficult times and I am glad that my team too aligned to the purpose. Now, the team understands and believes that they can do it too.

Q: Do you think exit from the leisure sector was helpful for Hemas?

We decided to divest before the pandemic hit. We believe in ‘go all or nothing’ to best use our capital. It was a portfolio decision we made and it gave us room to focus on what we are good at and luckily saved us from all the challenges the tourism industry is going through. (Laughs) As a country, we have to take bold and progressive decisions sometimes and without opposing every initiative, people must cope with it for the betterment of the entire country.

Q: How has import control and substitution impacted from a conglomerate perspective?

It is more to do with the exchange rate and access to funds than the import control or substitution. Planning has been a challenge for all domestic manufactures because we have a small market and we rely on global value chains for our commodities and raw materials. With the uncertainties and disruption, the prices of global prices skyrocketed and economically the pandemic aggravated it with people losing jobs and affordability. Therefore, policy consistency is key to plan manufacturing as everything rolls back to the cost of production.

Import substitution is the long-term way forward, but we don’t have the muscle to produce that quality raw material at the right prices. Whilst we plan self-sufficiency, the bigger plan should be to get access to global leaders as partners. In terms of the pharmaceutical industry, 85% of them are imported and of that 55% is by the State and it is the key element they want to convert, but the problem is how much science knowledge do we have to do it? I agree that essential drugs need to be manufactured domestically at affordable yet high-quality. 

However, to do so we need to first encourage global leaders in the industry and provide them tax breaks to allow partnerships to anchor around science, knowledge and to eventually up-skill. In the pharmaceutical industry, we are running without a pricing mechanism. We have suppressed the upward revision of the price of essential drugs which were done two years ago. Especially in a pandemic, it’s critical to have sensible policies for short-term and build on it thereafter, if the country intends to be self-reliant or have the correct partnerships.

Q: If you get invited to meet the President and Cabinet of Ministers, what is the one advice you will give?

Appoint one communication person and to monetise the assets that are underperforming by listing them on the stock market.

Q: How did you manage the third lockdown individually and as corporate leaders? What were the key learnings?

Tourism is the worst hit by the pandemic, but the human spirit in those engaged in the industry is indomitable. I have experienced this many times during the war and tsunami, but this time in a pandemic like never before; with everything uncertain around and with no cash flow over a year. We are thankful to the local business we got for our hotel business, but our travel business is zero. Whilst we were managing our cash flows, we had to teach our teams to manage theirs as they were heavily impacted too. 

We had to trim down our costs and right size the company as we had too many people. We realised early last year that the pandemic is not short-term. Telling them that some of them had to leave and to bear the pay cuts were some painful and extreme decisions we had to take for survival. Talking to our teams, making them understand the situation, ensuring the communities have some livelihood was important. We also started to grow in every little inch of land we have. I am amazed by the human spirit they have and for their ability to adapt and rally around to get that mindset to overcome this difficult time.

Q: What was the most challenging leadership skill that you faced in managing the pandemic?

Keeping everyone engaged and motivated was a key challenge for us. Some were depressed with job insecurity, closing down companies. About 80% of the businesses were not money-making ventures. We engaged with the community and ensured they had a livelihood. We also started organic farming and the team felt they contributed to the economy in their own way. As a result, we were able to open all our hotels even during the pandemic.

Q: Any plans of moving to agriculture and contributing to organic farming?

Jetwing has a couple of lands that were bought to build hotels, which will not happen in the near future. So, Hiran started farming in the lands we have in Trincomalee and Kandy.

Q: The Government is keen on reopening the country for tourism. Do you think it will be a dangerous move and are we doing it too soon?

There is a future for tourism and it will revive. It is an open secret that the country needs foreign exchange and tourism is one of the quickest ways to earn it. We don’t seem to have too many options left, but to resume tourism in a responsible way. We cannot afford to just get anybody and everybody and put them anywhere. Sri Lanka Tourism Development Authority (SLTDA) has set out updated protocols and we have been following them for the past months. 

Putting all of it in perspective, as an industry we are ready, but as a country we need to decide whether we are going to open in a controlled way or stay as a closed destination completely. Someone has to take that bold decisive step and everybody should align. The decision should be abided by all line ministries, institutions, chambers and the public must believe in the process or otherwise, it is not going to work.

We have become a set of people that oppose anything and observe with scepticism. I don’t know if it is the fault of the people or the leadership. However, the misconception of tourists causing COVID cases to escalate needs to be corrected and a responsible person must inform and educate the general public.

Q: There was criticism during the Ukraine pilot project and some even opposed the visit by over 700 French Naval personnel. Today we are in the red list with some airlines not operating. Can’t we have a consensus to ensure tourism is promoted amidst the pandemic with safeguards?

 Unfortunately, there were few incidents. Business is open for all on a level playing field and no one has to do anything secretively. Given the uncertain times, we have to take one step forward and maybe take two steps back or the other way around. It is still not in our hands to decide, but there is definitely hope for the industry in the next three years. However, it is important to take that bold decision, which might be successful or unsuccessful—but at least we tried.

Q: Soon after the pandemic the apparel sector benefited from Personal Protective Equipment (PPE) demand globally. Were the quarantine rules a lifeline for hotels?

Only a few hotels came forward and none of us at that time charged, as all of us considered it a national service. The Army was brought in later and they offered to pay for us and we agreed for the Rs. 7,500 per day fee. However, I don’t think it is exorbitant. The quarantine facilities indeed gave cash flow to the hard-hit industry, but we didn’t make money.

Q: If you get invited to meet the President and Cabinet of Ministers, what is the one advice you will give?

 Make a bold decision, abide by it and get on with it.

Q: How did you manage the third lockdown individually and as corporate leaders? What were the key learnings?

 As a top developer in the country, the pandemic disrupted our construction work. At present we have over two million square feet in the making where thousands of people are engaged in our construction sites. Ensuring their

health was the biggest challenge and we have now managed to vaccinate them. The pandemic also impacted our sales to a certain extent, but we managed it by changing our strategies around. Pre-pandemic, we have around 100 people invited when we launch a project and we had to rethink our launch strategies. We conducted a virtual launch where around 500 people attended and it was a great success. 

Q: What was the most challenging leadership skill that you faced in managing the pandemic?

 The pandemic caused distress not only from a business perspective, but also from a personal aspect. I personally spoke to almost all our team members and assured them that their jobs will be safe and salaries are paid despite the challenging times. The simple gesture of concern and empathy reflected positively in our company. The employees themselves came up with ideas to reduce unnecessary costs and manage projects and situations better even while operating remotely. It motivated them to outperform and turn it into one of the best financial years. Their performance made it possible to even provide them with four months’ bonuses. 

Q: The Central Bank recently said things have improved for the real estate sector with increased buying. How has the property sector fared?

It is working for us as interest rates have reduced and people are looking at real estate for investment purposes. However, the import restrictions on some of the products have resulted in price escalating by 50%. It is a concern for the entire industry and we hope the relevant authorities will take actions to control the prices in the local market as well.

 

Q: Is there a glut of apartments in the country?

 I don’t think the comment is 100% correct. There is an excess in the luxury apartment category as no foreign investors are willing to invest during uncertain times. However, in the mid-rise and affordable category of apartments, there is a considerable appetite. 

Q: If you get invited to meet the President and Cabinet of Ministers, what is the one advice you will give?

Focus on thriving sectors to harness the potential by addressing the challenges.