Sri Lanka firms find ways to battle tough times

Jan 27, 2013 (LBO) - Sri Lankan firms can ride out tough times by maintaining a lean culture, grabbing opportunities that are present in such periods and becoming more responsive to customer needs, top executives said. "Whether you are in tough times or not, it is important to have a lean culture," Hilmy Cader, head of MTI Consulting, told top executives at the LBR-LBO CEO forum in Colombo on 'Tough Times – Tough Strategies'.

"Smarter companies do not get carried away through good times."

Cader said his firm's years of consulting both in Sri Lanka and abroad had shown there were two types of companies.

'Cut and Chop' firms which panicked and started cutting costs and headcount and 'Trim and Fit' companies which took a long-term planned approach.

Cader said firms tended to keep adding brands, channels and price points during good times, but many would not add real profits.

In 2012 Sri Lanka's economy slowed to an estimated growth of around 6.5 percent down from two years of 8.0 percent growth as a credit bubble, worsened by central bank credit (money printed to keep rates down) fizzled itself out after hitting the balance of payments.

The exchange rate fell, inflation spiked and inte