Foray into Sri Lanka

Sri Lanka is a small country with barely 20 million people. Its per capita GDP is in excess of $11,000 (on a PPP basis) which is higher than India’s per capita GDP of $6,600. It thrives on tourism, tea, textiles, gems and jewellery, spices, sea-food, shipping and IT services. It has a GDP pushing $250 billion and is an attractive and growing market.
Price Waterhouse was a pioneer in Sri Lanka. It was the first international firm to drop anchor. To be precise, on 22nd April, 1994 Price Waterhouse Lanka (Pvt.) Ltd. was incorporated with 51% of the equity held by Price Waterhouse Associates Pvt. Ltd. India and 49% held by Herman Amarasekara, a Sri Lankan Chartered Accountant.
Much later, around 1997, we decided to scale the Sri Lankan operations by setting up an IT services practice in Colombo. To this end, we hired Dr. Ravi Correa who took over as a director. In 1998, Price Waterhouse merged globally with Coopers & Lybrand. While the local associate of Price Waterhouse, Herman was a safe pair of hands, the CEO of Coopers & Lybrand, Deva Rodrigo was quite famous in Colombo. He was associated with the Chambers of Commerce and had access to almost every C-Suite. Deva was married to a cousin of President Chandrika Kumartunga and that also made him a member of Colombo’s innermost circle.
It was a no-brainer then that Deva had to be the CEO of the combined firm of PricewaterhouseCoopers, Sri Lanka. But there were some wrinkles to be ironed out. Although Deva had spent some years in East Africa, he had very little experience of managing a consulting practice. In fact, he was sceptical about how an IT services practice would co-exist in an audit and tax firm. Secondly, the chemistry between Deva and Dr. Correa was a difficult one and there was lack of trust on both sides. Thirdly, Deva questioned why the Indian firm should control and manage the Sri Lankan consulting practice and he raised the question in a rather anti-colonial tone.
I sat with him for hours together at the majestic Mount Lavinia Hotel overlooking the ocean, explaining to him that the Indian firm had no colonial ambitions and that if the global firm packed its bags and went home, the consulting practice in Sri Lanka would collapse. To win his trust, we offered him a majority stake in the consulting company but with a rider. We would be a minority shareholder but we would manage the consulting practice. He would have a free hand with the audit and tax practice. He agreed.
I invited him to our offshore software factory in Salt Lake, Calcutta. He was so impressed that he requested if his son could train with us to which I readily agreed. It has been my experience that the chemistry and trust between key people make all the difference in a relationship between two organizations. Once Deva and his partners believed that we had no hidden agenda, all the goals were aligned and we became one team. Deva became the Chairman of the company but he trusted us to manage the consulting practice.
With his Colombo connections and our combined capabilities, PwC became the pre-eminent firm in Sri Lanka. Here I will narrate an interesting anecdote. Sometime in 1999, Ashvin Parekh quit PwC. Ashvin and I had amicably agreed that it was in our mutual interest to separate. Ashvin joined Arthur Andersen (AA). When he left, he was the project director of the first phase of an assignment for Bank of Ceylon. The second assignment, to be funded by the Asian Development Bank, promised to be much larger.
I was pretty sure that Ashvin would bid for the second assignment as a partner of AA and he did. But I was not prepared for the manner of competition. Stories were circulating in Colombo that, along with Ashvin, the entire assignment team of PwC had joined AA and this upset me. I called Deva Rodrigo in Colombo and asked him if he could fix an appointment with the then Chairman of Bank of Ceylon Dayani De-Silva.
Deva did one better. He organized a dinner at his home. There were tables laid for a dozen people in his garden. By design, I was seated next to Dayani. We discussed world politics, the Sri Lankan economy, the ethnic strife, links between Bengal and Sri Lanka, cricket but not the potential assignment. After dinner, when cognac was being served Dayani casually asked me if there was an exodus of people from PwC to AA. I told her that the short answer was no but could we possibly present before AA for a longer explanation? She readily agreed.
The PwC team was camped in Taj Samudra and the AA team was at the Lanka Oberoi. At the presentation next morning, I introduced the key members of our team. One by one, each member personally confirmed to Dayani that they had no plans or intentions of leaving PwC, let alone joining AA.
When Dayani saw through the game of deception, she was furious. For AA, the game was over before they could come in to present. I could not help but recall the famous advice of Sun Tzu, “The supreme art of war is to win without having to fight.” Our presentation over, we went for lunch to the famous cricket-themed restaurant called the Cricket Club Café. AA presented after lunch but their presentation was not long.
In the evening, we received a debrief from Deva. We were told that as soon as Ashvin began to present, Dayani asked directly if AA had recruited the team that worked in the first phase of the assignment. Ashvin hemmed and hawed and said he was negotiating and was reasonably hopeful of fielding the same team. Dayani then bowled bouncer after bouncer telling AA that the team members of PwC had personally confirmed to her that no one was leaving. The false rumours boomeranged. In another month, we signed the contract of one of the largest assignments in Sri Lanka. For PwC, Sri Lanka continues to be a success story.
On a personal note, I have a vivid and very sad memory. In the second week of December, the Nasscom Executive Council (EC) ,of which I was then a member, organised a two-day retreat at Taj Exotica in Bentota. The Chairman of Nasscom that year was Ramalinga Raju of Satyam and the President was Kiran Karnik. The CEOs of some of the largest and most prestigious IT companies were members of the Nasscom EC and we all assembled there for the Strategy Retreat. On the last evening, Kiran organized a beach party in traditional attire. The scenes of IT company honchos swaying to music in lungis and kurtas are seared in my memory. Barely a week later —on 26th December 2004– a devastating Tsunami hit the coast of Sri Lanka killing over 30,000 people and rendering one-and-a -half million people homeless. We were saved by the skin of our teeth. We helplessly watched the tragedy unfold on television. The Taj Exotica resort was badly pummelled. Our hearts went out to the people of Sri Lanka as we prayed.