MTI advice for incoming President on Country Marketing, Strategic Planning, Re-Structuring
@ DM / 16Nov2005
FT: Why is marketing important to a country, Sri Lanka in particular?
MTI: Sri Lanka Inc. is a brand that competes in the global market for Investments & Lifestyle, where over 200 other Country Brands are fiercely competing. To get a share of the world’s Investment & Leisure Dollar, Sri Lanka must competitively satisfy a need and to do so it must differentiate and position the country vis-à-vis the competition. The ultimate objective of such an exercise is to improve the quality of life of your internal consumer or the population of the country
FT: How is it different to the way countries were managed and marketed in the past?
MTI: Economically, we live in a highly interdependent world. North Korea and Cuba may be exceptions! Successful countries are figuring out what the world needs and then developing in-country competencies to meet these needs. This is opposed to the conventional approach of trying to ‘sell’ what you have, be it natural, human or intellectual resources. Also, countries need to be marketed as one integrated entity and value proposition, as opposed to a fragmented tourism, business, exports and investments approach. Singapore, Dubai and Hong Kong are Country Brands that offers a consistent, seamless value proposition and experience, be it for tourism, investment or business process out-sourcing
FT: Give us examples, good and not so good
MTI: India identified the need for cost-effective back office operations for developed markets and built a mega IT-enabled services industry, including the human capital and the supply chain to support such an industry. Today, services contribute almost 50% of the Indian economy. Similarly, Thailand identified the need for cost-effective medical care for American and European Consumers who cannot afford steeply escalating medical costs in their countries. This was the basis on which the entire Medical Tourism industry in Thailand had developed. India, with its language and competency advantages, is now making inroads into this market. Dubai has just launched the world’s first indoor ski resort, thus offering skiing for those who want to do so even in peak summer! India is foreseeing and planning for an APO (Advertising Process Out-Sourcing) boom, very much like the BPO boom, where most of the advertising for North America is developed in India. Sir Martin Sorrell, the Chairman of the WPP Group who was recently in Dubai, has signaled his intention to take the early mover advantage.
Therefore, Sri Lanka cannot take the approach of “We have tea estates, we have beaches, we have tailors, we have housemaids, who wants them!”
FT: Is there evidence to show the link between effective country marketing and country prosperity?
MTI: Yes, there is definite evidence and I would like to share some of the recent research we did for a Country Marketing assignment in the Gulf
Japan, Singapore, Taiwan, Korea, Dubai and Hong Kong have two things in common. They were among the poorer countries before World War 2 and they had and still have a very low level of natural resources. These countries were built on intellectual resources and resorted to effective marketing at country, industry and institutional level. Note that marketing here does not mean a fancy advertising campaign; it is about effective demand generation, profitably.
On the other end of the spectrum, you have Nigeria, Indonesia, Venezuela and Myanmar, with high levels of natural resources, but have suffered from poor management of these entities
Countries like Ireland, India and even Lithuania can be singled out as ones that have made it very strong in the knowledge economy
FT: So, what makes a country or a Country Brand, as you call it, successful?
MTI: Based on the MTI research and experience, we have zeroed in on 5 Key Success Factors. They are:
Focus & Position: In a highly inter-dependent yet specialized world, small economies like Sri Lanka must pick their focus, specialize and excel at it. For instance, the decision taken by the main Scandinavian countries in the 1980s to focus on telecom and allied technologies has paid off. Croatia is developing the Sports Tourism industry.
Ease of Entry & Usage: Countries must make it convenient for investors to enter the market. This does not necessarily mean lenience, but an efficient, transparent entry mechanism. For instance at the Bahrain Investors Centre, a potential investor could come in and lodge his application, open a bank account, apply for employment permits, sign up an auditor, get the telecom lines connected – all under one roof and almost seamless.
Having said that, China and India still do pose a few problems in this area, but their sheer size means investors are willing to endure the pain!
Work Ethic & Competencies: There is no point in having the highest literacy rate, we must convert this into productivity and to do so work ethic and competency development is critical. Of particular relevance to Sri Lanka, is the need to align our educational system to the global market needs. India and Ireland are two countries that have reaped major benefits from the global knowledge economy, because they had developed a skilled work force by aligning their educational systems to the needs of the global market.
Infrastructure & Satellite Industries: Cost effective and efficient telecom, internet connectivity, ports, roads, legal framework etc are a given today. The role of the government is to set the playing field for optimum economic and business performance Building Brands: We live in a highly branded world. Therefore Brand Power equates Economic Power. The USA and Europe have always had powerful brands, but today that power is gradually shifting to Asia. Powerful Brands can help the Country Brand as has been the case with Korea (Samsung, LG, Kia, and Hyundai), Dubai (Emirates, Dubai Shopping Festival), Taiwan (BenQ, Acer), India (Infosys, Shah Rukh Khan, Ranbaxy, and Bollywood) and China (Lenovo, Haier, and Huawei)
It would be a revealing exercise to rank Sri Lanka based on the 5 Key Success Factors.
FT: Can you name a few Sri Lankan companies in the same league?
MTI: Although we may not have brands of the same size and magnitude, I would like to personally pick Sri Lankan companies like MAS, Brandix, Hayleys, Jinasena, and Expolanka Freight as some of the corporates that have ventured into the global market with promising B2B brands. We need them to be bigger and we need more of them.
FT: What about the quality of the politicians who run the country?
MTI: I prefer to call it Country Management, because it has similarities to managing a company or a conglomerate. Yes, the 5 Key Success Factors assume that we have competent people to conceptualize and execute these strategies, effectively and honestly!
FT: This seems to be the problem faced by Sri Lanka. I know that you are not a politician, but would you like to throw some light from a strategy and management perspective
MIT: Like a company, a country needs a strategic plan that takes a long term perspective based on the market we compete in. In the Sri Lankan context, to make this effective, it is best if all stakeholders including opposition parties are involved. It should be strongly enforced so that it cannot be changed at the whims and fancies of fickle individuals and for individual gains. Any change in the Master Strategic Plan should need the Parliament’s approval
A strategic plan is only as good as its implementation. This is where a good set of Implementation Managers or the Civil Service comes in. Despite frequent changes in governments, India is effectively implementing its strategic direction because of this. Unlike in Sri Lanka, even Ministers cannot make unilateral changes in strategic direction without consensus and logic
FT: Any other advice on effective management of the country?
MTI: Yes, a few other initiatives that can help a country like Sri Lanka:
Either take the Parliament to a management school or take a management school to Parliament! Get them to think management
Make Ministers like Non-Executive Chairman and get professional, impartial CEOs to run the ministries
Get each ministry to present their strategic plans to the public via media, talk shows etc. Get them to come back on a periodic basis and account for performance. Set up Key Indicator-based performance measures and reward and recognize them based on their performance
Finally, there is a dire need to re-structure the government
FT: What do you mean re-structure the government?
MTI: If we are to manage the country like a company, to effectively implement our strategies, we need the right structure. In the case of the government, the structure covers the Ministries and the way in which it is segmented
FT: How can management structure be applied to ministries?
MTI: If you look at the pedigree of our ministries, they have evolved and got sliced and chopped mainly to meet short term political gains and not to support strategic development
Therefore, the Incoming President should start with by conceptually demolishing the current ministries / basis of segmentation. Start with ‘Ground Zero” and build a structure that will support the implementation of the Country’s strategic plan
FT: Are you suggesting that we develop the strategies first and then structure the government?
MTI: Yes, otherwise how can you develop a structure without a strategy in place?
FT: If MTI was given the mandate to do this, how would you set about this?
MTI: We would start with a clean slate, develop the country‘s strategies first. Start by looking at the needs of our Internal Customer (Sri Lankan population) and that our External Customers (world markets) and develop a structure that will have an entity focused on each strategy and each of the major customer needs.
For instance, if our current export earnings are on dependent apparel, tourism, foreign employment and tea, we should be having entities with a dedicated focus and well defined targets for export earnings. You may not even want to call it a Ministry, because there are so many stigmas to this institution. Even the institutions below the current ministries should be re-structured on the same basis.
We should also think of task based ministries where such a ministry is given a time specific strategic initiative and once it is achieved, the ministry is disbanded and the human capital assigned to another strategic initiative. This is very much like how movies are made. Australia had a minister and ministry for the Olympics that started with the bidding process
Sri Lanka should also identify and nurture emerging potential sectors where we have a competitive advantage like Cinnamon, Hotel Management, Accountancy based back-office operations to name a few
To do all of this, we need a competent pool of human resources and this would mean we set up ministries or other institutions with the mandate to work on a fast track competency development program so that we can reap the rewards of the global knowledge economy. This would require a complete overhaul of our educational system, at least at secondary and tertiary levels. Work ethic should be an integral part of this process.
FT: One last piece of advice for the President to be elected?
MTI: Singapore had no natural resources, but is today classified as a developed country. Dubai has neither the natural resources nor the indigenous human resources. Dubai did it by importing the human resources at a premium. In both cases, professional management was the key.
We, in Sri Lanka, have both the natural resources and the human resources. All we need to do is to apply the fundamentals of management, honestly!
I hope the new CEO of Sri Lanka Inc. will turn it around. I wish him success. I hope, by the year 2010, we can use Sri Lanka as a model for country management and country marketing.
About MTI: MTI Consulting is a fast growing business strategy and marketing consultancy with a branch network spanning Austria, Bahrain, Bangladesh, Dubai, India, Mexico, Pakistan, Sri Lanka & UK. In the last 8 years, MTI have worked on strategy and marketing assignments in 28 countries. In Sri Lanka, MTI has worked on strategy assignments for Aitken Spence, Bank of Ceylon, Carsons, CIC, Delmege, Expolanka, Export Development Board, Hayleys, Hemas, Lanka Equities, McLarence, MAS Holdings, SriLankan Airlines, Renuka Group, Triumph - to name a few
Internationally, MTI has worked with the likes of American Express, Cargill / Ralston Purina, DuPont, New Zealand Milk, Saatchi & Saatchi, Standard Chartered, in addition to leading conglomerates in the Gulf, India, Pakistan and Bangladesh