Returning to Sri Lanka, becoming MD of Reckitt’s in SL at age 33 and then Chairman

(Excerpted from the memoirs of Lalith de Mel)

He returned to a Sri Lanka going through a difficult phase due to the JVP uprising. There were curfews and a sense of fear in the air. His predecessor in Sri Lanka had a young family and was glad to get away from the chaos that prevailed and left a few days before he returned.

There was the usual tension that prevails when a colleague becomes the boss. He left for Brazil as a colleague and returned as the boss. This was short-lived as it was not a complete surprise and they probably expected it to happen.

He had a very relaxed style. No ties, short-sleeved shirt to work, and coloured tunic top and sarong in the evenings (he still does this) and everyone was asked to call everyone including the MD by their first name. This was a big change. The foreign MDs wore a jacket and tie but took the jacket off when they got to their office. The immediate direct reports referred to the MD as ‘Mister’. No first names.

A difficult economic environment

During his entire period as Managing Director, there was a difficult external environment. The Trotskyis version of Marxists had joined Mrs. Bandaranaike’s Government and were destroying the economy. They pushed through land reform, a ceiling on housing, and the nationalization of the estates. It was done in a hurried and unplanned fashion and instead of leading to a resurgence in economic activity, it led to a collapse of the economy. Import licences for raw materials were restricted, leaving no room for new activities and expansion

Pharmaceuticals

Over the years he had developed a special affinity for pharmaceuticals. He worked closely with the UK Pharmaceutical division which provided support and guidance to the overseas businesses. He had regular technical discussions with them about creating promotional material for doctors and whenever there was a pharmaceutical conference anywhere in the Group he was invited to attend.

This letter from the UK Group Director responsible for Pharmaceuticals illustrates their respect for him as a pharmaceutical man.

“Your letter reference 349 of June 2 on the merits of Disprin in comparison with ordinary Aspirin has been the subject of close and detailed study by myself and my colleagues in the Pharmaceutical Division. I apologize for the length of time it has taken to reply to it but I can assure you that this is rather a mark of the seriousness with which the matter has been approached rather than of neglect.

“There is little doubt that your efforts in Sri Lanka with some assistance from the UK have succeeded in producing the best possible case for Disprin based on all available evidence. So effective is it, in fact, that the Pharmaceutical Division is itself adopting much of it incorporation in their own activity.”

This was the start of being recognized as very competent pharmaceutical man and from then on he worked with them as a member of the top pharmaceutical team whilst performing his various regional director roles. This eventually resulted in his appointment as the Group Director for Worldwide Pharmaceuticals.

The pharmaceutical industry was under attack. Prof Bibile had a plan that he fortunately could not implement. His plan did not make good sense. His plan to ban brand names completely was nonsensical. A person wanting a bottle of Dettol would have had to ask for Chloroxylenol solution. His concept of a limited formulary of drugs was shot down by the medical profession. When all this was floundering, his grand plan was to make the multinational pharmaceutical companies contract manufacturers for his State Pharmaceutical Corporation. They were summoned for a meeting chaired by Dr. N.M. Perera.

He was then Chairman of the Pharmaceutical Manufacturers Association. After consulting their respective parent companies, they had adopted a common position. Despite being harangued and threatened by Dr. N.M. Perera, the manufacturers flatly refused to manufacture for Prof. Bibile. Then Bill Williams, Managing Director of the Pfizer business, pointed out forcefully that if they were not paid full, fair, just and equitable compensation, the US Hickenlooper Amendment would kick in, which would prevent the USA providing aid in any form to Ceylon.

There was a stunned silence and then Dr. Perera proclaimed that the industry would be nationalized. Nothing happened thereafter. It was an end to the fanciful dreams of Prof Bibile, who then left our shores and died shortly thereafter.

The Marxists were kicked out of the Government but the economy continued to struggle. He continued what he had been doing before he went to Brazil, namely growing the brands, but he had to move out of the seat of driving brands as a Marketing Director.

However, he kept his finger on marketing as in those times it was very much a command and control culture. Managing Directors gave directives and management executed them. There was discussion and senior managers had the opportunity to express their views but there was no delegation of key decision-making.

An interesting diversion from the difficult business environment was the marketing of condoms. The International Planned Parenthood Federation in the UK wanted to experiment with mass marketing of condoms. They were available at that time all over the world, but only in pharmacies. To make an impact in terms of birth control, it was important to make them available through the retail network.

The IPPF had identified Ceylon as the market to test this concept. They had persuaded Anandatissa de Alwis who had an advertising agency to take on the advertising for this project. Ananda who was an old friend then approached him and wanted him to participate in developing the marketing concept and wanted Reckitt & Colman to handle the distribution. He (Lalith) was quite convinced that it was a good social marketing project but he had the daunting task of getting approval from the lords and masters in the UK.

So he wrote them a nice letter and was pleased that they were very positive and gave the OK to market condoms in Sri Lanka. Now they agonized over a name and the name eventually selected was Preethi. He returned home and told his wife that at long last they found a name and it was Preethi. She smiled and reminded him that it was her first name, and so he had said, “Now you’ll be famous, your name will be on every packet of condoms!”

The project was very successful. IPPF was very pleased. From then on condoms have been freely available in the retail network. He was very happy to have been a part of this campaign.

They were difficult times and they had to look for various innovative ideas to grow the business. One such project was to export charcoal for barbecues to New Zealand.

He was very keen to market bottled water but he could not convince Corporate HQ in UK that this was a feasible proposition. Looking at what has happened with bottled water, it was a tragedy that it was not implemented. During this time he played an active role with a few others to create the Sri Lanka Institute of Marketing (SLIM). He was the third President of SLIM.

Reckitt & Colman of Ceylon was a public company and when he was the Managing Director, the Chairman of the company was John West, who was the Chairman of Reckitt & Colman of India. He came four times a year for Board Meetings. But in 1975, it was decided that the Indian Chairman need not visit and Lalith was made the Chairman of the company. That was the first time a Sri Lankan was a Chairman of a multinational company in Sri Lanka. He reported to a Regional Director based in Corporate HQ, which by then had moved from Hull to London.

He visited the business from time to time and so did various corporate staff. His Regional Director reported to Ted Wright, the Main Holding Board Director responsible for all the overseas businesses.

Ted Wright was of course a powerful individual in the Group and he too would visit overseas businesses. He made a visit to the businesses in the sub-continent and came to Sri Lanka when he was Chairman. When Lalith next went to Corporate HQ on one of his regular visits, he was asked to see Ted Wright. After a little chat about the business and the country, he was asked whether he would come and work at Corporate HQ in London.

He was very happy in Sri Lanka. He had no problems managing the business and there were early signs that there could be a change of government in the offing with a new government that was supportive of the private sector.

But he realized he could not continue to be Chairman of Reckitt & Colman Sri Lanka forever and that if he didn’t move, after a few years they would probably want to have a new head for the Sri Lankan business. So with some reluctance he agreed to move to the UK. At that time he was not sure about his exact job. He was told the grade, which was one rung below a main board director and that the role would be at Corporate Headquarters. So he had many discussions with various people including Ted Wright in London and the final decision was that he would be appointed a Regional Director in London and he would take over the role from his then boss.