Selling Oil, motor racing and moving from Shell to Reckitt and Colman

Excerpted from the memoirs of
Lalith de Mel

His first real job was with the Shell Company of Ceylon Ltd. Which her joined at age 22. The Research Economist role at the Coconut Research Institute was almost a continuation of life at Cambridge. Academic research at one’s own pace was close to preparing a piece of work for the supervisor.

Shell was a proper job. He had a boss, and he had to accomplish whatever his boss wanted him to do in an industry and in activity that was far removed from Economics. It was new territory, marketing petroleum products. It was his first encounter with petroleum and his first encounter with marketing, but he settled easily into the world of commerce.

His first role at Shell was working directly for the Head of Marketing as his Personal Assistant. He was an experienced petroleum man and a rather unfriendly Egyptian national. His core role for Lalith was having him prepare feasibility studies on building new filling stations.

Shell worked a half day on Saturdays, and Mike Khoury (that was his name) would give him an assignment around 11 a.m. and insist that he gets the report the same day. He did this regularly and justified it by saying that it was only on Saturday afternoons that he had the time to study investment projects. Lalith grudgingly says that this was probably true.

After his stint as a PA he was given responsibility for marketing kerosene and reporting to an Iraqi national. The man was happy to not exert himself unduly and probe the rural markets and to leave it all to Lalith. He was pleased that as a 22-year-old he was virtually responsible for marketing kerosene, which was perceived as a product with good growth potential. It was the main source of lighting in rural areas and the task was to persuade housewives to move from firewood to kerosene for cooking.

He enjoyed the opportunity of traveling all over the rural areas. It was perhaps this understanding of rural areas that has triggered his firm belief in the need to develop rural areas, on which theme he has written many articles.

From kerosene, he became a part of the Retail Marketing team. That was the engine room that drove sales of Shell products. Shell was one of the key retailers of petroleum products worldwide. The main competitors globally were equally big boys. Market share varied. The way Shell International ensured consistency in approach across the world was by having detailed process manuals for all parts of the marketing mix. The local companies had to develop their campaigns within the lines set by the process manuals. It was a wonderful course in structured marketing. He says it was like doing a marketing degree and freely admits that he learned his marketing at Shell.

After a few years, he was moved to the Finance Division. He had twin roles. In addition to carrying out a normal accounting function, he worked in the special unit created to study the options for formulating claims for compensation for assets that were taken over by the Government when Shell and the other oil companies were partly nationalized. He quickly became head of this unit and his last role was in putting together the claims for compensation on the agreed format, signing on behalf of Shell and submitting the claims to the Government.

Shell was keen that he should continue his lectures at Aquinas, and he continued to teach students studying for the BSc London University Economics degree in the evenings.

Outside work, Shell was a fun place. It had an excellent sports ground. He got into the cricket team that was in the A division of the Mercantile league. He also played badminton and hockey in the inter-firm tournaments. Shell took a keen interest in motor racing. The objective was to get the top drivers to use Shell petrol and Shell oil. Dudley Perera, a very Senior Manager at the time, was the link man between Shell and motor racing and Lalith became his assistant.

The atmosphere at motor race meets, the roar from the cars, the smell of burning oil and the vibes from screeching tyres got to him and he started motor racing. He drove a red MGA with the distinctive number plate I SRI 5555. He raced for many years and had his share of wins both at Katukurunda and the Mahagastota Hill Climb in Nuwara Eliya. In one event at Katukurunda, he raced with Upali Wijewardene, his Cambridge University friend and subsequent famous entrepreneur, and Asoka Gopallawa, the son of the Governor General, all driving MGAs.

How Shell plans management succession

“After five years at Shell, I felt the urge to move on. There was uncertainty about the future, with partial nationalization of the petroleum industry. The exciting future appeared to be in the new foreign investments to set up the manufacturing industry.

When I sent in my resignation, I was summoned by the General Manager, a Dutchman named Jan Van Reeven. He did not want me to go as they had identified me as a potential International General Manager. I probably had a bemused expression on my face and so Van Reeven said, `Let me explain.’ He said that Shell had over 100 operating companies around the world and they had 100 General Managers, some would move to other companies, some would get fired and the rest would eventually retire at some stage in the future. So he said it was a continuous process in Shell companies to identify potential future General Managers and to develop suitable career paths for them that would eventually lead to a General Manager post in the future.

The process, he explained, was for operating Shell companies to seek and recruit outstanding persons as management trainees from time to time. The new trainee’s first job is to work for one of the directors as a Personal Assistant. At the end of this period, an early call is made as to whether the person is a potential future GM. If the answer is yes, the trainee is given a challenging career path and reassessed at the end of each year.

`As your preferred path was Marketing, you were given various marketing roles,’ Van Reeven explained. After three years the Shell approach was to test the trainee in a different discipline. “That’s why you were transferred to Finance as an Accountant.’ He then said: ‘After five years, we were convinced you would be a future GM and our development plan is to transfer you to the international pool as an employee of Shell International and transfer you to a Shell Company overseas.’

I was having a great social life in Colombo and had no desire to go and work abroad. 1 thanked him for the excellent training I had at Shell and said all the appropriate nice things about Shell and Van Reeven and then said I was firmly committed to pursuing a Marketing career in a consumer goods company. He was very gracious and wished me well and as I got up to leave he said, ‘Someone I know is setting up a multinational manufacturing company and he wants a marketing man; would you like to meet him?’ I said yes and he sent me to meet Alex Alexander, the Managing Director of Reckitt & Colman of Ceylon, who was setting up the business. He offered me the Marketing Manager role. I accepted, and that was the start of my journey with Reckitt & Colman.”

He was marketing manager of Reckitts at age 27 and a director of that company at 29-years.

Shell always had a big advertising budget. Their agency was Grants, then headed by Reggie Candappa and his assistant was Anandatissa de Alwis, who later became Minister of State and the Speaker. Later on in life he started his own agency, De Alwis Advertising. Lalith said: “They both became good lifelong friends. I signed them on and they became our advertising agents at Reckitt & Colman. They deserve a good part of the credit for the excellent sales performance of the string of brands we launched.”

The first Marketing Manager of Reckitt & Colman of Ceylon was Michael Morris. He had been with the Indian business for a few years and came to help to set up the new business in Sri Lanka. He was in Sri Lanka for a relatively short period; he decided to go back to the UK as his wife was a doctor and wanted to go back into medical practice. This created the vacancy for which he was recruited. Morris later became a Member of the British Parliament and Deputy Speaker and was then ennobled to become Lord Naseby. He was recently in the news about war crimes in Sri Lanka. He continues to be a good friend.

Two Englishmen had been sent to start the business, Alex Alexander as Managing Director and Peter Crisp as Factory Manager. All the hard work was at the manufacturing end. Disprin was being manufactured for the first time outside the UK. A whole host of previously imported products were progressively locally manufactured.

The excitement of getting a job as a Marketing Manager of consumer products in a multinational company was short-lived. He soon felt it was a well-paid non-job with nothing to do by afternoon. The Reckitt’s products were distributed by E.B. Creasy & Co. and the Goya range by Lalvani Brothers; the advertisements were sent from the UK. All the advertisements were ones used by the group in the UK. All he had to do was send them to the advertising agency.

Basil Reckitt on a visit to Sri Lanka, with Lalith de Mel at an evening reception

After a few months he assessed the scene and made his move. It was brave, reckless or foolish. He had never marketed any consumer products, knew nothing about the Pettah wholesale market which controlled 50% of sales and had never managed a sales force. He was good with numbers and knew how to put together convincing project proposals (learnt the hard way at Shell).

He formulated a proposal to terminate the distribution agreements, to set up his own marketing office and to recruit a sales force, a product manager and an advertising manager. In his proposal, he demonstrated that the commissions paid to the two distributors would more than cover the cost and in fact make a significant contribution to profits. The MD Alexander was impressed with the proposal and bought into the idea. He had just asked one question: “Are you sure you can do it?” When Lalith said “yes,” Alexander had said, “Okay, go and do it.”

He did not quite know how he was going to do it. There were many things he had not done before but he was certain that he could do them. As subsequent events will show, this was a trait he carried right through his life. He persuaded Terrence de Silva who had worked for him at Shell to join him as the Manager for everything – HR, admin, credit control, managing the fleet of vans, etc. Terrence was with him as a part of the team until he left for England. Terrence was the engine room of the Marketing division and kept everything running smoothly, whilst he launched and developed a great basket of products.

They had an amazing array of products, such as Disprin, Dettol, Brasso, Silvo, Robin Blue, Harpic, Mansion polish, Cobra shoe polish and the Goya range of fragrance products such as perfumes, colognes, talc and soap. One by one they were rolled on to the market and it was a great challenging time for him.

Fortunately it all worked out well, the sales grew, there were no bad debts, which was always a risk with the Pettah wholesale market, the profits grew and the business was highly successful and profitable. The overseas investors were pleased.

Basil Reckitt’s visit

There is a story that must be told. Basil Reckitt, the Chairman of Reckitt & Colman UK, came for the formal opening, which was also attended by Prime Minister Sirimavo Bandaranaike, as it was the first major foreign investment in Sri Lanka during her tenure as the Prime Minister.

They were seated next to each other and chatting and she asked Basil Reckitt whether there was anything that she could do and he said, “Please could we have a telephone?” Those were the days when it was impossible to get a telephone. When Lalith became the Chairman of Sri Lanka Telecom later on, his objective was to make sure that anybody who wanted a telephone would get one within a week and by the time he left his role this objective had been achieved.

Marriage

In 1966, whilst he was busy building the business, he also got married. His wife was then an undergraduate at the University of Colombo and she had to continue her studies to complete her degree. After she graduated, she started working in the university itself Since she was studying, they did not have a much of social life in the evenings, so he thought it would be useful to do some studying himself and he started studying Accountancy. He completed the intermediate exams of Cost and Works Accountants, the precursor of CIMA, and also did the exams to become an Associate of the Institute of Book Keepers. When his wife graduated and was no longer poring over books in the evening, he stopped his studies. However what he had learned proved to be very helpful as it helped him to develop a good understanding of finance and accounting.

Managing Directors

Alex Alexander moved on to another part of the Group and was followed by Mark Foster, who was also a Cambridge graduate. When Mark moved on, he was followed by Greg Courtier, who became his third British boss. He did not resent this as that was the style back then, where all foreign firms had a foreigner as the Managing Director.

He was asked to say something in his own words about his key achievements and his relationship with his foreign bosses during this period. Multinationals controlled their businesses from Head Office. The local Managing Director reported to a Regional Director at Corporate Headquarters. There were very specific guidelines on what required approval from HQ

“All advertisements were sent from the UK. For the local language press we had to translate the English ads. After my spell at Shell, I appreciated that multinationals wanted to preserve the brand footprint and have the same consistent message all over the world. The challenge was to wriggle some freedom within this constraint in order to create better advertising that was more relevant in the context of the local market. After a long exchange of correspondence, I succeeded in getting approval to create our own ads.

I had to stay within the parameters of the global branding footprint but was given freedom on how to convey this in local media. We were probably the first Reckit’s market in the Commonwealth to win

this concession. I also got approval to shift the positioning of Dettol from solely a treatment for cuts and wounds to a personal care product that prevented infection. I pursued this right through my career and created a mega global brand in developing countries that is still growing. Dettol is

amazing marketing story as nobody has seen germs or seen Dettol kill germs, but were made to believe that it did provide protection from germs.Both Mark Foster and Greg Courtier were marketers, but they knew nothing about how to market and advertise products in Ceylon. They thought it prudent not to interfere with me and I had the freedom to operate in effect without a boss in the Colombo office whilst the MD worked out of the factory and office at Ratmalana. The challenge in a multinational is getting this freedom.

The wedding retinue, with Bestman Upali Wijewardene

The UK office was pleased with the results and naturally the MD got the credit for the good sales and profits growth. I made no claims for any credit from our lords and masters in the UK for the good results. When the Head Office staff visited the business, I made it a point to say as many times as possible how much I enjoyed working with Mark/ Greg and said I greatly valued their guidance. It was true I enjoyed working with them because they did not interfere. As for guidance it was not true, and they were not really able to provide any meaningful guidance.

But strategically it was a good thing to say, so this led to a good partnership with the Managing Director. Not getting the credit and warm congratulations from the parent company was a small price to pay for having complete freedom. I steered well clear of the pitfall of trying to get plaudits for the company performance from the overseas owners and getting into a competition for praise with the boss and thereby having a not-so-congenial relationship with him.

I had a gut feeling that payback time would come. They were possibly slightly embarrassed to take the credit for my sales and profits results and had to do something to acknowledge my contribution. They recommended that I be made a Director of the Ceylon Company, which was a public quoted company.

I was pleased and content. That was as far as one’s aspirations went in those days, to become a director of a local multinational company. There was no ambition to go any further, because less foreign firms were likely to always have a foreigner as the head of their business.

The Government formed a new company named Consolidated Exports and it came to be called Consolexpo. This was a joint public sector-private sector partnership to generate and support the growth of exports. I was flattered and pleased when I was invited to join the Board. This was my first experience with the Government sector. It was also my first Board appointment outside Reckitt & Colman, so I count this as one of my achievements during this period.

Then one day a visiting director from the parent company called me in for a chat. He said they had been following my progress and were pleased with what they saw. He said almost casually that I might have the chance of being the first Sri Lankan Managing Director, but added in the same breath that I would have to prove myself in another market. I impulsively asked whether I could be sent to Australia. Half my vintage Josephian rugger team and all my Burgher school friends had migrated to Melbourne. I thought if I had a spell in Australia I could have a whale of a time with my old buddies.

The visiting Director said, ‘We will let you know in due course’ and eventually they told me that they had decided I should go and work in Brazil as a member of the management team of that company. That was their biggest business in South America and it was a huge market. Brazil was five times the size of India.