Poor quality of decision-making main cause for destruction of Regional Plantation Companies

Is there hope for Sri Lanka’s mismanaged plantations industry?

Through a series of newspaper articles during the past few months, we have been stressing on the systematic killing of the world renowned Plantations industry of Sri Lanka. These articles covered the  gist of the evolution of the plantations industry of Sri Lanka since the first nationalisation of lands by the then Minister of Agriculture and lands, the late Hector Kobbekaduwa under the Sirimavo Bandaranaike government way back in 1972, to the present times, covering more than 40 years. 

We thank all those newspapers wholeheartedly for a yeoman service to the nation, by publishing them amidst fierce propaganda by a small yet powerful group of anti Sri Lankans claiming to be the industry leaders. They propose handing over the plantations to the workers with a different name tag called ‘revenue sharing’ and furthermore getting these poor workers to pay for the sins committed during a long period of time by the senseless top rung of the RPCs. 

They seem to be thinking that this handover (revenue sharing model) is the only viable option to overhaul and to turn around the loss making plantations managed by RPCs. However, some RPCs have undertaken this task already. Can they get those lands back from their current recipients, the workers? The failure to do so will definitely lead to the cannibalisation and destruction of the lands. Was it a collective decision by all the RPCs? No, it was not! Then, how can such a poor mechanism be implemented without the knowledge of the golden share? Isn’t this an instance of poor quality decision making again? 

Depleted resources

Most of the tea and rubber fields in many RPCs are in the process of becoming uneconomical due to the fact the desired level of replanting had not taken place on time. Either they are more than 30 years in production, hence, past their prime or, in the case of rubber; the bark is fully gone, due to poor quality decisions by the top management. So how on earth can the poor workers be expected to increase labour productivity when the bush and the tree both have reached an age of senility, on top of the fact that the soil on which these crops grow have been left to be eroded and hence depleted of nutrients?

They say that the fish start rotting from its head. This appears to have some relevance to the CEOs of most RPCs. Are they insane to give wide propaganda for such sinister thoughts that may be applicable to  organisations that have created an enabling work environment,  rather than the plantations managed by RPCs of Sri Lanka? The pattern of poor decision making is widely visible here. 

All directors of crop research institutes in Sri Lanka should know about this dangerous situation. Whether they appraise the state of this condition or continue to become best of friends with such mediocre CEOs is a question worth probing.  This is why most say that the RPC managed plantations are sitting on a time bomb. Those CEOs are now trying to escape impending legal suits or a thorough hit from the workforce, hence the mighty hurry to hand over the fields to workers with the blessings of the government. This also explains the dangerous agendas of political giants in the Indian Ocean who are competing with us. 

Passing the blame

These CEOs appear to only know how to claim credit for favourable market conditions and to blame successive political systems that were in power up to now, during poor balance sheet performances. They may also extend the blame to the workers, staff and executives on various grounds with little understanding that they are leaning on them without any value addition to the product they make by being in corporate offices with all the luxuries. However, taking quality decisions and understanding ground realities has never been their strong suit. In fact, the naked truth is that these CEOs, or at least most of them have failed to manage “Change”.

This is widely evident if someone compares the “asset base in every plantation” that was in place in 1972 with the one at present. You can even undertake a similar comparison with the base of 1992.  This is clear evidence for poor quality decision making. The asset base has been stripped off, denying multiple benefits to the nation which is a larger crime of its kind. That is the effect of poor quality decision making on a national economy. 

Although we use the term RPCs in general throughout this article, we recognise the RPCs that have done wonderfully well. Unfortunately thanks to the apex organisation which all RPCs come under, efficient RPCs have also become prisoners in their own homes. They are expected to go in accordance with the wide majority on the disguise of the brotherhood of employers. This is yet another case of poor quality decision making. 

The present role of most of the RPCs is to wait idly by and observe the chaos. The other role they play is to privatise profits and nationalise losses due to their ulterior motives and agendas. Mostly, all RPCs have similar cultures and issues but the handful of RPCs that have done things differently have been able to keep away from a red balance sheet and make good ROIs comparatively. The only reason any person could see their success is their managerial competence and commitment to managing change. They have exploited their core competencies in order to achieve competitive advantage. 

Nevertheless, the vast majority of the RPCs who exhibit the instinct to blame are still trying to understand the meaning of management. This is why we confidently say that poor quality decision making is the key factor for the downfall of the industry. If the government wants to intervene then the starting point is to ensure that all CEOs of the RPCs are competent in managing large bases of assets. As intimated through this article, we must take action to prevent the destruction of this gem of an industry. 

Reasons for the present situation 

There are many contributory reasons for the present situation of the RPCs, stemming from the core issues as mentioned earlier. Lack of a timely diversification of crops, not considering favourable crops that can be afforded,  to attract and retain high calibre professionals, lack of attention to soil development and enrichment, poor attitude towards ground water retention and realities of climate change, lack of developing people objectively and systematically, not adding value to the process (entire value chain) or to the product, not undertaking life cycle analysis, no initiatives to decrease inefficiency of both men and machinery are a handful of such reasons. 

It is the responsibility of the CEOs to manage them. That is why we say that the blame should be assigned to poor quality decision making. We must look inwards and perceive the situation with a better view of doing well rather than observing Kenya, India or any other country and detailing excuses. Who is fooling whom?

Wage negotiation with such a poor quality mentality is a task that can never be achieved. This is absolutely futile. It is our understanding that the government should lay down policies asking only CEOs of RPCs with a MBA or an equal educational competency to get involved in any top level discussion of this magnitude. Two wrongs cannot make one right. 

All ministries must take a lead from the plantation example and recognise the educated and competent to get involved in discussions at the policy making level. All CEOs, executives and staff have earned their annual increments already but daily paid workers have been denied even a reasonable increment due to inflation which is beyond the imagination even from the lowest quality management in the world. This is the typical Sri Lankan planter mentality and it must be corrected. 

RPCs must look at annual increments (based on inflation) on the basic wage to the daily paid workforce instead of once in two year daily wage hikes. The over kilo rate too may be increased based on the current value of money as affordability matters to all levels of employees. The wage component may be taken away from collective bargaining procedure on plantations considering the global economic situation. 

The CEOs must face the challenge of getting an increased price for their produce. If the wages are still inadequate, then they must look at the list of assets that are managed at a plantation level and use those assets to find solutions to these problems, thus creating new businesses. Any plantation today has an abundance of idling labour that can be made use of for any of these new ventures.  

Alternative decisions 

The general public and state officials must understand the impending risk of not listening and acting to the needs of masses fairly. The horrible experiences some of the most sought after planters experienced during a not so distant past should not be repeated due to silly actions by the most revengeful and incompetent set of CEOs managing certain RPCs. 

The management of RPCs should be streets ahead compared to small holders, which is not difficult to understand. RPCs are comparatively highly resourceful but if RPCs say that they like to learn from small holder models then we have a serious issue with the thought processes of such CEOs of RPCs. At least the spokesmen should exercise caution when making such degrading statements to the media. The readers are not unfocused to the extent that those spokesmen are. If the argument is correct, how do the other plantation companies exist in other countries? 

The initiatives of the RPCs must be very clear. They must first initiate action to develop soil using various methods including using microbial populations to a determined standard of soil. Ex: Plantation soil: six inches below the surface, a cubic inch of soil must contain C%, CEC, EC, Clay, sand, microbes etc. Currently most RPCs have violated many soil conservation acts thereby actively contributing to wilful soil erosion. Such violators can be charged in a court of law. Who is going to pay the heavy penalty for such poor quality decision making in the end? Clearly, mono-cropping has failed. Therefore, we need to install multi-cropping systems to improve crop productivity. Then we have to inject HRM concepts into RPCs heavily, as almost 65% to 70% of the so called high cost of production in tea, rubber or coconuts is due to the cost of labour component alone. 

The level of job satisfaction at all stages in the RPCs is at a lower level as job commitment, self-motivation and other factors keep performances far below  desired levels. The number of out-migrants from plantations annually bears witness to this dissatisfaction. The ultimate responsibility lies in the hands of the CEOs, but then again we have a situation of incompetency at the top-most level in most RPCs. 

It is not the TUs that should be held responsible for the sustainability of the plantations managed by RPCs but the set of executives, headed by the CEO. 

I have cited enough examples to prove my point that poor quality decision making is the main reason for the destruction of the RPC managed plantations industry of Sri Lanka. True leaders do not assign blame to other employees. True leaders do not falter in carrying out their duties efficiently. True leaders own up to failures publicly and take meaningful initiatives to turn around management. Plantation spokesmen today present immaturity, infant-like thought processes and anti Sri Lankan agendas. 

The ministry should not waste any more time in solving plantation issues. A “lot more senior and practically proven planters await the right call by the state to support a worthy cause even at this eleventh hour. There lies a possibility of drawing foreign funding to meet the requirements”. We must not waste time procrastinating when they do not have to re-invent the wheel. 

This could be the altering decision the plantations industry is in dire need of.  It is about time we said no to poor quality decision making. We strongly believe that $ 10 billion by 2020 is a high probability only if all improve on quality of decision making at the top most level of any RPC. We have a readymade, practically proven team of plantation executives and entrepreneurs ready for this giant leap forward. Our hats off to CEOs of the RPCs who are already making quality decisions under a similar ground situation to that of others. After all, managers are paid for making the right decisions. 

(The writer is former Editor of the Ceylon Planters’ Society Bulletin.)