What helps a business stay adrift through a financial crisis?

Hemas Holdings Director of Group Finance and Group Treasurer Hazel Pereira 

• Hemas Director of Group Finance Hazel Pereira speaks about what works to keep a business afloat

In the chaos that unfolded in the financial markets during the country’s economic collapse, there was little time for wishy-washy decision-making, recalls Hemas Holdings PLC Director of Group Finance and Group Treasurer Hazel Pereira. She watched legacy brands struggle and SMEs get wiped out, but the stocks of the company in which she heads finances —Hemas Holdings—held ground. The secret to organisational stability at times of crises, according to Hazel, is ‘structured decision-making, whilst being very agile and having a close tab on what the market was doing’. 

“I would say one of the most salient features imperative for Sri Lankan businesses in this crisis scenario is the establishment of a structured process to mitigate uncertainty,” says Hazel, who has spent over a decade working very closely with the financial sector of the country. “At the peak of the dollar liquidity crisis, we did have to make tough decisions fast, and be firm on what we wanted. There were no grey areas; we had to choose between black and white when it came to keeping businesses stable with a steady flow of foreign currency.”

Hazel goes on to explain how stable economic metrics facilitate corporate decision-making, much like a schoolteacher, which she was when she left school. After a stint teaching various subjects to schoolchildren of all ages, her father, also an accountant, convinced her to take the CIMA accountancy exam, which set her on a fascinating path to becoming one of the most prominent corporate financiers in the country at the most trying of times. 

During the peak of the crisis, businesses faced many ‘non controllable’ factors, “no one expected  the dollar to trade around Rs. 200 and then suddenly crash to Rs. 370,” she says. The majority of businesses in the country are reliant upon imports to deliver services. Therefore, when the forex crisis hit, many companies risked corporate collapse. However, several forward-looking decisions, which Hazel terms ‘innovative strategic thinking’, allowed businesses such as Hemas to avoid a catastrophic implosion. 

“What we did—I would say one of our strong points—was that we quickly adapted to changing consumer behaviour patterns,” Hazel explains. “In the inflationary environment when people weren’t spending money, we catered to the need of consumers and made our products affordable. We remained firm but agile in our decision making. Prioritisation was the key, and once a decision was made, we went ahead with it.”

It does not escape Hazel that businesses were not the only entities struggling during the economic collapse. Everyday people—those who were once loyal customers—were now struggling to feed themselves. Doing business at the time was not just about turning a profit. “We wanted to serve the community,” adds Hazel, while at the same time allaying investor concerns and giving assurances to various stakeholders. 

And companies, much like countries, require good governance, she emphasises. Working closely with internal audit and risk control to streamline and improve operations, Hemas has been able to mitigate risk and through it, overcome challenges.

Being a low-geared company means a business has cash reserves at hand not owed to lenders, explains Hazel. Having financial resources at your disposal is undoubtedly beneficial when confronting a major crisis.

Formulating consistent long-term policies that ensure future profitability requires leadership and team coherence, says Hazel. She describes herself as an organised and task-oriented person who tends to prioritise streamlining operations. A good leader can keep things running smoothly and build a vision for the company, but a great leader, emphasises Hazel, knows how to bring people together. 

“I think the most important thing to remember is that whatever tasks we do or whatever field we’re in, we are working with people,” she says. “As you move up the ladder, it’s your ability to get people together, and share your vision, that matters more than your technical skills. To get to a collective goal, in the context of a business, we need to cultivate close relationships with the employees at the frontlines, who are the unsung heroes.”

Despite being an expert ‘number cruncher’, a field not known for fostering relationships, which she insists is a myth, Hazel strongly believes that building stable relationships with your team, and the overall stakeholders of the company, is “really, really” important, just as crucial as proactive decision-making. It is, after all, the friends you make along the way who will help you overcome obstacles. 

“The relationships Hemas has cultivated over 70 years really helped us during the difficult times with regards to keeping operations running as smoothly as possible,” Hazel recalls. 

In the aftermath of the crisis, Hazel is highly optimistic regarding the future of the local corporate sector.

“Things have definitely improved from when the country was at rock bottom,” she says. “We are winning these small battles, but, for me, the war is not yet over. We are really happy about the small wins, but I think we still have much to do, as a country, to improve the business outlook.”