Sanjeewa Jayaweera, in Island, 27 February 2022, with this title “Ken Balendra’s Impact on John Keells”
Much information is available in the public domain about Deshamanya Ken Balendra (KB), the visionary Chairman of the John Keells Holdings Group (JKH) from 1990 to 2000, who recently celebrated his 81st birthday. For quite some time, I have wanted to pen a tribute to the great man but hesitated to do so as I felt many others ranging from his close friends from school days to those who worked closely with him, are more qualified than I to write about him.
However, given his advancing age and health challenges, I felt that it was my duty as a former employee of the JKH Group of over twenty-five years to express my admiration and appreciation to a man under whose leadership JKH forged to be the largest conglomerate in the country.
Leader par Excellence and Numbers Savvy
Great leaders are a rare breed, whether in politics, sports or business. Arjuna Ranatunga is acknowledged to have been an inspirational leader. He was not the best batsman in the team. However, he galvanised others to perform to their maximum capability, created an ethos of self-belief and risk-taking and used his instincts to strategize a winning formula and backed potential players. Under his astute leadership, a world cup winning team was assembled. I do not think too many will disagree that KB did the same with JKH over a more extended period and left a solid foundation upon which his successors could take JKH to even greater heights. Just as Arjuna is synonymous with Sri Lanka cricket KB will always be synonymous with JKH.
Having joined the JKH Group in 1993 as an Assistant Manager, I was appointed as a director of a subsidiary company only about a year before KB retired in 2000. My day-to-day interactions with him, therefore, were minimal. Still, his influence and leadership style were ever-present in the working environment. My early recollections of him were how he smiled and greeted whomever he met when walking along the corridor. Despite his stature, he seemed friendly.
However, I soon realized that most of my superiors were pretty nervous or even petrified when preparing for meetings with him. As a member of the finance team of the hotel sector, I remember extensively collating figures and information for them before a meeting. They all knew that KB was pretty savvy with figures. In the book “They call him Ken”, authored by Savithri Rodrigo (SR), the former Group Finance Director Anushya Coomaraswamy expresses her amazement at KB’s grasp of numbers despite not having formal financial training. She further states, “He expected answers for questions he brings up and stops you peremptorily in the corridor if he wants an answer. So, you had to have the facts and figures at your fingertips. That is the kind of training which keeps you on the ball. If you didn’t have the data he wanted, he was not happy, and he showed it!”
Work Ethic and Super Sense of Humour
The JKH culture was built around the principle “play hard, play smart, play together and have fun.” The Chairman was undoubtedly an embodiment of such a work ethic. Moreover, his sense of humour was legendry amongst those who worked closely with him. Many anecdotes are chronicled in the book referred to in the previous paragraph and Richard Simon’s account of JKH titled “Legacy”.
The one that I enjoy the most is how KB as a board director, had requested David Blackler (DB), the then deputy chairman, to get board approval to buy a new vehicle for the company trading in diamonds to replace the sad-looking Sri Lankan assembled Upali Mazda. KB felt this was necessary to be on equal footing with the wealthy gem merchants who used to turn up in rather expensive cars. However, DB had said that this would not be possible as the board was, in any case, weary of the project. So, the story goes about how KB then proposed that DB, a white Englishman, dress up as KB’s chauffeur as none of the gem merchants had a white chauffeur! KB had felt that this should negate the disadvantage of arriving in a dilapidated car! I am sure the story has undergone a few alterations over the years, but hopefully, the readers will appreciate KB’s humour.
One of KB’s most profound and far-reaching decisions early into his tenure as Chairman of JKH was appointing Susantha Ratnayake, Ajit Gunewardene and Anushya Coomaraswamy, all in their early thirties, to the Board of John Keells Holdings Plc. It was highly unusual for Sri Lankan companies or, for that matter, anywhere else in the world to appoint people as young as that to the Main Board of the holding company that was also listed. As SR in her book says, “His perceptive judgement of people has proven to be spot on.”
No doubt in appointing them, he was thinking of succession planning, a crucial but often neglected aspect of leadership. He undoubtedly would have been pleased when Susantha and Ajit took over as Chairman and Deputy Chairman in 2005 and successfully steered the group to even greater performance for nearly 15 years.
During KB’s tenure, senior management was structured into three layers known as “A” team, “B” team, and Team 2020. Although it might sound hierarchical, it was more a case of fitting people to slots where the seniors could mentor them and also give them an indication of their future path in the group as long as they kept performing. Team 2020 comprised talented youngsters he believed would be in senior management of JKH by 2020. Coincidently when I retired in 2018, nearly 80 per cent of the twenty senior-most had been at JKH for more than two decades.
Significant Investments and Initiatives during the decade
The substantial investments and initiatives JKH undertook under KB’s leadership are explained below. They have all stood the test of time and have contributed significantly to the company’s bottom line over an extended period.
The acquisition of the Whittalls Group in 1991 for Rs 300 million was to prove an excellent decision. At the time, however, the investment was considered risky by many in the private sector. The two Whittals hotels were in financial difficulties due to the civil war raging from 1984. In addition, Ceylon Cold Stores (CCS) was under government control, and the unions were ruling the roost.
Nevertheless, the deal gave JKH ownership of two hotels (291 rooms) in Bentota and Hikkaduwa, and CCS, the manufacturer of Elephant House soft drinks and ice creams and nine acres of prime land in Colombo. Despite severe challenges, particularly from the unions, the JKH team comprising Sumithra Gunasekera, Raji Goonewardena and Jit Guneratne slowly but surely brought about the necessary changes to CCS to be a highly profitable enterprise and compete on equal footing with Coca Cola on market share. As a result, I believe the initial investment was recovered in less than five years.
In 1994 JKH raised US$ 35 million by issuing Global Depositary Receipts (GDR) from overseas investors. It was a first of its kind by a Sri Lankan company, and its success was a feather in the cap of JKH and KB and his team comprising Kailasapillai, the deputy chairman, Ajith and Anushya. The issue of GDR taking place amidst a civil war speaks volumes of KB’s vision and confidence in JKH and, of course, the investors in JKH. The JKH share has been the most sought after by foreign investors, and until recently, nearly 50 per cent of the shareholding was with foreign investors.
In 1995 the JKH Employee Share Option scheme was introduced and launched. I believe we were one of the first to introduce this rewards scheme in Sri Lanka. Once again, it was a brilliant initiative to bring a sense of ownership and loyalty amongst the management staff. Undoubtedly, the scheme’s success in the ensuing years enabled many of us who worked at JKH in that era to build a secure financial future for ourselves.
In 1996 JKH invested in the Maldives by acquiring an 80-bedroom hotel. It was our first overseas investment, and I was fortunate to be involved in the acquisition. Our management team comprising of less than ten quickly transformed a “dead” hotel into a thriving property. When I joined JKH, I realized that one of JKH’s great strengths was its systems and procedures and was thrilled to see how seamlessly they were implanted in the Maldives. Jagath Fernando, the then MD of the Leisure Sector and Jayantissa Kehelpannala, the Head of Sales, Marketing and Operations, provided excellent leadership that contributed to our success. As a result, the investment was recovered in a record quick time of fewer than four years. Given the lucrative returns, JKH quickly added more properties to the portfolio in the Maldives and it is now a significant contributor to the group.
In 1999 JKH and P&O, a renowned international shipping line, and several others entered into an agreement with GOSL and the SLPA to develop the South Asia Gateway Terminal (SAGT). This was after four years of arduous negotiations. The project was the brainchild of Susantha Ratnayake, the then head of the transport and logistics sector of JKH. A great story that is part of JKH folklore is how when Lord Sterling, the Chairman of P&O, had said, “Ken, do you know that the issued capital of this company is going to be about a hundred million dollars and we from P&O are putting in twenty-six million dollars. What can you do?”
Without batting an eyelid, KB had said, “We’ll match it.” Vivendra Lintotawella, the then Deputy Chairman and Susantha had a shock and thought, ‘Chairman, has gone bonkers.’ However, KB explains in the book ‘Legacy’ that JKH had the money from the GDR issue. That SAGT has been a highly successful investment is to state the obvious.
Retirement from JKH and the Legacy
On 31st December 2000, KB retired from JKH and handed over the baton to Lintotawela. It was the end of an era for us all who had worked with him. During his tenure, JKH had grown to be a highly diversified conglomerate with the highest market capitalization on the Colombo Stock Exchange. In its December 1998 edition, Fortune magazine listed JKH among the top 10 stocks in Asia.
However, for most of us, his impact as the first Sri Lankan born Chairman of JKH went way beyond just numbers. His skills as a visionary leader, combined with his uncanny ability to select and promote people who can deliver, made many of us perform that extra bit which is the difference between being good and excellent. He made us believe that anything is possible and wanted his team to “think big.” It was a way of life. For many of us, JKH was “the family.”
In her book, Savithri sums it up quite appropriately “What most old hands cannot forget is that Ken was inextricably linked with both the past leadership and pending legacy of John Keells. Some would even venture to say that John Keells is what it is in the present largely because of Ken – an assumption that Ken, with his usual modesty, dismisses lightly.”
In my view, the ethos that he created has resulted in JKH being voted as “the most admired” corporate entity in Sri Lanka for decades. Undoubtedly, those who succeeded him have continued his excellent work and even built on them. I was mighty pleased to read recently that the JKH Annual Report was voted the most transparent. I am not surprised because that is the culture that has existed in the group.
Charming, Charismatic yet Outspoken Statesmen
Despite being a hard taskmaster, as his former boss, David Blackler, says, ” Bala’s personality was a fine blend of charm and charisma, an asset that was a much sought after commodity in a rapidly expanding and diversifying conglomerate.” No doubt a quality that benefitted JKH immensely over the years when dealing with politicians, overseas business partners, diplomats and even tricky superiors and subordinates! Given JKH’s significant exposure to the leisure industry, relationships with our overseas business partners during the civil war were crucial.
Romesh David of JKH says in the book, ” In the chaotic aftermath of the 1983 riots saw major charter tour operators, many of which were global giants, retain their commitments to Sri Lanka based solely on the assurances given by Ken, driven by the confidence and close personal rapport they had with him. Being articulate, personable, warm, and friendly added to his charm and the building of some strong business relationships in his time.”
The book by SR includes a pictorial representation of a Reuter report titled ” Private sector needs guts.” The article, I believe, was published in 1994. It states, ” Mr Balendra, who as the chief executive officer, has guided the fortunes of the 125-year old company since 1990, is one of the few private-sector bosses unafraid to express strong views on the country’s political, economic and social fabric.”
KB had said, ‘The private sector should openly be able to criticize the government, suggest policies. That does not mean we are in politics,’ The report goes on to say, “His outspoken views have probably caused the company trouble. It fell foul of former president Ranasinghe Premadasa two years ago and was the target of a vicious campaign by rivals and state-owned media.”
I doubt my article has done sufficient justice to Mr Balendra. I feel I have just touched the tip of the iceberg. I am sure many will write with greater authority about the Corporate Colossus, who was voted by LMD in 2003 as the most effective business leader in Sri Lanka since the country’s independence in 1948.
I wish to acknowledge Ms Savithri Rodrigo, the author of the book “They Call him Ken.” From which I have quoted in my article.