Saturday, November 13, 2010

To trust or not to trust my deputies

To trust or not to trust my deputies

Coming from Singapore to take over the Indian operations, for Peter Chen gaining trust with people should be the least of the issues. Yet what he took most for granted turned out to be the most challenging for him. He had completed a few rounds of meeting all his deputies and was reasonably pleased with each of them, the spirit of professionalism they demonstrated and the self assured way they carried themselves about the office. It should be a professionally challenging and intellectually stimulating to grow a market that offered so much diversity at such a scale he could never have imagined Singapore to offer. However that was not to be.

Peter’s family could not relocate to India. So the board allowed Peter to be in India Monday through Friday and return to Singapore for weekends. One such weekend, he was surprised to run into one of his deputies in Singapore. He let it pass thinking that people are entitled to their privacy and made no effort to make any connection with her. A few weeks later he received a confidential call from one of his Board members asking Peter if he was aware of the concerned employee being away from the country, as was required by the company policy? She, Meenakshi Khatri had obviously not done so.

Peter approached one of his long time India based Director, Gopalan, and expressed his displeasure at employees not following company rules and setting a poor example of themselves to the rest of the staff. Gopalan thought for a while and suggested that he cannot go by hearsay. Peter must possess an irrevocable evidence; when confronted the employee concerned must have no choice but to realize and own up the default. If they are given an opportunity to explain, it will drag the organization into a loop that they cannot afford to create.

Gopalan knew of an ex Army officer who was reputed for carrying out confidentially checks on the conduct of a sample of the employees and table it to Peter for him to take action. When Peter called up Col Preetam Singh, the head of the surveillance agency, Preetam expressed happiness to undertake provided the company had an explicitly state policy note being put out to all employees on the need for them to observe the code of conduct and obtain their signature on it. As a first step, Peter should give the employees an opportunity to voluntarily disclose any anomalies either they are aware of or are currently engaged in. By getting them to disclose, Peter was fortifying his stand. Peter would be better off forming a sub committee of the board of Directors looking such cases of voluntary disclosure and making a recommendation for the board to approve of. By doing so, Peter would be above board and not get pulled into the political repercussions such decisions are bound to have.

Peter faithfully went by the advice of Col Preetam Singh. Two weeks later, he received a dossier, passed on to him by the subcommittee with their recommendation on the disclosures made by his closest deputies.

Sunil Shah, Manager-Transport and Logistics admitted taking a fee for allotting loads on a priority basis so that the transporters did not have to idle their trucks outside the factory gate. A faster turnaround time for trucks need a premium to be paid to him and his staff. In turn they would ensure that the transporter’s bills were passed with minimum of delays.

Bikash Kalra, Manager distribution accepted that he charged a premium whenever the products were shipped to dealers prior to a price increase. The differential between the new price charged to consumers and the old price at which the goods were shipped would be passed back for a consideration to Bikash.

Deepak Battacharya: The ad agency and printers were mandated to pad up the fees charged on their services in order to accommodate the princely life style maintained by Deepak.

Sunil Srivatsava’s popularity with the dealers stemmed from his arbitrary division of territories and induction of new dealerships for a consideration of course. He was always kept in good humor both ways; existing dealers rewarded him for not further fragmenting their territory while the new ones were fed the hope that their allotment was imminent any time.

Kishore Rajavanshi, made a cut on every real estate deal and government liaison, while Om Prakash Gupta, Head of Procurement and import licensing collected a fee for faster goods inwards and acceptance past the income QA. Raj Sekhar, the Head of HR ran his own private agency for testing candidates and intake of temporary and full time manpower. Meenakshi Khatri handled outbound tours for her ‘friends’,which explained her being spotted in Singapore.

Peter shook his head in disbelief not so much at the recommendations made by the subcommittee on how to deal with them. It was more to do with how naive he was in assuming his deputies to be above board and the image of themselves they revealed to him thorough such a disclosure.

Preetam computed the loss to the company to be of the order of 85 crores apart from the lost productivity, internal politics and a bad reputation for being a value compromising institution. Erosion of share holder value stared Peter in the face. Should he keep them or let go?


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