My client was a car dealer for an X brand. For the sake of easy understanding, let us say hypothetically, the brand was Maruti cars. Along with him, there were multiple Maruti car dealers in Mumbai. It is a usual practice for the principal company - Maruti - to announce awards for the top car selling dealers in every city ie. Awards for the highest number of cars sold in a year.
In the pursuit of getting the prestigious awards, my client made sales plan to increase the sale of cars. Emulating what other dealers were also doing, he started offering big discounts, freebies to various prospective customers. He came up with innovative schemes to increase the car sales. It became like a price war among the dealers. While the dealers fought among themselves, the principal company made big sales.
Increase in sale called for increase in inventory. This naturally implies need of more funds in the system. To meet the working capital requirements, they made more borrowings which lead to higher finance cost which eventually put more pressure on the net profit.
If such discounts and offers are a part of well-designed articulated strategy to make an inroad, it can be a business decision. This can act as an entry strategy. However, in the race for the top line, never disregard the bottom line.
One client is in Yarn trading business for past more than 2 decades. They were clocking an annual turnover of about 30 crores. In the beginning of March 2020, there was outbreak of the pandemic and suddenly there was a lot of uncertainty about the future and even survival of their business.
This was precisely the time I was roped in as their business coach. We set down, took stock of the situation. We brainstormed with their team as to what can be done in the given challenging circumstances. We took cognizance of strengths and weakness of individual team members and accordingly reassigned specific roles and responsibility to every team member.
The promoters were ambitious. They believed in themselves and were willing to do whatever it takes to get back on track. We discussed and got clarity as regards their Vision in the business. We set ambitious specific Goals in their business and made a complete road-map to achieve them.
We designed weekly meetings with their senior team members. We enrolled and involved every team member in achieving the goals, motivated them, keeping them fully aligned to the organizational goals. We created templates MIS reports and started tracking key parameters and numbers relevant to the business, every month.
With active involvement and push from every member, the company that was staring at their existence, crossed turnover of Rs. 100 crores in the financial year 2021-22. This was seemingly an impossible target a couple of years ago.
One of my clients was not performing well. The quality of their services was deteriorating and the customers were complaining about the services and were naturally unhappy. On an inquiry we found that there were some employees who were spreading negativity in the company, they were laid back and not pro-active in the work. They were actually spoiling the culture and work atmosphere in the company. We figured out that these were typically old employees with an attitude problem.
My client actually knew this problem but was reluctant to take any action because these were old loyal employees. In fact, he had spoken to these employees in the past and tried to motivate them. However, there wasn’t any visible improvement, except for a temporary surge and then sliding back to their old lethargic attitude.
The problem was that while he was tolerating the old non-performing employees, the other employees were getting totally demotivating to perform well in their functions.
We talked to these non-performing employees. We informed that exactly what problem we are facing and we warned them in no unclear terms that if we do not see a turnaround in their performance in next 30 days, we will not be able to keep them in the company for long.
A couple of them realized their mistake and they became productive members. However, some of them ignored our warning and continued with their negativity. We stuck to our words and fired these non-performing lot. The message in the company was loud and clear – “Perform or Perish”.
Suddenly we saw a dramatic improvement in the efficiency of people and the quality of services significantly improved. The company started to regain its position in the market and got back on to the growth trajectory.
Yes, it is extremely important to educate, train, motivate and provide all kinds of support to our employees. It is equally vital to set a right kind of positive culture in the company. However, in spite of all your efforts if some employees do not perform to their ability, if some employees have attitude problem, as a leader, you got to step in and fire him.
“Nothing kills a great employee faster than watching you tolerate a bad one.”