Home > Ideas > Missing the obvious!

Missing the obvious!

Part-1

Amar runs 3 businesses – he started the first one 25 years back using the savings from his job. He was in the early 20s back then, brimming with ideas and enthusiasm. He took on the dealership of the products he was selling, as an employee, for a few years. He knew the products inside out and the people who mattered; many of his organisation’s customers would be the ones he used to visit earlier and the Principal was after his old employer.

Amar worked with a lot of energy and all the ideas he had started out with began bearing fruit. When the dealership was on a firm footing Amar decided to take on one more line of activity. He promised the Principals that his maiden venture would not be neglected and business would continue like before. Since a significant portion of his time would have to be invested in the development of this new line, he decided to find a Manager for the first business – and just then his brother, Manu, quit his job and was in search of work. Amar felt that having someone from the family to run the affairs meant he could safely take his eyes off the old line and focus fully on the new one, which he was not so familiar with. But with Amar’s undivided attention and his Sales acumen the new business started growing too. Soon this new line was also achieving decent revenue and providing healthy profit.

But soon news started reaching him through customers that service in his old line was not up to the mark and former colleagues called up to tell him that fresh inventory requests have fallen in recent months – that clearly indicated a dip in Sales. Amar called Manu to find out what was wrong – he was assured that it was only a minor blip and things were under control. Amar also heard from competitors, with whom he was still in touch, that business was booming.

With the first venture still in the positive (albeit with Sales and Service showing downward trends) and the second business achieving stability Amar felt good and soon he experienced that old itch again – “Isn’t it time to start a new line of activity?”

It was then that an old friend of his appeared out of nowhere and asked him to join a venture that was being launched in another city – it meant that he would have to be away from his home-base for extended periods of time. But this seemed like a break into the big league and he was excited – the profit expected from the venture was too good to resist. The friend had also told Amar that he need not put in any cash, just his know-how and sweat equity were sufficient. Amar jumped in with eyes-closed. The reins of the second business were handed over to a second brother, Kumar, who had recently retired and returned to their home-town, after working for many years in another country.

Amar got totally involved with the newest baby and left the affairs of old businesses completely in the hands of his two brothers; they were family after all and things can’t go wrong. But, that wasn’t how it went – the first business had been slipping for quite a while and Sales was now in the red. And while Amar was still comfortably placed with decent returns coming from the new venture he had been pumping a lot of money to keep his old businesses afloat. His brother always seemed to be short of cash to run the business and he generously made good the shortfall.

Kumar, who ran the second business was unfamiliar with the market but wouldn’t take any inputs from the team and they in turn did not his style of operations. They were used to working with Amar, who was more accommodative and gave the team more freedom. The brother was more autocratic and wanted to call all the shots – while he did not know the situation on the ground and was unable to understand the demands of the customers, he wouldn’t permit the team to take decisions. Business stalled and many employees left the organisation.

While Amar’s third business provided returns it wasn’t at the levels predicted by his promoter friend and he was not able to call all the shots in the operations like he had hoped to. His own businesses were in the hands of Managers who were permitting thing to spin out of control – they clearly didn’t seem to have the answers.

Can you help Amar work his way out of the sticky situation he seems to be in right now?

Questions:

  1. What do you think is happening here? What went wrong?
  2. What would you suggest to Amar to help him get things back under control?

I really look forward to your thoughts and suggestions. Leave them in the Comments section of the Sales Coach Blog and I will read each and every one of them.

Thank you!

Part – 2 would discuss your responses and I will throw in some suggestion from my side too. 

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  1. August 3, 2012 at 2:39 am

    Oh God! I hadn’t thought of surprise assessments! I’ll try my best to be ambiguous in my answers so that I don’t flunk it! 😀

    Apparently, not only Amar’s brothers are not serious towards the businesses they are running, they are unprofessional and dishonest too. These are destined to fail. Amar himself isn’t successful enough in his latest business.

    This Amar lacks focus. And he is gullible.

    • JayadevM
      August 3, 2012 at 6:14 am

      Hey USP

      Yes, an assessment. Got to check who all are reading, right? 🙂

      Thank you for sharing your thoughts on the case. Will respond at the end of the day through the article. Cheers.

  2. Shajan Varghese
    August 3, 2012 at 3:43 am

    Amar, did not build a system / business process. His business was solely depended on him. His pick of his brothers was apt, but he did not hand hold them till they got on and caught on. Above all, he should have demanded regular business reports which would have given him upto date info.
    Regaining the old form is going to be difficult becouse both his brothers will not take Amar’s interference. If he must, then, he should get the confidence of his next best reliable person in each of the business and work to aligne business through him with his brothers. Tough but thats whats going to work.

    • JayadevM
      August 3, 2012 at 6:26 am

      Hi Shajan

      Thank you for that analysis. Will include it in the article I am presenting later in the day.

  3. pg
    August 3, 2012 at 6:36 am

    owner driven businesses tend to go astray the moment they bring in relatives in to the picture who do not have financial stake, Amar should have made his brothers accountable to their business areas and should have had review meetings periodically as well monitor the business process through a good MIS. Multi processing in business always seems to be an easy task until unless you have processes and systems in place which are not easy to come by in owner driven businesses.

  4. Jamy
    August 3, 2012 at 6:42 am

    Jay, in hindsight, Amar should have sat down with his brothers and created a master plan for business No:1 and No:2. In business, family is only good if they can function efficiently but the fact of the matter is that there should be periodic follow-ups and business meetings reviewing profits and how to improve the business in general- I believe Amar blindly trusted his brothers to run the businesses with the confidence that they would be able to manage properly on the foundation that he created initially and THERE WAS NO PROPER HANDOVER OF MANAGEMENT. Our man needs to urgently have a sit-down with his brothers and other senior managers in each business and identify the management flaws and then come up with a plan to try and recapture the market; also Kumar clearly needs proper guidance in HR related issues and should be replaced by a Manager with proper business credentials- sounds a bit harsh but if the business is going down because of the guy at the top, well, he should be the first one to go. Manu seems to lose focus and take things easy and also seems to be really bad with his financials- if he has a strong financial controller to guide him in the right direction, he could do well. Finally, the customers who used to be regulars need to be contacted individually and assured that their needs would be taken care of and even if it takes a bit of a loss appeasing in the beginning would benefit immensely in the long run. Amar needs to concentrate on his own 2 businesses first.

  5. August 3, 2012 at 9:16 am

    Hi Jayadev

    When the reigns are handed over to someone, there should be periodic reviews supported by facts and close monitoring upto a certain point until one is confident that the concerned person can independantly handle the task…irrespective of whether family or not.
    Also there should have been a proper transition period when he should have set a rapport between his staff and his brothers taking over the leadership advising either parties as necessary.
    As to what needs to be done, I guess he should stop concentrating on the new venture, get back to the two old ones and get them to report to him and act as their guide for some time till they get the hang of things.
    Dunno if these make any sense at all 😀 I am no sales person 🙂

    • JayadevM
      August 3, 2012 at 11:29 am

      Hi Jayashree
      The magic of the Sales profession is that there is no magic in it. Any smart person can excel in it by following the process.

      Let me hasten to add that a pinch of imagination and the ability to persuade and to influence would help in no mean measure.

      Thank you for responding to the Case Study. I shall include the inputs in my analysis

  6. vijay
    August 3, 2012 at 2:22 pm

    one, he needs to have systems/processes in place to ensure that business goes on smoothly and service is not affected in his absence, second-he needs to handhold his brothers on their new roles as i feel they were handed over the responsibility without evaluating whether they were fit for the job.He also needs to plan his day in such a manner that he still spends time on each business every day and should make sure that he meets each team periodically to review the business and way forward

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