They were running very late. It would be another 30 minutes before they reached Amroha, in Uttar Pradesh, which was to be the last stop on their itinerary before they headed back to Delhi.
The CEO’s displeasure was evident as he addressed Vijay: “Surely, this could have been planned better.”
“I understand, sir, but I never expected our dealers to organise such elaborate functions,” said Vijay, the Head of Sales, who seemed not too perturbed.
Where it all started
Sujit was the CEO of India’s largest tractor company. Though he went to Michigan University, the way he operated his company was no different from the management style of his late father, the founder . While Sujit did hire professionals to head each of the verticals, some of the old-timers, who had served under his father, still made up his inner circle.
Sujit’s biggest weakness was that he was easily swayed by hearsay , and his direct reports were quite frustrated trying to find answers to every opinion expressed by the inner circle.
Someone had to bell the cat. And Vijay saw his opportunity one day, when Sujit expressed his fears about the sales targets.
“We are not giving stretch targets to our dealers and this worries me, more so now that our new factory will soon start production. ”
“Why don’t we visit some of our dealers to see for ourselves, sir ? Let me set up a programme for us to visit our dealers in Western Uttar Pradesh.”
Back to the present
Finally, they reached Amroha.
By now the CEO was quite overwhelmed by the scale of the arrangements at each of the dealerships on this trip. Once the usual felicitations and speeches were over, the CEO, the Head of Sales and the Amroha dealer were soon seated in the dealer’s office.
“And what’s your sales target for the next three months?”
The dealer was beaming as he replied. “Fifty tractors a month!”
The paper in the CEO’s hand showed 15 tractors a month.
“Did you say 15 or 50?”
“Not 15, sir. I said 50 a month.”
“So you will sell 150 tractors over the next three months?”
The question was clearly directed at the dealer, but it was the Sales Head that bore the full brunt of his boss’s glare. The CEO had suspected all along that his sales people did not have their ears to the ground. What greater evidence than this!
“No problem, sir. In fact if you so like I can do 10 to 15 more.”
“Shall I put your target down as 160 for the next quarter?”
“Of course, sir,” came the unhesitant reply.
The CEO felt triumphant. “Thank you very much and I appreciate all your nice arrangements.”
It was 1.30 am by the time they reached the CEO’s residence in Delhi.
“Please see me in my office tomorrow, Vijay,” said Sujit as he got out of the car.
The Amroha effect
The next morning, as the CEO settled down in his favourite garden chair with a cup of tea and the newspaper, he noticed Vijay and the Amroha dealer walk through his gates.
“I hope all is well?”
“Yes, sir, all is well,” said Vijay.
He continued, “I asked the dealer to reach my house at 6 am and brought him along. Sir, last night you heard his opinion. Now please listen to the facts.”
The dealer spoke in broken sentences, “I am very sorry, sir, ...actually I will be able to sell only 35 and 40 tractors in the next three months.”
The CEO’s voice was raised. “Is this some sort of a joke? Then why did you commit 160 last night?”
The dealer’s voice was a murmur, “I thought that if such a big man like you comes all the way to my dealership then I have to give a very big target. So, I gave you a big target of 160.”
Lessons learnt
In the end, the dealer sold 42 tractors that quarter.
The Sales Head kept his job. And the incident opened the CEO’s eyes to a new reality.
He realised that people tend to tell you what they think you want to hear: they actually share their opinions, which are often far removed from the facts.
Within the company, this phenomenon came to be known as the Amroha effect.
When the story was repeated in company corridors, many suspected that Vijay had orchestrated the whole thing. After all, he had been voted ‘Mr. Smart Alec” at IIM-A, many years ago. The CEO never again fell prey to the Amroha effect!
And the influence of the inner circle diminished considerably.