“Hum lut jaayenge Sir!”
That’s what Alok Modi’s senior administrative manager told him, when he proposed a new approach to expense management. This was his radical approach to it: None. Meaning, everyone who filed an expense report would have it cleared automatically, with no approvals. So, as a sales guy, if you took a flight from Delhi to Indore, took a cab from Indore airport to the prospect location, took a cab back to the airport and the late-night flight back to Delhi, all that you needed to do was to fill out a nice little form in their ERP system with back-up invoices and Presto! Your expenses were cleared. No multi-level approval, no Accounts check on your bills, none of that bureaucracy. Except that, along the way somewhere, the system also sent out some of the details of your claim to some of your peers, your manager and others – just FYI. So guess what? If you took the bus back but claimed flight expenses, you could get away with it once, maybe twice. But one of these days, a co-worker you chatted with when on that bus would see your claim and you’d get caught. Or, someone would wonder how your lunch could cost Rs. 2,000. Even so, Modi Tyres will forgive you – once. The second time you do this kind of thing, you’re thrown out unceremoniously, no matter that you’re the hot-shot sales guy that got that 25-crore order last quarter.
For one of the oldest business houses in India, this was a revolutionary step. And not surprisingly, it was seen as downright foolish. What if people filed huge bills and defrauded the company? What if sales expenses galloped beyond control, even with the random checking that Alok was proposing? This was a recipe for financial disaster, in most people’s minds. What they did not see was Alok’s plan in its entirety – a way to reduce cost by, essentially, “crowd-sourcing” the collective integrity of the company. By taking away the bureaucracy, Alok freed up his sales managers of hours of drudgery, making for better sales and greater growth. And by distributing claim info, he instilled a culture of openness that is hard to beat. If you messed up, you were no longer afraid of the company bean-counters – you were afraid of your own peers, the guys and gals you saw every day of your life. That is a much better way to engender honesty and attention to detail than any policing mechanism “management” can dream up. And it’s worked – across the board. What an idea, Sirji!
To us, customers like Modi Tyres are not just terrific “wins”, they embody real-life stories that we are constantly learning from. The flip side is that working to the expectations of CEOs like Alok is a tremendous challenge. But then, that’s what makes our business this interesting!
