“Even though we were not clear about processes internally, unit head would have handled it better.” CEO, Aryavarta Cements Ltd (ACL).
This is a story of a ACL company, a super giant in cement manufacturing in Asia. With more than $500 mn in revenue and 3000 employees, Aryavarta Cements is a juggernaut in the industry. It is known for best people, state of art processes and controls, most innovative campaigns and ideas and fastest growing company in its segment. The competitor of this company is not even half of its size. It is the dream company to work for. What else can you ask for more.
Monday morning, 9:47 am, Indian Standard Time (IST), Delhi city, services division was closed, four senior employees were fired, revenues worth $1 mn took hit and reputation worth millions was at stake. How did this happen!
Aryavarta home solutions was services division of ACL. Totally ignored and orphan division of the company. No revenue earning division. It was there for namesake. All new hire were given positions in Home Solutions. They can try and test their skills and then were moved to better divisions.
One such new hire, ignorant of the policies and legalities was given the unit head position in Delhi division. He ordered to stop salaries of the employees as they were not doing their job properly. He also created false accounts to show higher sales and fired two front line staff.
One such fired employee appealed to the High Court of India against the company and its policies. Ignorant company now looked into this division and started digging deeper.
Immediate corrective actions were firing top employees in Delhi division, closing down division for a while. Other actions were:
- Checking all process
- Direct reporting of unit head to company head
- Monthly meetings and plans
- Appointment of a third party audit control quarterly
- Supporting the company hierarchy by appointing General Manager for services division
- Creating a employee grievance redress mechanism
Who’s fault it was, child who did mistake or the parent who ignored the child and punished him severely on mistake!