The resignation letter

To,

Chairman and Managing Director,

Tristar India Ltd.

Dear Sir

At the outset, I would like to thank you for the opportunity you gave me to serve this excellent company for four years. I am indebted to some of my senior managers who helped me hone my skills and develop in professional terms, who also appreciated my contributions to the company by rating me with straight A's for three consecutive years.

At this juncture, when I am seeking severance from the company, I would like to put on record the happenings which have compelled my hand.

As you would be aware, the division's performance has started dipping from last year. That is when Mr. Sanjay Sharma was hired to be the head of this division, and his omissions and actions have caused a great deal of confusion within the division, led to disputes, and have been the root cause behind the performance issues faced here.

At the time of his assumption of role within the division, I was the All India Sales head with fifty sales professionals in the team. We had four regional managers who supervised the work of the remaining sales executives. As you are aware, our product is sold through four national distributors (NDs) who, in turn, sell them to over 15000 retailers spread all over the country.

I would request you to take a second opinion on this, but from the beginning, most of us in the division felt that Mr. Sharma did not correctly comprehend the requirement of the job. He came from an institutional sales background and had little experience in handling marketing channels. He had a poor understanding of how channel partners (distributors, retailers) made margins, stocking norms, and product mix requirements. His instructions were often disjointed and lacked coherence. He tried to design his schemes, which found no takers amongst channel members. It was not unusual for him to give one set of instructions and withdraw them within days, causing great confusion in the downstream.

To make matters worse, he refused to listen to anyone's proposal or suggestions. He had this habit of putting down people if they offered him any inputs in open meetings. It was as if he was worried he would look inferior in front of his subordinates if he listened to other people's advice. If someone pointed at any flaw in his decisions, he would be mean and do his best to put him down with direct and indirect insults.

About four months ago, he suddenly suggested we hand over our scheme money to the national distributors. This he claimed was in keeping with the company's policy of empowerment. As you know, the scheme amount is built into the pricing and is left at the discretion of the All India Sales head to use it to improve business. Usually, the schemes are designed to serve weaker markets. We offer more aggressive schemes in markets where we are struggling against the competition. The scheme is also used to promote slow-moving products. Finally, we employ the schemes incentives to control our retailers. We managed them in a manner to maximize sales. They were linked to individual target achievement on the part of the channel partners. The national distributors, who are separate entities with their balance sheets and profit statements, were not expected to use the scheme money in a similar manner leading to wastage of funds.

Mr. Sharma took exception to my raising this point at a meeting. The very next day, he produced an order shunting me out of my position as the All India Sales Head and appointing a new person in my place. The new person, Sachin Shrivastav, was brought in from a different division. I was placed in an "advisory" role in the system. If you would remember, this is the time when I had taken a brief appointment with you and sought your advice on the matter. This form of "transfer" had greatly affected my position within the organization, reducing me either to an object of sympathy or joke. At the time, you had asked me not to react "emotionally" and wait out for a few months till the situation stabilized. I had followed your advice and had decided to continue.

Mr. Sanjay Sharma's plan has been operational for the last four months, and the chaos in the marketplace is there for everyone to see. There was widespread discontent amongst the salespeople with the changed state of affairs, which made no sense. Few had the guts to say the same to his face. The channel partners have also expressed their dissatisfaction with the situation. In many cases, the channel partners didn't know what the scheme was for a particular month. The national distributor does not care to make their pay-outs in time. During his meeting with them, Mr. Sharma's standard reply is, "Wait for a couple of more months, and the things would stabilize."

Of late, In a laughable twist to things, Mr. Sharma is loudly complaining about how I had misled him with my "bad advice." As is well known, I had offered a piece of advice, which was diametrically opposite to the scenario Mr. Sharma has brought on the division.

A more appropriate course for him would be to accept his mistake and roll back on this "initiative" with immediate effect. This, of course, needs a large heart, which Mr. Sharma lacks. He seems to be worried his admission of a mistake would somehow impact his position within the organization by showing him in a bad light.

Of late, he has become even louder in his criticism of my actions. He usually does not do it in my presence. But news filters into me about how he makes ugly comments about my supposed mistakes. The matter has reached a point where it is no longer possible for me to continue this position. The office ecosystem has become a source of embarrassment for me where people are looking askance at me and silently wondering why I am putting up with this situation.

This letter may be a communication of my wish to resign from my position within the organization.

Yours faithfully

Kumar

Note:

Tristar Inc. operated in the IT Hardware space manufacturing computer peripheral products like monitors, keyboards, hard disk drives, and webcams. The products were sold to end consumers through IT retail outlets spread over the country. As Mr. Kumar mentions, there were 15000 of them scattered all over the country.

Mr. Kumar's team handled the distribution side of the business, which was directly linked to sales. Since it was impossible on the part of the company to service all 15000 outlets on its own, it had chosen to operate through a hierarchy of four national distributors and 250 regional distributors who worked together to ensure the items reached the retailers. Four national distributors were necessary as the business volume was high (around U$ 200 million) and needed sizable financial capital. The regional distributors operated in local markets. For example, the city of Mumbai had six regional distributors whose primary role was to offer credit to the frontline retailers and canvass for bigger businesses with them.

The schemes were the prime movers, which made the above channel partners (you would have studied about them in your course in marketing) work. As Kumar mentions in the mail, the scheme was built into the price of the product. For example, if a monitor was billed to a national distributor at Rs. 10,000, this amount also contained the scheme portion, which would be about Rs. 1000. This money would be later disbursed amongst the channel partners as per the scheme devised by Mr. Kumar's team.

For example, if they sold 50000 monitors in a particular month, the scheme amount generated is Rs. 1000X50000 = Rs. 5 crores. Mr. Kumar's team designed the scheme in such a manner as to focus the amount on slow-moving products, complex markets, etc., to benefit the company. As the head of the division, Sanjay Sharma took power away from Kumar's team and asked the national distributors to manage the scheme. This is the main point that has led to the above situation.

According to Mr. Kumar, the national distributors are separate companies whose goals are their profits. If the scheme is left to them to handle, they would use it to maximize their gains and, in the process, compromise the business objectives of Tristar.

What are the tasks of a system leader? Based on the case above, comment on Sanjay Sharma as asystem leader. How has he fared against these tasks? Illustrate with examples from the case.

State the characteristics of a destructive narcissist. Bases on his conduct, as mentioned in the case, do you thing Mr. Sanjay Sharma can be labeled as one?

List the warning signs of shadow leadership visible in the case.

Breif a note on the fears leaders experience. Illustrate it with examples from the above case.

How should the Chairman-cum-managing director handle Mr. Kumar's resignation letter