Sunday's THOUGHTFUL Post : Doing Business in the right way

 Sunday's THOUGHTFUL Post

Our client imposed a ₹75 lakh penalty and blacklisted us.

This was 2021. We at Think Lean Prefab Systems Pvt Ltd secure a ₹2.5 crore automotive project in Pune.

Brownfield project. We had only done greenfield sites before.

And we didn't understand the complexity until it was too late. Wrong sizes delivered.

Our measurements, site conditions and customer requirements - nothing tallied.

Production was working on version 3 drawings. Site engineers version 5. Customer's team referring to version 1.

Complete chaos. Nobody was on the same page.

This went on for a long time. Every week, a new problem. Every call was an escalation.

The customer was angry. Their purchase team was bearing the brunt of our inefficiencies. All of it came rolling down on me.

Because I had a good relationship with the SCM head, he called me: "Shekhar, you've received most of the payment for what material you’ve supplied - just a 3 lac difference.

Walk away - don’t supply the balance, let go of the installation - Blame it on us, the consultant or the user department.

We're blacklisting you anyway. Even if you finish the project - I can't guarantee you'll get your balance payment.”

He was offering me an exit.

For me, running away was out of the question. I said no.

The purchase head told me "Shekhar, You don't understand business at all."

Fine. But you'll face huge penalties. I said okay, let me worry about completing the project first.

We put a senior team on site. I frequented my visits on site. We fixed all mistakes and snag points - finally completed the project.

Then came the penalty notice. ₹75 lakhs deduction from final payment.

Naturally, I denied it. Said I want to meet the MD one time before the penalty was deducted.

I prepared a presentation. Showed him everything - every mistake we made, why it happened, how we fixed it.

Then I told him: I was advised to walk away from this project. To abandon you mid-way. But I didn’t.

You had already paid us. I couldn't desert you.

Don't deduct ₹75 lakhs. Instead, give me a 3-year defect liability period.

If anything goes wrong, penalise us then. Usually it's 6 months or a year. I'm giving you 3 years. We will also carry out AMCs for this period.

This penalty will break my firm. We'll wind down within a year."

He agreed. Fast forward to 2025. Same MD. Same purchase head.

Their cleanroom running perfectly. Zero issues in three years.

Their end customer was extremely happy with the facility. We got our full payment without any deductions. And we got a repeat order.

Today, they're still our customers. Still calling us for new projects.

If I had walked away that day, I might have saved a few lakhs.

But I would have lost my reputation. Lost the chance to fix my mistakes. Lost future relationships and orders.

In business, people forgive mistakes. But they never forgive intentional betrayal.

source: Shekhar Sangwikar