The good thing about a crisis is that it forces us to stop and evaluate the existing management systems. For years environmentalists, historians and concerned citizens have been talking about how Mumbai was bursting at its seams. There were predictions made about how the city will collapse if something out-of-the-ordinary doesn’t happen. But all these forecasts fell on deaf ears.
As long as the going was good, nobody worried too much about how the city would react if things got out of hand. And then came July 26, the day that brought the city to a standstill. The floodwaters wreaked a damage of nearly Rs 9,000 crore in just one day.
On that one day the channel community in Maharashtra lost nearly Rs 50-Rs 60 crore. And in a business that works on margins, if your core trading stock is damaged, it hits the bottom line directly and swiftly. Yet, it was surprising to learn that very few partners actually opt for any insurance on their stocks. Most still depend on the manufacturer or the distributor to compensate the damage incurred. This business model is not only unrealistic, it is also unviable. It leaves too much to chance.
Partners need to accept the fact that in a crisis they have to be self-reliant. The help given by a vendor/distributor should be an add-on to the compensation got from insurance companies. The time has come for the channel community to start acting like businessmen, and not as traders. For, while the latter thinks only of making profits for the day, the former has a long-term vision in mind. And businessmen know the difference between expenditure and investments.