Dushyant Corporate Trainers (DCT)

In Sept 2007 the CEO of DCT Dushyant was asking himself if he heard his Chairman
correctly during the 8th board meeting of the company ? Did the Chairman Dinesh really say that
he had faith in him as a person - but not in his sales forecasts ? He thought probably it was a hint
for him to resign and go away ?
What the Chairman had really said to Dushyant was as follows;
“Dushyant, it is 2 years since we started this company and - in spite of your
experience – we are continuing to make losses. We have not generated
revenue as per the sales forecasts we made. Originally, we were supposed
to begin making profit in the 4 th quarter. We are now in the 7 th quarter and
yet the profit is nowhere in sight. When is this red ink going to stop? I
invested in this company because I trusted you - but I feel betrayed. I do
not really trust your sales forecasts anymore. God alone knows when the
red ink will end.”

Unfortunately, Dushyant did not himself know when he will begin making profit. He had gone
wrong but did not know why.

DCT Formation
It was a mere 2 years ago that Dushyant was rejoicing that the dream of his life had come true. A
self employed corporate trainer for most of his professional life of 20 years, he managed to
convince one of his client companies AVL (Archimedes Ventures Limited) to float a separate
training company and put 75% of the equity in the new company. The rest 25% was to be put by
Dushyant. AVL understood they did not know the training business well and left the
management entirely to Dushyant - and Dushyant was made the CEO of the new company DCT.
The Managing Director of AVL Dinesh Kriplani became the Chairman of the board of DCT.
Dinesh left the usual decision making of DCT to Dushyant and preferred to direct the company
by reviewing the DCT performance every quarter through the quarterly board meetings.
Archimedes Ventures was in the business of direct selling of men’s cosmetics (as Oriflame was
in women’s cosmetics) and had a large commission based sales force of 6000 people all over
India. The width and depth of the selling operation spanning over 150 cities needed continuous
training and Dushyant was the one who had been doing an excellent job as a trainer for AVL
over the last 8 years. Explaining his decision to invest in DCT to his board, Dinesh had said that,
“our investment in DCT is strategic and well timed. The training market is
growing rapidly. As the economy of India becomes more prosperous the
demand for service businesses will be more and such service businesses
thrive on training as an input. We at AVL are also essentially a service
business and can do some business with DCT, and of course we know
Dushyant for several years to be a very good sales trainer. It is all coming
together very well”.

Dushyant himself had been a successful sales trainer. After working for 3 years in a Pharma
company where selling plays a key role, he set up his own business and operated out of his

Written by Prof S K Palekar for class discussion / For Private Circulation Only / APRIL 2020
home. In over a decade he became well known among the consumer products industry around
Mumbai and had a good reputation for his training skills among his clients as well as fellow
trainers.

Minutes Of the 8th Board Meeting

The CFO of DCT Ms Alka Kulkarni presented quarterly figures at the board meeting as follows
Sale for the last quarter 50 Lakhs
10% commission : Business Development 5 Lakhs
40% fees of the trainers 20 Lakhs
Travel and incidentals allowances to trainers 5 Lakhs
Retainers for 5 Business Developers 3 Lakhs
Office rent / administration 6 Lakhs
Staff of 5 3 Lakhs
Staff reimbursements 2 Lakhs
CEOs cost 9 Lakhs
Other costs 2 Lakhs
Interest and Depreciation 2 Lakhs
Profit Before Tax (7) Lakhs

In response to the query from the Chairman the CFO gave the following information for these
figures
 Billing : 250 batches, 2 days each, 25 participants each, at Rs 10000 per day per batch.
 Trainers were paid Rs 4000 per day as the fees and a daily allowance of Rs 1000 per day.
 5 Business developers were paid a retainer of Rs 20000 pm.

The chairman Dinesh Kriplani expressed a serious concern;

“Dushyant, we were to make profit from the 4th board meeting ( Indian laws
demand that board meetings are held every quarter) but even till this 8 th
board meeting we continue to make losses. The equity of Rs 100 Lakhs is
wiped out and we are forced to borrow – and for what? Not for future
expansion but for compensating for the current loss! I suggest you apply
brakes to spending – hard and fast. You should cut the office staff from 5 to
2. And to show that you really believe in what you are doing you should take
a voluntary salary cut. “

Dushyant did not agree with the Chairman;

“Dinesh, don’t do this. It may look like we are planning to close down the
company ! It will sap the morale of the new organization. Morale is the key
at the start up stage. The scared employees will take this rumor to our
customers who may take their business away. Instead of organizing loans
for us, why don’t you create a big training plan for your own sales force
which is huge. This will shore up DCT top line and the bottom line.”

Written by Prof S K Palekar for class discussion / For Private Circulation Only / APRIL 2020
This idea was not acceptable to Dinesh;

“Such artificial infusion will further weaken DCT’s business model. Every
company must learn how to stand up on one’s own feet and find its own
customers.”

Dushyant came up with another idea;

“There is a lot of demand these days for training of commission-based “Feet

on Street” for various industries like recovery agents in financial services,
credit card sales, contacting people for loans, telecom sales etc but the
problem is that the trainers are difficult to find for Rs 4000 per day. Good
trainers may charge even Rs 6000 per day which we cannot afford. Can you,
being a good sales company, spare your sales managers to act as trainers
for our training programs? This way, your managers will get additional
money and will become better trainers themselves.”

The Chairman was dismissive of this idea too.

Finally it was decided that the CEO will revert to the Chairman within 1 week about how the
company can be made profitable as early as possible.

QUESTIONS
 Is DCT doing a good job of marketing itself ? Give reasons for your answer.
 What should DCT do to improve itself in the area of marketing ?
 Using this, provide an a recommendation for action to Dushyant / Or to Dinesh.

Written by Prof S K Palekar for class discussion / For Private Circulation Only / APRIL 2020