Leaders usually enjoy considerable authority and power. Should they use it to gain a difficult agreement? Or, should they attempt persuasion? This incident from my early career in Hindustan Lever, now Hindustan Unilever, offers an important lesson for aspiring leaders.

I was based in Delhi as Area Sales Manager for Rajasthan. A Jodhpur newspaper had carried the story that our distributor, Sanjay Jain (name changed) had defrauded a bank. The police were investigating. City retailers were concerned and our distribution was suffering. I wondered if we should we look for a new distributor, or wait for the police investigation to be completed.

I took the problem to Mr. Ranjit Talwar, Branch Manager for North India. Talwar sa’ab, as he was known, was a venerable, unflappable man in his late fifties.

He asked me to do a quick investigation. Later that week, he made the decision: the distributor would have to go.

Given the distributor’s long association with the Company, Talwar sa’ab would go to Jodhpur himself, and asked me to accompany him.

Reputation or experience?
Next week in the distributor’s office, Mr. Talwar listened attentively to Jain’s version of events. He sympathised with his plight. Then asked for his resignation.

Sanjay vehemently protested. He had not been proven guilty, he pointed out. He cited the many years of association with the Company and assured he would protect our market.

Mr. Talwar was unmoved. He said ,“Sanjay, you know we consider reputation as the most important quality in our associates, even more than experience. If we were appointing a new distributor in your town, would we consider you at this time?”

“No,” Sanjay reluctantly admitted.

“If we would not appoint you, can we continue with you now?”

Sanjay resigned.

The power of persuasion
Mr. Talwar had the authority to terminate Jain’s distributorship. He could have done it sitting in Delhi. But he chose to persuade. Use of power makes people resentful. Wise leaders make people feel they made the choice. They use a powerful argument, give a noble reason, and appeal to other party’s conscience.

I learnt a valuable leadership lesson that day.