Vineet Nayar, the HCLT’s CEO, identifies the part of the organisation that creates value, the people who work for the customers. With the right support, these people can create much more value for customers, which mean the customers will create the business success that the organisation wants. Nayar- recounts how he defied the conventional wisdom that companies must put customers first, and then turned the hierarchical pyramid upside down by making management accountable to the employees, and not the other way around.
The Problem
In a knowledge economy, knowledge is power, so each level of management jealously guards his or her knowledge because it appears to be the sole reason they hold that management position.
- What if you share your information with the front-line staff, the people who create value?
- What if the whole company, all of the support functions, the office of the chief executive, are dedicated to supporting the front line to produce the highest quality, the best and most effective experience for your customers?
- What if you (as Chief Executive) refuse to pretend that you have all the answers, and instead insist that people come up with the solutions themselves?
- Surely 50,000 heads are better than one?
- They know the customers better, they know the technology better, and they know their passions better?
The drive
“Unless the company becomes obsessed with constant change for the better, gradual change for the worse usually goes unnoticed.” The magic that Ford’s “Assembly Line”, Toyota’s “Kanban”, Dell’s “Global Supply Chain” and Google’s “Revenue Model” did to the manufacturing, supply chain and e-commerce, HCLT’s “Employee First Customers Second” is trying to do to the service industry.
The Solution
- Creating a sense of urgency by enabling the employees to see the truth of the company’s current state as well as feel the “romance” of its possible future stateCreating a culture of trust by pushing the envelope of transparency in communication and information sharing.
- Inverting the organisational hierarchy by making the management and the enabling functions accountable to the employee in the value zone
- Unlocking the potential of the employees by fostering an entrepreneurial mindset,
- Decentralising decision-making,
- Transferring the ownership of “change” to the employee in the value zone
Since Nayar took over the business in 2005 they have tripled revenue, quadrupled customer numbers, doubled market cap and made healthy profits during the worst parts of the downturn
Employees are the greatest asset
The company believed (then and now) that employees are their greatest asset and if they have an engaged, empowered and enabled employee, that employee will go beyond the call of duty to satisfy customers, which benefits everyone in the end. “So, yes, people were initially cynical, they’re initially sceptical until you present them the business case and present them the data, which is easily verifiable.”
How to do it.
So like Gladwell’s “Tipping Point”, he needed a certain number of people to go with the change. About 10% but they had to be the right 10%. Employees fall into the categories of:
- transformers
- fence-sitters
- lost souls
Transformers are the go-getters.
These are the people who are self-motivated, smart and observant. Working in the right direction in line with the organisation’s vision, mission and values.
The fence sitters
Employees who are saying, “Hey, wait a minute, there is something new on the horizon. Either the CEO is using a marketing gimmick or he is on steroids. He is saying employee’s first, customers second. I don’t know if this will work or not, so I want to wait and watch.”
The lost souls
Who just spread negativity and don’t care if they miss out on the opportunity being offered to them.
The value zone
He looked at the employees who were creating the most value. They were Gen Y employees.
- Believed in collaboration,
- Didn’t care that he was president,
- Loved to learn
Without them, the business was just made up of layers and layers of management with controls and processes that had nothing to offer customers. “The value zone wasn’t in the technology but how our people made sense of, applied it.”
The steps
The journey is described in four stages, as mentioned in the book:
- Looking in the mirror,
- Creating trust through transparency,
- Inverting the pyramid and
- Transferring the responsibility for change to all.
Redefine the important zones within your company, emphasising spans of results-based influence rather than traditional structure-based zones of control.
How did this happen?
Let’s say that your title is vice president of operations and several hundred people report to you, but only a small percentage of them deliver feedback on you. That shows that your span of influence does not match your zone of control. Also, the difficulty was that management did not say to the employees in the value zone, “What can we do to help you?”. Instead, we wasted their precious time and energy by requiring them to make endless presentations to us about irrelevant things and write reports about what they had or had not done.
HCL took the standard 360-degree performance review and added some innovative changes
At HCL, they make the standard 360-degree appraisal process for all the top management open to review by any employee in the company. Based on the person’s appraisal, you draw up an individual development action plan for next year; and you send this out to your circle of influence, all the people with whom you work directly and indirectly. This way, you hold yourself accountable to everyone you work with. Accountability to the employees is what they practise. In this way, the value is created at the bottom of the pyramid, between the customer and the employee. So bringing the bottom to the top is important — and, thus, their top management is completely accountable to all the employees. This creates an environment of trust through transparency.
Questions for managers and employees?
- As a manager do you provide value outside your area of control? Are you encouraged?
- Does your manager help you enhance the value you are delivering to the customer?
- After discovering that you have a problem, does this manager help you define the problem and help you identify its solution?
- When you approach the manager with a problem, does he or she respond by offering solutions or resolving the issues involved?
- If you can’t reach the solutions on your own, does the manager enable you to reach out to other people in the organisation who help you achieve the solutions?
Other books that cover similar themes
Talentmasters, Great place to work, Delivering Happiness, Loose, Shift, Generation Einstein, Blue Ocean Strategy, The Tipping point, The Trusted Advisor, The Wisdom of Crowds, Starfish and the Spider, Fortune at the Bottom of the Pyramid, Break from the pack
