Imagine that you were put in charge of a company with 55,000 employees and $750 mil in net revenues. The company has a long history of being successful, but you know that the industry is changing rapidly and the competition is growing faster than you. How do you implement revolutionary changes in your business model without tearing the company apart?
In 2005, this was the mission given to Vineet Nayar as the new CEO of HCL Technologies, a global IT services firm based in Noida, India. He pioneered a unique management culture that he calls Employees First, Customers Second (EFCS) that is detailed in an article in the Harvard Business Review (June 2010).
Mirror Mirror Process
Vineet created a methodology for the company to analyze itself from the inside out. He codified the process and decided to call it Mirror Mirror. He had held up a mirror to the company in a new way, forcing people to see the reality of their situation.
Vineet illustrated the movement towards their goal using two points. Point A was the company’s current situation, which Vineet believed required significant structural changes. Point B was where they should land. Finding the exact location of Point B required talking to customers in order to discover where they perceived the company’s value zone to be. Was it their products, services, technologies or employees?
Employee responses to the message could be divided into three groups: 1) Those that sensed no danger and could see only their successful track record, the booming IT services market, and past successes. 2) Those that had no opinion; they wanted to wait and see. 3) Those that believed that the situation was dire and HCL should have changed a long time ago.
Turn the traditional pyramid structure on its head so that senior management- the heads of enabling functions such as human resources and finance and even the CEO- could become accountable to employees.
Collaboratively Develop a Strategy
A series of company-wide meetings were then scheduled in order to facilitate questions, conversation, and discussion. Vineet believes that employee caveats and concerns must be addressed. These are often expressed with sentences that start with “Yes, but..:” These objections are at the very heart of collaboration. If you don’t respond to them, Vineet cautioned, you’ll never get the people who have questions or doubts to play with the team.
The goal of these meetings wasn’t for Vineet to provide answers, offer justifications, or make new suggestions; He wanted alignment to emerge on its own.
Droplets for Change
Transformation requires action, not just words, but Vineet doesn’t believe in large-scale technology initiatives or massive reorganizations. So he decided to use small-scale catalysts, referred to as blue ocean droplets (BODs). This is a phrase he borrowed from the ideas in W. Chan Kim and Renee Mauborgne’s Blue Ocean Strategy. He used four BODs at HCL:
1. Sharing financial data extensively, within and across groups. enables employee teams to compare their performance to that of others. goal was to help people better see where we stood and to increase trust by greatly increasing transparency.
2. Online Suggestion Box – allows anyone in the organization to lodge a complaint or make a suggestion. a manager has to respond to every ticket, and the employee who opened the ticket determines whether its resolution is satisfactory. Not only does the system help resolve issues, but it effectively puts managers in the service of frontline employees.
3. The comprehensive 360-degree – I posted the results of my 360-degree appraisal on the intranet for all the company to see. Most managers followed suit. If they didn’t,suggested they had something to hide.
4. Planning via YouTube – managers to make video recordings summarizing their plans and post them on an online portal, where other managers could review them, share feedback, and discuss changes. This made a difference in how managers formulated and communicated ideas. Consequently, plans became more specific and executable.
The approach taken by Vineet relies on convincing employees and bringing them onboard using consensus building and transparency. Research supports his approach and has shown that “successful organizational adaption is increasingly reliant on generating employee support and enthusiasm for proposed changes rather than merely overcoming resistance.” (Academy of Management Review: Rethinking Resistance and Recognizing Ambivalence by Sandy Piderit)
Take the Leap
According to Vineet, many CEOs today are standing on a virtual ledge, unaware or unwilling to admit that their building is on fire. Some are banging at windows, trying to summon help. Others have frozen in place. Only a few are thinking about boldly moving toward the edge and taking that leap out into the unknown.
Vineet Nayar is the CEO of HCl Technologies and the author of Employees First. Customers Second: Turning Conventional Management Upside Down (Harvard Business Press 2010).