- Business management & operation
Turning conventional management upside down
Anand Pillai, Senior Vice President and Global Head of Quality, Talent Transformation and Intrapreneurship Development at HCL Technologies talks to BSR about his views on business and leadership.
Tell us about HCL Technologies.
HCL Technologies was founded in 1976 and is based in Noida, India. Worldwide, the company employs more than 80,000people and operates in 31 countries. HCL offers an integrated portfolio of services, tied mainly to IT solutions but also including infrastructure management, engineering and business process outsourcing (BPO) services. The company is involved in work in many industries, including aerospace and defence, consumer electronics, energy and utilities, health care, media and entertainment, retail, transportation as well as travel and hospitality.
You’ve been very much in demand around the world, judging from your travel schedule, because of HCL’s ‘Employees First, Customers Second’ philosophy. Has the response been what you had hoped?
Yes. For example, I’ve just returned from Dallas and the kind of traction from Employees First, Customers Second is truly amazing. Employees First, Customers Second: Turning Conventional Management Upside Down was authored by our CEO, Vineet Nayar. That motto has been the guiding light ever since we started our transformation journey in 2005.It places employees on top of the organisation and provides them with all the requisite support to succeed. This has helped tide us over every situation and build a strong, committed and passionate workforce.
Has HCL won business as a result of this philosophy?
When one chief information officer read the book, he said, “This company is doing things differently; let me hear more.” So we did three workshops for his staff in a little more than three months, and that tilted the balance in our favour. Compared to eight months ago, we now have more than three times the business we were doing with that company.
Do you think there’s an appetite in Western companies to learn from Indian companies?
Absolutely. The biggest war being fought the world over is the war for talent. But attracting talent is one thing; helping them to be (and stay) productive is what makes the most difference. Our approach to employees and clients helps us achieve more. That is something everyone is interested in these days, everywhere.
How would you describe your job in relation to winning that war?
My job is basically getting the ‘three E’s’ to our employees. That is, my work centres on engaging, empowering and enabling our employees in such a manner that we can deliver non-union productivity.
What do you mean by ‘non-union productivity’?
Unions are known for producing the same amount of work from the same number of employees in company after company. Unions standardise the work to be done and how many employees it takes to do it. But the work world is changing. If X number of people are giving Y output for a particular project — and if new business conditions or a new economic situation requires twice the output — conventional wisdom would say that 2X the number of people are required to give that 2Y output. This happens frequently, but few companies can afford to double their workforce as if they were conforming to union standards. Those business conditions could be a shortage of talent or an economic situation that is forcing a firm to do more with less. Or a new business model might create a situation in which, in order to move up the competitive value chain, a company has to deliver more from the same number of employees. We have become known as the company that not only achieves 2Y output with less than 2X the number of employees — and we help other companies do the same.
How do you change that equation of X people and Y output?
Through engaging, empowering and enabling the employees, we are getting a little more than 1.2X or 1.3X number of people giving that 2Y output. My job in the company is to enable, empower and engage our employees in our platinum, gold and silver accounts so that our customers see the differential, see the non-union productivity from our employees.
Do you encounter much cynicism and scepticism as you travel around the world speaking to executives?
Absolutely. One reason is that, for good or bad, Indian companies are not credited with thought leadership. If you look at any management book, it is always an American company that is coming out with something new. Now there is an Indian company that has produced something dramatically new. And I’m not talking of something that happened just one year ago. We’ve got six years of track record to prove what we have done and reliable data to support the impact this business philosophy created on our business results, customers and employees.
What do you say to people who are cynical and sceptical? How do you convert them?
I remember that, when we announced this initiative in 2005 in the midst of about 400 customers, some were unhappy and in fact walked out of the meeting. But we believed (then and now) that employees are our greatest asset and if we 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 are initially cynical, they’re initially sceptical, until we present them the business case and present them the data, which is easily verifiable.
Now, many companies are clamouring to learn about what you’re doing, but where are you looking for inspiration, new ideas?
I want to learn how other companies have faced similar challenges and what it is that they did to overcome these challenges. Southwest Airlines would be a classic example. It has a long history of considering employees as ‘the first customer’. So HCL and Southwest have much to teach each other.
And other Indian companies?
Believe it or not, there are a lot of companies in India that are far more employee-focused than we are. I have to be frank, however, that focusing on employees, by itself, does not lead to employee empowerment, employee engagement or employee enablement.
Because if you are pampering the employee, if you are giving all the delights and benefits to the employee — without empowering him, without enabling her and without engaging him or her — I don’t think it is in the interest of the employee and the organisation. This kind of culture would not focus on transforming talent, developing intrapreneurs, unleashing employee potential to the fullest. And then equipping people with the necessary tools to help them put their ideas into implementation so that they can generate delight for the customer. It is like us as parents pampering, delighting or giving the best we can for our children. Sometimes the best that we should do for them is, basically, to get them to stand on their own feet, to do things on their own, to find the tools they need, to find the motivation from within and to be empowered to take decisions, rather than coming back to us continually for guidance and support.
HCL deployed some of the thinking in Blue Ocean Strategy, the 2005 book by W. Chan Kim and Renée Mauborgne. Can you share how that happened?
In 2005, we as a company looked at the market and found that we were getting into an increasingly commoditised space and we needed to differentiate ourselves. ‘Blue Ocean’ is a classic strategy for us to differentiate ourselves in an already crowded market. We chose areas where we are competing against the biggies, and we said this is where we need to differentiate ourselves. When we looked at the market, we found it was increasingly employer-centric; we recognised ourselves as being the same way, and we said let us see how we can turn this around. When we looked at employee recruitment year on year, we found that increasingly the Gen Y workforce were coming in and very little was being done to really engage, enable or empower them to be more productive.
Using a diagram, we drew on the X axis the value we provide customers (from low to high) and on the Y axis, the cost or effort required to provide value (again, from low to high). Then, we started populating our own grid. As the Blue Ocean authors would say: eliminate, reduce, raise or create. Each one of our business lines learned to eliminate those things that are low in value and high in cost or effort, to reduce those things that are low in value and low in cost and effort, to increase or raise that which is high in value and high in cost or effort and to create that which is low in cost or effort but high in value.
Where did that analysis lead you?
Overall for the company, what came out as a ‘raise’ was this issue of employee empowerment, employee engagement and employee enablement. These E’s are high in value for the customer and high in value for the employee. But, at the same time, they are high in cost for the organisation. If I have to empower a relatively junior person, there is a risk in that he or she may make a mistake and that can prove costly for the organisation. So, empowering is actually a very costly exercise for the organisation, as is enabling and engaging. But we raised them well above the industry standard because they were seen to be high value by the customers and by the employees themselves.
Levels of engagement among employees in companies in the West and throughout the world are actually very low, aren’t they?
Absolutely. If you look at so many of these organisations, you will find abysmally low levels of engagement, anywhere from 15 per cent to 17 per cent. A worldwide study by the Gallup organisation found that, annually, the cost of disengaged employees for the US economy is $26 billion. And this was only among the organisations that participated in the survey. So $26 billion is the cost of what we call ‘quit-but-stay’ employees. They have mentally quit, they’ve emotionally quit, but they’re physically staying on in the organisation.
How has ‘employees first, customers second’ affected employees in terms of engagement? Does everyone rally to this motto?
We have found that employees fall into the categories of transformers, fence sitters and 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 organization’s vision, mission and values. Then, there are 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 employees first, customers second. I don’t know if this will work or not, so I want to wait and watch.” Then, there is the third category of people, the lost souls, who just spread negativity and don’t care if they miss out on the opportunity being offered to them.
Recession can reduce employee productivity. Has the current business environment affected your philosophy?
Companies can maintain productivity by giving employees power and responsibility and endowing them with various tools to excel. They’ll feel more responsible, committed and more valued by the organisation. That is a sound approach (in fact, the best approach) in any economy.
Given current economic challenges, what specific measures are you taking at HCL?
The current environment has increased our focus on utilisation and customised training programmes. We have also introduced a number of new initiatives to allow employees to enhance their skills. For example, following our ‘blue ocean’ strategy, our goal has been to find and create new markets and find opportunities in new geographies. Operating in new markets has its challenges, but we also have a number of programmes that are customised to the needs of a region, which will assist employees to excel.
For instance, the Cultural Sensitisation Academy enables employees to work effectively with different types of people and, at the same time, recognise and appreciate the cultural differences within their own organisation. As we move into newer geographies and customer bases, we will invest more in creating new academies. For instance, we have just created one academy in the insurance practice called the actuarial science academy. We realised that just having an insurance specialisation is not good enough — we needed to have a micro-specialisation in the science of probability.
What other growth opportunities are you offering employees?
Our Learning Management System reaches employees, irrespective of time and geographical boundaries. The e-learning portal, iLearn, is a one-stop shop for all training programmes. Employees can simply log in and register themselves for the course they wish to join. We have also put together our Top Gun Academy, which is a next-generation leadership development programme. People are selected for this academy on the basis of both potential and performance; but potential is given more preference because a person may be performing very well in a particular role, but if he or she does not have potential, scaling up to the next level will be difficult.
You also took the standard 360-degree performance review and added some innovative changes. What were they?
At HCL, we make the standard 360-degree appraisal process for all the top management open to review by any employee in the company. Based on my appraisal, I draw up an individual development action plan for next year; and I send this out to my circle of influence, all the people with whom I work directly and indirectly. This way, I hold myself accountable to everyone I work with. Accountability to the employees is what we practise. In this way, 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, our top management is completely accountable to all the employees. This creates an environment of trust through transparency.
Is there a way to monitor how employees feel about their own level of engagement and interest?
We use a unique learning assessment tool called EPIC, which stands for Employee Passion Indicative Count. We believe that every individual is motivated and driven by one passion or another, such as challenge, diversity, specialisation or tangible rewards. To find out what drives our employees, we designed an instrument that measures people’s passions or, rather, helps people know what their passion drivers are. With this instrument, which is rolled out once per year, people can measure how they have improved or grown in their passion.
It comes back to engagement, doesn’t it?
You cannot build a learning organisation unless employees are engaged, and that means more than just interested. I have three things that I recommend to any organisation. First, get top management ownership of the idea of employee engagement and empowerment. Second, make sure that employees at lower levels are motivated to learn and participate in the engagement effort. And third, try to get some immediate demonstrable results, some early wins, so people maintain their interest.
Learn more about Anand Pillai (or contact him) via http://anandpillai.in/blog/.