Where is value created in an enterprise?
Value is created in the last two feet of a transaction. The space between the employee and the customer.
The Journey of HCL
In 2005, HCL Technologies of India needed a transformational change. New CEO Vineet Nayar decided to make a statement. He set out a new strategy called, “Employees First, Customers Second (EFCS).”
Vineet understood the importance of interactions between front line employees and the customer. He calls these 24 inches the “value zone.” The priority at HCL became: Employees first, customers second, management third and shareholders last. His employees on the front line were the key to the turnaround of HCL. They were the true custodians of the brand and drivers of customer loyalty. Nayar want to shift the focus from the “WHAT” of what HCL offered, to the “HOW” of delivering value.
Putting Employees First
HCL decided to turn conventional management upside down. They inverted the pyramid and placed employees first. This wasn’t just lip service. Vineet engaged in a number of changes that reinforced the new direction. It was a strategy that Vineet called “Blue Ocean Droplets.” Inspired by the book “Blue Ocean Strategy” these droplets are the tangible changes on the journey. They are beacons along the voyage. They help drive employee engagement and reinforce culture. Nayar drew his inspiration from a leader like Mahatma Gandhi and his symbolic salt walk.
Here are some of the “green goldfish” changes HCL made:
Opening the Window of Information
HCL (#809) put together an online forum for employees called U&I. Employees could ask any question to the senior team at HCL Technologies. It was an open site where everyone could see the question, the questioner, and the answer. Employees responded favorably as noted by this comment,
This is the biggest change we have seen at HCL in years. Now we have a management team that is willing to acknowledge the dirt.”
Why open the window of information? Vineet uses an analogy in his book of “The Amsterdam Window.” Having previously lived on the Herengracht (“Gentleman’s Canal”) in Amsterdam, I can attest that these windows are immense. They are a throwback to the modest Calvinist period when subtle expressions of wealth, such as being able to afford to pay the highest window tax, were favored by the rich. In the words of writer Joanna Tweedy,
Today, the centuries-old glass, beautifully imperfect, frames the olive-green waters outside and lets natural light, and the eyes of curious tourists, pour in.”
While visiting Amsterdam, Vineet asked his friend, “Why so large?” The friend mentioned all the obvious reasons like letting in light and enjoying the view of the canal, but then offered a much more interesting answer… “It keeps the house clean.” It turns out that the bigger your windows, the more glass you have, the more visible your dirt will be – to you and to everyone who visits or passes by. In Vineet’s words,
If you can see the dirt, you will be much more likely to get rid of it. A transparent house has a dramatic effect on the culture inside.”
Trust Pay
Vineet developed a clear point of view on compensation and recognition during his twenty years with HCL. “The industry used to pay 30 per cent variable compensation to the employee linked to the company’s performance.” He found this idea quite ridiculous, because with jobs such as a software engineer, you have no meaningful in?uence on the performance of the company. So HCL turned that amount into ?xed pay – “trust pay.” It allowed HCL to start focusing on the value employees were creating for the customer.”
Open 360-degree Review
To help invert the organizational pyramid, HCL (#938) opened the 360-degree performance review process to all employees who a manager might influence— and allowed anyone who had given a manager feedback access to the results of that manager’s 360. This practice increased participation, empowered employees, and made the 360 review a development tool, not an evaluative one. (Source: HCL)
RESULT: These changes have made HCL one of the fastest growing and profitable global IT services companies. In addition, according to BusinessWeek, HCL was considered one of the five most emerging companies to watch out for.
TAKEAWAY: Actions speak louder than words when it comes to putting your employees first.
Today’s Lagniappe (a little something extra thrown in for good measure) – Here an interview with Vineet by MIX TV:
The examples in this post were taken from the Green Goldfish Project. The Project is a quest to find 1,001 examples of marketing lagniappe for employees. Green goldfish are the little signature extras given to employees. They help differentiate a company, reinforce culture, increase retention and drive positive WoM. The book, “What’s Your Green Goldfish?” will be published on March 29, 2013.
