Vineet Nayar, vice Chairman and CEO of HCL Technologies, is one of the eight Indians in Thinkers50, a global listing of world's best business minds. In an interview with Alokesh Bhattacharyya and Anand J, he talks about employee empowerment.
On the employees first philosophy
I fully believe that the trust between the employees and the management is at its poorest. The only way you can bring innovation to the centre stage of the company to grow faster in the economic turbulent time is to get innovation going at the bottom of the pyramid to employees.
If employees are the true value, you are creating for the customers. And employees are the true answers. So the bottom of the pyramid innovation, which you need to grow faster. What choice you have other than putting employees first. You actually have no choice.
So only by putting employees first would you be converting the management and managers and management of the company to be in the business of enthusing and encouraging and enabling the employees. Then can you create an organisation architecture which will create higher value for your customers and hence grow faster.
The Japanese did it in 2008 and the Japanese did it in the eighties by transforming the culture on how they manufacture the cars, they outstripped the Americans in automakers. So today the choice is not on what you do, because there is lot of "me too" in what you do. There is a great opportunity in how you and your company and piping the competition that is the reason employee first make tremendous sense.
On how employees first applies to other companies
It is very interesting. I was presenting my employee first philosophy at the world economic forum. This gentleman stood up and said, "Vineet, what you saying is absolutely correct" and you know the old philosophy and this is a family run company and whole philosophy of the family run companies in India were basically to treat every single person as their family member.
And the reason why family run businesses survived were because everybody is treated was a family member and Shree Cement had the highest productivity in the country today...it is because he treats every employee as a family member. So all problems are his problems and his is a father figure in that company.
And therefore in my mind, the whole concept has nothing to do with product services R and D, country, culture. It has lot to do with why would you as a person go to church on Sunday and spend money on petrol and feel good about it. And why on Monday you will come to a company - get paid to come, including the petrol - and still feel bad about it. And the reason is that you are not engaged, not enthused, not motivated and not aligned. Therefore, you working at only 25 percent of your capacity.
So, if you can increase employees productivity from 25 percent to 75 percent, irrespective of the business you are in you will see a significant rise in the fortunes of the company. That is the simple logic.
On whether companies can balance an employees first approach without sacrificing customer centricity
Every customer tells me that, whichever company says customer first, those are the companies they disbelieve first. Because, today customer first has become a slogan.
And the customer ask this of everybody as to how are you going to deliver the customer first experience. So I don't know if you had the opportunity of travelling American Airlines and Singapore Airlines. They both have Boeing 777. But one has a motivated set of employees and another has not so motivated set of employees. And the experience in both case differed dramatically. Therefore, say that American Airlines never say that customers don't come first. It is hard to say that they don't take customers first.
I met a very senior executive at American Airlines recently. And he said to me that, whenever... I told him this. I said, 'What can you do to motivate the employees." Fortunately or unfortunately, I take 4 flights to Chicago every month. Two going up and two going down. So, I was very keen that I can help improve my state of affairs on that flight. And his answer was that, anytime, you have a problem, drop me a mail as to who(m) did you have a problem with and we will take strict action.
And I said, "Man, you are not getting it. It is not about my dropping a mail after the experience, it is about you doing something before the experience."
For him, the customer was so important, he was willing to respond to my mail within one hour of receiving it, because I was a very important customer. His response to me of not fixing this employee moral issue or the employee quality issue or the employee service issue. But to say, Vineet, you are important is not fixing my problem.
And most customers think like that. Most customers would prefer not to be told they are number first, but to experience the uniqueness of being really important and that can only happen through employees.
I go to a restaurant. And this is a Chinese place in Noida called Red. I don't know… if you've been there? This is a chef and he is a Chinese chef. And the moment you go there he recognises you. He does everything, comes and meets you … and every single employee and he leads from the front and every single of his employees works there to create a unique experience by remembering your name, by remembering what you eat and all that stuff and that is one of the few places I do not eat by the menu. There are lots of people who do not eat by menu. But the employees out there create such an experience you want to go back and back and again and again. So that Chef has motivated these people enough, that each one of them is like a chef and creating a unique experience.
So that is why, I am saying, the more people...
On transitioning from a customer first to an employee first workplace
Two answers to that. The first is to create the architecture of transformation. Number two is four baby steps. The architecture of any transformation is to learn from Gandhi. Right, what did he do?
The first thing he did was, he spent enough time demotivating ourselves, educating us that we are slaves. It took a long time for Indian population to be convinced that British Raj was bad for them. And he spent enough time to create that dissatisfaction, that British Raj is bad for us. And he did not put a picture of freedom till he got that dissatisfaction in place.
Then he created a vision of what could a freedom look like and Nehru did that and Gandhi did that.
If you look at the songs of those days, which Manna Dey came and all these guys came and painted a vision of free India. So it was not just freedom, but a vision of free India, but a vision of India with people thought that everything will work much better than it is working tomorrow. So dissatisfaction with today, a vision for tomorrow, which is so compelling that you jump up from the bed and go after it and then third, small experiments to move from here to there.
Dandi march, burning foreign clothes, in a mutiny here and there, Bhagat Singh's contribution in the cause: all those were what I call small experiments, incursions happening all over the country which eventually led to a revolution and eventually led to Britishers realising that they need to exit this country. That is what I call the social architecture of change that you need to, a) look at the mirror and say.... So you need to create dissatisfaction, you need to create a vision and small experiments.
And now, four baby steps.
First baby step is look in the mirror and create the dissatisfaction. We spend enough time in telling our employees, how great we are. And everybody is in the business of fooling each others on greatness. If you don't tell a problem to the employee, then he is not going to be in the business of fixing the problem. So, the first baby step is look in the mirror and be honest and share your problems with your employees. Don't share how good you are, but share your problems with your employees.
The second baby step is make the enabling functions, enable. Today, HR, Finance, quality, CEO office, marketing head office have become pests in the life of employees. They disable and don't enable. So by reversing the accountability, by small tools which we implemented within HCL by making the evaluation of managers in the enabling function behind the employees, you can make the enabling function to enable, rather than command and disable. That is the second baby step you can take.
The third is by handing over by inverting the organisation pyramid and getting your appraisal as CEO, done by your employees. And asking all you management team and managers that their appraisal will be done in a reverse 360 degree fashion. So that people really believe that you mean business. If our prime minister is willing to fight an election and lose, why is it that, you and your managenment teams including CEOs willing to fight an election, so called, or get feedback from the employees and get humiliated, if the feedback is not good. So that is the third thing you need to do, that if you really believe in enthusing, encouraginag and enabiling the employees, then give the chance of employees to voice their opinion in a public forum, where the results will be there for everybody to see.
And fourth baby step, which is very important, which I think, Gandhi did well, if we handover the execution to the employees. He handed over the execution of the revolution to the aam admi, who was working with him in the street. And they were only the mass momentum, which you also see with Anna Hazare today. Only the mass movementum gives you the ability to execute. So, tell the employees, this is the problem. Tell the employees, that I am accountable to you. Tell the employees that all the enabling functions will be accountable to you. But tell the employees that you need to run the risk. This is about creating a high performance culture. This is not about pizza parties. This is about growing faster than our competition. This is about everything, but you need to perform. You are the person running the relay race. The baton is in your hand and you need to run and to make sure that employees understand that you are in the business of enabling that risk.
On the impacts of employee first within HCL
If you see, my management team has remained the same, and today we are growing twice as fast as the industry average. So the people are the same. What we do is the same. You have not heard of an apple kind of idea coming from HCL. By just changing the culture of the organisation, the social architecture of the organisation, and inverted the pyramid of the organisation and implementing employees first. We are growing at twice the rate of twice the growth as industry average. And we are number one in customer satisfaction. We are number one in employee satisfaction. We are the only Indian company in the Thinkers 50 or Fortune dream list. In both these cases, we are the only non-product company. Everybody else is a product company. So for a non product company to be known for innovation, it also contributes to the brand.
So, I think, this has worked wonders for our performance. People find it easier to get higher performance from their teams.
On two major trends that are transforming the world
Major trend number one is Gen Y in the workforce. And mega trend number two is the impact of social media on your business. So, Gen Y is all about openness, transparency and lack of command and control and collaborative work style. And social media is exactly the Gen Y architecture. So if your organisational structures are in pyramids, you will die. Your organisational structure has to be thought about as digital neural network. Even if you take a human body it is neural network which is many to many communication. So, you have no choice, but to rearchitect your organisation which looks more like Facebook, which is not hierarchical pyramid, so that it can get the best out of Gen Y.
We are not thinking about changing the social architecture of the organisation and creating a more digital entity where there is many to many communication and there is many to many working together, many to many reporting, you will die a pyramid.
Let me give you another example. The maximum value is discovered between a buyer and a seller is in stock market, where they mutually discover value. And it is not governed by a pyramid command and control structure. So the global trillions worth of value that is created stock market, which is non-command and control. Why would you not bring a stock exchange and argument and align your thinking within your organisation. And to test the real value of employees and ideas. And why would you depend on the pyramid kind of organisational structure to real value of employees and ideas. It is all wrong.
I may not have all the answers, but what Facebook is teaching us today is and what the stock market is teaching us today is that pyramid organisational structure is not the way to move towards future. The pyramid organisational structure and the stock market structure answers all the questions, with respect to security, compliance, regulations, it answers all the questions. At the same time, it creates trillions of dollars worth of value. Those are the things against the social architecture of pyramids, which were meant for egoistic managers is not going to survive in the future.