When we read and hear about the most innovative companies, we're often told they put the customer first. But Indian services giant HCL Technologies has succeeded by putting its employees first. Vineet Nayar, HCL's CEO and the man who introduced the Employees First, Customers Second management philosophy to the company in 2005, said it works because employees feel they have a real stake in their employer's fortunes.
The approach worked well during the recent global recession, said Nayar in a Q&A with strategy+business (registration required). HCL grew 23 percent and increased global market share by 21 percent during a time when many companies were laying off employees to cut costs. HCL went to its employees and asked for ideas to help the company make it through the recession. Said Nayar:
We had thousands of ideas coming in, and we implemented them. Most of them were operational: There were no new products, services, geographies, or contracts. ... Our employees felt they were a part of everything we were doing, because of our inclusive approach. Even if it may take a bit longer to arrive at decisions, this approach helps ensure that implementations are smooth and that initiatives are sustained after the initial hype.
HCL eschews the traditional performance review in favor of a 360-degree appraisal technique in which any employee can offer feedback to any other employee, including Nayar himself. The feedback is posted on an internal intranet, where all employees can view it. Though this kind of transparency likely wouldn't work for every company, it seems to be a positive tool for improvement at HCL.
The transparency extends to other areas, as well. Nayar writes a blog called "You and I," in which employees are encouraged to ask questions for Nayar to publicly answer. Discouraged by the number of negative questions he received initially, Nayar held an open house with employees to find out if such questions were bad for morale. Said Nayar:
Their answer was interesting. They said it is good to wash dirty linen in public, in this case on the blog, because it builds trust. There are no rumors. We discuss everything openly and honestly. We don't always have solutions to problems, but at least we expose them. Out of that, I began to share the financial numbers and give my perspectives, and the tenor of the blog comments began to change.
Sharing detailed financial performance data for each business unit with employees accomplished three things, Nayar said. Employees began asking their managers a lot of questions. It initiated a lot of action. There was a single version of the truth, without multiple interpretations. HCL employed the balanced scorecard approach to "lay this version out and relate it to what people did every day," Nayar said.
I think transparency is generally a good thing and appreciated by most employees -- at least those who want to do a good job. Earlier today in a post on interactive voice response systems and contact centers, I discussed a program at American Express that lowered employee turnover, boosted sales and increased customer-satisfaction levels. One aspect of the program is sharing responses from customer-feedback surveys with contact center agents within five to seven days after a call, making it available through a reporting system that shows their recent customer-satisfaction results, their aggregate results and how they stack up against peers.