KARL MOORE: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to speak to Vineet Nayar who is CEO of HCL Technologies, one of the largest I.T. outsourcing firms in the world.
Your bestselling book, Employees First, Customers Second seems to turn one of the central ideas that we teach at our MBA program on its head. What is the central idea of your book?
VINEET NAYAR: I don't think it actually turns it on its head, it says the obvious. The question is "What is the core business of any corporation?" and the answer is to create different shared value for its customers. The second question is "Where does that different shared value get created?" and the answer is in the interface of the employees and the customers. Hence we ask if the employees in that interface create a different shared value, what should the business of managers and management be? The answer to that question is the business of managers and management should be to enthuse and encourage employees so that they can create a different shared value: Enhance employees first and customers second.
KM: So, in this model, the customers also win as well?
VN: I think the customers win, the question is any company that says "customer first" does not know how to deliver that promise. All I am saying is by employees first you can actually deliver your promise of customers first. If you do not put the employee first – if the business of management and managers is not to put the employee first – there is no way you can get the customer first.
KM: So what are some of the practical ways that you put an employee first at HCL?
VN: The trust between the management and the employees is amongst the lowest today in the world. The first thing that you need to do is create an environment of trust where the employees believe what you are saying and are willing to follow you wherever you are going. Therefore, by pushing the envelope of trust you can create an environment of trust. So that's the first thing that you need to do.
The second is you need to make all the enabling functions, HR, finance, and all these functions, the office of the CEO which all have enormous power with them, accountable to the employees as much as the employees are accountable to them. So we created an electronic trouble ticketing system where an employee can open a trouble ticket on any of these functions and they have to resolve these issues within a certain period of time and the ticket is only closed by the employee.
The third is to make the management and managers as equally accountable to the employees as the employees are and one of the initiatives we took was my 360 Degree [performance feedback]is done by 80,000 employees across the world and the results are published on the Web. That is true of 5,000 other of my colleagues and this is purely in development, this 360 Degree, which we use for development purposes but the very fact that you as an employee can rate a CEO and the results are published on the Web for all to see creates accountability for the managers and management, and creates a culture which unlocks a huge amount of energy in the corporation.
Those are three small steps of how you can make an organization which is stop-heavy into something which is accountable to the employees with huge amounts of energy which gets unleashed as a result.
KM: This has been Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for the Globe & Mail.