Employees first ! Supporting those who really create value.

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Summary : “Reverse the pyramid”…other words may be used to scare less but it’s concern shared by many organization. It’s, in some ways, necessary to face the increasing complexity of the world that surrounds us but it’s also the obsessive fear of many organizations and managers used to the command and control model and not willing to go out of their zone of their comfort zone to improve what’s happening in the value zone. Value zone ?  As a matter of fact that’s because value is created at the field employee level that the command chain should turn into a service one. But, beyond exhortations that are easy way to drive change while being surprise it doesn’t work it’s a hard work that consists of reversing flow, redesigning some processes and transfering responsabilities that has to be done. That’s was was made at the Indian compant HCL and the story is told by Vineet Nayar, HCL CEO, in his book, Employees First, Customers Second: Turning Conventional Management Upside Down. Here are my takes.

One year ago, in July 2010, I read attentively and bookmarked this blog post by Gary Hamel where he was telling the incredible management experience that people just lived at HCL, an Idian IT service company. Spurred on by its CEO, Vineet Nayar, they seemed to be on the right way to meet a goal that look unreachable for many : reversing the pyramid to make the organization more successful.

Here’s what I highlighted at that time :

– Transparent Financial Data. Vineet realized it’s hard to feel empowered if your manager has a lot of data you don’t. With this in mind, HCLT’s IT team created a simple widget that gave every employee a detailed set of financial metrics for their own team and other teams across the company.

– U&I. Early on, Vineet and his leadership team set up an online forum and encouraged employees to ask tough questions and offer honest feedback. Nothing was censored on the “U&I” site; every post, however virulent, was displayed for the entire company to see.

– Service Level Agreements. Powerful corporate departments, like HR and finance, often seem more interested in enforcing blanket policies than in making life easier for employees. When Vineet would ask front line employees, “What have the enabling functions done to help you create value in the value zone?”

-Today, HCLT employees are able to rate the performance of any manager whose decisions impact their work lives, and to do so anonymously. These ratings are published online and can be viewed by anyone who has submitted a review.

As the CEO, Vineet was being asked to weigh in on hundreds of unit-level plans each year. Recognizing the limits to his time and personal expertise, Vineet challenged his colleagues to develop an online, peer-based evaluation process. The solution: MyBlueprint. In 2009, three hundred managers posted their business plans, or “blueprints,” online. Each document was accompanied by an audio presentation. More than 8,000 employees were then invited to jump in and review the plans.

Three years after launching this concept, 20% of HCLT’s revenue is coming from initiatives launched in these communities of interest.”

Today, Vineet Nayar tells us more in a book called Employees First, Customers Second: Turning Conventional Management Upside Down. Rather than summarizing a book that’s very easy to read, I’m going to highlight what seem to me being the key points of his approach and share a couple of comments.

 

• Why employees before customers ?

Any program, any strategy should be customer centric to be fashionable nowadays but Nayar tells us that the focus has to be put on employees. There’s a reason to that. Declaring that customers are more important than anything else if employees have not the means to serve them is, at  best, a smoke screen and, at worse, very deceptive if customers believes the promise while nothing changes for employees. Starting with employees makes sure that things are really ready to happen in things are improved “de facto” for customers that will feel and see the change…and will eventually change themselves to make the most of this new opportunity.

It’s interesting to compare this approach with the HERO one, proposed by Forrester.

• Why employees ?

Because they are the ones who create value. Should I remind once again that value is not created by a person or a group of people in the organization, isolated from the rest of the world, but in the zone were the organization meets the customers. That’s only once value has been created for the latter that, mechanically, value is created for the organization too. That’s why Nayar is focused on what he calls the value zone. The farer people are from this zone the less they create value (what does not mean they’re useless…but need to be focused on helping those who are in the value zone). The conclusion, that may be hard to listen to for some, is that even if it has a use for some other things, the hierarchy creates no value and nor does the CEO).

• Management and CEO ? A role of support (among other..)

Consequence of the above lines, the management line should have only one concern : make sure than those who are in the value zone are in the best context to be successful. It’s all about all the current discussions on the future of management, the service oriented organization, because managers have to get out of their “push” logic to serve others.

• Going beyond words

Make people responsible, empower, make things more flexible are very common words and expectations today. But the gap between words and actions is often wide and employees who want to turn the corporate discourse into actions often have to fight against their own organization…and often give up. Nayar did not try to implement a new management model in an unchanged system with old processes but tried to make everything aligned and consistent. He didn’t stay in the middle of the ford. Result : managers are committed to deliver real value and services to field people and a system was set up to allow anyone who did not get the expected support from the organization, who was handicapped by internal processes, to request explanation from the person in charge, the latter having to answer. In case of no-answer or if the person does not have anything to answer, the question is forwarded to the superior and so on. In the end, it allowed to realign processes and internal services with employees’ needs and a huge improvement of the quality of service followed. Add 360° appraisals and the fact nearly everyone shares his evaluation sheet with all employees (even if it’s optional), a CEO that shares his concerns and questions (and takes the feedback into account)….

• What about technoloy ?

What I like in this case is that it’s a great example of organization transformation that avoids the fashionable discourse on social networks, communities etc…Phew ! There are, in facts, a couple of initiatives supported by tools but the role of technology is limited to a few paragraphs and technology is used on an opportunity basis, to support a new processus or operating model that is implemented to become THE way things are done in the company.

Maybe that’s the reason why HCL manages to provide quantifiable results and hard numbers for their communuties…that are called councils there.

 

• How to do the same ? Trust, transparency and responsibility

The path drawn by Nayar is not hard to understand but needs, among other, courage to be followed. What is something that can’t be bought on the market, to the despair of many managers or execs. It’s easy to understand that it all relies on the fact that employees become more responsible and, in fine, make them change drivers themselves. To get there, a hard work has been made on trust. And, to make trust happen, it all started with transparency. How to change, convince and engage employees if no one looks the reality in the eyes, if no one tells what he sees, feels or think, only way to build a shared vision.

• He’s a making money with such an approach?

Since the beginning of the program, not only HCL has become leader in its country, has more consideration from customers, closes bigger deals with bigger customers at managed to become a strategic partner for some of them instead of being “a provider among others” before. They even kept on growing during the crisis.

Happy reading !

Get “Employees First, Customers Second: Turning Conventional Management Upside Down” on amazon.