Employees First, Customers Second

That is the core philosophy of HCL Technologies and the title of the new book by its CEO, Vineet Nayar. It is a title very similar to one of the key books that influenced Happy Ltd from its earliest days: The Customer Comes Second by Hal Rosenbluth.

HCL is one of the leading Indian IT out-sourcing companies and employs 55,000 people. He took over as CEO in 2005, when he felt HCL was slipping - only growing at 30% a year! He used the philosophy of Employees First, Customers Second (EFCS) to radically change the culture, empower the staff and deliberately reduce the power of managers and of himself. Some examples:

Transparency: HCL introduced full transparancy of the performance of every unit in the company. Seeing their benchmarks, and being able to compare their performance with others, increased shared learning and provided powerful incentives to improve.

Internal Service Tickets: Most IT support companies have external service desks, with tickets and response times. HCL introduced this for all internal services, like HR or finance. The effect was to reduce the involvement of managers (who'd previously been called on to get another dept to respond) and improve response. especially when the target became not quick response times but reduced tickets.

Beyond 360 Degree Evaluation: Most big companies now get managers to be evaluated by peers and by some of those they manage. HCL's innovation was to open this up, so you could evaluate anybody in the company that you came into contact with. As well as the widespread feedback, the unexpected result was that managers began to be judged by how responses they received. It became a measure of their circle of influence.

Sharing CEO Problems: I love this idea. Vineet decided to create a portal to share the problems he was having difficulty solving as CEO and the challenges he saw for the company. He involved the whole company in understanding his role, the big picture and in coming up with solutions.

Employee Passion: HCL decided to survey not just employee satisfaction (for which the company was ranked no. 1 in India in 2009) but also their passion, and to share the results. People got to think about what drove them to act passionately and how they could best leveredge this at work.

Employee First Councils: To get people to embed their passion, Employee First Councils were created. Initially on subjects like health and hygiene, art etc but were extended to core work areas. Now there are 2,500 Councils - each with elected leaders driving forward change throughout the company and, as Vineet explains, pushing control away from the office of the CEO and the conventional hierarchy.

Customer-Employee Value portal: This portal is for employees to put forward ideas, which custoemrs then read and feedback on - leading directly to improved ideas and improved service.

Make all manager plans public: Previously the 300 most senior managers had prepared their plans for the next level up. Instead HCL published them all to all staff in the MyBlueprint portal, so they could see and compare them. As well as increasing transparency, Vineet comments that it led to much more work being put into getting the plans right.

Thriving in Difficult Times: Faced with the challenge of the 2008, and seeking to avoid wholesale layoffs, HCL reached out and asked its people how they should respond. From the massive response, the HCL management drew up 15 initiatives which were to result in "huge" cost savings and enabled the company to continue to grow. When Vineet asked their customers why they thought this had happened, they responded: "Your employees made the magic happen".

And it was the Employees First, Customers Second philosophy that made this possible. Indeed one impressive aspect of the story is the way the philosophy is shared with customers - explainign to them why HCL puts its philosophy first. Rather than putting off customers, it has actually led to many adopting some of the same ideas.

When I tell the Happy story, people often ask if the ideas of trust and freedom for staff would work in a large company. HCL is another example of how these kind of ideas work brilliantly in the largest of enterprises.