Employees First, Customers Second

Feb. 14, 2012

Reversed leadership style produces results.

India's fourth-largest software services firm and manufacturer, HCL, posted a 43% increase in quarterly net profit in the second quarter and also added 2,556 employees. The company signed 18 large contracts with a total value of more than $1 billion in the quarter, adding to customers such as IBM Corp. and Microsoft Corp.

Their secret? According to CEO and vice chairman, Vineet Nayar, it's their employees. In his book, "Employees First, Customers Second" he explains that it was when the company "turned the organization upside down" its standing in the marketplace strengthened.

"We made management and managers, including those in enabling functions (such as finance, human resources, etc.) accountable to those who create value," Nayar says. "The greatest impact of this EFCS (employees first, customers second philosophy) is that it unleashes the power of the many and loosens the stranglehold of the few. It increases speed and quality of innovation and decision-making where it matters most -- in the value zone -- every day."

When Nayar's customers would rave about his employees, he realized that "they were the ones who did the real work. They delivered our products and services; they worked through the problems. They were the value we offered customers. Without them, the company was nothing but a shell, layers and layers of management or aggregators with controls and processes that had nothing to offer to the customer."

Nayar details the company's journey of creating a culture of change. In his book he explains how the company progressed through a sequence of phases that include: looking in the mirror, creating trust through transparency, inverting the pyramid and transferring the responsibility for change to all. He also discusses recasting the role of the CEO as well how as to build a structure for change and how to renew the cycle of change.