HCL Technologies (A)
The HCL Technologies case study is one of interest and hatred for me. While they made many solid business moves which will be discussed because of their inherent innovative interest, there is little I loathe more than off-shoring of American jobs. I will not get into the politics of that, but it is worth noting that these off-shoring engagements may or may not turn out well for the company that is trying to save money through them. Worst of all, it often drives customers to the competition. It’s been reported recently that these customer service and I.T. off-shored jobs are coming back to America because of the dissatisfaction of the customer. The amount of time it takes to work through issues actually raises the costs in many cases because of language and cultural issues. With that rabbit trail out of the way, here is the HCL story.
While HCL did a lot of things that could be discussed, they built one specific strategy on which I’d like to focus. They created a system called Employee First, Customer Second (EFCS). The idea was partially to win back the work force’s faith in them, and partially shock value to get them noticed. It worked well on both fronts. Originally HCL was the place to work because of their ingenuity and willingness to take risks. They also held the view that failure was not to be feared but was an opportunity to learn. As time went on and HCL failed to maintain their leadership in innovation, employees felt less satisfaction working there. As we’ve learned, dissatisfied employees will move on or become apathetic. Both will cost a company money. During this EFCS initiative HCL opened up the lines of communication and management made every effort to become as transparent as possible. HCL’s leadership encouraged dissent while maintaining the company’s vision and goals for the future. The CEO radically restructured the way most employees were compensated. Instead of paying them their base salary with nearly impossible to reach incentives, he gave them 100% of what they were to earn for the year with the expectation that they would perform. This brought in employees from their competition, and made HCL the place to be again.
As did some of the companies previously discussed, HCL realized the value of their employees. It seems pretty simple to me that happy employees are motivated and take pride in the companies for which they work. And those companies seem to always be at or near the top of their industries. This makes me wonder why more companies can’t figure this out. Although we’ve read several case studies about these great companies, it still seems they are a rarity. I’ve worked for companies that think they’re super innovative when they come up with things like “pay for performance” that are old unproven methodologies that most often create impossible goals and leave workers disgusted, but I’ve yet to work in a really innovative company that truly values its employees. I’ve had managers that have been great to me, but it’s disheartening that there aren’t more great companies out there. There are certainly companies that want to make a lot of money, but they do so on the backs of them employees instead of with their employees. This may sound lofty, but as we’ve seen there are companies that view their employees as team members rather than indentured servants. It’s our job, as managers to make sure this happens in our offices. Only when we start making our employees feel like they are the reason for our success will they really work to make sure we are successful. Apathetic employees do mediocre work for mediocre companies that have mediocre profits. We can effect change in that attitude and increase our bottom line, or we can stand by and allow the status quo and mediocrity to put us out of business. I’m all for the employee.
HCL Technologies (B)
The (B) section of the HCL case study did a lot to quantify the growth and change the company underwent after implementing the EFCS program. HCL actually got up and announced EFCS at a huge celebration the company sponsored event called “Explore and Transform.” During the closing the CEO explained the Employee First, Customer Second approach that was now well ingrained into their corporate culture. Some would think that just say the words Employee First, Customer Second would offend the customers, but it was quite the opposite. HCL even had customers come ask them how to implement such a program, because they had seen the positives the system had produced.
With the EFCS program firmly built into the culture, HCL closed ever increasingly huge deals and became highly publicised as a pioneer in IT outsourcing. Their attrition rate fell off the table compared to other Indian companies. While it was common for an Indian I.T. company to realize very high attrition rates that seem to increase over time, HCL actually saw theirs declines by 9%. This can be squarely attributed to the EFCS initiative, as can many of HCL’s improvements.
I could go on and on about the advantages of putting employees first, but I think the point is self-evident based on the case study. Put simply, happy employees make money for the companies for which they work.