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. Its 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 Id like to focus. They created a system called Employee First, Customer Second (EFCS). The idea was partially to win back the work forces 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 weve learned, dissatisfied employees will move on or become apathetic. Both will cost company money. During this EFCS initiative HCL opened up the lines of communication and management made every effort to become as transparent as possible. HCLs leadership encouraged dissent while maintaining the companys 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 cant figure this out. Although weve read several case studies about these great companies, it still seems they are a rarity. Ive worked for companies that think theyre 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 Ive yet to work in a really innovative company that truly values its employees. Ive had managers that have been great to me, but its disheartening that there arent 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 weve seen there are companies that view their employees as team members rather than indentured servants. Its 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. Im 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 HCLs 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.

HCL Technologies was founded in the 1970s after the Indian government passed a law that discouraged multi-national companies from doing business in India. HCL was a successful hardware company during the 1970s and 1980s, but by the 1990s the industry had changed as the software and service markets grew in popularity and deregulation occurred creating increased competition from global corporations. HCL lacked differentiation and as a result of being a late entrant into the software/service markets they struggled to compete. HCLs turnaround began in 2004 when Vineet Nayar was appointed as leader of HCL Technologies. Vineet transformed HCL Technologies by changing the culture and business model. The company changed their business model to offer differentiated multi-service solutions that aimed to add value and transform their customers businesses. HCL Technologies also switched to going after big deals and abandoned two hundred smaller customers, which could be interpreted as a risky strategy. While HCL Technologies has begun to gain large customers, the problem of becoming reliant on big customers, is that if deals are lost huge profit shifts can occur. What interested me most about the case was the opportunities Vineet gave employees on all levels of the hierarchy, to help shape the future of the company. Giving teams of employees many of whom were young, the opportunity to work with the company president is a huge opportunity for those employees concerned. Initiatives like `Mirror, Mirror and `U&I where employees can give their opinions and ask the company president questions, makes Vineet more approachable and goes a long way towards

fostering higher levels of employee commitment. The `employees first, customers second phenomenon works well for their organization by focusing on the idea that employees that are given the opportunity to develop, are more likely to deliver increased levels of value to customers. It can be argued that this idea works because of who HCLs employees are. For the most part HCLs employees are educated and ambitious and want to go far. The same initiative may not work in a company where employees are working in low skilled jobs and arent so career focused. In the B case Vineet attributes the `employees first, customers second as the main reason behind the companys rejuvenation. I would argue that while it has helped, it is their differentiation and their ability to offer customers unique value-added solutions, improving their global competitive position which has rejuvenated HCL Technologies growth.