The Future of Management... From India

Over the past decade we've witnessed the rapid maturing of Asian and Indian industrial companies from simple low labor cost assembly operations to manufacturing powerhouses with advanced technologies.  Last September we blogged about a BusinessWeek analysis on India, which described how many Indian companies were rapidly adopting Lean principles.  The Chairman of Toyota has even said that Indian auto companies may surpass Toyota due to their focus on quality and waste reduction.

But the U.S. has always held the edge with leadership theory, right?  How does Peter Drucker, Tom Peters, Jack Welch... and Vineet Nayar sound?

Mr. Nayar is president of India's 30,000 employee HCL Technologies.  CNN/Fortune has an interesting article on his rather innovative approach to management, where employees come before customers.  You heard that right... employees first, then customers.  Every employee ranks their boss, their boss's boss, and at least three other company managers on a 1-to-5 scale.  Then (omigod!) the results are posted online for everyone to see.  Employees also create "action tickets", and participate in a very public forum where they discuss perceived problems with bonuses, cafeteria quality, and even uncomfortable chairs.  Tickets can only be closed by the employee, and department managers are graded by how many tickets their teams are creating... the more the better.

Mr. Nayar realizes that satisfied and secure employees can best focus on customer success.  He is also thinking outside of the box to solve a problem many Indian companies have: it is very difficult to retain the best and the brightest.  His approach is working.  The past year has been difficult due to several of his rather unorthodox changes, however during that time employee attrition has been cut in half and the stock price has doubled.  HCL has formed new strategic alliances, and is embarking on a rather innovative approach to shared risk with customers. 

The point is that Indian companies aren't just innovating manufacturing methods,technologies, and product design.  Their leaders are also re-thinking leadership and management to create energized creative teams of employees focused on customer success.  Thinking outside of the box is risky, but reward is a function of risk.  Contrast that with the results of the ongoing epic struggle between labor and management at GM and Ford.

Detroit continues to operate under the delusion that new product designs will help them compete against Japan.  Japan may soon become the least of their worries.

Comments

[Keerthi Abeywickrama]

Mahatma Gandhi made it clear “customer is the most important ........", and it will probably hold true till next ice age.

Mr. Nair reached his conclusion "that employee is first.... not customer” by applying Theory of Constraints, within confines of his business model:

Quote: In January HCL [Mr. Nair’s company] won one of the biggest Indian outsourcing contracts ever, a three-year deal, reportedly worth $300 million, with European electronics retailer DSG ((DSGI.VX)), best known for its Dixon's stores in the UK. Un quote.

Mr. Nair is upholding customer’s best interests, within IT BPO model.

This is a good brain twister to understand Lean and TOC both.

[Razib Ahmed]

employees come before customers- is a good concept and this should be the case because if your employees are not satisfied then they will feel no motivation to satisfy the customers. On the other hand, if the employees can feel satisfied and happy in a company and can feel that they are an essential part of the company then they will try with all their heart to satisfy the customers as the customers bring profit for the company and for them.

[Venkatesh Sridhar]

Hi,
I just came across your article today, well I think you hvae fallen for a marketing gimmick, there has been no reduction in the employee attrition at all, in fact it has sped up, how do I know? Because I am part of HCL.

This whole employee first thing is about areas in which HCL can gain benefit from the employees and when it comes to providing benefits to the employees HCL is nowhere there in the leadership position.

HCL's work culture is dynamic no doubt about that and I have a good time here. But, my point is employee first ain't any new thinking. It's just a rehash of the people first policy. It's different to have something that is a marketing buzzword than something in real.

You want a true example of Employee First, read 'Maverick' by Ricardo Semler. That's true employee first, because you have empowered them.

[Hello]

Sridhar, can u tell what makes HCL's culture dynamic. As i can not see anything dynamic about the culture here, it's very much like any other INDIAN MNC (rotten). Anybody aiming to join HCL, please do not go by brand.