A Maverick CEO Explains How He Persuaded His Team to Leap into the Future
This HBR article was written by Vineet Nayar, CEO of Delhi-based IT services provider HCL Technologies. The insights of this article are invaluable for members of the business profession as they can help them learn and gain value from applying these principles. Nayar formulated the “employee first, customer second” approach which has guided HCL into one of the most successful IT outsourcing business over the last ten years.
Factors in the global environment that influenced Nayar's need to create a more innovative organization
Nayar contemplated over various factors that necessitated HCLT to transform into a more innovative organization. First, although the revenues of the company had been growing at a rate of about 30% a year, HCL Technologies was losing mindshare as well as market share. Most of its global competitors were growing rapidly at higher rates of about 40% or 50% a year. This prompted Nayar to work out a plan of action that will help increase IT services produced by this company so that it would compete financially with its rivals in the IT industry. Perceptibly, this plan had to be rooted in a strategy of increased innovation, a vital variable for the growth function of the industry (Nayar, 2010).
Secondly, IT services industry was changing rapidly all over the world; its customers’ preferences had changed with them wanting long-term partners that would provide end-to-end services rather than work with undifferentiated service providers that provided discrete services. This necessitated changes in employment techniques into a unique management culture that would be in line with the preferences of its customers.
According to Nayar (2010), it was also perplexing that customers of IT services provided by HCL Technologies did not talk much about technologies, products or services, but they mainly focused their speech on HCL employees. This became a definite value zone that Nayar needed to work on by increasing the value offered by the company through innovatively perking up the interface that existed between customers and HCL's first line employees. An example was the need to reorganize the hierarchy of managers, an innovative measure that would help employees to add value.
Nayar's use of the five discovery skills and how he used those skills to create an innovative organization
The ability to innovate is a "secret sauce" for one to be successful in the business profession. Jeffrey H. Dyer, the author of The Innovators DNA, highlights five "discovery skills" that distinguish the most creative executives and that we can build upon to become great innovators. They include associating, observing, questioning, experimenting and networking (Dyer et al., 2013). These skills were the basis of the creative business strategies implemented by Nayar at HCL Technologies.
Associating is the cognitive skill of being able to make connections between seemingly unrelated ideas, questions or problems from a different field to come up with a new idea. HCL prospered by virtue of Nayar's ability to capitalize on the divergent associations of its employees, executives, and founders. Nayar was able to make synthesize and organize various intersections where innovative breakthroughs take place. Nayar talked to HCL managers, customers, and employees and even collected such information as the "Yes, buts" He took these suggestions and auctioned them. This helped him and his associates derive innovative strategies that would help HCL get from point A (a dire situation) to point B (the envisioned desirable situation).
The second discovery skill is questioning. It involves asking provocative questions such as “Why?” and “Why not?” and “What if?” The questioning attitude was innate in Naveet Nayar. He was able to raise new possibilities, new questions and regard old problems that existed at HCL from a new angle. Nayar achieved this through a suggestion and complaint system that ensured employees were able to lodge complaints and make suggestions and determine whether the resolutions were satisfactory. That is; they were able to question existing circumstances. Additionally, when collaboratively developing a strategy, he asked managers of their views that brought up issues that he hadn't thought of such as, "The IT analysts favor the established players—how can we get them to recommend HCL?”
Observing involves scrutinizing common phenomena especially the behavior of potential customers so as to come up with uncommon ideas. This helped Nayar innovate new ways of doing things at HCL Technologies. Nayar intentionally, carefully and consistently observed what customers in the contemporary IT services industry wanted. By doing this, he realized that they fancied long-term partners that would provide end-to-end services that helped change HCL's business model. He had also observed that HCL would not reach point B if the organization did not acknowledge that they need to. This helped him develop innovative strategies that would increase passion among employees to work towards better future (Singh, 2012). One such strategy was the small-scale catalysts that he called the blue ocean droplets (BODs).
Experimenting is the process of constantly and relentlessly trying out news experiences and piloting new ideas. Nayar unceasingly explored the IT industry and the internal organization of HCL intellectually and experientially to help him come up with an innovative organization. He tried many ideas such as the small-scale catalysts or the blue ocean droplets (BODs) for change. Nayar also developed a new survey, called the Employee Passion Indicative Count, to help increase passion. This experiment led to the development of Employee First Councils, which were groups that focused on specific passions of HCL's employees.
The final discovery skill is networking, which involves finding diverse individuals and regularly engaging them in a discourse to help acquire radically different perspectives. Nayar sought new ideas by talking to people and encouraging their transparency to help extend his knowledge base on how to improve HCL Technologies. He was able to discuss issues with Shiv Nadar, founder of HCL, and the board before making major decisions. Through networking, Nayar was also able to develop strategies such as the smart service desk and the online planning process that have helped network ideas of employees and managers respectively.
Nayar's opportunities for improvement in the use of discovery skills that encourage and support innovative organizations
Nayar can strengthen observing through by looking at how certain customers experience IT services from HCL in their natural environment. This means rather than asking them to fill questionnaires or give ideas, Nayar could simply pretend to be “a fly in the wall” and make observations without consumers knowledge and as neutrally as possible. This will give him an insight of the “jobs” that customers are trying to get done. Therefore, rather than just focusing on employees who are aware that they are being observed, he could focus on customers in their usual setting, which will give a better insight.
Additionally, Nayar can fortify experimentation by consciously and carefully approaching both work and life with a hypothesis-testing mindset at both the organizational and individual levels. For instance, he could decide to conduct in-depth analysis on areas he thinks are fundamental for the growth of HCL Technologies such identifying emerging trend for both employees and customers. As he travels through HCL's offices around the world, he should not hesitate to try out and learn about local behavior and different lifestyles of people around the world. Then, based on the knowledge he's acquired, he should develop a new hypothesis and test them in search of new processes and services that will help HCL compete globally with its rivals.
Nayar can also improve networking by integrating HCL with other IT service companies and brainstorming ideas from diverse angles. According to Gregersen (2011), asking them to share what they do will help stimulate creative thinking amongst his managers and in him. For instance, he could hold regular idea seminars, conferences or even lunches where he will meet new people from diverse industries, functions, companies and countries. Getting them to tell their innovative ideas and asking them to give their feedback on HCL’s strategies will help radically different points of view which are vital for encouraging and supporting HCL as an innovative organization.
In conclusion, the capacity of an executive to encourage and support an innovative organization is not a genetic predisposition. Conversely, it is an active endeavor that helps members of the business profession to act different and think different. By modeling, understanding and reinforcing discovery skills, companies can undoubtedly find a way to develop a creative spark in everyone (Lam, 2011). The ability to discover (innovation) is a raw material for competitive advantage, and it is up to each and every business professional to harness the power if they are to succeed in their industries.
References
Dyer, Jeff, Hal Gregersen, and Clayton Christensen (2013). The innovator's DNA: Mastering the five skills of disruptive innovators. Harvard Business Press.
Gregersen, Hal (2011). "The innovator's DNA." Harvard Business Review Press.
Lam, A, (2011). "Innovative organizations: structure, learning, and adaptation." Paper presented at the DIME Final Conference. Vol. 6
Nayar, V. (2010). "A Maverick CEO Explains How He Persuaded His Team to LeaQ into the Futu." harvard business review.
Singh, A, K. (2012). "Employee satisfaction at HCL Technologies." Delhi Business Review 13.2, 123-124.
