Apr 25, 2006

The Future of Management is Indian : David Kirkpatrick

Fortune senior editor David Kirkpatrick praises HCL and CEO Vineet Nayyar:
I have seen the future of management, and it is Indian. Vineet Nayar, president of India's 30,000-employee HCL Technologies is creating an IT outsourcing firm where, he says, employees come first and customers second.

"Everybody was aghast the first time I said that," admits Nayar.

Every employee rates their boss, their boss' boss, and any three other company managers they choose, on 18 questions using a 1-5 scale. Such 360-degree evaluations are not uncommon, but at HCL all results are posted online for every employee to see. That's unheard-of!

And that's not all. Every HCL employee can at any time create an electronic "ticket" to flag anything they think requires action in the company.

Explains Nayar, "It can be 'I have a problem with my bonus,' or 'My seat is not working,' or 'My boss sucks.'" The ticket is routed to a manager for resolution.

Amazingly, such tickets can only be "closed" by the employees themselves. And Nayar is vigilant that managers not intimidate employees about creating or closing tickets. Managers are evaluated partly based on how many tickets their departments are creating - the more the better. (emphasis mine - gautam)

"I want to be the company that gives superior service to my employees compared to everybody else," he explains. He also firmly believes the ideas that will guide HCL into the future will come not from him, but from below.

Early signs suggest his bold strategy is working. Nayar has only been president for a year, a tumultuous one in which most of these innovations have been implemented. But in that time the attrition rate has dropped in half, he says; the stock more than doubled - HCL Technologies' market cap is $4.2 billion. (The company is mostly owned by a holding company which also owns HCL Infosystems, India's largest PC-maker.) Revenues last year grew 34 percent to $764 million.

It's interesting ...that bit that I emphasised in bold. A wrong metric can ruin the whole purpose of the exercise.

As the article shows, Nayyar is on the correct path. The focus is on unearthing areas of improvement. Not in suppressing them. Seth Godin speaks about something similar here.