HCL Technologies (A)

Case Analysis
Introduction
HCL Technologies is a leading global IT services company with over $2
billion revenues. Founded in 1976 by Shiv Nadar.
In 2005, Shiv Nadar, chairman & founder, appointed Vineet Nayar as
CEO of HCL Tech .
Vineet told Shiv: I want to be free to adopt an unconventional approach
and Shiv agreed.
In February 2005, Vineet Nayar, CEO, HCL Technologies announced a
radical new philosophy, Employee First, Customer Second (EFCS).
Through this philosophy the aim was to create a unique employee
organization, drive an inverted organizational structure, create
transparency and accountability within the organization, and encourage a
value driven culture.

Significant Issues within HCL.

In the year 2000-2005, HCL started losing its market share and started
falling after remaining number one for many years.
Compound annual growth rate (CAGR) of ~30% over previous 5 years
compared to Market leader was achieving 50% CAGR.
Higher Attrition Rate as compared to the peers
Focus mainly on Hardware industry and late entry into the Software
industry as compared to the other players.
Reluctant to participate in the Y2K remediation and this proved costly for
HCL since many of the Indian software companies did take this work
and built strategic relationship with top leadership at global companies
Most Significant Issue in HCL technologies is about losing the market
share and falling from number one spot. Also unable to change and
diversify into the Software Domain as compared to the peers.

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In looking at the HCL Technologies Case, we can pull out several issues,
o After 1991, multinationals like IBM returned to India and market became
more competitive.
ARRIVAL OF VINEET NAYAR
o On April 5, 2005 Vineet began his tenure as president of HCL Tech.
o In new role, Vineet spent the next 2 weeks visiting facilities and talking
with as many people at all levels as he could
o During May, Vineet formulated a plan for the company. To keep up with
markets demand, Vineet knew that like all Indian IT companies HCL had
to differentiate itself.
His Plan of action based on 3 fundamental beliefs:
1. Flexibility and Transparency: Offering it of a kind customers have
never seen before (even from the big players)
2. Centricity: Put energy into increasing the value for the customers
rather than trying to build volume of business HCL do with them
3. New Standards for value delivered: Major differentiator, Employees
First Customers Second, will enable HCL to unleash positive energy
and passion of employees, to create wow in the value zone for
customers.
o In June, Vineet set up a communications and marketing team of about 30
Young Sparks, some of whom had transitioned from comnet. He also
brought over the heads of systems, sales and talent development.
o Operating groups:
A seven-person management consulting Team for delivery
A five person management consulting team for sales
HCL realized that in service industry the value gets created not in the
back office but in face to face interaction between the customer and
employees. Hence it is important to empower employees so that they
deliver more value to the customers. When an employee is delighted, he
will delight the customer. This gave birth to a path breaking philosophy
called :
'Employee First, Customer Second.
By putting our employees first doing everything we can enable those
people who bring real value to you we will server you far better than
ever before
It doesnt mean we take customers for granted. Never. We want to
unleash the power of our bright minds.
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Opening up the 360-deg review

Decided to allow anyone who had given feedback to a manager to see
the results of that managers 360
Earlier, managers superior often disregard the 360 because of his/her
own concerns and perception, but now it was just one voice among
many Optional for managers to open their 360: Vineet led it by opening
his 360 to every employee.
Smart Service Desk
An automated query resolution mechanism for employees.SSD enables
employees raise their concerns for adequate solutions in quick time.
On an average 31,000 tickets are raised every month.
U&I Portal: an Online forum for employees queries
Answers would be given by Vineet along with his leadership team if it
remain unanswered
Everyone was able to see the question, the questioner and the answer
Employees felt that they have leadership team that did not claim to
know the answers and they are willing to acknowledge dirt
Employees on their own started working on the problem reported by
other since they believed they have answers
Simply by allowing questions to be asked, they improved likelihood
that answer would emerge from someone, somewhere.
RESULTS
HCLs attrition rate has dropped significantly.
Employee utilization rate and revenue/employee has seen an increase.
Through Employee First initiative, HCL strives to provide excellent
human resources leadership and expertise to the organization, and also
attract and retain a workforce that is diverse, inclusive and committed
to creating quality customer service.
In Nov 2005, HCL Tech won its first big deal: a $50 million, multiyear
contract to provide offshore application and data centre services to
AUTODESK, California-based software and Services Company.
In Dec, HCL won a strategic partnership with Japans second largest
Steel manufacturer.
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 India today ranked HCL as one of the top 10 most wanted Indian
Stock.
In Jan 2006, HCL won the $330 million DSG International deal. The
largest Indian outsourcing deal ever beating TCS.
Stepped on the accelerator and surged forward: achieved 3X revenue
growth in 4 years
Key Learnings :
Make yourself the example: Vineet Nayars idea of making 360
degree feedback public online was designed to hold managers
accountable. In first year Nayar posted his own review before asking
his team to follow.
Put your time on line: Vineet spends about seven hours in each week
to answer questions asked by employees.
Technology: Leverage technology to make life simple. Automate
process and empower employees to raise their voice.
Changes: Put in place a series of small changes that will potentially
have a dramatic effect on how people work.

HCL Employee First initiative reveals how innovation can apply to

organization systems as well.

Submitted By :
Sushant
Roll Number - 640

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