Group 4

Ankita | Meeta | Ity | Priyanka | Siddharth

Strategic Implementation
Company’s Timeline

Nadar reorganized the

IBM leaves India and Shiv
Nadar founded the HCL
company
HCL won DSGi deal
company into HCL Info
worth USD 330 millions .
systems and HCL
technologies. However,
the attrition rate rose to Launch of “Employee
first, Customer second
all time high

1985-92 April and Jun, 2005 Sep-Dec, 2005

1974-76 1998-2000 July and Aug, 2005 January 2006

Vineet Nayar joined HCL
and after 6 years of
joining, he founded HCL
Comnet
Vineet became the
president and started
“Mirror, Mirror”. He,
then brought in “New
Sparks” and worked to
revive sales and delivery
360 degree feedback for
managers got public on
intranet. The company
won Autodesk and EXA
deal
There are two basis of forming Strategic Commitments Powerful Forces having effect on strategy evolution

Organizational Decision-Making • They are responsible for translating

General company’s goals in a simpler way to
Structure Process operating managers
Managers • They also connect top and lower level
managers

Knowledge is Process Span

dispersed- People on Multiple Levels, Operational • These managers are responsible for
activities proceed implementing ideas in a innovative way
the right spot have the
on parallel,
Managers
right knowledge
Independent track

Processes are • Customers give perspective in the decision-

iterative- the top Customers making process
Power is Dispersed managers needs to be
committed at all the
stages of decision-
making
Roles Determine Capital • This factor can affect the decision making.
For example- Earning pressure can cause a
Perspective- People Markets company to exit the market
at different leadership
level come together to
form a decision
 Organizational Key Challenges

• Due to government regulation, companies like IBM entered the market. Hence, the competition increased

• The company wanted to stick to its core but the customers were demanding for integrated IT services

• The attrition rate was as high as 30%, higher than any competitor in the industry

• There was lack of co-ordination between sales and delivery team

• The company’s employees had “it’s okay to lose” attitude

• Although the employees were technically skilled but they lacked unity

• The company’s decentralization was taking a toll on the president. There were 85 managers reporting to
him

• The systems and processes needed to be more consistent across the global operations
Q. 2) What were Vineet’s key moves? Can the moves be linked to key challenges facing HCL? How Exactly?

 HCL decided to go after big deals rather

Organizational Structural Change
than small project to tackle competition
Employees First, Customers Second
KEY MOVES

 They differentiated themselves by offering

The Intranet multi service, unique value propositions to
transform business
360 Feedback
 To achieve this, they needed to remove silos
Trust Pay and collaborate across the company
 Address high attrition rate
Organizational Structural Change
 Centralization : Recognition of strategic issue and how to address it Created two operating groups :
 Organized company into 5 lines of business to build a single theme 1) 7-person Management Consult for
and benefits for the company Delivery
 Separate finance group to directly participate with sales and Delivery 2) 5-person Management Consult for Sales
 Multi service delivery unit to focus exclusively on big deals
Q. 2) What were Vineet’s key moves? Can the moves be linked to key challenges facing HCL? How Exactly?
Employees First, Customers Second
Objective:
1. Provide unique working environment
2. Drive inverted organizational structure
3. Create transparency and accountability
4. Encourage value driven culture
The strategy aimed at
 setting clear priorities for employees
 investing in their development
 encouraging them to produce bottom line
results
The Intranet
The Intranet
 Smart Service Desk (SSD) – ticket based online system
to increase transparency and decrease resolution time
 U & I – a communication vehicle between Vineet and
employees, where employees could directly ask any
question to Vineet and it was visible to a
 Town halls - Top company leaders would travel to HCL
locations to interact with employees
All of the above efforts were in the direction to engage
employees with top management and bring transparency in
the organization.
Q. 2) What were Vineet’s key moves? Can the moves be linked to key challenges facing HCL? How Exactly?

360 Degree Feedback Trust Pay

 Use of operational managers to get work done  Trust pay for the 85% of employees, excluding
 At HCL, frontline workers could review any manager who senior management and sales people
directly or indirectly influences their work.  Everyone would receive a fixed amount instead of
 Managers were encouraged to make the results of their fixed and variable pay which was an industry
reviews public for all to see. This is where peer pressure norm
kicks in: As senior executives post their reviews, the  It reduced transaction volume and increased trust
pressure mounts for other managers to follow suit.  It succeeded in attracting talent from competition
 Employees view reluctance to post a review as a tacit
admission that a manager has something to hide from his
peers
 360-degree reviews were used purely as a developmental
tool and are not linked with the formal performance
appraisal process.
3) How effective has Vineet been in In identifying and
implementing the key moves?
The company’s progress shows that Vineet’s method were very effective:
 India Today ranked HCL as one of the top 10 most wanted Indian stocks
 Attrition rate declined from 30% to 19.5%
 Nov, 2005: Secured the 1st big deal of $50 million multiyear from Autodesk after
competing against giant rivals like IBM, HP, Accenture, Wipro, Infosys, Satyam, etc.
 Dec,2005: Won strategic partnership agreement with Japan’s 2nd largest steel
manufacturer
 Jan, 2006: HCL won $330 million DSG International deal which was Indian’s largest
outsourcing deal
 Automated system resulted in greater transparency , information sharing,
better tacking and reduction in error
 More Centralized approach ensured that people do not work in silos
 An environment of trust, transparency and management accountability through open
communication was created
 Drastic change in the motivation of employees
Strategy: Guiding Development of the company- its identity
and purpose
Strategy as a Set of Strategy as a Dynamic
Solution Process

A long-term sustainable Goal

Creation of value
competitive advantage

The CEO and Strategy CEO as chief strategist: the job cannot
consultants
Leadership be outsourced

Unchanging plan that derives

Organic process that is adaptive, holistic
from an analytical, left-brain Form and open-ended
exercise
Intense period od formulation
Time Frame
followed by prolonged period of Everyday, continuous, unending
implementation

Defending an established strategy Ongoing Fostering competitive advantages and

through time Activity developing the company through time
Why ‘Employee First Customer Second?’
Is it a good idea?

 In the service industry, value gets created with employees’ interactions with the customers.
 A drastic transformation was required in the organization and mindset of customers.
 The need of an internal campaign to engage employees and their perception about HCL.
 The operating efficiency of the employees needed improvements
 A value-centric goal setting was required to be set up and create an environment to develop
trust and accountability and empower employees to provide a sophisticated experience to the
customers

Yes it was good idea as it brought better performances out of the employees and
helped HCL create a distinct image among customers and gain multiple contracts

Should Vineet announce this strategy at the February 2006 global customer meet?
YES. This would further empowered the employees and enhanced the brand image of
HCL Technologies as an innovative and different company
Thank You!