Employees First Customers Second by Vineet Nayar

"Employees First Customers Second" by Vineet Nayar -  Ground-breaking strategy!

This book was published by Harvard business review press in 2010 and has 208 pages. 

Book summary

This book is the story of ground breaking business model that brought about organizational transformation of HCL Tech, an India based global IT company. This book is divided into five sections. 

Mirror - Mirror

Where does one begin change? By looking in the mirror. Look for the things you don't like and create a picture of what could be. When you look into the mirror, ensure that you don't stare into past, but you catch a glimpse of future. It was necessary to establish where we stood. It was necessary to point out the elephant in the room. Author categorizes the employees into Transformers, Lost souls and Fence sitters. Author identifies Gen Y employees who believed in collaboration as key. Invert the traditional organization pyramid with management at top. Change to Employees first, Customer second and Management third. This exercise helps to see reality, creates dissatisfaction with status quo and builds hunger for change. 

Trust through transparency

One reason for gap between intent to change and actual act of changing is lack of trust between employees and management. They should be aligned through transparency. The difference between being convinced by an idea and trusting that it can be executed should be bridged. It's important to build trust in leader and in each other. Trust has 4 dimensions: credibility, reliability, intimacy and self-orientation. Transparency can be the catalyst to drive trust. Transparency keeps the house clean. Share financial data, create open forum where questions posed by employees will be answered by management team. By putting employees first our goal was to create more value for customers.

Inverting the organizational pyramid

Organizational structure did not support people in value zone i.e. interface between customer and employee. So, we turned organization upside down and made management and managers accountable to those who create value. We decided to make Enabling functions (through Smart Service Desk), Management (Through Open 360 degree feedback - Happy Feet) and Influencers (Through Directions meetings) more accountable. 

Recasting the role of CEO

Stop thinking of yourself as only source of change. Start asking questions, seeing others as source of change. This increases speed and quality of innovation and decision making. Transfer much more responsibility for change from CEO to Employees. If CEO asked employees for answers to questions he is struggling with, the responsibility is redistributed, and it will ensure that competitive advantage would remain beyond any CEO's tenure. It will ensure that power lies in value zone, thought- change- implementation is speedy, enables people who do have the knowledge. 

Find understanding in misunderstanding

These practices should be seen as catalyst for positive change. Small ideas can create ocean of change. Author responds to some objections for EFCS approach like: It won't work when times get tough. We don't need it because times are good. Customers will never see the value. Implementation requires large scale initiatives. This has nothing to do with performance. 

End of Book summary

The book essentially tells us to turn conventional management upside down by putting employees first. EFCS is all about empowering the employees and making them responsible and accountable by igniting the passion for working towards integrated solution for client that will bring value to their business. 

Some of the situations, terminologies and positions in this book (e.g. CIO) are specific to IT industry and someone who does not belong to IT industry, like I, had to refer elsewhere to understand them. Also, the issues faced, and solutions found were specific to IT industry. Question that comes to mind is,  this works in service industry and knowledge based economy.  Will it work in others? It needs to be adapted to implement elsewhere. Putting employees first and customers second is not disadvantageous to customers. On the contrary, when employees are empowered they will provide better service to the customer. 

Author collected thousands of suggestions from employees through various feedback initiatives and selected what to implement. However, he does not elaborate how he selected or eliminated the suggestions and how he customized the selected suggestions into action plan. 

For this approach to succeed you need a CEO who is ready to decentralized power, employees who are innovative and an organization that is agile.

EFCS should not be seen as a one time initiative but as a repetitive exercise or a cycle that you may have to implement company wide, department wise or activity based.

It's a first hand account of the author (CEO) who brought about the transformation. Author clarifies at the outset that he has written this book to provoke thought and discussion about concept of Employees First Customer Second (EFCS) rather than to capture all facts about HCLT transformation. Foreword is provided by Management Guru C. K. Prahalad.

Vineet is ex CEO of HCL Tech and Founder of Sampark foundation. This book has sold more than 100,000 copies. 

Why did I read this book? Wanted to understand HCL story. 

What I didn't like? Selection and customization of suggestions missing.  

What did I like? Revolutionary business strategy.

Recommend reading,