Vineet Nayar: Employees First

 

   Here are some notes on my meeting yesterday with Vineet Nayar, CEO of HCL Technologies and author of ‘Employees First Customers Second’:

 

How vs What

I thought I knew this from his book, but wanted to be sure, so asked Vineet what has led to HCL Technologies’ success – what is its source of competitive advantage – is it competitive positioning, core competencies or is it simply EFCS?

 

Vineet explained that in 2005, HCL Technologies started an innovation in what they were doing, developing new products and services and the rest of the 4Ps to outserve their customers.

But there’s a commoditisation taking place in the industry – you’re either good enough or you’re not.  It’s OK if you’re Apple etc, but service companies are finding that they’re less and less differentiated.

At around this time, the book Blue Ocean Strategy came out so HCL asked themselves can they could apply this to how they run their company.

The resulting differentiation from their competitors works at three levels:

1. what is our business – providing value to customers
2. where do we create this – in the interface between customers and employees
3. who creates it – employees (which means that HCL’s management needs to enthuse and encourage employees).

 

That’s HCL Technologies’ competitive advantage - how they run the company.  EFCS isn’t about being employee friendly – it’s about using employees as a way to grow faster that your competitors. Employees are your strategy and differentiation.

 

The family model

An important part of EFCS is the family model which is about building a trust based environment based upon the family unit.

Vineet wants to avoid the separation that occurs when people say good-bye to their families, go to work, hang their costs on a hook and leave their emotions, subjectivity, personality and connections to family life behind.

This leads to the following unwritten rules of the workplace:

• Do not trust your manager
• Don’t get too emotional about anything
• Remember it’s not personal, it’s only business.

 

Vineet believes these are outdated thoughts left over from the industrial age.  So he’s led HCLT to become more transparent, sharing plans and financial information with everyone in the organisation.

I wanted to ask about this because it goes so clearly against much conventional wisdom.  In particular, Vineet talks frequently about the need to provide an appealing environment for Gen Y, but there is a view (yes, I’m thinking about you Laurie) that Gen Y desire an even more transactional and less close relationship with their employer.

 

Vineet responded to my question with three of his own:

1. Where is growth going to come from: – emerging markets and new products
2. Who will provide this growth? - employees
3. So what to do about it? – you need to develop relationships with your employees – what will you be doing to bring them closer to you over the next 2 years than they were over the last 2 years?

 

Vineet described an organisation where someone said it felt like Russian Roulette, there had been so many redundancies.  His advice was that you’ve got to care, not for people who go, but for the people you leave behind.  Don’t let go of them – or let them go but care for them.

In any case, things have changed, outside the workplace at least.  Our generation want to be friends with their kids, who are generally more collaborative.

So CEOs have no choice in this - if they want to grow, the only way to do so is to innovate through their teams.  So they need to go back to their ‘family members’ and say let’s reset the whole thing.

 

Reward and Engagement

Vineet doesn’t mention rewards in his book, but it was an obvious area to ask about.  If everyone is accountable to, and supporting everybody else, and if the traditional pyramid’s inverted, then to me, this means that there needs to be more equal sharing of rewards.

And to me, it’s a critical enabler for building trust.  So in his book, Vineet suggests self-orientation is one barrier to trust – people need to know that those they’re interacting with are thinking beyond their own self-interest.  And surely focus on high personal compensation is a major part of this.

However I think that in Vineet’s view the question was missing the point and we soon moved onto HCLT’s ‘engaging the whole person’ approach:

 

Everyone needs to be rewarded appropriately. The definition of this varies individual to individual and country to country.  Think of the Head of BP getting them out of the current crisis – any compensation is less that they deserve because they are the man in charge.

Trust is the key. And lack of trust is the reason these questions are being asked. Do you ask your father how much do we spend? 

Everyone has work to do and the market determines their compensation (he’s not talking about obnoxious compensation).

In any case, there’s a lot more to me as an employee than my compensation.  And just because I’m being paid I won’t jump up and down for you.

You go to church on Sundays.  You pay to go to church and make a donation and provide your time and maybe do some social work and the church doesn’t pay you but you still have passion – why?

So why do we assume that just because we pay you you’ll feel good.

People have multiple interests - social activities, sports, technology etc - and the only way to engage them is in multiple directions.

HCLT gains a lot of motivation by involving people in giving - for example by teaching for 2 hours per week.

This leads towards thinking about concentric circles - like a Facebook.  If you’re interested in a community, you can belong to it, if not, don’t belong.

But if you’re a member of 6 or 7 communities, it provides a higher possibility of creating passion in you.

 

 

I really appreciated the chance to have a conversation with Vineet, and highly recommend his book.  I’ve also moved HCL Technologies experience up towards the top of my list of great HCM case studies.

Why?  Well look at these aspects of Vineet’s story from an HCM point of view:

• HCLT’s competitive advantage comes from its organisation, not its business (Julian Birkinshaw would describe this as from HCLT’s management rather than its leadership)
• It has a clear focus or mojo which describes how the organisation is going to work: EFCS
• It has understood the journey it has needed to undertake in terms of organisational outcomes, moving from Point A - being tolerant of gradual change - to Point B – the v’iew on the other side of the mountains’
• It has used innovative and unique activities like the provision of financial information of each employee’s team on his or her desktop to support these outcomes
• The company uses the resulting organisational capability (or human capital) to create vs simply add value (red ocean is about adding value, blue ocean is about creating new value)
• This has helped drive performance in HCLT’s ‘value zone’ and has contributed to new business ideas through unstructured innovation.

 

Also see my post on HCLT’s collaborative organisational structures including more on Vineet’s concentric circles at Social Advantage.

And you can read Vineet’s blog posts at vineetnayar.com or blogs.hbr.org.  You can follow him on Twitter at @vineetnayar.

 

Technorati Tags: Vineet Nayar,HCL Technologies,Employees First,Customers Second,HR,HCM

 

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Konosuke Matushita on putting people first

 

   I’ve just come out of a meeting with Vineet Nayar, CEO of HCL Technologies, in which we discussed his new book, ‘Employees First, Customers Second’ (I’ll be reviewing this here and at Personnel Today).

I will just say that I’ve very much enjoyed the book which is well aligned with my own thinking around HCM.  I just hope it sells much better than the one on Profits First (which basically suggested that whilst customers might be second, employees should be placed very much at the back of the queue).

However, the main thought that’s been in my head as I’ve been reading Vineet’s book, and talking to him today, is why is it that, other than in HCL and a few other companies (including a couple of my own clients), this perspective still sounds so revolutionary?  After all, it’s really not that new…

 

I’d like to share with you some of ‘People Before Products’ written by Konosuke Matushita (pictured) and originally published as ‘Jinjimangekyo’ [‘My Approach to Personnel Management’] in 1977 (and thanks to Danny Kalman for this book and tour around Panasonic recently):

An enterprise is only as great as the employees who work for it.  The growth of a business centres around people, and success or failure hands on whether suitable employees can be found to undertake the tasks it needs done.

No matter how fine a tradition it boasts or how excellent its technology or services, a business that cannot find people capable of sustaining these advantages will gradually go into decline.  For that reason, every business takes the matter of cultivating human resources very seriously.  I believe that the more successful a company is in these endeavours, the more its performance and fortunes will flourish.

When you make use of a machine, all you have to do it turn on the switch and it will perform as it is designed or programmed to do; no more, no less.  But people will reveal unexpected abilities – and willingly put them to work for you – if you adopt the right approach and the right attitude.  Indeed, there lies the great challenge of training people and using their talents to optimal advantage.

 

Wonderful stuff.  I also loved these comments on the limitations of measurement:

Human beings are complex and sensitive creatures.  They’re sometimes difficult to understand, and often uncooperative.  Every individual is different, changing from moment to moment – a veritable kaleidoscope of variety.  One plus one may equal two in ordinary arithmetic, but with people the equation is not so simple.  In the proper combination, the working potential of two people may equal three or even five; in a bad pairing, the same two can equal zero or even less.  In this sense, nothing can be more unpredictable, unfathomable, and difficult to del with than human beings.

 

Of course, some of the book does show the sign of age.  Take these comments on early computerisation:

Technology is changing at an unprecedented pace, presenting us with ever-newer and more complex innovations and concepts.  Business as well as management has been completely transformed by the advent of computers and computer systems capable of performing complicated analyses and calculations in the blink of an eye.”

 

Even here though, the general tone of the comments could apply just easily to web 2.0 today as web 0.0 back then.

Technology’s moved on a pace, but I’m not sure management has - even if Matsushita showed us the way 33 years ago.  Let’s hope there’ll be more progress between now and 2043!

 

In the meantime, I’ll be posting some of Vineet Nayar’s thoughts on management later on today.

 

Technorati Tags: Vineet Nayar,HCL Technologies,Konosuke Matsushita,Panasonic,Employees First,People Before Products,Jinjimangekyo

 

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Developing HCM Strategy

 

   Despite my focus on HR 2.0 during the past month, I’ve been continuing to work on HCM as well (consulting and writing).

My writing includes this article on developing HCM strategy in Croner’s ‘Developing HR Strategy’.  It’s not available online, but here’s a short extract (contact me if you want the rest):

 

Strategic HCM delivers increases in human capital by putting people first. So, rather than considering how people can deliver given business results, it looks at what can be achieved from a given group of people and their human capital. This human capital centric approach is also the core theme in Ed Lawler’s recent book, Talent (2009). According to Lawler:

“Companies that are truly competing on the performance of their people need to adopt a human capital or HC-centric approach to organising — simply doing better talent management is not sufficient. Rather, special attention needs to be given to implementing organisational structures, processes and systems that will help manage and support the performance of an organisation’s human capital.”

 

Some examples of talent- or human capital-centric processes, which are all being used in one or more organisations, include:

 Talent shoring — basing a company where talent is rather than where customers are, or costs are less.

 Communityship — for example, placing project-based staff in communities and moving them across projects to provide broadly based performance feedback and to support career advancement.

 Head farming — proactively searching for talent and building relationships in advance of recruitment (v head hunting).

 Job sculpting — creating jobs to fit talent, rather than the other way around.

 Dream making — discussing the individual’s dreams and how these can be achieved at work, rather than just looking at how the individual can help achieve the organisation’s plans (as in traditional objective setting).

 Deal management — broadening out performance management to review the organisation’s engagement of the employee, as well as how the employee is performing for the organisation.

 Career partnership — providing an employee with the opportunity to work over several discrete periods, gaining experience with other organisations in between these times.

 

Putting people first does not imply a return to the “pink and fluffy”, “tea and sympathy” world of personnel, but it does require a step back from the business focus of HRM. The reason I suggest this is that human capital does not just support the achievement of existing business objectives — it provides value in its own right. So, while the use of human resources is a secondary activity supporting an organisation’s traditional value chain, HCM is a primary activity in a
completely different value chain — the creation of human capital.

This means that, although HR does provide value as part of the business leadership team, focusing on the traditional value chain, the function provides much more impact by focusing on the HCM value chain and the creation of the right form(s) of human capital leading to competitive advantage.

This shift in focus suggests that the future of HR, or at least the function responsible for people management (which Lawler suggests should be called the Organisational Effectiveness unit), is not to be yet another business function (as in the current call to be a business function first, HR function second) but for HR to pride itself in its focus on, and its abilities to develop human capital.

 

 

There’ll be more on this point about putting people (employees) first very shortly…

 

Technorati Tags: Technorati Tags: Linda Holbeche,CIPD,Croner,Developing HR Strategy,HCM,putting people first,talent,shoring,communityship,Head farming,Job sculpting,Dream making,Deal management,Career partnership

 

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HCM Newsletter

 

   If you didn’t receive it from me, the first edition of the Strategic HCM newsletter is available here.

Visit here if you’d like to subscribe to future editions of the newsletter.

 

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Did you miss (on Social Advantage during June)

 

   Check out these recent posts from my other blog if you’ve not already seen them.  All, apart from the top one, on the recent Enterprise 2.0 conference in Boston:

• Chasing Stars and Socialism
• Enterprise 2.0: Social Media and Community
• Enterprise 2.0: Communities aren’t sites, they’re ...
• Enterprise 2.0: Sharepoint – an all-or-nothing dec...
• Enterprise 2.0 tweet-up
• Enterprise 2.0: IDEO and Innovation
• Enterprise 2.0: CSC and Social Collaboration
• Enterprise 2.0: Cisco and the Human Network @ Work...
• Enterprise 2.0: Culture and the islands of Me and ...
• Enterprise 2.0 conference: EMC’s business case
• Enterprise 2.0 Boston 2010.

 

I’ll be catching up with more posts from the conference during early July. 

And of course these are also posts from the two HR 2.0 sessions at the conference on Strategic HCM as well:

• Human resources and workforce collaboration
• Social learning.

 

You’ll have probably noticed that there were a lot more posts on HR 2.0 and Social learning last month too!

 

Technorati Tags: Enterprise,HR,2.0,conference,Boston

 

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Social learning – why it’s important and how we can use it

 

This is a continuation on my thoughts following last week’s Social Learning Zone webinar (see part 1).

 

Why is it important?

This is about low cost and high capability development, given the need for emotional / social context, and organisational as well as individual learning (shared mental models etc).

As I explained, I think the word and idea behind the work, ‘social’ are important, and I think organisations need to be comfortable to use this (see this post – don’t get made sick by the social).

I liked the tweet from Martin Couzins referring to Dave Weinnberger’s quote which explains the ‘why’ of social learning: ‘knowledge isn’t in our heads, it is between us’.

 

I do agree with Abi Signorelli and Jenni Wheller that other changes like remote working and Gen Y are enablers, but I don’ think they're the main drivers / benefits of this.

The Gen Y point reminds me of Fons Trompenaars international cultures work where he suggests that if you take any particular trait, the difference within one group is always going to be greater than the difference between groups.  Ie there’s probably more or as much variation within the Gen Y population than there is between the average usages of Gen Y vs other generations.

 

How can we use it?

My suggestions were those from the slide above.

But I also liked Abi’s suggestions to create social spaces in every office whether people can socialise and learn using offline and online methods; and also of internet cafes – shareable PCs set up as a social learning zone (sort of what I think SHRM are doing at their annual conference with a Social Media Room).

 

What does this mean for HR / L&D?

We had to skip over this quite fast.  The point I wanted to make is that I think social learning requires a move towards L&D being a strategic partner vs a designer and deliverer of learning.  I thought Dhruv Devasher summed it up quite well – the role involves facilitating and supporting the exchanges, maintaining the tools, capturing, codifying and disseminating pockets of shared knowledge / technical knowledge too.

Of course, that’s been the direction of travel for some time, but most organisations haven’t made much progress.  Social learning is going to reinforce the need to make this journey, and to quicken progress.

Read Dan Pontefract’s remarks on my recent live blog from last week’s social learning session in Boston, and also Dan’s follow-up about the need to bring together HR and IT.

 

Implementation

This wasn’t something I addressed specifically, but came through as an important focus for people from many of the tweets.

Because, given everything I described and have reviewed above, and as Julian Summerhayes noted: if there’s so much power with social media, and with the £ crisis, you wonder why more people are not using it to deliver training (and enable learning).  Good point.

 

One problem is very practical- eg Alana Inness asked how do we get round the challenge of staff who don’t have internet access in their work place – eg bank cashiers, call centres?  And another question from Michelle Kaye was how do you get round companies block on games / virtual worlds?

To me, this is about focus and ambition.  Do you want to do social or not.  If you do, you’re not going to ban access to games, and you’re going to find a way to give your cashiers access (like how McDonald’s put a PC in every restaurant, or ASDA in every store).

 

Ken Moir raised another good challenge to social learning: How to address audience expectations of a ‘sage on a stage’?  Upending the passive content intake model can generate active resistance.

I think this one is more about culture than strategy, but a lot of it depends on the same thing – on an understanding and commitment to social.  Helping people understand that this is valid and important.

 

And there was another interesting exchange between Ken and Dhruv:

Ken: Is free & open sharing a realistic expectation of real, emotional human beings interacting in stressful / competitive environments?

and: Lack of trust is a universal obstacle to social media use.  In fairness, the odd loose cannon can do ‘massive’ damage.

Dhruv: Should an organisation exert control to prevent loose cannons and does that hurt the platform?

 

In my view, keeping things too tight will will hurt the platform.  You don’t want to make people question using the technology (apart from clearly inappropriate comments).

I was asked a similar question at my Kenexa presentation recently.  I responded to this by thinking back to a discussion at Informatology where someone made the point that we trust people when we recruit them (or we wouldn’t do so – hopefully), so why can’t we treat them as adults after they join?  I talked about BT and AXA and how these companies have found they’ve needed to take very little disciplinary action around the use of social media.  However, I was reminded afterwards that the point I should have as well was that most effective communities are self correcting – that the community will respond to loose cannons.  The organisation / community manager won’t normally need to be the one to do this (also see my recent Social Advantage post on Community).

 

And Ken raised yet another good point – that formal training’s easier to administer, control and measure than social learning – that’s why HR likes it.   I mentioned this one in the webinar.  I think it’s sad.  But true.

 

I also liked Alana Inness’s question: will we lose skills required for face2face interaction (eg negotiation, differences resolution etc) with more reliance on 2.0 tools)?

My view – I don’t think we will.  Partly because I think 2.0 interaction leads to increased f2f interaction, rather than the reverse ( a point I’ve made on Abi’s post about Introversion / Extroversion in 2.0).  And secondly, because of a point made by JP Rangaswami from BT Design at last week’s E2.0 conference: that while increased use of social media my reduce individual skills (make people dumber), it increases the skills of the organisation as a whole. (Abi, sorry I didn’t come back to you on this again – I’m not sure about the original research.)

 

There were other points too.  Culture was raised a lot.  Strategy too (Julian: don’t we need to consider what the strategy is before just worrying about the tools?).  Yes.  But these are separate webinar subjects I think!

 

That’s your lot.  But thanks very much for all the tweets (and comments on Citrix I still haven’t seen – other than those Verity read out).  They’re all highly valued – by me and by others too (eg Debbie McNamara’s tweet: Can’t be on the webinar but getting lots of good information from the feeds!  Isn’t that working the talk!).

And it would be good to hear your further thoughts – do comment below.

 

Technorati Tags: Social learning,webinar,Training Zone,twitter,tweets

 

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HR and Communities (Talking HR 029)

   Yes there was a reason why I suddenly did those two Social Advantage posts on communities (1, 2): so that I could refer to them in tonight’s podcast on the role of communities, their importance, their management (or facilitation!), and also on the HR function’s role in supporting them (see this post at Strategic HCM).

For this show, Krishna and I were joined by Claire Boyles from Management Matters.  Thanks a lot, Claire, it was great speaking with you.

You can listen to the archive here.

 

Picture: Community Maturity Model from the Community Roundtable

Technorati Tags: Communityship,Enterprise,2.0,Talking,HR,podcasts,Krishna De,Claire Boyles

 

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Connecting HR and ‘Community’

 

   We had another great ‘Connecting HR’ tweet-up last week.

One of the issues at the back of my mind during the evening revolved around the idea of community, and Gareth Jones’ email to attendees prior to the tweet-up that mentioned the ‘Connecting HR community’.

Now, personally, I’m not sure that this group of people is a community as yet, although there are, I think, signs of one developing.  And I’m not sure I’d use the C word at this stage as I don’t think you can make a group into a community simply by calling it one.

But I do see where Gareth is coming from, and agree that it would be great if Connecting HR does develop into a community, because I do think there is a need for more social connection and meaningful relationships between practitioners in HR and talent management, and across the different disciplines within this (resourcing, development, communication, legislation etc).

So my thoughts went back to the discussions on community at the Enterprise 2.0 conference in Boston the week before this.  I have still to complete my postings from this conference, including those on community, but you can review my current status of postings at http://bit.ly/e20conf.

But there was also this short conversation over Twitter that got me thinking about HR and community:

 

 

So, is community management the new HR?  And if it is, how many practitioners understand this?

We’re going to be talking about this issue on Talking HR at 7.30pm BST / 2.30pm ET today.  Do join us if you can.

 

Technorati Tags: Connecting,community,HR,Enterprise,2.0,tweet-up

 

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Human Capital Institute webinar today

 

   OK, time to start thinking about today’s webinar with the Human Capital Institute…

This is at 2.00pm BST (9.00 am ET) and you can still book here.

 

You’ll also find my guest blog post on employer branding, technology and enterprise 2.0 (linking back to last week’s conference in Boston) at HCI.org.

 

Technorati Tags: HCI,Human Capital Institute,Europe,employer brand,technology,enterprise 2.0,social,business,webcast

 

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Social branding

 

  One of the things I want to talk briefly about on tomorrow’s Employer Branding webcast is my idea of ‘social branding’.

I still need to do more thinking around this before tomorrow, but I’m going to suggest that as well as an EVP and employer brand, companies need to think about their ‘Social Value Proposition’ (SVP) and ‘social brand’.

Why?  Because more and more of what we do at work is about our relationships with other people.  It’s why I’ve included ‘people’ as a major element in my EVP model for so long, and why I’ve argued that people and relationships need to be a major focus of engagement surveys.

But it’s more than this.  It’s not just about how organisations treat their people.  It’s how people treat each other.  What’s our offer to our colleagues and others we work with?

And this is different to an EVP because it’s not about what’s done to us, it’s about what we do with each other.

And I suspect it’s going to be an increasingly important enabler for engagement as well as collaboration and productivity.

 

Of course, I realise this is probably just going to result in increased confusion.  Those who have come across social branding before will link it to either and ethical focus or the simple use of social media.  But hey, there’s nothing I can do about that.

 

What do you think?  Any ideas for the factors that should be included in a SVP?

Or is this idea just nuts (it’s probably not too late to take out the slide!).

 

 

Technorati Tags: social,employee,employer,employment,value proposition,offer,brand,HCI,webcast

 

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