The article about HCL Technologies and newly appointed CEO Vineet Nayar was very interesting as it is the first article we read that show whole transformation process with a lot of success. The HCL Technologies is a well established Indian company that is a leader in software and hardware production. The company’s success in India was helped by the government that discouraged multinational corporations from doing business in India. Many world companies ceased operations in India and move elsewhere allowing for HCL to move into other fields. When IBM moved out HCL got permission to move into hardware manufacturing.
In April 2005, Vineet Nayar became President at the request of the founder and chairman Shiv Nadar. At the times HCL was in a struggle especially in Sales and Delivery. Many clients were cancelling contracts and Vineet knew that the change was necessary. He said “The company needed more than a band-aid; it needed a tourniquet.” Vineet had a new vision for the company’s future, one that will transform company into a global leader in hardware and software manufacturing. Vineet hoped to move the company up the value chain while providing his clients with innovative and integrated services that would change the way business is done. In order to this Vineet had a transformation strategy. The first strategy is “Employee First, Customer Second”. HCL was putting focus on its employees and gaining trust from them. This would make employees more loyal to the company and improve productivity. Employees were skeptical but then at the Global Customer Meet in Delhi, Vineet made a public announcement about their EFCS strategy. By doing this he energized employees even more, ensured them that the company cared about them. This strategy was very risky as it was putting customers second contrary to many other companies but Vineet knew that he would have much more benefits in a long run from loyal employees. Also such strategy would allow HCL to differentiate itself from competitors in India. The second strategy was to think big and focus more on a long run rather than short term. Also HCL would form strategic partnerships to offer more value added services to its customers. Vineet was very diligent about the transformation process. He would travel to many locations where HCL was present and would analyze if the change was feasible. Vineet demanded from every employee to think about adding value to everything that they do. He also focused on unity as fragmented company would not do well. The employees went for the big deals offering customer integrated business solutions. Every employee had a goal or multiple goals depending on their job duties. Also employees would participate in 360 degree feedback that would be visible to all. This type of feedback created competition and employees performance improved as a result. Also as another incentive the company introduced “Trust Pay”, which was just another way of saying we will pay you performance bonus because we know you will perform well. Trust pay affected 85% of employees and excluded senior managers and sales department. Soon after all these changes HCL Technologies started getting new clients and its first big contract was for Autodesk in California worth 50 million dollars. This was at times single biggest contract HCL received. In years after, many other companies gained trust in HCL.
The HCL was transformed with great success. The company expanded worldwide. Vineet said”Employees First, Customers Second had rejuvenated the company, and HCL was no longer losing market share.” The company has reported revenue increases in each year after and has gained more trust with employees and customers.
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