Vineet Nayar is a charismatic leader that utilized disruptive innovation to improve HCLT in the IT industry. The rapidly changing IT industry was trending in the global environment. Although HCLT was increasing revenue it was not increasing their market share. To transform HCLT into a market competitor Nayar utilized associating, questioning, observing, networking and experimenting to reach and accomplish HCLT’s success. However, Nayar neglected the market status in the beginning of this transformation and he did not network with other leaders in the IT world. Had he done both, he may have improved HCLT more than he did.
HCL Technologies (HCLT) Limited is a global information technology (IT) services company. HCLT offers services in software-led IT solutions, remote infrastructure management, engineering and Research and Development (R&D) services, and business process outsourcing.
In 2005, HCLT hired Vineet Nayar. Nayar used the five discovery skills referred to in Dyer, Gergensen and Christensen’s The Innovator’s DAN; associating, questioning, observing, networking and experimenting also referred to as disruptive innovation. In using these skills, Nayar was able to look over the global environment and ask what HCLT was doing and how could it be changed. He posed these questions to the management and frontline employees. He used his strengths and supported his weaknesses with those that held them as strengths. Vineet Nayar brought a company that was barely competing in the IT industry to one that now competes with companies such as IBM.
Global Environment Influence Factors
In 2005, Vineet Nayar was appointed president of HCLT. He joined a company with a 30% increasing revenues per year, a loss in market share and mind share (Nayar, 2010). The competition was growing at a 10-20% increase per year. With the rapidly increasing growth and change in the IT industry, Nayar turned to the consumers.
In speaking with customers, Nayar found that they wanted long-term end-to-end partnerships (Nayar, 2010). HCLT had to adapt with the changing global environment or be lost in their competition’s dust. Singh, Ramaul and Talwar (2013), employees of HCLT, called this change “grassroots ideapreneurship – where everyday ideas, set a new business paradigm.” Nayar did not shrink from the need to change. He went to his employees and brought this need to their attention. Nayar challenged his employees. He questioned what was wrong with HCLT, made them look into a mirror, into the future, within and to confront the truth (Singh et al, 2013).
Five Discovery Skills
The Innovator’s DNA describes associating as cross-pollination. Walt Disney put it best saying he was like a bee gathering pollen; gathered and distributed information as he went from (Dyer et al, 2011, p. 44-45). As Nayar went from location to location around the world, he too was gathering information and distributing information from managers down to frontline employees.
The questions are an important part of Nayar’s innovation. Nayar asked questions of his managers, engaged his frontline employees and spoke with customers wanting to know all of their views on HCLT. He responded to the “Yes, buts…” questions stating that “if you don’t respond to them, you’ll never get the people who have questions or doubts to play with the team” (Nayar, 2010). Nayar knew that these questions were the catalyst to the change he wanted to make.
Nayar observed HCLT noting things that needed to change. He observed, networked and experimented in change. He observed that there were five areas needing improvement: financial data, complaints and resolution, employee involvement in 360 degree performance evaluations, business plans, and middle management.
In his observations, Nayar realized that employees did not know how their sections were doing financially. Nor did they have the ability to compare their team to other teams. He noticed that complaint resolution meant that management should serve the employees. Nayar recognized that the 360 degree performance reviews did not have strong participation from the employees. The business plans that were reviewed by him were not receiving feedback from other managers or being followed through. And he realized middle management had lost some power. In order to solve these problems, Nayar had to network.
Networking “requires linking the ideas in your area of knowledge with those of others” (Dyer et al, 2011). Nayar did exactly this. Nayar used the experience of HCL’s board. He sent them “progress reports, held extra meetings, and ensured that more people than usual participated in the process” (Nayar, 2010). Naylor also met with senior management in small and large meetings. In these meetings, he discussed what he calls Point A; HCLT’s current circumstances.
HCLT’s customers were also an important part of HCLT’s transformation. He spoke with the customers concerning Point B; the end goal. Another meeting method Nayar (2010) used for networking was later called a Directions meeting. Directions meetings are held with thousands of frontline employees and include asking questions, general conversation and discussions of the company.
Through Nayar’s associating, observations, questions and networking he began experimenting. Nayar used four BODs (blue ocean droplets) at HCLT; sharing financial data, smart service desk, comprehensive 360-degree performance reviews, and an online planning process.
Nayar wanted to have a transparency in HCLT’s finances. Employees had the ability to see their project financials, but could not see how they compared to other teams or how the organization at a whole was doing (Nayar, 2010). Nayar gave employees access to the financial data and in turn saw employees begin to trust management more.
Nayar also wanted management to be accountable to their employees. He wanted the employees to know that complaints or suggestions were taken seriously and that the person filing one should know the results; deciding whether it is to their satisfaction. In order to accomplish this, Nayar set up an online system called the smart service desk. It accomplished exactly what he set out to do. Each ticket (complaint or suggestion) filed by an employee was addressed by management. Once addressed the employee states if the resolution is met (Nayar, 2010).
The review system was next. HCLT already had the 360-degree review system in place. However, most employees did not participate by reviewing the management and those that did could not see results. Nayar “decided to allow anyone who had provided feedback to a manager see the results” (Nayar, 2010). This was done to promote employee contribution and to give managers the opportunity to celebrate achievements with their teams.
A team effort is exactly what Nayar wanted for the business planning process. Instead of submitting business plans to him in paper format, Nayar set up an online portal. He instructed the managers to make video summaries of their plan. Other managers would be able to review, comment and suggest changes. Changing the business planning process gave way to more specific and executable plans (Nayar, 2010).
Opportunities for Improvement
The main area Vineet Nayar has an opportunity to improve is how he networks. During this transition, Nayar spoke with senior management, frontline employees, customers and his board. What he didn’t do was meet with other people outside the realm of HCLT. Had Nayar spoken to other members of the IT industry, he may have found even more innovations that would improve HCLT. HCLT was moving forward in the rankings, but to be number one he would need information that showed him how other IT companies were able to attain this status.
Nayar’s innovations were internal improvements. He did not discuss how he improved the marketing to customers or how he obtained new contracts. Was one of their innovations in the marketing field? Currently, no information can be found suggesting there was. But, to obtain new contacts and to show company improvement, there had to be a marketing plan in place. More transparency in this area would show the employees that it’s not simply about what’s happening internally, but how the internal affects the external.
Market shares are important to a company. Nayar (2012) stated that he “didn’t worry much about the stock market in the early stages of my transformation efforts.” Without observing the market how could he measure success in that area? The statement does suggest that he observed the market after the transformation began, but as a board member, I would assume that transformation or not the bottom line is always important.
Vineet Nayar is a dynamic CEO. He has a few opportunities to improve what he has already accomplished, but those few do not take away from the huge success HCLT has become. He utilized all aspects of The Innovator’s DNA discovery skills; associating, questioning, observation, networking and experimenting. Nayar engaged his management, employees, customers and board giving them a stake in how the company achieved its transformation. Their transformation was dependant on global trends and what needed to be done for HCLT to become a competitive player in the IT industry. In the end, Nayar truly succeeded in placing Employee’s First.
- Dyer, J., Gregersen, H., & Christensen, C. (2011). The innovator’s dna: mastering the five skills of disruptive innovators. Boston: Harvard Business School Publishing. HCL Technologies Limited. (2013). Hcl. Retrieved from http://www.hcltech.com/
- Nayar, V. (2010, June). A Maverick CEO Explains How He Persuaded His Team to Leap into the Future. Harvard Business Review, 110-113.
- Singh, P., Ramaul , P., & Talwar, A. (2013 , January 8). Hcl technologies: An ideapreneurship. Retrieved from http://www.managementexchange.com/story/crafting-one-of-worlds-largest-ideapreneurship