Employees first, customers second | Vineet Nayar | TEDxAix

Summary

In this inspiring talk, Vineet Nayar shares his journey from being fired by HCL to becoming its CEO, emphasizing the power of trust and employee empowerment. He discusses the importance of innovation not just in products but in the way companies treat their employees. Nayar introduces the concept of 'Employees First, Customers Second' and outlines three steps for successful execution: creating dissatisfaction with the status quo, defining a compelling vision, and forming high-performance teams to achieve the impossible. His story illustrates the transformative impact of leadership that prioritizes employee growth and satisfaction.

Takeaways

• 🔥 **Leadership and Trust**: Leaders must earn the trust of their team to ensure they will follow in critical situations.
• 🏢 **Transformation through People**: A company can be transformed not just by innovation in what it does, but also by how it treats its employees.
• 🌟 **Employee-First Philosophy**: Prioritizing employees and their unique value creation can lead to significant business growth.
• 🤝 **Role of Management**: The role of management should be to enable and encourage employees to create unique experiences for customers.
• 🧐 **Understanding the Business**: The core business is creating unique experiences and value for customers, which is where innovation should focus.
• 🌐 **Value Creation Zone**: The unique value is created at the intersection of customer and employee interactions, known as the value zone.
• 🔍 **Execution Over Ideas**: While ideas are important, execution is critical, and often where many fail to deliver.
• 🚀 **Innovation in Execution**: Innovation should not only be about products but also about how organizations operate and treat their employees.
• 🌱 **Inspiring Vision**: A compelling vision can inspire employees to work passionately towards a common goal.
• 🔄 **Organizational Inversion**: Inverting the traditional organizational pyramid can empower employees and drive change from the ground up.
• 🏆 **Performance Through Challenges**: High-performance teams thrive on setting and achieving goals that others deem impossible.

Q & A

What was the main challenge Vineet Nayar faced when he became the CEO of HCL?

Vineet Nayar faced the challenge of transforming HCL into the best company in the world, and he was unsure if he knew how to lead by accepting rather than rejecting, as he had been rejected in his early career at HCL.

What was the vision Vineet Nayar's grandmother had for him when he was born?

Vineet Nayar's grandmother, or 'Amma', had a vision for him that he would have a steady job and do good, which was a simple yet profound vision for his future.

How did Vineet Nayar's early experience at HCL influence his leadership philosophy?

Vineet Nayar's early rejection at HCL influenced his leadership philosophy by making him commit to outsmart those who lead by rejecting rather than accepting, and to become the CEO of HCL to show a different way of leading.

What does the term 'employee first' mean in the context of Vineet Nayar's leadership?

In the context of Vineet Nayar's leadership, 'employee first' means putting employees at the center of the organization's focus, enabling and encouraging them to create unique experiences for customers, which in turn drives the company's growth.

What were the three fundamental questions Vineet Nayar asked to drive the transformation at HCL?

The three fundamental questions were: 1) What is the business we are in? 2) Where does this unique experience, unique value get created, and who creates this unique experience and value? 3) If our employees are creating the unique value, then what should the role of managers and management in any company be?

How did Vineet Nayar approach the concept of innovation at HCL?

Vineet Nayar approached innovation by focusing on the 'how' aspect, which is about how the company treats its employees and runs its operations, rather than just innovating in what the company does.

What were the 'three steps for successful execution' that Vineet Nayar implemented at HCL?

The 'three steps for successful execution' were: 1) Create unhappiness with today, 2) Define a compelling vision for tomorrow, and 3) Move from here to there by attempting to do what others consider impossible.

How did Vineet Nayar democratize the organization at HCL?

Vineet Nayar democratized the organization at HCL by opening a 360-degree survey of all managers, including the CEO, making the results public, and thus inverting the traditional organizational pyramid.

What was the outcome of the transformation initiatives at HCL under Vineet Nayar's leadership?

Under Vineet Nayar's leadership, HCL grew six-fold during a recession, became number 1 in customer and employee satisfaction, and achieved what others considered impossible.

How does Vineet Nayar's personal foundation relate to his leadership philosophy?

Vineet Nayar's personal foundation, which aims to reach out to poor children in rural schools across India, is a reflection of his leadership philosophy of 'employee first', showing his commitment to inspire and uplift individuals beyond the corporate world.

Outlines

00:00

🔥 Leadership and Trust in a Crisis

The speaker, Vineet Nayar, begins with a powerful analogy of being on a burning building's ledge, asking the audience to imagine the urgency of a decision to jump to survive. He extends this scenario to leadership, questioning how a leader's command to 'jump' would be received by a team, emphasizing the importance of trust. Vineet shares a personal anecdote from 2005 when, as a new leader of a company with 25,000 employees, he faced a similar 'jump' decision but was uncertain if his team would follow due to a lack of trust. He then takes the audience back to his childhood, discussing the influential role of his grandmother's vision for his future, which despite being simple, led him to pursue an MBA and start his career at HCL.

05:02

🚀 Overcoming Rejection and Aspiring to Lead

Vineet Nayar recounts his early career setback when HCL, his first employer, rejected him after only four weeks, shattering his grandmother's vision for him. This experience was a turning point, leading him to make two commitments: to outsmart those who rejected him and to become the CEO of HCL. Two decades later, he was indeed invited to be the CEO, which brought forth a new fear—whether he could lead by accepting rather than rejecting. He decided to take on the challenge, which led him to stand on a metaphorical ledge with 25,000 employees, ready to transform HCL into the world's best company. He introduces the concept of transformation through innovation in 'how' a company operates, not just 'what' it does, focusing on employee empowerment and customer value creation.

10:03

🌟 Prioritizing Employees and Executing Change

The speaker explains the philosophy behind 'Employees first, customer second,' which emerged from fundamental questions about business, value creation, and the role of management. He argues that employees create unique value at the interface with customers, and thus, managers should enable and encourage them. Vineet draws parallels from Indian history, emphasizing the importance of execution in realizing ideas. He outlines 'three steps for successful execution': creating unhappiness with the current state to drive change, defining a compelling vision for the future, and forming high-performance teams to achieve the impossible. He shares an example of HCL's 360-degree feedback initiative, which democratized the organization and empowered employees to drive change.

15:04

🌱 Legacy of Leadership and Employee Empowerment

Vineet Nayar concludes by reflecting on the success of HCL's transformation, where 25,000 employees grew the company six-fold during a recession and achieved high customer and employee satisfaction. He addresses the sustainability of such initiatives beyond a leader's tenure, pointing to his grandmother's enduring influence on his values and leadership style. He also mentions his foundation's work in education, showing that the company's success continued after his leadership. Vineet calls for a commitment to making 'employee first' a reality in organizations worldwide, inspiring employees not just for financial gain but for the shared vision of their leaders.

Keywords

💡Leadership

Leadership in the context of the video is about guiding a group of people towards a common goal, often through challenging circumstances. The speaker reflects on his role as a leader when he was faced with a metaphorical 'fire' and had to decide whether his team would follow his directive to 'jump'. It's about trust and the influence a leader has on his team's actions, as illustrated by the story of standing on the ledge of a burning building.

💡Trust

Trust is a central concept in the video, referring to the confidence that team members place in their leader's decisions. The speaker questions whether his employees would follow his orders without having established trust, which is crucial for effective leadership. The narrative emphasizes the importance of leaders earning the trust of their teams to ensure collective action and survival.

💡Transformation

Transformation in the video is used to describe the process of changing the form or nature of something, particularly a company. The speaker discusses two ways to transform a company: by innovating in what the company does or by innovating in how the company treats its employees. The latter approach focuses on creating a more efficient and motivated workforce, which is a key part of the speaker's strategy for turning HCL into a successful organization.

💡Innovation

Innovation is a key theme in the video, referring to the introduction of new ideas or methods. The speaker differentiates between innovation in 'what' a company does, which is common in the business world, and innovation in 'how' a company operates, which he advocates for. Innovation in the 'how' involves changing the company's internal processes and culture to create a more dynamic and effective organization.

💡Vision

Vision in the video is the idea or image of the future that guides decision-making and motivates action. The speaker's grandmother's vision for him is used as an example of how a vision can shape a person's life. In a business context, the speaker discusses the importance of creating a compelling vision for the company's future that can inspire employees to work towards it.

💡Employee First

Employee First is a concept introduced by the speaker as a management philosophy where employees' needs and development are prioritized. The speaker argues that by putting employees first and enabling them to create unique experiences for customers, a company can achieve greater success. This concept is exemplified by the speaker's experience at HCL, where he implemented policies that empowered employees and led to significant growth.

💡Execution

Execution in the video refers to the practical implementation of ideas or plans. The speaker emphasizes that while ideas are important, their success depends on effective execution. He shares his experience of executing a vision for HCL by creating a culture of innovation and employee empowerment, which led to the company's transformation.

💡Value Zone

Value Zone is a term used by the speaker to describe the interface where customers and employees meet and create unique value for the company. He argues that this is where the unique experiences for customers are created, and thus, it is crucial for the company's success. The concept is integral to the speaker's strategy for transforming HCL by focusing on the interactions between employees and customers.

💡Democratization

Democratization in the video refers to the process of making an organization more open and inclusive, particularly in decision-making. The speaker describes how HCL opened up a 360-degree feedback process for all managers, including the CEO, making the organization more democratic and empowering employees to influence change.

💡High Performance Teams

High Performance Teams are groups that are capable of achieving exceptional results. The speaker discusses the importance of creating such teams that are willing to take on challenges and attempt what others deem impossible. He gives the example of HCL's initiative to open up feedback to all, which was a bold move that contributed to the company's high performance and growth.

Highlights

The importance of trust in leadership and the power of a leader's decision to inspire action.

The story of the speaker's grandmother 'Amma' and her influence on his early life and career aspirations.

The challenge of fitting into an organization and the impact of rejection on personal growth.

The speaker's commitment to outsmart those who rejected him and his ambition to become CEO.

The fear and responsibility of becoming a CEO and the challenge of leading by accepting rather than rejecting.

The concept of transformation in business and the two ways to achieve it: innovating what you do and how you treat your employees.

The idea that employees create unique value for customers and the role of management in enabling this.

The strategy of 'employees first, customer second' and its role in driving company growth.

The three fundamental questions that guide the company's approach to innovation and value creation.

The importance of creating unhappiness with the current state as a catalyst for change.

The power of a compelling vision to inspire employees and drive organizational success.

The concept of 'employee first' and its experimental approach to inverting the organizational pyramid.

The execution of the 'employee first' initiative through 360-degree surveys and the democratization of the organization.

The remarkable growth of the company and its achievements in customer and employee satisfaction.

The enduring impact of the 'employee first' initiative beyond the speaker's tenure and its legacy.

The call to action for leaders to make 'employee first' a reality and inspire millions in their organizations.

Transcripts

Transcriber: Bob Prottas Reviewer: Leonardo Silva

Thank you so much.

Just close your eyes for a minute.

Just go ahead.

Close your eyes for a minute.

And imagine,

that you're standing on the ledge of a building,

which is 3 stories high,

and imagine that the building is on fire,

and if you knew that the right answer for you is to jump

in the next 30 seconds.

How many of you would jump?

I guess everybody.

Imagine you are on that ledge of a building, with your entire team,

ten, hundred, thousand,

and the building is on fire,

and you are the only one who knows the right answer

is to jump in the next 30 seconds

for all of you to be saved,

and you turn to your team, and you say: "Jump!"

What do they do?

They jump, because you said so.

Or they don't jump, because you said so.

Think about it.

I was standing on the ledge of a building in 2005,

with 25,000 of my colleagues,

as the new leader, and they looked up to me

as to what to do next.

I knew that the right answer is to jump

but somewhere in my heart

I knew that we as leaders have done nothing

to win the trust of our employees,

and therefore, even if I say: "Jump!",

would they jump?

Did they jump?

I will come to that story in a bit, but let's rewind a bit,

and tell you a story about how did I get on the ledge of that building,

in the first instance.

In India, as is true with many parts of the world,

when a child is born, it is considered auspicious

for the grandmother -- I call her "Amma" --

to walk up to the child -- she is the first to pick up the child

and she picks up this child, in her hands,

and defines a vision for that child.

That vision has no data. That vision has no logic.

And she says: "Your fingers are so long, you'll be an artist."

"Your forehead is so wide, you'll be a NASA scientist."

Everybody in the family believes in that vision.

When the girl grows up that vision becomes her ambition.

Becomes her pursuit, and then becomes her reality.

I was fortunate to be born in my Amma's house.

Those days children were born in homes, not in hospitals,

on this huge bed, which could sleep 9 people,

My Amma picked me up,

and I guess I was waiting for this vision,

and she picked me up, and defined this vision, and said:

"Vineet,

this boy is going to do good,

and he's going to have a steady job."

What?

I guess my grandmother didn't see anything,

(Laughter)

to say something more profound.

But not true.

Twenty three years later, armed with this MBA degree

I walked through the corridors of my first job at HCL.

Four weeks later, I was called into the room

with these 4 grim looking people

who had this single sheet of paper in front of them.

They sat me down, and said:

"Vineet,

we don't think you fit into our organization."

I don't know what I was most disappointed about,

The fact that I was rejected,

or the fact that even that vision that my grandmother thought of me

has collapsed.

(Laughter)

I still remember that night.

It was very long, very painful, very frustrating.

But by that time the morning came, my life had changed.

With the sun rays I made 2 commitments to myself.

The first, that I will do everything in my power

to outsmart these self-proclaimed gods,

who believe in leading by rejecting,

rather than accepting.

And second,

that one day, I will be the CEO of this company,

and show them the way.

Somebody has rightly said:

"You need to be a bit careful about what you wish."

Two decades later, time had turned a full circle,

The chairman of HCL, who's a brilliant man,

with uncanny intuition and foresight,

invited me to be the CEO of HCL.

I was afraid, not that I was not happy to be a CEO,

but I was afraid, not because my first commitment was turning right,

but my second commitment, that did I know how to lead by accepting,

rather than rejecting.

And I said: "How would I know, unless I try?"

And that is the reason I was on that ledge of the building

with 25,000 other employees,

who were waiting for my direction to jump.

Because we wanted to transform HCL to be the best company in the world.

Transform is a very interesting word.

Changing the form of something permanently.

In my mind, you can transform the company in 2 ways.

First, by innovating in what you do, which is the obsession of the world.

To be a Google, to be a Facebook, to be a Tesla.

But it is a more interesting, human way of transforming yourself

using innovation about how you treat your employees,

about how you run your company.

By increasing the clock speed of your organization,

you can actually outperform all your competition,

with the same product, the same customer, the same market.

Why don't people get it?

Our journey of thinking about innovation on the how-axis

rather than what-axis started with 3 fundamental questions.

The first: what is the business we are in?

And our answer, we are in the business of creating unique experiences,

unique value for our customers, and the more unique we are,

the higher market share we will create.

Second question.

Where does this unique experience, unique value get created,

and who creates this unique experience, and unique value?

Answer, it gets created where our customers and our employees meet.

In that interface, we call the value zone,

and our employees in that value zone create that unique experience.

Thus, the third question.

If our employees are the unique value,

are creating the unique value, which helps us grow faster,

then what should the role of managers and management in any company be?

And the obvious answer for us was nothing

but enthusing, encouraging, enabling those employees

to create the unique experience

so that we can grow faster.

What is not obvious about that?

And that is how employees first, customer second was born,

where the management is in the business

of enthusing, encouraging, enabling people,

and employees are in the business of customers first.

Ideas are great, but they are --

many, many of them fail under pedestal of execution.

Our study of revolutions, our study of Indian revolutions with Mahatma Gandhi

came to the shores of India in 1915

with this inspirational idea of non-violence.

He came to the shores --

In 1915 we had this inspirational leader, with the inspirational idea,

and yet it took 32 years for India to gain independence.

So we started revolutions, we started transformations on sports teams,

we started organization transformations, and came down with what we call

"three steps for successful execution."

The first was, create unhappiness with today.

There were so many of my colleagues on that ledge, who didn't want to jump

because they did not think anything was wrong with the company.

I'm sure that is not happening in your company,

that people are slicing and dicing the data to look good.

I don't think this is happening.

But if you're slicing and dicing the data to look good,

then how would that change happen?

It is important to say:

"Mirror, mirror on the wall, I am the ugliest of all."

A diamond cutter gets excited with rough diamond, not polished diamond.

A potter gets excited with rough clay.

What you need in your organizations to transform,

are those diamond cutters, the plumbers, and the potters,

who believe in challenges.

Then show them the challenge, and they will fix it for you.

So we throw all our dirty linen in public for everybody to see,

so that it was not about whether we are performing or not,

it was what can we do with this -- the word I can't say --

(Laughter)

The second, is defining a vision for tomorrow, which is so compelling

that people with jump out their bed, and go work for you.

Freedom.

Where is that vision in our organization?

Why does an employee,

on a Sunday, spend his money, time, energy,

drive to a mosque, a mandir, and a church,

and feel good about it?

And why does the same employee

get paid to come to our organizations on Monday,

and feel bad about it?

Because organizations have a vision, and a purpose for themselves,

they don't have a vision, and purpose for that employee.

Employee first was and experiment to invert the organization pyramid,

by inspiring people to do what they wanted to do,

better than what we wanted them to do.

The question we ask ourselves:

If we could inspired these people to pursue a vision which is their vision,

and that vision is aligned with our vision, magic will happen.

And it did.

The third step was: How do we move from here to there?

We have created dissatisfaction with today, a vision for tomorrow.

How do we move?

And the answer was,

high performance teams attempt to do what others consider impossible.

So unless in your life and your teams you are attempting to do the impossible,

how can you ever think of high performance?

So 1 idea which worked at HCL

was the fact that we opened a 360-degree survey

of all our managers, including the CEO.

So all our employees did confidential surveys,

360-degree survey, anonymously of everybody including their CEOs

from 32 countries, and the results were published on the web for all to see.

With one stroke, we had democratized the organization,

we had inverted the pyramid,

and now the employees were owning the change they wanted to see.

So many asked me this question in terms of:

"Vineet, did this succeed?"

Honestly, I don't know.

But I do know for a fact

that 25,000 brilliant individuals

jumped that summer of 2005,

and when they landed, they were 100,000.

They grew the company six fold, in the peak of recession, in 7 years.

They were number 1 in customer satisfaction,

employee satisfaction, and did everything which others considered impossible.

The second question I'm asked is:

"Vineet, would this initiative outlast a leader?"

Remember my grandmother had defined a second vision,

that you would do good.

Me and my wife started a foundation,

and today we are reaching out to 2.8 million poor children,

in rural schools across India,

by innovating on how education is delivered to them.

And for these last 2 years,

HCL has outperformed whatever they did in my tenure.

So this story is not about me.

This story is not about those brilliant 25,000 or 100,000 employees,

but this story is about our grandmother's wish,

our grandmother's sense of leadership.

So can we hold this employee in our hands?

Can we define a vision for her?

Can everybody believe, and trust us in that vision,

and go work for that vision?

Can that employee trust us, and make that vision her ambition,

her pursuit, and then her reality?

Employee first is that leap of faith every single employee deserves

from every single manager in the world.

Please stand up, all of you, please stand up.

Please join me in making this commitment,

that we are going to make employee first a reality

for millions of people who walk through our organizations,

not just to get paid,

but to be inspired by the vision

you have for them.

Thank you.

(Applause)