A simple, powerful idea | Employees First, Customers Second: Turning Conventional Management Upside Down |...

Innovative, Radical, and Worth Trying! | Employees First, Customers Second: Turning Conventional Management Upside Down | Vineet Nayar

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	• Employees First, Customers Second: Turning Conventional Management Upside Down Vineet Nayar Harvard Business Press, 2010 - 208 pages average customer review:based on 8 reviews view larger image
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highly recommended

An alternative look at the value zone

Putting employees first is an idea with which most are probably already familiar, the idea that putting employees first will bring benefits to customers. Putting customers first is not necessarily going to move a company in the right direction. As Roger L. Martin stated in "The Opposable Mind: How Successful Leaders Win Through Integrative Thinking" (see my review), "customers are not always right...customers lie or they are wrong". But just how will putting employees first bring benefits to a firm? In trade-off scenarios between employees and customers, does putting employees first mean that they will always win?

In this book, Vineet Nayar discusses the transformation of HCL Technologies (HCLT) since he became CEO of the firm in 2005. As it became apparent that other Indian firms in the technology services space started to outpace HCLT, Nayar started seeking solutions. While contemplating the traditional hierarchical corporate pyramid (where a few managers sit at the top and the bulk of the organization sits at the bottom) and the traditional value zone where products are created and produced, and conversing with customers and observing the younger generation of workers, Nayar came to the conclusion that the value zone lay in the "how" of their offerings (the way technologies are brought together and implemented) more than the "what", but that the employees working at this level of the pyramid were not respected or supported by management.

Nayar began to contemplate whether a solution might lay in making management accountable to the value zone and the people in it. In other words, putting employees first might help the end goal of HCLT, which was to provide technology services. Some of the methods used to achieve this aim were the "Mirror Mirror" exercise (to help see the reality of the situation, to create dissatisfaction with the status quo, and to build a hunger for change), the "Blueprint Meeting" (to draw a path from point A to point B, and to create trust through transparency), the "Smart Service Desk" (to enable employees in the value zone to open tickets for management to resolve), and the "Open 360-degree Review" combined with an initiative called "Happy Feet" (to open the performance review process to all employees whom a manager might affect or influence, and to allow anyone who provides feedback to a manager to see the results of that manager's review).

The author provides a well-worded explanation of the customer-management-employee relationship, something lacking in other texts of this genre. And Nayar succeeds in his goal of explaining the "how" rather than the "what" while other business texts such as Ric Merrifield's "Rethink: A Business Manifesto for Cutting Costs and Boosting Innovation" (see my review) that specifically set out to explain the "what" rather than the "how" often change course. This reviewer also enjoyed Nayar's incorporation of the four elements of trust (see my review of "The Trusted Advisor", by David H. Maister, Charles H. Green, Robert M. Galford). Recommended text for anyone looking to other firms for ideas on how to take an alternative look at the value zone.

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A simple, powerful idea

Anyone who's ever been underpaid and undervalued by management can tell you how much harder they would have worked, how much better their work would have been, and how much more satisfied they would have been in their job if their bosses had made any efforts to respect their contributions. This is part of the basic premise of Employees First, Customers second. In short: if you treat your employees well and support them, they do better work and keep your customers happy. When you treat the people at the bottom of the pyramid like interchangeable parts, but they're the ones interacting with your customers, your customers are going to see it and your relationships with customers are going to suffer.

Mr. Nayar's book has several suggestions that apparently worked well for his company, and look great on paper: Realize that your customer-facing employees are far more important than their pay grade indicates, Increase transparency, Admit when times are tough instead of denying the elephant in the room, Make management and service departments accountable to employees. He gives examples of how his company did these things, and most of those methods seem fairly portable. In all, i'd love to work at a company that even tried to do these things, and i'd love to work with companies that respected their employees by putting them first.

I have a two complaints, one substantive and one superficial.

First, the substantive: repeatedly through the course of the book, Mr. Nayar says something to the effect of 'we had many successes, and many failures.' He never once describes a failure, an initiative that flopped, a new policy that did more harm than good. All we see is the raging successes. For an executive trying to reform their company, knowing what worked for Mr. Nayar's firm will be very helpful, but not as helpful as knowing that and what looked like it should work but ended up being a disaster. Mr. Nayar touts transparency, but gave a very self-servingly opaque account of his efforts and results.

Second, the superficial: This book is written by someone who speaks the Indian dialect of English, not the American. Sentence structure, paragraph structure, and word choice are all a little unusual to American eyes. It doesn't interfere with comprehension, but it does take a little bit of habituation.

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Innovative, Radical, and Worth Trying!

As a member of Generation Y (or at least close), Nayar's ideas resonate with me, and are needed badly in today's workplaces. Research shows that many Americans hate their jobs and have no respect for their employers. Why? This could be in part because employees feel undervalued, voiceless, and expendable. My experience is mostly in the non-profit and education sectors, but the idea that a technology company would put employees over clients intrigued me, and I wanted to see if Nayar's company was really different from other businesses that Americans seem to disdain.

While most people wouldn't call a book like this a "page-turner," I viewed it this way. I couldn't wait to see what Nayar and his company did next. The basic content of the book is Nayar explaining the various ideas he implemented, which were designed to put "employees first." By putting employees first, he increased productivity, creativity, and revenue. He accomplished this in part by giving employees in the "value zone" more control. Value zone employees are those that actually provide the most value to clients, i.e. those doing the work and generating the ideas that attract and keep clients.

One idea Nayar explains is "Mirror Mirror," where he challenges employees at all levels (including himself) to "look in the mirror" and truthfully describe what they see. This exercise keeps employees fresh and innovative because they are regularly assessing the reality that they - and the business - find themselves in. When Nayar's company used this exercise, they found that management was often detached from the value zone, and hindered the work of the employees there. This was an "a-ha" moment for me, having witnessed disconnected managers trample innovation among lower level employees.

Another of Nayar's ideas is to increase transparency so that employees at all levels know what is going on within the company. One way is making financial information open to all employees. Another that Nayar has established is an online forum where employees ask questions, to which the leadership team responds. Others can join in on the discussion as well. This forum has allowed open discussion, promoted innovation, and reduced gossip and speculation.

Nayar also has taken steps to invert the traditional hierarchy, making managers accountable to employees. Bosses often believe that they should make decisions that affect the entire company, even if they are virtually disconnected from the value zone. Such an approach makes no sense, but is taken for granted in many settings. One solution Nayar has developed is the "Smart Service Desk," a system where employees open a "ticket" on a work-related issue, and the issue is investigated and dealt with; only when an employee is satisfied with the answer is the ticket closed. Another tool to increase transparency is the "360 degree survey," in which managers are reviewed not by a select group of other managers, but by everyone a manager might affect or influence. The result is that managers have to reach out to, and inspire, many more people, especially employees in the value zone; they no longer just have to please fellow managers.

Additionally, Nayar explains the role of CEO in his "employees first" paradigm: CEOs should enable their employees to do great things and make great decisions. In fact, a CEO is just one voice among the crowd (albeit a highly paid one!), and should feel comfortable reaching out to his or her employees, even asking their advice.

The last chapter deals with possible objections that naysayers might have to the program, and Nayar realistically addresses them. Interestingly, when it came time for possible layoffs in 2008, his company consulted employees about ways forward during that difficult time. The result was innovative and effective solutions. All I can say is "wow." If only businesses and non-profits everywhere were so transparent and open to new ideas. You can't have a negative rumor-mill if employees are openly working with management to address the problem of possible lay-offs.

Overall, I loved this book. Since I am exploring educational administration, I am excited about implementing some of these ideas, if allowed to do so. The only concern I have about this book is that often Nayar doesn't really explain too many of the negative results of his program. He also provides few details of how he dealt with those employees who consistently resisted his ideas. Granted, he candidly acknowledges failure, and he is, overall, very humble, but I think managers and administrators would like to know some of the specific challenges he faced, to be able to effectively address them in their own settings. To end this review, I will say that these ideas are exciting, and I hope that businesses consider putting employees first, since it seems to be a great way to take care of people and increase profits.

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I Wish EVERY Company Would Do This!

In college I took an amazing course called the Sociology of Complex Organizations. It opened my eyes to things I might not ever otherwise have understood. Complex organizations have HUGE problems. Huge, huge, huge. They cause major problems in how people live their lives, how the economy works, and many other things.

This book is exciting. Author Vineet Nayar has found ways--lots and lots of ways--to vastly improve complex organizations. What this book describes needs to be studied and implemented very widely.

Nayar describes the process of the company he serves as CEO, how things turned around and many things they learned in the process. What speaks to me most is the difference it made to the employees. That transferred to everyone else, especially customers.

In complex organizations, the various levels of power quite often cause more problems than they ever solve. In this book a lot of ways to change that are described.

This book gives me a lot of hope. I wish it Godspeed to get out and communicate its great messages to the people who need them.

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Prepare to have your assumptions rattled

Vineet Nayar will challenge your Status Quo with EFCS. It's refreshing to a read business book from a perspective outside the typical Western dogma. Nayer refers to the likes of Ghandi and MLK Jr to support his ideas - something seldom seen in biz books. In doing so, he connects smart business practice with strong human instinct.

There's an attractive vulnerability in Vineet's narrative. He's not afraid to share missteps and personal doubts experienced along the way. He also gives appropriate credit to co-thinkers.

His easy gentle style could lull a reader into thinking the EFCS idea would be easy to impliment, which would be a mistake. These ideas make sense and would be well worth the incredible effort to make them happen.

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One small idea can ignite a revolution just as a single matchstick can start a fire.

One such idea—putting employees first and customers second—sparked a revolution at HCL Technologies, the IT services giant.

In this candid and personal account, Vineet Nayar—HCLT?s celebrated CEO—recounts how he defied the conventional wisdom that companies must put customers first, then turned the hierarchical pyramid upside down by making management accountable to the employees, and not the other way around.

By doing so, Nayar fired the imagination of both employees and customers and set HCLT on a journey of transformation that has made it one of the fastest-growing and profitable global IT services companies and, according to BusinessWeek, one of the twenty most influential companies in the world.
Chapter by chapter, Nayar recounts the exciting journey of how he and his team implemented the employee first philosophy by:

• Creating a sense of urgency by enabling the employees to see the truth of the company?s current state as well as feel the “romance? of its possible future state

• Creating a culture of trust by pushing the envelope of transparency in communication and information sharing

• Inverting the organizational hierarchy by making the management and the enabling functions accountable to the employee in the value zone

• Unlocking the potential of the employees by fostering an entrepreneurial mind-set, decentralizing decision making, and transferring the ownership of “change? to the employee in the value zone

Refreshingly honest and practical, this book offers valuable insights for managers seeking to realize their aspirations to grow faster and become self-propelled engines of change.

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