CHAPTER TWO

Trust Through Transparency

Creating a Culture of Change

Summer descended. One steamy afternoon, I sat in my office and asked myself, What do we do next?

The Mirror Mirror exercise had served its function: to help us see the reality of our situation, to create dissatisfaction with the status quo, and to build a hunger for change in the company. The anxiety and concern that some had expressed during that period had largely been replaced by a new energy and excitement. People felt good to be talking about movement and growth and how we could be a great company again.

Beneath the excitement, however, there was still plenty of skepticism and uncertainty.

The idea of Employees First, Customers Second sounded promising—if you’re an employee, why wouldn’t it seem positive?—but what exactly did it mean? How would we put employees first, and why would we put customers second? Did it mean that we would increase salaries and have pizza parties on Fridays? Did it mean we would actually change our organizational structure? Did it mean we no longer had to work within the budgets and meet the schedules our customers set? Were we truly serious about this concept of focusing so sharply on the employees in the value zone? Or was it just superficial talk, intended to make people feel good? Or, worse, was it really just a prelude to downsizing?

People started debating the future vision of HCLT and I saw this as a good sign. It had been a long time since employees were interested enough in where we were headed to discuss it during meetings and over lunch, a long time since they felt that what they had to say would be listened to and would make a difference in how the company operated. That was a change in itself, but hardly the transformation we were looking for. As our next move, we had to figure out exactly where to go, strategically, and how to get there, practically.

These goals can seem very difficult when you’re in the middle of figuring out how to achieve them. There are so many levers to pull, so many people to influence, so many courses of action that could be taken. I obviously did not have all the answers myself. I didn’t even know all the questions to ask. Nor was I familiar with the specific issues in every one of our businesses or country operations. I decided it was time to call a meeting of my hundred most senior managers to discuss with them our future and how to get there.

The Blueprint Meeting

In early July 2005, my A team, the hundred best and brightest brains in the company, flew in to Delhi from around the world for a three-day conference. Many of us had met in various smaller groups before, but this was the first meeting in which we all came together to focus on the specific question:What should we do next together?

Next. Together. Those were the fundamental words. Could we come up with the answer to the question “What do we do next, together?” We called the meeting Blueprint, and our goal was to draw a path from point A to point B.

On the first day, I had planned to present my initial ideas for our strategy. These had emerged from a lot of work with a group of very smart members of my strategic marketing team. We had considered many strategic options and narrowed them down to two. One of the ideas—to compete against the global players for much larger customer engagements—looked very bold, perhaps too bold for us to pull off, but offered the largest and most significant opportunity for HCLT. The other was more conventional and less daring and probably represented only an incremental improvement. Both had their advantages, and I was of two minds about them, as were many members of my marketing group—so much so that we had prepared two versions of my remarks, one for the bold strategy, and one for the more modest approach. I had stayed up late the night before, thinking them over. At last I went to sleep, still uncertain which road to go.

I woke around 5 A. M. and reached for my cell phone. I read a text message from one of the team members: “Vineet. Go for the big idea. We are all with you.”

The message struck me as encouraging, but also odd. Did it mean they would not be with me if I went with plan B? I realized that the big ideas are the ones that attract the most talented people and bring out the best in them. My colleagues were telling me that they wanted to go for the big move, the impossible.

I thought back to a decision of similar magnitude that I had made in 1993: to found Comnet on the idea of remote network management. We thought the idea was very compelling and had huge potential, but it also carried a lot of risk. We decided to go for it and the result was completely worth the effort. Remembering that past decision helped me make up my mind about the current one. I shot a message back to the team: “Let’s go for the bold one!”

But what about the hundred best and brightest that I had invited to this meeting? Would they support the plan the marketing team and I had drawn? I had a nervous sensation in my stomach as I dressed. The last thing I wanted to do was get excited, reach too far, and fall flat. But we would never know the answer unless we presented the question.

My marketing team and I got to the conference room early. We thought that if we arrived before everyone else, we would improve our chances of success. Soon enough, the hundred started rolling in. We shook hands, hugged some old friends. Everyone was smiling. People said nice things. But my stomach was still churning.

At last everyone was seated. The lights dimmed a bit. I walked to the podium. One of the communications strategies that has worked well for me is to start by plunging right in to the main idea. If you identify the elephant in the room in the first few minutes, you put yourself on the path toward success or disaster—a path that is pretty much irreversible.

“Let me share five interesting facts with you,” I began. “Fact number one: the worldwide IT outsourcing market is worth about $500 billion. The industry is dominated by the global players like IBM, Accenture, and EDS. Fact two: the top five Indian IT companies, including HCL, account for just $6 billion of that total. That is just 1 percent.”

I paused for a moment. I wanted everyone to focus on just how enormous our market was, how tiny a share of it we actually had, and what a narrow segment we played in.

“Fact three: the Indian IT players seem to have become satisfied with this 1 percent. They have gotten used to a business model that is narrowly focused and can be easily scaled. Competitive advantage comes from hiring and training young, college-educated engineers and deploying them to deliver high-quality services.”

I paused again. Everyone knew that this was the truth of our industry and that we had been depending on an endless supply of talent to build scale for years.

“Fact four: IT outsourcing customers are seeking higher transparency, greater flexibility, and more attention from their global IT players, and they are increasingly frustrated with these suppliers because they don’t always deliver. Fact five: the total-outsourcing model that was dominant in the 1990s, largely led by the Big Four, in which clients got locked into ten-year deals and lost control of their IT, is not working for customers anymore. They want to regain some control by collaborating with their outsourcers rather than leaving everything to them.”

With the facts laid out, it was time to move on to the proposed solution. “We know that of the G-1,000, the thousand major global companies, the top two hundred are quite well served,” I said. “The G-200 are the customers that everyone is chasing, and the Big Four catch them most often. So why don’t we focus on the next eight hundred, the ones that are not so well taken care of? There is no reason we can’t integrate our services so we can manage the complete IT life cycle for our customers and take on the role of partner rather than supplier. These types of contracts can run into the hundreds of millions of dollars.”

This was, indeed, a bold idea. It caused some fidgeting in the audience. At that time, HCLT offered discrete IT services, which generally meant smaller contracts. Most of our relationships with customers were not the kinds of strategic partnerships that the global players had with their clients.

There was a nervous cough or two. People shifted in their seats. I glanced at my team, saw a nod or two of encouragement, and plunged ahead.

“Now, how will we go about winning this business? How will we get companies to think differently about HCLT? By offering a real strategic difference based on three fundamental beliefs. First, we will offer flexibility and transparency of a kind customers have never seen before, not from us, or from our new direct competitors, the big global players. Second, we will sharply focus on value centricity. By that, I mean we will put all our energy into increasing the value we are creating for our customers rather than trying to build the volume of business we do with them. Third, and most important, we will set a new standard for the value we actually deliver. And that is where Employees First, Customers Second comes in. It is what will enable us to unleash the positive energy and passion of our employees, to create a tremendous wow! in the value zone that will become our major differentiator.”

I paused and let this sink in for a moment.

“This cannot happen overnight, of course,” I continued. “To transform HCLT from a provider of discrete outsourced services to a strategic IT services partner, from a developer of technology to an investor in core intellectual property, will take five years. It will require a reorganization of the company structure, from a collection of business units to a matrix organization that can integrate services and do it worldwide.” And I knew it would take much more, as I went on to describe. “We will have to rejuvenate those employees who have lost their enthusiasm, improve outdated processes, build strategic partnerships, and develop new products and services.” I concluded, “We must not waste our time and energy pursuing small, easy-to-win, nonstrategic opportunities, but we cannot fail to grow in any year, either. In short, we have a hell of a lot of work to do.”

I turned over the last page of my notes. I looked out at the audience and asked for the lights to be brought up a little. The hundred members of our A team had listened attentively, but I did not see a lot of expression on their faces.

“Now, I would like to hear from you,” I said. “Does the strategy make sense? What are your thoughts?” I looked at the young colleagues on my team. They seemed to be collectively holding their breath.

I waited. Silence. Nothing. Thirty seconds passed. A minute. I swear that two full minutes went by, and still no one said a word. This was unprecedented. I could not remember another time when members of this group had been so reluctant to speak their minds. At last, one of the business leaders from Europe, whom I will call Alex, raised his hand.

“Yes, Alex,” I said. “What are you thinking?”

“Vineet,” he said, “I’m thinking that you must be crazy.”

“Possibly,” I said. “Why do you think so?”

“We have never done anything like this before,” he said. “We have no idea how to compete with the global players. We will destroy everything we have created in the past few years. Instead of going after these big contracts, we should first get better at executing on our current business model.”

I said nothing. I did not want to get involved in defending my ideas. I wanted debate. Another manager spoke up.

“I agree with Alex,” she said. “Taking a big leap is all very well, but we can’t abandon our core competence. That is a recipe for disaster.”

The temperature in the room was rising. People began shifting in their seats and whispering to one another. A business leader from the United States stood up. “I agree with Vineet,” he said. “Our current business model is outdated. Our employees know it. Our customers know it. Our competitors know it. Haven’t we already faced up to the reality of where we are? Don’t we see customers leaving us every day? Our shareholders asking tough questions about our future? Talented people walking out our doors and going to work for our competitors? We are already good at our current business model. But it no longer works!”

Another voice chimed in: “We have been in this industry for over two decades and have been number one for many of those years—but not once in the last five years. Now, we’re not even in the top three. We have to take a bold step!” More voices rose from around the room, and soon a heated discussion was taking place. I stepped back. I wanted the A team to talk, not me. In truth, it didn’t really matter what they said about the global services strategy. What mattered is that they started talking truth, rather than going on about the normal, fine-sounding plans and programs that would keep driving us into the ground. These were the hundred brightest people in the company. If they decided to kill the plan I had presented, I was confident they would come up with something equally big and probably better. We needed a big change, but it did not have to be the one I had proposed.

So the discussion continued. I wanted all the comments to come out into the open and be debated to the point of exhaustion.

The Trust Quotient

The strategy discussion at the Blueprint meeting went on for the better part of that first day. I listened and watched as, over the course of the afternoon, three distinct positions emerged.

The transformers loved the idea of change and would hear no objections to it. Their enthusiasm was exciting and infectious, if not yet completely grounded in reality and practicality.

The fence sitters believed that something new needed to be done, but they had questions and concerns about the global IT services strategy, and some of these people suggested other strategies we might pursue. They kept asking questions, adding information, and working to make up their minds.

We did not have any lost souls, those negative thinkers of the larger HCLT population, among the hundred brightest minds of the A team. But we did have a third group composed of what I call the “yes, but” managers. For every idea or proposal, these managers had an objection. “That’s all very well,” they would say, “but …” And the “but” was always about why this idea could never work or how that idea had already been tried or how this solution would cost too much or could never be executed. I had heard the “yes, buts” many times throughout my career. I had seen how these objections could stop an organization from facing the naked truth. In this case, the “yes, but” managers viewed the proposed strategy as too big a risk, for themselves and for the company. For every new proposal, they found new reasons why the plan couldn’t work, and many of their reservations were completely plausible.

But as the afternoon turned into evening, the transformers tempered their enthusiasm with a dose of reality. The fence sitters, one by one, made up their minds. And the “yes, buts” gradually had their objections met or dismissed. At last, the top hundred reached a consensus that we needed to make a bold move, that provision of integrated services made sense, and that the principles of transparency, flexibility, value centricity, and the EFCS approach could create a powerful differentiator for HCLT.

I was impressed by the quality of the conversation and by the engagement of the management team. I had entered the meeting wondering whether we had the people we needed on board. Now I felt certain that with only a couple of question marks, we did.

When we came to the end of the day, I stepped to the podium to close the session. “I want to thank you for this conversation,” I said. “For expressing everything that is in your minds and in your hearts. Now that we have come to a general agreement on our strategy, we come to the most difficult part of all—execution and change management. And that will be our discussion for tomorrow.”

I paused and looked out over the audience. I was startled, even troubled, by what I saw. In an instant, the looks in the managers’ eyes had changed. A moment before, they had looked weary, but satisfied, confident that we had aired our differences, engaged in a real conversation, and come out on the other side. Why did many of them now look so uncertain? Why, when I looked from face to face, did some of them avert their gaze? What had I said?

And then I understood the problem. I had spoken the words “execution” and “change.” Those two words had provoked the different look in their eyes. I saw that many members of my senior team did not truly trust that they could execute on the strategy and manage the complex organizational change. They did not trust that I could execute on the strategy, that their employees could execute, or that the entire company could pull it off.

I was confronting the difference between being convinced by an idea and trusting that it can be executed. We have all seen great orators speak and win over crowds at enormous gatherings. The orator describes in stirring tones a great vision, a whole new way forward. The crowd cheers and shouts in approval. Then they go home and think, “That was a great speech, but what that person said will never happen.”

I wanted to be sure that I was not fooling myself. All eyes were on me, and I could see that although a few of the managers were confident that we could take on the challenge ahead, not enough of them were.

“Well, Vineet,” I said to myself in that moment, “it’s not going to work. Without trust from the management team, the game will be over before it begins.”

In hindsight, I wonder why I thought they would trust me at all. What we were proposing was pretty radical. Why should they trust me? Just because I was asking them to? No. That is not a reason to trust anyone, especially in today’s world. Employees have distrusted managers since there have been employees and managers, but I was sure the distrust that ran within the organization was deeper than ever before. Over the past decade, we have seen many business executives and managers who have lied and stolen and betrayed the trust of their people and their companies. The distrust of people in positions of authority and power extends into every walk of life. The trust quotient, therefore, particularly regarding business leadership, is at an all-time low around the world. If you are a CEO or senior executive, you must not allow yourself to imagine that you, as a leader, or your company, no matter how successful, is immune to this problem. It is natural for a CEO or senior executive to think, “I am nothing like the ones who were tossed out of their companies or ended up in jail. My people know me. They know that I am a trustworthy person.”

I suggest that you think again. If your organization has more than a couple of hundred people in it, most of them don’t know you. You know you are trustworthy, but they do not. I believe that your personal trust quotient is lower than you think it is—probably quite a bit lower.

If I had any illusions about my trust quotient before the Blueprint meeting, I had none at the end of that first day’s discussion. Please do not misunderstand what I am saying. I did not see distrust in my managers’ eyes. I just did not see complete, 100 percent trust. Not being distrusted, however, is not good enough to embark on an important transformation.

I also realized that the lack of trust was not confined to me. The people in the room did not trust each other 100 percent. From what I read into their dubious looks, it was clear that they did not have complete faith that their colleagues could pull off what we had decided. And if they couldn’t have faith in their own people, the distrust was probably mutual.

So, what should have been obvious even before the Blueprint meeting began, now became blindingly clear: before we did anything, we would have to find a way to build trust throughout the organization. Not trust in me, as their leader, only. Not trust in a particular strategy. But trust in each other.

Lack of trust, we had discovered, was the most important “yes, but” of all.

The Nature of Trust

I have thought a lot about trust over the years, as I have worked with people who say, “I want you to trust me.” Or, “We must build a trust relationship.” These statements puzzle me. What are they actually proposing? I have also done a great deal of reading about trust. David Maister, for example, writes about the management of professional service firms, where trust between consultants and clients is extremely important and quite personal. One of the books he coauthored is The Trusted Advisor. Maister says there are four dimensions of trust:

Credibility: Credibility comes from professional expertise. If the person possesses deep knowledge and follows good practice, you feel trust in what he or she says and does.

Did I have credibility at the time of the Blueprint meeting? Perhaps. Certainly I was credible when I talked about the state of our business. But how could anyone know whether I could be trusted in what I was saying about long-term strategy?

Reliability: Reliability is revealed through actions over time. If you have observed a person’s activities and respect them, you probably trust that the person will do what he or she says, the person is dependable and will behave in certain ways.

Did my managers think of me as reliable in July of 2005? Probably they didn’t think of me as reliable or unreliable, because they didn’t have enough experience to tick the box either way.

Intimacy: This aspect of trust is about emotions. You instinctively feel that you can or cannot discuss many kinds of issues with a certain person.

During the Mirror Mirror exercise in the months before the Blueprint meeting, I had hundreds of conversations with employees throughout HCLT, individually and in meetings big and small. It was an emotional experience for everyone, including me. But my people had not seen the result of this emotion sharing and soul searching. I might yet betray them.

Self-orientation: The self-oriented dimension is Maister’s fourth aspect of trust. This one, though, reduces the trust quotient. It is about your motives and the things you care about. Can I trust you to think beyond your own self-interest?

What did my managers think about my motives? Did I just want to increase my own personal power? Did I want to appoint my friends to important positions? Did I wish to get lots of media exposure? It was hard to see how the Employees First idea would exalt the CEO, but people make all kinds of assumptions about a leader’s motives.

If I think about my trust quotient at the time of the Blueprint meeting and evaluate it on Maister’s four elements of trust—credibility, reliability, intimacy, and self-orientation—I am not surprised that I saw a lack of trust in the eyes of my hundred senior managers. In that moment, I realized that our first job would be to build trust throughout the organization.

The Family Model

We know about the importance of building trust from the family units we live in. All my life, I have been a student of the institution of family, which I view as a micro-organization that holds many lessons for large companies.

Many of my thoughts about management spring from observing my own family: my parents and grandparents, my wife and me, and our two children. We are fortunate to have built a great deal of trust into our relationships, and I believe that we have a strong and trusting family. So, as I thought about creating trust at HCLT, I naturally looked towards family units for insight.

Throughout my career, I have been puzzled by the way that businesspeople separate themselves into two parts. Each morning, we say good-bye to our families, come to work, hang our coats on a hook, and in that comfortable coat we wore from home, we leave behind all our emotions, subjectivity, personality, and connections to family life. We don our stiff white collars and put our heads down and go to work. We abide by the systems and practices and 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.

These are outdated thoughts left over from the early years of the industrial age, when jobs were largely mechanical and business organizations felt they had to protect themselves through command-and-control methods.

Families used to operate this way, too. In the traditional family, parents were the ultimate authorities. The children were expected to follow the rules and do as they were told. If they did not, they were punished.

In the past several decades, however, the family unit has changed considerably. Parents wish to be friends and mentors and advisers to their children. The kids want to be trusted to live quite independently.

The best families are those that have a culture of trust. The parents trust their children to come to them with problems. The children trust their parents to support and protect them, but also to let them have their freedom. I recall the old story about a child who will jump from the roof of the family home into the outstretched arms of the father waiting below, even if the child is blind.

But if trust does not exist in a family, the parents may battle with the children and with each other. The kids get in trouble or leave home. The parents have their own problems, personally or at work. The family becomes dysfunctional or breaks apart, just as high-performing companies can lose momentum in the absence of a trusting environment. But, I asked myself, how does one go about building, in a company, the kind of trust that exists in strong families?

The Elements of Transparency

On the second day of the Blueprint conference, I talked with my A team, my hundred brightest managers, about the importance of trust at HCLT.

Could transparency really be the catalyst to drive trust? I believed so, for several good reasons. Before I describe them, however, it’s necessary to understand a bit about the culture at HCLT. I compared it often to Comnet, where the culture was much easier to see and understand. It was largely driven by product and service innovation. We believed that if we did not innovate every eighteen months or so, if we did not bring a new product or a new service to the market, we would not remain competitive and would lose our position as a leader. We saw regular transformation as an essential part of our culture, driven by the nature of the business we were in.

Obviously, this was not the case at HCLT, a legacy business that had grown rapidly and changed quickly in its early years. As it grew bigger, it gradually slowed down. Change became more difficult and took longer to implement. Too many bright ideas got left on the table.

But I saw that the culture at HCLT was not all about legacy. We had bright people and strong leaders who wanted to break free of the old ways. We saw this very clearly in the Mirror Mirror exercise and again in the Blueprint meeting. As is true in so many large companies, it was the HCLT organization—the archaic pyramid—that was shackling people and keeping them from contributing all they could and in the ways they longed to.

I believed that one of the ways we could release this talent was to make our culture participative. To get our people to participate more, we had to create a culture of trust and to do that we needed much more transparency. There are five main ways in which transparency builds trust.

First, transparency ensures that every stakeholder knows the company’s vision and understands exactly how his or her contribution assists the organization in achieving its goals. Working in an environment without transparency is like trying to solve a jigsaw puzzle without knowing what the finished picture is supposed to look like.

Second, transparency helps to ensure that every stakeholder has a deep, personal commitment to the aims of the organization.

Third, for the Gen Y members of our workforce transparency is a given. They post their life stories in public domains; they expect nothing less in their workplaces.

Fourth, in a knowledge economy, we want customers to be transparent with us, to share their ideas, their visions for the future, and their strategies for solving core problems. Without such transparency, how can we create the technology solutions that will accelerate their growth and strengthen their businesses? And why would a customer be transparent with a potential partner like us if that company does not trust its employees enough to be transparent with them?

Finally, knowledge companies like HCLT often do lateral hires—people brought in from outside the company—to work on specific projects or initiatives. The only way these outsiders can get up to speed quickly and be as effective as possible is through sharing of information and complete transparency about the strengths and weaknesses, the issues and concerns, of the assignment. The more transparent the process, the more trust that the outsiders felt in the organization, the more we could reduce the amount of learning time, which would give us an advantage over our competitors.

The Amsterdam Window

I remember a visit I once made to a friend’s home in Amsterdam. Its huge windows faced one of the city’s main canals. The home was flooded with light, and the rooms felt very exposed to the glances of people on the street and in boats on the canal. My friend’s home was typical of all the houses in the central part of Amsterdam.

“Why do you have such large windows?” I asked my friend. A stupid question, perhaps, but—after he mentioned all the obvious reasons like letting in light and getting a nice view—I got a much more interesting answer.

“It keeps the house clean,” he said.

He didn’t explain further, but I took his answer to mean that the bigger your windows, the more glass you have in your house, the more visible the dirt will be — to you and to everyone who visits or passes by. If you can see the dirt, you will be much more likely to get rid of it.

A transparent house, therefore, has a dramatic effect on the culture inside.

In the house of HCLT, the Mirror Mirror exercise had been, in a way, about transparency. We had talked openly and honestly about the issues at the company. But the activity was limited in scope and duration, and not yet embedded into the organization or its processes.

At the Blueprint meeting, after we adjourned the formal session on the second day, we reconvened for cocktails and dinner. Having joined in many conversations during that long evening, I became increasingly convinced that we were all more or less on the same page. We had not ironed out all the details, and we saw a long and difficult road ahead, but we felt a sense of unity and agreement.

The next day, we came together once more to review our conclusions and draft a simple blueprint that would define our future state or point B and articulate in broad terms the what of our offering and, most important, the how. At last, weary but with a sense of accomplishment, we dispersed to our different corners of the world. I wondered what the managers would tell their people about the meeting when they returned to their offices and were asked,“Did it go well?” Would they say, “Yes, but …”? Or would they say,“We have a great opportunity ahead of us. Let’s get to work.”?

I knew that all eyes would be on these hundred managers. Now it was up to them to influence their own top hundred, and so on down the line. That is how we would engage the entire company in our journey of change.

A Novel Approach to Transparency

After the Blueprint meeting, we faced the problem of how, exactly, we would increase the transparency of the organization in order to build trust. How could we let the light in, as the windows did in my friend’s house in Amsterdam?

I knew that we must not deal in half measures. We had to do more than crack open a small window of transparency. We had to throw it wide open—do things we had never done before and attempt things that other companies had not tried.

Looking back, the solutions we came up with seem quite obvious. But at the time, I had no easy answers.

I appealed to our bright sparks for ideas and asked my managers to reach out and listen, as well. We got a lot of responses. Many of the ideas, although provocative, were too far out, too difficult to implement. One idea, however, made a great deal of sense.

Opening the Window of Information

The idea was to open the window of financial information.

At the time, our people had access to the financial information that pertained to their own projects, but they had no way of knowing how their business unit and the whole organization were doing. Nor could they compare the performance of their team to that of others in the company. What if we allowed everybody to see all the business units’ and the company’s financial data? Wouldn’t that be an important step toward greater transparency? Wouldn’t it help build a culture of trust—showing that we had nothing to hide and were willing to share both the good and the bad, just as one would in a strong family?

I floated the idea. Immediately came the “yes, buts.” There were two major objections.

First, the “yes, buts” asked, wouldn’t people get demotivated when they discovered that they were not doing as well as their managers had been telling them? I heard this many times, from many people.

Second came another objection:What would happen if the information leaked out to the press? What if our competition got hold of it? The “yes, buts” worried that all hell would break loose. I saw real fear on this one.

These were fair points, I had to admit. However, I argued, the instant we opened the information window, people would see that some business units were rolling downhill or were underperforming compared with other units. They would also have a true picture of the overall performance of the company. “Our employees told us in Mirror Mirror that they want to climb up,” I reminded them. “How can they know how steep the hill is without seeing the road? Are there risks involved? Yes, but it is all part of trusting our employees. Putting their needs first. These are risks we must take.”

Once again, I saw cautious agreement, with a skeptical glint in the corner of some eyes.

I turned to our internal IT team. I believed that using our IT system was core to the successful execution of new ideas. I had faith that this team could roll out virtually any bold idea and make it work for employees around the world. I asked the team to create a system that would show the financial performance of each employee’s team and be available on his or her desktop.

In just a few weeks, the new system was up and running. The employees loved it immediately. Some of the managers loved it quite a bit less.

When I discovered why, I realized there was a third “yes, but” that no one had articulated to me. Opening the window of information shed a lot of light on the role of the manager. Some found themselves exposed to the glances of the passersby from the streets and canals of the company. People saw that some of the managers were little more than aggregators and brokers of information. These managers’ entire authority lay in their control of the information. As soon as everyone had access to it, their power might come into question.

The transformers, however, especially loved the new system. They used the information to instill new energy and direction into their teams. Because all their team members shared the same version of the financial data, they could focus better on what actions to take. With each passing day, the information analysis improved. As people could see the benchmarks and compare their performance with that of others, they worked harder to improve their own performance. Soon, we added nonfinancial information and implemented the balanced scorecard for all our businesses through this process and made it visible for everyone to see on their desktops.

Increased transparency led to quicker action at the grassroots level. It also motivated the teams that were doing well. They felt that their success was being recognized, and they worked even harder to remain in the topperformer club. A new sense of purpose and direction was quite visible in the teams. Now that they had the information they needed, they could spend more time on execution and less time searching for data and trying to understand the reality of their performance.

I should say, however, that the other two “yes, buts” proved to be valid.

Some employees were, indeed, demotivated by the information they saw. And, yes, some information did leak out in ways that caused embarrassment and complication. On balance, however, the positives far outweighed the negatives. When you open the window, you must expect that a fly or two will buzz in to annoy you or that a vase could fall out onto the street and shatter.

However, the effects of the rush of fresh air and brilliant sunlight more than made up for those minor problems.

Opening Up the Office of the CEO: The U&I Portal

Too much happened in those hot summer months of 2005 for me to recount it all, but I want to describe one other way we brought greater transparency to our organization.

As I mentioned earlier, in my early days as president, and then CEO, I spent a lot of time visiting offices around the world and talking with employees at all levels. I heard lots and lots of questions, not all of which I could answer, either because there wasn’t enough time to do so or because I simply didn’t know the answer. When that happened, I would say, “Shoot me an e-mail. I’ll get back to you.”

When I said this, many employees did not look satisfied or convinced. They thought I was just dodging the question. They figured they would “shoot me an e-mail” and no answer would ever come back. But I really wanted to answer their questions. At Comnet, we worked in an open office space, and I was used to people calling out questions across the room.

At HCLT, with tens of thousands of employees and offices all over the world, we had to find some way to create the equivalent of the open office. If we did not, the office of the CEO (i.e., the position, and not me personally) would hold too much power. What the office said—or what people said it said—would always take precedence over what any employee might say or do.

How could we create the sense of an open office at HCLT?

While I was working with my social networking group, we came up with an idea we called U&I—an online forum where any employee could post any question, which I, along with my leadership team, would answer. The idea was to build an open site where everyone would be able to see the question, the questioner, and the answer. It was a simple idea that we hoped would foster a culture of open conversation, with fewer rumors and less misinformation, and that would thus create more trust. Today, I see forums like this in many companies, but in 2005, I believe it was a breakthrough. Many of these sites, however, are not sufficiently open. They enable people to ask questions directly of the CEO, but neither the questions nor the answers can be seen by others. Such one-on-one dialogues are good but do not create the kind of transparent culture that builds trust.

There were many “yes, buts” to the U&I concept. As with the posting of financial information, two of these doubts stood out.

One: “Some employees will ask really tough questions. They will expose weaknesses that some people don’t know about. This could get out of control. It could leak out. We could be in for real trouble.”

Two: “Only employees who have problems will ask questions, not the people who see good things or who are satisfied. This will skew the picture. HCLT will look like a much bigger mess than it actually is.”

These objections rang true. I talked with many people about them. I consulted my leadership team. I wondered if this initiative might be taking the idea of transparency too far, since all our dirty linen would now be aired in public.

Just when I was about to pull the plug on the idea, I put myself through a personal Mirror Mirror exercise. How could we create trust through transparency if the members of management were the only ones who decided what questions could be asked and answered? Was this not the reason the office of the CEO was such an indomitable power center, because it totally controlled the official conversation? If the CEO was afraid of what would leap out of the cupboard, how could this executive be trusted, and how could management as a whole be trusted? We had to keep pushing open the window. We went for it and launched the site called U&I.

Again, the fears of the doubters were justified. The U&I site was clogged with cribs and complaints, harangues and imprecations that the company was wrong about everything. The comments and questions came pouring in and would not stop. Most of what people said was true. Much of it hurt.

One day, I was speaking to a group of employees, and I expressed my frustration with the questions we were receiving on U&I. I asked what they thought about it, and their answers amazed me.

“This is the biggest change we have seen at HCLT in years,” they said. “Now we have a leadership team that is willing to acknowledge the dirt.” There was much less gossip now, they said, and fewer rumors flying around the company. People felt that management was listening to their views, and thus there was increased hope that someone, somewhere, would do something about it. Most important, the employees said, they had a leadership team that did not claim to know the answers when it didn’t, or say it could fix something when it couldn’t. The people said they trusted the leadership team more. They sensed that the team really got it.

One day I received an interesting e-mail that pointed out another aspect of the portal and how people used it.

“You are making a mistake in assuming that U&I is solely about open and honest conversations between the employees and the leadership team,” the e-mail read. “Many others around the person who asks the question get involved in the conversation, too. They pounce on that person, offer their own views, and help the commenter see things in a different light. Yes, the response from the leader is important, but a lot of discussion takes place beyond that exchange. Also, it brings issues to the attention of other employees in other parts of the organization who may not have been aware of the problem, and they may start working on the problem since they believe they have the answers.”

Another wow! I finally understood the power of what we had created. The U&I site had become a way to transfer the responsibility for fixing problems from the CEO and the leadership team to the employees in a form that we had not envisioned with the original idea. Simply by allowing questions to be asked, we had improved the likelihood that answers would emerge—from someone, somewhere. By being open and acknowledging the imperfections that existed in the company, we had shifted the conversation away from what was wrong to what could be done about it. Although the list of issues to be fixed never gets shorter, the problems we face today are not the ones we faced five years ago. The U&I portal continues to attract significant traffic every week, and has become a great source of information that helps me to understand where we are and what issues we need to address next.

There were other experiments in increasing transparency. Some went horribly wrong; some went surprisingly right. We never, however, fell in love with any of these ideas in and of themselves. We just focused on the results, which seemed to show that the sun was shining bright and strong and we were now ready for real change. Or so I thought at that time.

Explaining to Customers Why They Come Second

As we were working on building trust internally, we continued to focus on developing new business, new strategies, and new solutions for our customers. Part of our eventual success with our customers can be traced to a meeting we held in February 2006 with three hundred customer representatives, most of them chief information officers (CIOs). They journeyed to Delhi from around the world.

The idea for the meeting came from my conversations with customers. I wanted to know whether they were really getting value from our EFCS approach. I wanted to better understand their relationships with other vendors. Did our customers trust their vendors? Did the vendors provide enough transparency for them? And I wanted our customers to know that although we said we put them second, they were, of course, central to our business, and that EFCS was meant to create tremendous value for them, as well as for us.

In this meeting, I wanted to expand the idea of transparency. So we did a Mirror Mirror session with the customers and shared with them what we thought we needed to change at HCLT. We explained the challenges that lay ahead and the path we wished to follow to address these issues and to create higher value for them.

We also saw the meeting as an opportunity to continue increasing transparency with our employees. Why not broadcast the event so that our employees could listen to the conversation and see just how serious we were about EFCS? And that’s exactly what we did. While three hundred HCLT customers gathered in a conference room, thousands of HCLT employees gathered in front of their computers to watch and listen. It was a level of transparency that HCLT employees had never seen before. On that day, many fence sitters became transformers.

During the two-day meeting, we introduced a number of speakers—including analysts, customer experts, and HCLT leaders. We covered a wide variety of topics, such as the changing needs of customers, the changing aspirations of our people, and increasing demands on CIOs. We talked about new technology trends, privacy issues, the world economy, the emergence of India and China as big consumer markets, and changes in consumer behavior that were causing the emergence of new business-to-business and business-to-consumer models. We argued that these issues would require more than just a few innovative ideas; they would need a fundamental change in the models of partnership.

And then I presented to the customer audience our Employees First, Customers Second philosophy. I talked at length about the concept and how it was already benefiting our customers and leading to better, stronger relationships.

I closed the meeting by assuring the audience that EFCS did not mean we considered customers second-class citizens. “You face extraordinary business challenges that will drive new IT challenges in the years ahead,” I said. “You need integrated solutions for complex processes. You need transparency and flexibility. You need to increase your agility. In order for you to accomplish these things, you need to enter into value-based relationships with IT suppliers who understand your business goals and can align their technology solutions with them.”

I continued: “To be that kind of supplier, we at HCLT believe that we must create a whole new business model. We must change the way we build and sustain value in our partnerships with you, our customers. These partnerships will require us all to think far beyond the technology solutions themselves. Success lies in how the solutions are implemented and the sustained business benefit you derive. We believe that by putting our employees first—doing everything we can to enable those people who bring real value to you—we will serve you far better than ever before. Our new approach does not mean we will take our customers for granted. Never. What we want to do is unleash the power of our bright minds. We want them to align themselves with your challenges and become your enablers and facilitators. We intend to develop partnerships that are transparent and trusted and will create tremendous value for you and, as a result, for us. That is why Employees First is such an important part of our strategy. To realize its incredible potential, we need not only your understanding and approval, but also your active involvement.”

How did our customers respond? Two “yes, but …” customers were not convinced about HCLT’s new approach, seeing it as too little too late, and canceled their contracts with us. A few fence sitters said, “Sounds interesting. Let’s see how it goes.” Some, the transformers, loved it and asked, “What do you want us to do to help you?”

On balance, our customers were more understanding than I had expected. With just one meeting, we had engaged several large customers as active participants in this change, and our employees, watching at their desks, realized that the new approach was the right one. Customers began to see that by putting employees first, our goal was to create more value for them, the customers, not less—that in our reversing of the standard equation, they would, in fact, come out ahead.

Our customers began to breathe more easily. They smiled. Sometimes even at me.

Winning Big Ones Against the Big Boys

As we continued to improve our transparency, we made progress on building trust throughout the organization. I reviewed our progress on Maister’s four elements of trust.

Reliability: We were doing better. The online tools helped us improve on that score.

Intimacy: Doing better here also. The endless conversations contributed to that.

Self-orientation: This too was better. Managers were much more visible and engaged than ever before. They had become more skilled at listening.

Credibility: Not so good.

What help were transparency and a culture of trust if we couldn’t make good on our new business strategy—our goal of becoming a global IT services provider and winning business against the big boys?

In the fall of that year, however, the tide started to turn. We started winning against the global players. The first win was a deal that we closed with Autodesk in November 2005. It was much larger than our previous largest contract and was headed in the right direction in terms of partnership.

Then came the big breakthrough.

In late spring of 2005, we had set our sights on one very large potential deal with a company called DSG International. The company is a conglomerate of retailers of electrical and electronic goods—TVs, laptops, washers, GPS units, iPods, and more—perhaps best known for the Dixons chain based in the United Kingdom. We refer to the conglomerate simply as Dixons.

In Dixons, we thought we saw a perfect opportunity for HCLT. Our new organizational structure enabled us to offer the complete range of services Dixons was looking for, in an integrated and very efficient way. All through the summer and fall, our people worked incredibly hard. They created new tools and templates and processes. They developed wonderful things out of nothing. They put together a brilliant solution that no global player could match.

In mid-January 2006, DSG International announced its choice. Here’s how it was reported in the ZDNet Asia, a major source of global tech business news: “Kevin O’Byrne, group finance director of DSG international, said, ‘This co-sourcing partnership will enhance our capabilities, drive innovation and improve our agility as we build our position as Europe’s leading electrical retailer.’ ”¹

Partnership. Co-sourcing. Beautiful words. No mention of the words supplier or vendor or outsourcer. Not only was it by far the largest deal that HCLT had made in its history, but it was also the largest IT services outsourcing deal ever for any Indian company.

Another article, in EFY Times, quoted me:“It is because of our people and people practices that we get opportunities like these to demonstrate the true value which HCLT-ites deliver to our customers.”²

Put employees first, and customers will follow.

And indeed they did. Just six months after the Dixons win, we entered into a five-year, multimillion-dollar, multiservice outsourcing deal with Teradyne, a leading supplier of automatic test equipment in the United States, beating the global giants that were with us in the race. Chuck Ciali, CIO of Teradyne, underlined our partnership model as a key differentiator. “We selected HCLT on the basis of its breadth of experience with global customers in the hi-tech manufacturing industry, its partnership approach and the transparency in its engagement models.”³

But it was an industry analyst, Eamonn Kennedy, research director at Ovum, who really articulated the success of our new strategy for all the world to hear: “To all the remaining doubters out there: HCLT has just whipped away your comfort blanket. This engagement is proof that Indian-based outsourcers have what it takes to beat the established players.”⁴

In the twelve months after the Blueprint meeting, we won five large outsourcing deals, worth a total of $700 million, all of them in competition with the Big Four global IT providers. The industry took notice. The buzz about HCLT had begun. “HCL Technologies is disruptive and bears watching,” read the headline of an IDC report. “HCL may very well be one of the contenders to lead the IT services world of the very near future.”⁵ And this from The Economist: “IBM and the other multinationals are becoming increasingly nervous about the fifth-biggest Indian outsourcer, HCL Technologies.”⁶

The Power of Catalysts to Create a Culture of Change

Now, before going on to the next chapter, keep in mind that we did not have all this activity planned out carefully in advance. Yes, I had the big strategy sketched out in my mind, but things were even more fluid and improvisational than I have described them here.

In hindsight, I see that within a broad plan, we were trying a variety of things, and that these ideas and initiatives (the ones that worked, anyway) brought about a specific positive change. More important, they served as catalysts for further change, beyond the original intent. One small change in the chemistry of the organization could provoke a very powerful, and often an unexpected, escalation and acceleration of even greater change.

This was true of sharing the financial information and for U&I, as well as other activities we pursued. In retrospect, I believe that I was driven by three very strong convictions:

• That Mirror Mirror, which had started as an exercise, could and should become a sustained approach and an institutionalized way of thinking
• That trust was essential for us to execute on our strategy and that it could only be created by going far beyond conventional notions of transparency
• That just a few catalyst ideas, like the idea of the Amsterdam window, can ignite a lot of change

Catalysts are simple actions, rather than elaborate programs of organizational transformation change that plod on for years and years, and they can help transform a locked-up culture into one that is constantly changing. I do not suggest that the catalysts we employed at HCLT are those that others should employ. I only urge you to find your own catalysts, push them hard, and then find new ones and push them even harder still.