CHAPTER FOUR

Recasting the Role of the CEO

Transferring the Responsibility for Change

By midwinter of 2006, people throughout HCLT had started to believe in the enormous potential we had as a company. They saw that our commitment to transparency and our efforts to invert the pyramid were making a tangible difference. We were now regularly and successfully competing with the best global players, just as we had vowed we would at our Blueprint meeting. This was satisfying to me, to the leadership team, and to employees throughout the company.

Yet, as I had with each previous phase of the process, I began to look ahead and worry. Just as we had intended, we were starting to speed up our growth. We were taking on hundreds of new people. Although we were still a relatively small company, at under $1 billion in annual worldwide revenue, we were quite diversified, with operations in eighteen countries in ten vertical areas, and with eight lines of service.

As we grew, how could we sustain our focus on Employees First, Customers Second? Wouldn’t individual units start to rebuild their own traditional pyramid? Wouldn’t new layers of management seek to gain power by aggregating information? How would new people coming on board understand the importance of trust and transparency?

Around that time, I was reading The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations, by Ori Brafman and Rod A. Beckstrom.¹ Most companies, they argue, function like eight-legged spiders. “Cut off the leg of a spider, and you have a seven-legged creature on your hands; cut off its head and you have a dead spider,” Beckstrom writes on his Web site. “But cut off the arm of a starfish and it will grow a new one. Not only that, but the severed arm can grow an entirely new body. Starfish can achieve this feat because, unlike spiders, they are decentralized; every major organ is replicated across each arm.”

At that time, HCLT operated more like a spider than a starfish. For all our openness and transparency, and for all of our inverting of the pyramid, we were still a highly centralized organization. The CEO and, just as important, the office of the CEO, still stood at the center of everything, just like the head of the spider.

I saw that we needed to become more like the starfish and that this would require us to rethink the role of the CEO and to transfer much more of the responsibility for change to the employees. Only in that way could we continue to focus on the value zone, put employees first as our company continued to gain in size and scope, and make the change truly sustainable.

I began to look for ways that we could accelerate the transfer.

A Revelation

One day during the winter of 2006 I caught my first glimpse of what the starfish HCLT might look like. The CIO of a global customer was visiting our offices in Delhi to meet with his technical team. I made a point of stopping by to say hello a few minutes before the meeting got started.

“How is everything going?” I asked the CIO, who was working on his laptop in the conference room where the meeting would be held.

“Very well,” he said. “The team is handling everything to our satisfaction.”

“Fantastic,” I said. “Then, if we don’t need to discuss your current project, I’d like to tell you about a new service approach we’re working on.”

“Of course,” the CIO said. “Please.”

“It’s called Business-Aligned IT, or BAIT,” I said. “The goal is to much more closely align our services with our customers’ specific business processes. We’re working on a pilot right now, and we plan to roll out the full program to all our customers in the next few months.”

“I know all about BAIT,” the CIO said.

“What?” I said. I was taken aback. “How could you know about it? It’s an internal pilot. Only a couple of customers and a few employees know about it.”

“Your people told me about it. My HCLT team. How else could I know?”

“But we haven’t even rolled this out internally. Your team hasn’t been through the training yet,” I said.

“Well, not only does the team know about BAIT, they’ve already put it to work for us. They identified our three most critical business processes. Analyzed them. Determined how to align them with HCLT solutions. And estimated the amount of money we can save over a twelve-month, twenty-four-month, and thirty-six-month period.”

I did not know how to react. I was a little concerned that the team was using the BAIT process before it had been formally introduced throughout the company. On the other hand, I saw this as an example of the responsibility for change being transferred, without any involvement from me or the office of the CEO. It was happening organically.

At that moment, the team entered the room, ready for its scheduled meeting.

“I have just been telling Vineet about our work with the BAIT process,” the CIO said to Tarika, the team leader. She looked a little abashed, not sure how I would react.

“Yes,” I said. “And I am very interested to learn more about it.”

Tarika (name changed) went to the whiteboard and grabbed a marker. Over the next ten minutes, she and her colleagues, with occasional interjections from the CIO, sketched out flow charts of the customer’s three business processes, described the solutions in detail, and went through the cost savings analysis. I could not help but be infected by their enthusiasm and excitement.

What Tarika and her team had accomplished was pretty amazing, considering that our BAIT framework was not an official offering for us yet and, even more important, that these people were engineers, not business analysts. Their skills lay in implementing technology solutions, and they had little experience in dissecting strategic business processes and reducing cycle times. The last time I had checked in with the team, they had been working on a very straightforward application development.

When they finished their impromptu presentation, I asked, “So tell me how you made the shift from a technology solution to thinking more broadly about business strategy.”

Tarika told me that she had heard about the BAIT pilot through one of her colleagues in a different area of the company. He had described it to her, and she thought it could be very helpful to the CIO’s company. However, the HCLT consultants who were expert at BAIT were all too busy with the pilot project to help Tarika and her team. And besides, she knew that the customer didn’t have any extra budget to pay for a consultant.

“So,” Tarika explained, “I said to the team, ‘Let’s see if we can learn this on our own.’ And everybody agreed to try.” Over the next three months, in off moments and after regular business hours, the team members educated themselves and gained a much better understanding of the use of IT in driving change in core business processes. Once they thought they had sufficient knowledge, they asked an HCLT business consultant to do a workshop for them so that they could learn more about how to use the BAIT methods and tools.

“Then we applied the framework to the information we had gathered about our customer’s business processes,” Tarika said,“and made our recommendations in a business transformation report” She held up a thick document. “In it we describe what changes we would implement and how they could save several millions of dollars each year.”

I shook my head. “This is fantastic work,” I replied. “Especially since you have done it on your own time with almost no help from the formal organization or your managers.”

Tarika and the team members smiled and tried to look as if it were no big deal.

When I left the office that day, I kept thinking about Tarika and her technical team. They had made a fundamental shift in the way they worked and how they added value for the customer without being directed to do so by me or any superior. The responsibility for change had been transferred, almost unconsciously, because of all of the efforts that had come before.

I thought: this is how EFCS can become adaptable and sustainable as HCLT grows. Men and women, like the members of this technical team, will take on the responsibility for change. They will see the CEO differently, not as the source of all change but as a kind of stimulator and enabler of change.

How could I recast the role of the CEO to make that clear to the entire organization and to accelerate the transfer of responsibility for change to HCLT employees around the world?

Reversing the Transfer of Responsibility: A New Dimension of the U&I Portal

Around that time, I was attending a number of seminars, including the World Economic Forum and Fortune magazine’s BrainstormTECH conference in San Francisco, where I talked about the EFCS concept. At these events, I always got the same “yes, but” question.

“Mr. Nayar,” someone would say, “this is all very interesting. But aren’t many of these Employees First initiatives closely linked to your personal tenure in the job? How many of them do you think will produce long-term change? Won’t they all fall apart after you have moved on?”

It was a good and valid question, and it nagged at me now. Every new CEO comes in with his or her initiatives. The organization takes the programs on board as much or as little as it can. When the next CEO arrives, months or years later, many of those initiatives are swept away and new ones put in their place. Too often, the CEO’s initiatives create shifts in the organization that are not sustainable and do not produce everlasting change—that is, deep-down, fundamental, long-term change.

A possible solution showed up in an unexpected place: my e-mail box. During the winter of 2006, I was receiving a huge volume of e-mail every day. Even with all the initiatives we had put in place to increase transparency, to build trust, and to invert the organizational pyramid, a large percentage of the messages were still of the “Vineet, please tell me the answer to my question” kind. They would describe a problem or an issue and then conclude with a question like, “What do you recommend?” or “What should we do?” or “How should we handle this one?”

The people who sent them were, in effect, putting the responsibility for change on me, my office, or someone I might refer the problem to. But our aim was to transfer responsibility to the employees, not take it off their shoulders. It was not that the people sending the questions couldn’t answer the questions for themselves. Many of the e-mailers were brighter than I was, after all, and knew a lot more about the particular technology, product, or geography they were asking about than I did or ever could. More important, they were closer to the value zone and had a better understanding of what should be done to create more value for the company and its customers. So why did they continue to look to me for solutions? They knew I couldn’t have the answers to all their questions. I shouldn’t have the answers in an organization with the multiple lines of service, markets, and operations that we did. There were so many value zones at such a distance from me, and we had a hugely diverse set of issues and problems.

I realized that employees were asking me such questions for two reasons. First, it was simply a habit, an unthinking response, typical of any command-and-control organization in which employees automatically look upward for answers. Second, perhaps they didn’t want to take complete responsibility for the answer or for the outcome. They wanted me—the CEO—and my office to take some or all of the responsibility. Perhaps they wanted to be able to say, “Well, Vineet said it was OK. Don’t blame me.” Very possibly, I was to blame. Maybe I had led them to believe that I did want to make all the decisions, and thus perhaps I was the cause of their behavior.

Whatever the reason, this situation had to change. Employees had to take much more responsibility for their ideas and actions. After I discussed the issue at length with the leadership team and many colleagues, we hit on a simple catalyst for recasting the role of the CEO: add a new function to the U&I portal.

Our original goal with U&I had been to create transparency and thus build trust. We had succeeded in doing those things. But now I saw that in our desire to be transparent and make the CEO accessible and open, we had actually enhanced the perception of the all-knowing CEO and his all-powerful office; we had unintentionally reinforced the idea that the CEO would take responsibility for everything. The premise of U&I, after all, was that anyone could send Vineet a question, and that I, or some member of my office, would quickly get back to the questioner with an answer.

This quest for transparency had served to centralize power in the office of the CEO even more than before. But, as I had learned in that client meeting with Tarika and her technical team, much more knowledge existed outside my office than within it. It dawned on me that I had a lot of questions to ask of others. “Vineet,” I said to myself, “you are an employee, too, after all.” Why shouldn’t this question asking go both ways? I was struggling with a lot of issues at the time, many of which I simply could not solve by myself. Rather than hide my struggles or pretend I had the answers, why not seek help from the organization? Wouldn’t that take a chip out of the marble facade of the office of the CEO?

So, we created a new section within U&I called My Problems. It was about just that: my problems, the questions that I, as CEO, could not answer or solve myself. I started posting questions that I was struggling with, and people began to send me answers. One issue, in particular, was galling me. As you may know, there is a group of analyst companies that have a lot of clout in the IT buyer community. These very smart organizations conduct research, offer consulting to clients, and have a significant influence on how IT customers think. They are intermediaries in the market, often standing between service companies and customer companies.

At that time, some of these intermediaries seemed to have a strong bias toward the global IT suppliers, which we were now competing against so successfully. Some of these analysts, though few in number, seemed to believe that big was always better and, accordingly, would recommend that their clients always go for size even when smaller players like HCLT could demonstrate a better value proposition. This frustrated me because I knew that we had just as much capacity and capability as, if not more than, the global players did to create value for our customers, and that we had greater ability to innovate and come up with disruptive changes. In other words, it was far more likely that we would be the Apple or Google of the IT industry, rather than those that were considered a safer bet. But some of the analysts seemed unable to hear that message or, if they heard it, to believe in it. Perhaps it was because we had not adequately communicated our message and proved our claims about ourselves.

One of the first posts I wrote in the My Problems section of U&I was about this issue. “How should we reach out to analysts to change their views? What proofs can we give them about our new capabilities and our unique approach?” I asked. And I followed that one up with a few other conundrums I could not crack.

I got an incredibly large number of responses. It was as if everyone in the organization had an opinion on the topic and was only too willing to help out their poor, benighted CEO. Were all the organizational problems solved by the answers I got through My Problems? Did I get perfect, ready-to-implement solutions to my every concern? No, of course not. But we heard many interesting points, ideas, and suggested remedies that helped me understand the problem better and develop my thinking. In many cases, I engaged in a back-and-forth with the contributors, as we asked each other questions such as:

• What is the fundamental nature of the problem?
• How does it really affect us?
• Do we really need to do something about it?
• Who is the right person or team to think more about this?
• What timeline makes sense?
• How will we evaluate the process and the solution?

This conversation, by focusing on “my problems and your answers,” started to shift the responsibility of actions that could create change away from me to other people throughout the organization. It became a dialogue rather than a monologue.

Then we took the concept a step further and posted policy ideas we were thinking about and solicited comment from employees. We created opinion polls about various issues and showed the results for all to see. The leadership team did not always accept the advice that we received, nor did we always follow the majority opinion expressed in the polls. That was not the real purpose of this idea. The goal was to get the whole company talking and listening to one another, just like a good family, and for the management to justify and communicate their decisions when they were at variance with majority views.

It was another step toward recasting the role of the office of the CEO. If the CEO was not willing or able to answer all the employees’ questions, and if he actually asked them for answers to the problems he was wrestling with, weren’t we redistributing responsibility for our fates, sharing it? Didn’t that mean that everyone in the company had to take responsibility for creating value in the value zone? Wouldn’t this ensure that our competitive advantage would remain beyond any CEO’s tenure? Didn’t that mean that we all had to take responsibility and spread the philosophy of EFCS to new employees so that it would carry on?

Engaging the Whole Person

But we had to do still more to encourage people to take on greater responsibility for change within the company. Not everyone communicated with me through U&I, after all, either by asking his or her own questions or trying to answer mine. And there were still plenty of employees who simply did not engage completely with the company. Their job was just a job; what they really cared about lay outside the work environment and beyond the workday.

Around that time, I had a fascinating conversation with the CIO of an important global 100 company. We had just won a contract with him to greatly expand our scope of engagement with his company. After the deal was done, I asked the CIO why he had selected HCLT over the other vendors that had bid for the business.

It was a pro forma question, to which, at first, he gave a pro forma answer. He talked about the innovativeness of our solutions, the quality of our service, our responsiveness, our facilities and locations, and our pricing. But then he said, “However, Vineet, I really think that the entire bidding process for jobs like this makes very little sense. We put out a request for a proposal, and you diligently respond to it. But it doesn’t really tell us what we want to know about you or your company.”

“What do you mean?” I asked. “Are you saying that our proposal was inadequate?”

“Not at all,” he said. “After all, we chose you. What I’m saying is that the proposal did not address the really important issues.”

“Such as?”

“Such as what your people are all about. Who are they? What do they think about? What are their ethics? What are they passionate about? I don’t need to know about the tools and technologies they’re going to use. They will be very similar to the ones that people in every other company use. I want to know if they will walk the extra mile for me and my project. Will they get excited enough to share their knowledge beyond what’s in the contract? Will they engage their whole selves in their work with us?”

This idea struck me deeply. If we could engage people around their passions and beliefs and ethics, wouldn’t they be more likely to take responsibility for change? Wouldn’t they demand it?

But how could we begin to understand the role of passion at work?

Identifying Sources of Passion: The EPIC Survey

Lots of companies conduct surveys that seek to measure employee satisfaction or employee engagement. But as I thought about the CIO’s remarks, I realized that these approaches were inadequate. Is satisfaction really a useful indication of anything? Satisfaction is very different from passion. Doesn’t satisfaction actually imply a complacent acceptance of how things already are? If I am satisfied, will I be interested in changing or improving anything?

And what about engagement? Is that any better? I suppose that if an employee is engaged, that is better than being disengaged. But isn’t it just another, slightly more active form of satisfaction? I am engaged with the work and the project, but does that mean I am asking questions about it? Have I considered better ways? Will I walk the extra mile that my CIO friend so highly valued?

Probably not. Only passion makes people jump out of bed in the morning looking forward to the work of the day. Only passion pushes them to try things that may be difficult or seem impossible. Only passion makes them take on responsibilities or accept tasks that are not strictly specified in a contract document.

So, we asked ourselves, how can we measure and tap into an employee’s passion? How could we improve our understanding of what he or she really loves and wants to do? Could we use such a measure to help people find and follow their passions and therefore become more passionate toward their jobs?

We didn’t know, but we decided to try.

To that end, we developed an initiative called the Employee Passion Indicative Count (EPIC).

We identified a short list of the main drivers of passion and organized them into three themes: self, social, and secular. We created a survey, with questions organized into those three themes. The goal of the survey was to identify the core values that are of most importance to people and that drive their potential to act passionately, both personally and professionally.

The passion survey turned out to be a huge hit. People loved thinking about the passion they had, or did not have, for the jobs they were doing. They were intrigued to learn what others were doing to drive passion in their respective areas. Managers were able to take the pulse of their employees in a different way. Interest in the survey spawned several post-EPIC workshops and team interventions, all of which helped people think more about their passion indicators and how they could best leverage them at work.

Creating Sustainable Communities of Passion: The Employee First Councils

Next, we needed a way to embed people’s passion into the organizational structure. We struck upon the idea of creating employee communities that would be called Employee First Councils and would be organized around a specific area of passion, much like a college club. The councils would be virtual, spanning all organizational boundaries, but would have an elected representative in each physical facility.

The idea caught on like wildfire. Councils were created around health and hygiene, art, music, corporate social responsibility, and dozens of other issues. Today, some twenty-five hundred people serve as council leaders around the world and have a team of council members across geographies who participate according to their areas of interest or passion. It’s a democratic exercise; the leaders are elected by the employees, rather than appointed by management. This practice further pushes control away from the office of the CEO and out into the arms of the starfish.

The effect of these councils has been amazing. They allow people to enhance their persona at work. Employees become so engaged in these groups that the councils have provided a new way to spread learning throughout the organization and bring the whole person, as well as the person’s families, into the culture of the company.

Employee First Councils proved so popular and so powerful in energizing our people, in fact, that we began to think about how the groups could be put to work to affect our business more directly. To that end, we added communities that focused specifically on business-related passions such as a particular technology or a vertical domain area. Soon enough, these business-focused communities were generating all kinds of ideas for HCLT, helping us to develop plans and come up with proposals for new business. (The idea for BAIT, for example, originated in one such business-focused community.) When some of these ideas began to produce new revenue, we realized that we had stumbled on another unanticipated benefit: creating new business ideas through unstructured innovation.

One such complex unstructured innovation, centered around cloud computing, is in progress at HCLT as I write this book. Organizations around the world are trying to improve their understanding of cloud computing, which essentially moves applications off the desktop and company servers and onto the Web, as it is sure to have a far-reaching impact on IT suppliers and their customers. Business models will undergo radical change; some will not survive. No single person, team, or community owns the issue of cloud computing at HCLT, because its implications are immense for all our lines of business.

But the debate and community participation help us increase awareness, create a sense of urgency, encourage new thought, and prevent us from being blindsided by change. As CEO, I am just one of many voices in the conversation. As a result, our strategic response to cloud computing is constantly evolving. When a specific approach gains critical mass within the council, it is transferred to a group that focuses on execution. It is my belief that innovation, especially in our business, often thrives in an unstructured process like this one.

These communities of passion—built around personal interests and business issues—had the desired effect on the structure of the company. They helped to further transfer the responsibility of new-idea generation beyond the office of the CEO and the leadership team and into communities of people collaborating and creating alternatives outside the boundaries of hierarchy.

Gradually, step by step, catalyst by catalyst, the office of the CEO was becoming a little less like the all-knowing spider’s head. The company was becoming a bit more like the starfish.

Transferring Responsibility for Setting Strategy

Since beginning our efforts at recasting the role of the CEO in 2006 and transferring responsibility for change to our employees, we have pursued many other catalysts and initiatives. For example, we began to see that we had to change the relationship with our customers and enable them to take more responsibility for where our partnerships and new endeavors were headed. We already had a customer advisory group and a quarterly steering committee meeting focused on customer issues, but we wanted to involve the customer more deeply in creating value and, at the same time, to further challenge our employees to take more responsibility beyond their defined roles.

Soon enough, we had a proposed solution: create an idea exchange, to be called a value portal, between the customer and our employees. Employees could generate and register new value-creating ideas, then share them with customers, who would evaluate and rate the ideas on various specific criteria. For participating and generating well-rated ideas, the employees would be recognized and rewarded.

Within a short time after we implemented the value portal, more than a hundred customers had joined in. Meanwhile, HCLT employees had generated thousands of ideas with the potential of saving hundreds of millions of dollars for our customers.

Then we were ready for what might be seen as the ultimate step: enabling employees to share in the responsibility for the setting of our company’s strategy, working together to determine our future.

I must jump ahead to 2009 to describe the most potent expression of this approach, a concept called MyBlueprint. As I described earlier, in 2005 we held our first Blueprint meeting, a gathering of our senior managers to talk about where we should be headed in the coming five years. In 2009, we were nearing the end of that plan and needed to map out the next leg of the journey.

About three hundred managers had responsibility for making plans for their specific business areas. In past years, their written plans and oral presentations had been reviewed by the next person up the hierarchical ladder, including me. In 2009, as we were recasting the role of the CEO, I found myself in the midst of the annual review process. I asked myself, Why should I be the one to review all of these? What do I know about the businesses of these three hundred managers? How can I really evaluate them? What value am I adding? Wouldn’t it make more sense for a manager in financial services to hear views on how retail companies are innovating in building relationships with their end consumers, or how media and publishing companies are innovating in tracking and monetizing digital content—both of which could possibly trigger new ideas or solutions for this manager’s financial services customer? Wouldn’t a manager in Australia learn a lot from a peer in Europe who had faced similar issues and challenges?

So, in 2009, we decided not to hold a live Blueprint meeting at all.

Instead, we agreed that the three hundred managers would each prepare and record their plans, and the recordings would be posted on a MyBlueprint portal, rather like Facebook. The plans would be open for review by another eight thousand HCLT managers, including people above the managers in the traditional hierarchy and those below them. This, we hoped, would transform the planning process into a peer-to-peer review rather than a top-down judgment. It would bring planning much closer to the value zone. It would further shift responsibility away from the office of the CEO.

Did the “yes, buts” fly?

Of course they did.

“But, Vineet, that means you won’t look at the plans?”

“You want us to share our plans with eight thousand managers? That’s pushing transparency much too far. We’ll give away our strategy. The whole world will find out where we’re headed!”

“Vineet, we have always prepared these for executive eyes only. What form should they take in a MyBlueprint portal?”

We went forward anyway. And the effect has been astonishing. The three hundred managers posted their plans. When I listened to a few of the recordings, I was surprised to find that they sounded very different from the face-to-face presentations I had heard over the previous four years. Because the managers knew that the recordings would be reviewed by a large number of people, including their own teams, the depth of their business analysis and the quality of their planned strategy improved. They were more honest in their assessment of current challenges and opportunities. They talked less about what they hoped to accomplish and more about the actions they intended to take to achieve specific results.

As always, the catalyst had unanticipated secondary effects. Eight thousand HCLT managers took advantage of the opportunity to review the recordings on the MyBlueprint portal. Soon enough, the network was buzzing. People pointed their colleagues to a recording they thought would be useful. Employees within a department discussed their futures with new understanding, and they loved the transparency. The amount of knowledge sharing outside the walls of the formal hierarchy was extraordinary. Managers made new connections with one another across all kinds of boundaries.

People posted comments about the strategies that provided the managers with new perspectives and ideas that were far more relevant and actionable than the inputs managers had typically received in their annual reviews. When a new employee joined the team, he or she had a place to go to learn what the team was trying to achieve and why. Everyone felt able to contribute to the thinking and planning process. People understood the challenges better, owned the plan, and could align themselves with the strategy as I had never seen before.

In the end, the leadership team and I participated in the process, giving comment and feedback, but our voices were just a few among the eight thousand.

Was the MyBlueprint process a success? I think so. Will we do it the same way again next year? Probably, but there will undoubtedly be new twists and turns, new refinements and new catalysts. Nothing is ever perfect.

Pushing Responsibility to an Acquired Company: The Reverse Merger of AXON

Our efforts to share responsibility with employees and units of the company extended to the way we handled mergers and acquisitions, as well. In December 2008, HCLT completed the acquisition of a U.K.-based SAP consultancy firm, AXON Plc, for £440 million, the largest overseas acquisition by an Indian IT company to date.

At the time, SAP business management software was growing fast. We were not able to organically create highend SAP consulting capabilities. AXON was the largest and most successful independent SAP consulting company in the world, so we acquired the company to help us strengthen our offering and grow faster.

We were determined, however, not to make the mistake that so many companies make with their acquisitions: forcing the AXON organization to integrate into the HCLT organization. Instead, we recognized that we had acquired AXON because we were weak in this space and it was strong, and thus we should be in the business of enabling AXON to succeed rather than focusing on how to integrate it into HCLT. Accordingly, we merged our SAP organization, of some twenty-five hundred people, into AXON. Then, we enabled HCL AXON to be even more successful by allowing it to leverage HCLT’S balance sheet, brand, reach, customers, solutions, and innovation framework. The approach worked so well that nine months after the acquisition, the HCL AXON leadership team took charge of running many other parts of HCLT businesses.

Thus, HCL AXON and the rest of HCLT achieved a good deal of growth, HCLT’s customers could take advantage of a new value proposition, and our stock price rose, even during the downturn of 2008–2009. And as CEO, I gained bandwidth to do more and more. Or perhaps I should say, to do less and less. In other words, much of the responsibility that would typically have been transferred to the office of the CEO in an acquisition actually went in the opposite direction.

We saw that the EFCS concept, when applied to a large acquisition like the AXON merger, could generate such powerful results that we completed four more successful acquisitions in that year. With each of them, we proved that when a CEO focuses less on governing and more on enabling, the executive can accomplish much that might otherwise have been too risky to undertake.

The Benefits of Transferring Responsibility for Change

Many people have questioned me about this recasting of the role of the CEO. Am I really serious about it? Mustn’t the CEO hold tight to the reins of power? How can a company set strategy in a collaborative process?

I deeply believe that a good deal of responsibility for managing the company must be transferred to employees, for three reasons:

• First, concentrating power in the office of the CEO drains power away from the value zone. The office of the CEO is always too far away from the value zone to really understand the zone. The CEO who tries to drive what happens there, especially in services and knowledge economy companies, may simply drive it into the ground.
• The second reason is speed. The speed of thought, of change, and of implementation gets suffocated by too much hierarchy, wherever it may be. The only way to remove hierarchy in the organization is to recast the role of the CEO as one who asks more questions than he or she answers. The rest of the hierarchy will soon tumble.
• The third reason to recast the role of the office of the CEO is the element of knowledge. The complexity of the knowledge and service economies is so great that it is impossible for any individual or company unit, including the CEO and the office of the CEO, to possess all the knowledge. The CEO must be in the business of enabling the people who do have the knowledge to do what they are good at, rather than taking decisions on his or her own, using incomplete, imperfect, and probably outdated knowledge.

The CEO can no longer be the one who scribbles strategy on a paper napkin over dinner. He or she cannot be the one who stands in front of a crowd to motivate it with fabulous oratory. The CEO will not be the one who thinks of the best and the brightest ideas. The role of the CEO is to enable people to excel, help them discover their own wisdom, engage themselves entirely in their work, and accept responsibility for making change.

Toward Self-Direction

I have a very personal and long-standing argument with hierarchy. Perhaps that is why I am so intent on rethinking the role of the CEO and getting others to share the responsibility for the work of the company.

I was fortunate that the teachers in my school operated in the role of enablers of learning. They wanted to transfer the control of our education to the students, as early in our lives as possible. They did not think of themselves as CEOs of the classroom.

In our family, there wasn’t much hierarchy either. My father died young, when I was a teenager. So the traditional command-and-control structure that he might have followed simply did not exist in our household.

Over the years, I have watched and studied other institutions, from philanthropic organizations to religious groups, searching for clues and models that might be applied to business. I have concluded that when people feel passion and responsibility for what they do, not only can they transform a company, they can also transform themselves.

Once we transfer the ownership of our collective problems from the supposedly all-powerful CEO to the employees, people want to transform and deal with their professional and personal lives in a very different way than they ever did before. Suddenly, they see the company as their own enterprise. They start thinking like entrepreneurs. Their energy quotient leaps up. And when that happens with a critical mass of employees (usually, 5 or 10 percent is all you need) throughout the company, it creates a kind of fusion—a coming together of the human particles in the corporate molecule that releases a massive amount of energy.

So, the ultimate goal of all of the initiatives I have described in this chapter goes beyond the recasting of the role of the CEO; it is the creation of a self-governing, self-organizing company. We are not there yet at HCLT. Give us a few more droplets and a little more time.

Many managers within our organization have become flag wavers for our efforts to shift responsibility for change away from the office of the CEO and for the quest toward self-governance. “But it’s not always the easiest way to get things done,” they have often admitted to me. “Then again, the easiest way usually isn’t as much fun.”

Indeed, I have seen people flounder as they struggle to make decisions and take responsibility for themselves and for their organizational units. I myself have stumbled many times. We have seen as many failures as we have successes. At many forums, I have debated the issues that surround the transference of responsibility to employees as well as the entire EFCS concept. Sometimes I have been unable to do full justice to our ideas and have probably failed to convince some of those who were engaged in the conversation.

Nonetheless, we have continued to successfully walk the path of Employees First, Customers Second. What has made it possible, and what has personally given me the strength to continue, is the faith and passion of employees throughout the HCLT organization—those people who are the essential droplets of change—who put so much of their minds and hearts into our company and its transformation.

Without them, we would long ago have slid down the hillside and found ourselves looking up at a mountain too high for us to climb.