Employees first, customers second
“Upside down engagement – transparency or smoke and mirrors?” asks Cricket Development Director Louise Barfield… Continue reading
Louise was reflecting on the Wall Street Journal Europe review of Vineet Nayar’s book. She asks: Is this the way forward? How do you see this working in practice in your sectors?
Indy’s reply: I certainly believe something like this is the future of the larger companies Nayar is talking about. The gap between management and the people who deal with customers is a real problem in big companies. But…
- It’s important for companies like HCL (where Nayar is CEO) whose service involves a lot of solving of customer’s problems. A company supplying iron ore to a steelworks probably doesn’t have as much to gain. One could probably use something like Treacy and Wiersema’s Value Disciplines model to begin to evaluate whether a company is ripe for Nayar’s approach.
- How do we get to that future? Nayar is a visionary CEO who had a “burning platform” problem that inspired radical action. I think in many companies there will be a lot of politics around both the increased transparency and the notion of making managers more accountable to the teams they work with.
The key to helping companies come to terms with this radical change is probably helping them recognise how big the gap between their managers and their customers is. We’ve all seen it from the ground level when working – but until leaders take it as seriously as Nayar did, I don’t think things will change. - This piece of the article is important too: “this is a self-renewing approach to business that continues to pay dividends to employees, EFCS companies and their customers.”
Note that there is no mention of shareholders in this sentence. I don’t think that’s an accident.
Nayar’s system isn’t bad for shareholders, but part of the reason the pyramid is the way it is now is the shareholder imperative – I think we’ll see privately owned companies making the change before public corporations. - This isn’t the only way forward – there are other alternative ways to get managers closer to customers. Just at the functional level, we’ve worked on programs to improve the communication flow and that can make a big difference. At a more conceptual level, very often companies are organised as behemoths because of advantages of scale or financing – but as the economy changes with technology and networks – one can imagine a shift towards federations of smaller companies, which would address some of the value zone problems whilst preserving some of the oversight that investors may demand.