Anant Gupta, President and CEO, HCL Technologies Limited, in this exclusive interview with The Smart Manager talks about how the company has redefined customer engagement and how they are investing in technologies that are driving fundamental shifts in the market.
Could you throw some light on HCL’s journey from ‘Employee First’ to ‘Relationship Beyond the Contract’?
First of all, this is not a journey from Point A to Point B as both ‘Employees First’ and ‘Relationship Beyond the Contract’ (RBTC) are two philosophies that coexist and are intertwined in our culture.
With ‘Employee First Customer Second’ (EFCS), we inverted the organizational pyramid to make management accountable to employees. In the services industry, the real value for the company is created in the interface between the employee and the customers; we call it the ‘value zone.’ The more enthused, enabled, and empowered the value zone is, the faster a company will grow. EFCS therefore argues that the management of a company should be solely in the business of supporting and enthusing the value zone. In implementing EFCS at HCL, we took several revolutionary steps to reverse the accountability, focus, and raison d’être of the traditional top-down corporate pyramid.
What this sparked was an unprecedented empowerment of the value zone, the place where our employees interact with our customers.
It also resulted in a culture of ideapreneurship, where each employee felt empowered and engaged to think, create, and execute new ideas to create value for our company and our customers. Our approach to customer engagements thereafter found a new definition which we described as delivering ‘Relationship Beyond the Contract’ (RBTC). Let me explain.
A contract can safeguard all that is in your and my ‘span of control,’ but in today’s uncertain environment—where business and the macro environment are undergoing new challenges and changes every day—we believe what will ensure a continued defense of our customer’s interests is nourishment of an engagement from outside the box, through everyday innovation by thousands of our employees interfacing with system lifelines and critical business processes. We have institutionalized this innovation through unique platforms, such as Value Portal and MAD JAM, to ensure that we are able to deliver ‘relevant’ business value to customers in real time, despite changing times. In essence, what we are trying to say is—do not obsess over contracts, obsess over relationships.
And mind you, this is not just a feel-good philosophy; the RBTC has had a clear business impact on us. We have had a double-digit increase in CSAT–14%, and our revenues have increased by 55% in the last four years. We have garnered several industry citations along the way like debuting in Forbes 1000 this year, being ranked amongst Forbes Asia’s Fab 50 List for the sixth consecutive year, being included amongst the world’s most valuable 500 brands, and receiving 20+ industry awards on our customer engagement best practices.
So has this impacted your client portfolio also? Tell us more about your client mining and retention ratios in light of RBTC.
Like I said before, we continue to strengthen and grow our relationships through our focus on RBTC, zero defect transition, and continuous value add through enhanced value propositions. Our employees themselves have generated 55,000+ ideas through our value generation platforms so far, resulting in nearly $1.6bn worth of incremental value delivered to our customers.
Over the last four years, we have doubled our number of customers across categories. Further, we added customers at the higher revenue range faster than the lower revenue range, indicating the value and strengths of our relationships. As a company, we have outpaced the industry average in growth at all levels above the $5mn+ client category, so I would say we are doing exceptionally well on client mining and retention parameters; our customers’ loyalty and trust are what we are most proud of.
You have previously said the company is investing “in what we believe are forces fundamentally shifting the market.” Could you elaborate? How has HCL Technologies invested to take advantage of these?
I truly believe that technology is driving fundamental shifts in the market. We have therefore been consciously investing, both organically and inorganically, across the following three strategic capabilities which are the future of the IT services industry.
01 digitalization: After launching our BEYONDigital Business Unit, we have hired some of the best talent available in this market. The employee mix in this business today represents a diversity of skills like anthropology, design thinking, behavioral psychology, data science, etc. We have developed several IPs also along the way from our worldwide network of eight Co-Innovation Labs. Recently, IDC called us a ‘leader in digital transformation’ and a ‘major player for digital consulting’.
02 IoT: Multiple decades of clear market leadership in engineering and R&D services gave us a great entry point into the IoT space. We have already developed 15+ IPs, and significantly invested in building Incubation Labs in Seattle with Microsoft, and with IBM in India.
03 next-gen ITO: Cloud and autonomics are significantly disrupting the infrastructure services market. Our early investments on both these fronts, however, have ensured that we continue to maintain our lead in the ITO market. Today, 80% of our engagements have some element of Cloud and 200+ clients are benefiting from our automation programs. Together, more than 5,000+ dedicated professionals are working on these two tracks in HCL; of particular note is the fact that our Cloud IPs go back to as far as ten years when we first launched our debut version of XaaS service for IMS, which we had christened as MTaaS. Today, of course, we are the clear leaders in the space, a fact acknowledged by IDC in its recent worldwide report on Cloud services.
We have also made significant inorganic investments in all these three spaces, namely PowerObjects to augment our capabilities in Digital and modern apps space, Trygstad for further empowering our IoT portfolio and P2P, and Volvo IT for providing more muscle to our next-gen ITO Offerings.
Talking of next-generation technologies, what are your views on the startup ecosystem in India?
I believe that our country has some of the smartest minds in the world, and by instinct Indians are entrepreneurial, ingenuous, and ambitious. Those two are great combinations for making a successful entrepreneur, so I am actually quite upbeat about our country’s startup ecosystem.
However, I feel that the cookie-cutter/factory approach of entrepreneurship that has worked very well for the Silicon Valley might not be the best way to approach our ecosystem. What our entrepreneurs need is not just financial support, but more importantly mentorship that will ensure that their success ratio improves substantially from the less than 10% mark where it stands today.
If you read the Start-up Genome Report Extra on Premature Scaling, a project co-authored by Berkeley and Stanford faculty members, which analyzed 3,200 high growth web/mobile startups, within three years, 92% of startups failed. Of those who failed, 74% failed due to premature scaling, which means they spent too fast on infrastructure, hiring, etc., without having worked out a business model. The same report also clearly stated that founders who learn are more successful ie, startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth. I definitely feel that if we reorient our ecosystem—from its present disproportionate focus on funding alone to one that has access to more mentors and foundational competencies—our chances of success will improve significantly.
So are you a supporter of the ‘Make in India’ program?
Any program that is aimed at the economic and social progress of our country definitely deserves everyone’s support. We have many natural advantages such as a big labor pool and a large domestic market. Not surprisingly therefore, with an aggressive push from the government, growing appetite of India’s business community, and a close public-private partnership, India is slowly emerging as an investment destination of choice. In 2015 alone, net investments by foreign institutional investors in India totaled $40.92bn, roughly seven times as much as in the last year. We definitely have, ahead of us, a clear window of opportunity to become a manufacturing giant. We must not squander it.
Automation is a central element in the enterprise of the future. What is your view and strategy towards automation?
I believe automation is one of the greatest opportunities to break through the present global economic logjam with the power of technology. However, in order to realize its potential and derive its true value, we have to view automation as a human-machine partnership. And for this, automation needs to transform into autonomics.
Traditional automation enables lean operations in a company. It evolves into autonomics with the additional potency of machine learning, artificial intelligence, robotics, and analytics—making it exponentially more powerful. Now, autonomics is hard-nosed business strategy. It combines the strength of the world’s most powerful supercomputer technologies with some truly innovative automation solutions to empower the 21st Century Enterprise, and radically transform the way business is run.
Automation in the 21st Century Enterprise must necessarily be about ‘agile thinking’ and ‘lean delivery’. DryICE™ is HCL’s proprietary framework which leverages reference architecture of deep automation and process transformation to set up a journey, targeting the simultaneous reduction of workload through automation; adding simplicity with self-healing, self-service, and proactive support through autonomics; and the creation of process agility through orchestration. It combines the lean principles of automation with the agility of IT process orchestration powered by cognitive agents to eventually achieve the seamless transition into Next Generation IT Operations.
Today, 200+ clients are benefiting from our DryICE Framework which is delivered by 2,000 highly skilled professionals from centers across the world including Noida, Cary, Gothenburg, Dallas, and Singapore. Our efforts in this direction were recently lauded at the Automation Summit where we won the ‘Best Innovation in Natural Language Processing (NLP)’ Award.
You have earlier said, “the work that you do now won’t remain the same a few years into the future. The nature of the work will fundamentally change.” How will work look like in the future? What skill sets do managers need to relearn or unlearn to survive?
The fact is that we have to get used to a world that is continuously in beta mode. It is a real possibility that the dream job a student is pursuing today may not even exist in the future. Looking back, the top ten in-demand jobs of 2010 did not exist in 2004. In fact, in the field of technology, some of the hottest jobs today—mobile app designers, data scientists, Cloud computing professionals, or even social media managers—did not exist in 2000. The change is so rapid that 65% of today’s schoolchildren in the US are expected to end up in jobs that have not even been invented yet!
Therefore, staying relevant within this landscape of constant disruption and reinvention will require rapid and ongoing skill development. So do not wait for a master plan to reveal itself to you. Take the first step. Change your attitude. Design the new you, ‘U2.0’. Learn, experiment, innovate, collaborate, and then do it all over again until your own upgrades are as swift as your favorite app’s
“Ideas are the most important currency of our times”
How would you define successful leadership?
Simply stated, successful leadership is the ability to inspire others to dream more, learn more, do more, and become more.
How do you resolve conflicts?
I believe in the power of dialogue. And dialogue is the backbone of an ‘employee first’ culture, which thrives on trust, transparency, and flexibility. Empowerment and a collaborative
work environment do not mean that there should be no conflict. In fact, it actively encourages articulation of any difference in opinion. However, it also means that these are resolved through open and transparent communication.
Three important leadership lessons
To me, a successful leader has three fundamental qualities. The first is a compelling vision. This is the one thing that most clearly differentiates a leader from a manager. A good leader always has his or her eyes set on the horizon, and feet firmly planted in the ground. The second is being an avid listener. Most people communicate to speak and very few to listen. It is the latter, however, who are more effective as they not only gather more insights but, as a result, also speak with more gravitas. I truly believe that a leader must grab every opportunity to listen to customers, partners, team members, and then transform the insights into real-time action. And finally, a successful leader believes in collaboration. Given the volatility, complexity, and ambiguity of the business environment, a leader must ‘invert the pyramid’ to engage, enable, and empower each individual, as well as create partnerships internally across teams, functions, and externally with customers, partners, and industry peers.
Work-life integration as opposed to work-life balance
I do not believe that the two are contradictory. Whether we admit it or not, our work and life have become integrated in today’s environment of hyper-connected systems. So, the need is to strike a personal balance within this integrated fabric—and that I believe is essential for every individual.
Your definition of innovation
Ideas are the most important currency of our times. In order to seed, nurture, and harvest innovation, we have to build a culture of ideation. This can be achieved by aligning beliefs, intentions, promises, and actions that allow employees the freedom to operate with autonomy, build mastery, and contribute with a sense of purpose.
Any mistake or initiative you learnt from?
Like most people, I have made innumerable mistakes. However, all through my life, I have treated every mistake as a learning opportunity.
Management philosophies that have influenced you the most?
It is our ‘Employee First’ and ‘Relationship Beyond the Contract’ philosophies. To us at HCL, they are not just management theories though, they are a way of life.
What is the biggest leadership lesson that you have learnt?
That if you empower others, you end up unleashing a chain of energy in the organization that no market situation or economic downturn can diminish.