HCL Technologies overhauled its annual business planning process, turning it into an opportunity for a) grooming future leaders, b) pushing the envelope of organizational transparency, and c) leveraging the collective wisdom of thousands of employees in order to create realistic forecasts informed by the “new normal” facing business as the economy emerges from the recession.

Context

• HCL Technologies is a leading global IT services company that draws on a quarter-century of engineering excellence to create innovative solutions for clients in ways that affect or redefine the core of their businesses. • It also is an organization actively engaged in reinventing how you run a business. It seeks to develop radical management practices that enhance the value created for customers. • The company’s central management philosophy – “Employees First, Customers Second” – turns traditional management thinking on its head. It also upends traditional organizational hierarchy: Managers are ultimately accountable to employees. • HCLT’s bold management experiments – which engender a rebellious entrepreneurial zeal among employees – have enabled the company to grow during the worst economic downturn in 80 years. And the experimentation continues, as the company prepares for the radical “new normal” that will characterize the post-recession business environment.

Triggers

• Beginning in 2005, HCL Technologies underwent a transformation: A once-successful company that had lost its competitive edged became a world leader in IT services, growing at a rapid rate even during the worst economic crisis in 80 years. • It should have been a moment for savoring the success and raising a toast to the CEO Vineet Nayar, who had catalyzed the revival, right? • Wrong! Instead of clinking glasses, HCLT chose to throw open the door of the corner office and create 300 new CEOs in-house. The rationale: If just one CEO could achieve this much for the company, imagine what 300 could do, given half a a chance! • The company’s leaders realized that the business planning process was becoming dated, dependent in many ways, on a few wise heads staying abreast of the times – no longer possible as the industry faced major and rapid changes. • Planning the next five years of the company’s future could therefore no longer be limited to a select few senior managers with an aggregated view of company operations. They needed to incorporate trench-level details of the business and business environment. • Furthermore, CEO Vineet Nayar was asking himself critical questions about the sustainability of the planning process, in which he was faced with the review of 300 business plans every quarter: Why should I be the one to review all of these plans? What do I know about the businesses of these 300 managers? How can I really provide each of them developmental feedback? What value am I adding? • Similar questions were echoed by other senior business leaders: • How can I develop leaders in my business practice? If the sales managers for key customer accounts are representative of HCL’s best line of offense, why not get them to start thinking like “business owners” rather than senior employees? Why not convert the annual revenue forecasting exercise into a method for integrating the sales teams and the delivery teams (the people who work directly with customers to implement HCLT’s IT solutions)? • Can we reconcile accounting principle-based forecasting with actual revenue opportunities – in advance? Although the finance team had traditionally played the lead role in the annual goal-setting and monitoring activity, shouldn’t actual business “owners” marry the financial planning with a factual, on-the-ground view of current revenue opportunities? • How can we make the significant effort put by key account managers into planning worth their while? Is there a system in which their valuable work wouldn’t be a) merged into a larger indistinguishable whole and/or b) remain unexamined – with little value extracted – because it was ultimately overshadowed by rule-based financial forecasting based on the past and not the foreseeable future!

Key Innovations & Timeline

Summer 2005 • The roots of the new business planning system – or rather its label, “MyBlueprint” – date back to the strategic transformation initiated in the summer of 2005 by new CEO Vineet Nayar. • HCL Technologies had a glorious history that began with the garage startup of its parent company in 1976. But though HCLT continued to enjoy rapid growth in the early 2000s, it was falling behind its Indian rivals and risked being made irrelevant by a changing business environment. The company was “shaken” by its eroding competitive position but not “stirred” enough to make bold changes. • So Vineet called together a group representing the 100 best and brightest people in the organization to answer the question: “What next, together?” The three-day meeting in Delhi, which came to be known as the Blueprint Meeting, was in fact a stirring event, by most accounts. • Younger employees who were there (we were still in business school at the time) recount an amazing scene. A plan to completely transform the company was being sketched out – and the discussion there in a super-cooled Delhi banquet hall was heated, to say the least. • But though the long-term planning process was exciting, it represented strategy-setting by the elite. And one of the ultimate outcomes of that meeting was the philosophy that came to be known as “Employees First, Customers Second.” One of the central features of EFCS is that it transfers ownership of change within HCLT to the trenches – to the customer-facing employees who directly interface with customers. That’s because the interactions between front-line employees and customers take place in what we call the “value zone,” where value is created for both HCLT and customers. • The problem: Despite the tremendously successful transformation that HCLT underwent following that 2005 Blueprint Meeting, the company’s business planning process stayed pretty much the same. June 2008 • Consider, for example, the business planning process for FY2009, which took place in June 2008: • Several hundred account managers – each responsible for one or more HCLT clients – would work with their sales people to put together a business plan for the coming year. • Each of these would be reviewed in a meeting that included at least four senior executives: typically, the account manager’s direct boss, an executive responsible for some or all of the accounts in a particular industry, another responsible for some or all of a particular geographical region, and ultimately someone from the office of the CEO. • There were some problems with this system, some more obvious than others: • Bringing managers from around the world to a single location for these meetings was expensive, difficult to schedule, and time-consuming. • The nuance of the account manager’s presentation – not to mention the questions and responses of the senior executives – wasn’t captured in the only documentation of such meetings: the account manager’s slide deck. • In many cases, the account manager’s thoughtful rationale for sales targets and assessments of business opportunities/threats were trumped by a corporate financial plan that was agnostic about such detailed information from customer-facing employees – so long as the company made its aggregated revenue numbers. • The planning process was totally at odds with the “Employee First, Customers Second” philosophy, which puts organization power into the hands of front-line employees because they are the source of insights that generate value. April 2009 • We were part of a relatively young “sales excellence” team charged by the CEO’s office with driving functional excellence in the sales management process – and the problem in the business planning process seemed like a good place to start. • Our goal was to develop a process that responded to a number of questions: • Why not tap into the collective insights into customer behavior that thousands of front-line employees possessed? • Why not use the planning process as an opportunity to convey true ownership of the business back to the employees who were directly responsible for its success? • Why not move away from a mind-set that considered business planning to be an exercise performed at a fixed point of time and instead realize that it is an evolutionary process that gets increasingly better as insights into customers increase? June-July 2009 • The business planning process for FY2010 looked very different from the one used in the previous year: • The sales managers for the largest customers – about 150 clients, representing some 70% of HCLT revenue – work with the delivery managers for those accounts to develop a business plan. • The presentations are posted on the MyBlueprint portal on the HCLT intranet, along with recorded spoken explanations by the account managers. • These are reviewed by the handful of relevant senior executives but are also available for review by another 8,000 HCLT employees – including people below the account and delivery managers in the traditional hierarchy. • This allows the plans to be enhanced not only by an account manager’s sales people (who have always helped her put together business plans) but also members of the delivery team. This input, from people who are working with customers on a daily basis, opens up new horizons of customer insights – for example, overlooked customer needs that the sales team wouldn’t be aware of. • Finally, the CEO Vineet Nayar records a response to each account plan, offering suggestions based on his experience as a leader and his meetings with key customers – again, something that those 8,000 HCLT managers, many of them aspiring leaders, can listen to. • The game-changing 2005 Blueprint Meeting lent its name to MyBlueprint. But the new business planning process is no longer about a handful of elite managers creating a blueprint for the CEO. Rather, it’s about but rather about the account manager – aided by input from people throughout HCLT – creating a planning her blueprint that maps the value zone that exists at the interface between HCLT and her customer.

Challenges & Solutions

Challenge: Creating an online tool that • Was inexpensive • Would allow content to flow easily through company networks • Wouldn’t be difficult for account managers to learn • Would be available “on demand” to interested parties Solution: Used existing, familiar, and easy-to-navigate company platforms: • A MyBlueprint homepage accessible through the Myhcl.in intranet interface • Microsoft Live Meeting software to record the voice-over to the slide decks Challenge: Uniformity of content to address key requirements Solution: Account management template socialized with clear expectations from management team Challenge: Ensuring the quality of the information presented Solution: Peer visibility that fosters high quality information and analysis Challenge: Convincing account managers that the information wouldn’t flow to unwanted audiences Solution: Limited access to MyBlueprint based on seniority and role

Benefits & Metrics

Business Benefits • Transparency around individual business plans leads to: • Consistency of purpose and performance metrics across accounts • Continuity of purpose when account leadership changes • Horizontal and vertical cross-collaboration for additional revenue opportunities • Integration of traditional financial projection with revenue plans informed by customer-driven insights and opportunity spotting • “Open-source” development of business plans Organizational Benefits • The “My Blueprint” label highlights the importance of customer-facing employees – is an explicit acknowledgement that “the business planning process belongs to me,” not senior executives, that in fact “I am the business.” • The transparency of the process – the democratization of information – creates both honesty and accountability in the development of business plans • The opportunity for aspiring leaders to watch at close range seasoned leaders in action (for example, the give and take on individual business plans between account managers and senior executives), as well as offer their own feedback on the plans, helps people a first-hand feel for art of leadership and managing relationships. Metrics are being developed as the process is rolled out in the current fiscal year.

Lessons

• Be bold in rethinking long-accepted processes • Realize where real value is created in your business – which is likely to be at the interface between employees and customers • Tap the value that individual employees can offer when they information is made widely available

Credits

Shubhi Mittal, Sameer Chandira-Mani

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