Analysis of Leaders in Innovation
Capella University

Introduction
Innovation is a term used to describe new ideas and new beginnings. One who introduced this concept to a failing organization, was an innovative leader named Vineet Nayar. In 2007, Nayar was named CEO of IT Services and Outsourcing Firm HLC Technologies. With his strategic vision and global outlook, he catapulted the then dismal firm into the leader of the organizational pack in a short amount of time. In the beginning of Nayar's 2010 article "A Maverick CEO Explains How He Persuaded His Team to leap into the Future”, he describes his appointment as President of HLC technologies as a “leap to safety.” (Nayar, 2010) It became apparent that there was something he needed to do to change the interface of this company. He began to create a vision, but knew that it would not take place without some major adjustments.
When one thinks of innovation, it is a term used to described new ideas and new beginnings. One who introduced this concept to a failing organization, was an innovative leader named Vineet Nayar. In 2007, Nayar was named CEO of IT Services and Outsourcing Firm HLC Technologies. With his strategic vision and global outlook, he catapulted the then dismal firm into the leader of the organizational pack in a short amount of time. Vineet formulated the” employee first, customer second approach” and took HCL to be one of the most successful IT outsourcing businesses in the world. It worked magic at HCL and the company created 34% percent revenues even at the time of turbulence (sparks.wisdomjobs.com). Key insights from his approach were: 1.) Be transparent – share information, show you have listened, be consultative 2.) Be inclusive – talk with people, ask their opinion and listen and 3.)
Global environment that influenced Nayar's needed to create a more innovative organization
First, this analysis will take a deep look into the strategic vision and global outlook that Nayar used to catapult HLC Technologies. Also, the analysis will introduce the five discovery skills and how Nayar used these skills to create this organization and what steps he needs to take to continue shaping HLC into a more innovative company. Nayar realized that it was important that his EFCS could be implemented about other countries and regions in his company, not just his central region. It reached across price brands and time zones, thus creating a company of greater innovation. Vineet Nayar adapted the five discovery skills that were displayed in Dyer, Gregersen, & Christensen ‘s Innovator’s DNA; associating, questioning, observing, networking, and experimenting. He applied these skills to create an innovative organization and gave a blueprint for other innovative organizations to follow.
Nayar also catered to the global trend of the Internet. There is a new breed of employees that shun away from the traditional hierarchy and adapt new concepts and ways of getting ideas for the creation of new products and services. This generation is now known as the “internet generation”, a generation who wants more innovation, collaboration, and more value in a company. Nayar used this generation to propel his company wide meetings called “Directions” and his smart service desk. This desk was an “online system that allowed anyone in the organization to lodge a complaint or make a suggestion by opening a ticket.” Management would then read the ticket and once answered, the employee would then rate the answer from unsatisfactory to satisfactory. It not only resolved issues but it also made higher management accountable. Other uses of technology came in with the use of the 360-degree intranet appraisal and the online planning process that was used company wide. This will be more appealing to the new generation of employees.
HCL’s Employees First, Customers Second (EFCS) philosophy is centered on the belief that organizational focus and structures should be inverted to focus on the ‘value zone’- the place where frontline employees interact with customers and create real value for them (sparks.wisdomjobs.com).
Nayar believed, a company culture that fosters and strives to develop and train employees as well as clarifying the overall vision of the organization has helped HCL rise like a phoenix above all odds in the last few years to become one of the top runners in the IT industry in India and the world. It was not so long before when the employee motivation and enthusiasm was at the bottom rungs, but through careful analysis and a change in the management style, Vineet Nayar, the CEO of HCL Technologies Ltd., has been able to turn around the graphs from negative to a solid positive for his company and has made Employee First, Customer Second (EFCS) not only a catch phrase but a model to follow (sparks.wisdomjobs.com).
Nayar's use of the five discovery skills and how he used those skills to create an innovative organization.
The first discovery skill is associating. Dyer, Gregersen & Christensen (2011) stated, “Associating happens as the brain tries to synthesize and make sense of novel inputs. It helps innovators discover new directions by making connections across seemingly unrelated questions, problems, or ideas” (p. 23). Nayar used association to determine in which area did he want to take his company. With the losing market share and mindshare, growing competition, and unsure customers, it became important that he found the important measure to take to turn HCl Technologies into an innovative company.
The next of the discovery skills, which actually catapult associational thinking, is questioning. “Innovators ask questions to understand how things really are today, why they are that way, and how they might be changed or disrupted. Collectively, their questions provoke new insights, connections, possibilities, and directions” (Dyer, Gregersen & Christensen, 2011, p.23). Nayar questioned the employees to see which direction they believed they were in and what steps they needed to take. From the “Directions” meetings to the 360 interfaces, it became essential that higher management knew what employees were thinking. This not only triggered the EFCS strategy, but also gave way to new innovative ideas for the company. With the recession, he was able to get the input of the employees, instead of layoffs; they found ways to cut costs and wages, which allowed the company to be one of the few who made more profits than losses during that recessional period.
“Innovators are also intense observers. They carefully watch the world around them, including customers, products, services, technologies, and companies - and the observations help them gain insights into and ideas for new ways of doing things” (Dyer, Gregersen & Christensen, 2011, p.24). Nayar observed the way that the consumer relied on the fundamental quality of the service provided to them rather than the fancy bells and whistles of other companies. He was able to gain clear insight into the way that, not only the consumer thought, but how the employees thought as well. With the questions that he asked, he observed their environment and used what he found and even what he himself went through as an employee to change the interface of the company.
Innovators do not network by simply doing “social networking or networking for resources, they actively search for new ideas by talking to people who may offer a radically different view of things” (Dyer, Gregersen & Christensen, 2011, p.24) Nayar spoke with not just employees but consumers as well. He found out what they valued in a company and its products. This opened the doors for employees to create new products that catered to the needs of the consumers. Not only that, but with the new creative circuits created by the new Generation employees, it became apparent that a new innovative approach was being created.
The last of the discovery skills would be the experimenting of new ideas. Innovators use experimenting by traveling to new places, seeking new information and trying new things. The one new thing that Nayar experimented with would be the EFCS concept. This concept completely reversed the hierarchal organizational structure and put higher management into the place of accountability. Nayar and management became susceptible to the ideas and thoughts of the employees. He knew that he was not the only one with ideas and that it was essential that bridge the gap between employees and management. This created a place of trust, where many employees, if not all, would value where they worked and give more time and dedication to it.
Opportunities for Nayar to improve his use of the skills that encourage and support innovative organizations.
According to Nayar, if you are genuinely being innovative, you should succeed in three fundamental areas. First, provide new levels of satisfaction to your customers. When we proposed to one of our banking customers, for instance, that instead of charging them time and materials on a software development project we would charge them on a per transaction basis, the customer embraced that idea with open arms. It’s been our experience that if you have a distinctive value proposition like this, customers do admire you for having the gumption as a company to innovate (www.ceoforum.com). Second, bring new products and services to market, as a proof of ongoing commitment to innovation. And third, innovation should be effective in being accepted in the market place. These three measures provided the confidence that strategy was paying dividends, and we simply have not just fallen in love with our own ideas (www.ceoforum.com).
One of the best ways to engage creative workers is to align their passions with company goals. HCL management believes that employees feel passionate about their jobs when they know that management understands the importance of their roles, respects them, and makes it easier for them to accomplish their work. The result is a shared purpose that acts as a bond between employee and employer.
Nayar’s focus on empowering employees to achieve growth defines HCL’s growth trajectory rather than the goal itself. He shows that focusing on the values and fundamentals of achieving compound growth will prove successful over the long term. HCL focuses on five values as a platform for sustainable growth: value centricity, trust, new markets, the employee first initiative, and disruption in the value proposition. HCL is a testament to the fact that it is possible to define the values that will guide decisions and frame a growth blueprint. According to Nayar, a true leader is someone who is an explorer, sees an opportunity in challenges, has irrationality in his/her expectation, and is inspirational and emotional.
HCL transformed its business by practicing radical transparency and increasing the autonomy of individual development teams. HCL also turned its traditional organizational pyramid on its head by making shared-service organizations such as tech support and management accountable to frontline developers. Developers are responding with innovative ideas and creating a self-sustaining “can-do” culture. The financial results were also impressive: a 35% growth in revenue per employee and a sector-leading 25% compound annual growth rate (CAGR) through the 2008 to 2010 recession.

Conclusion
All in all, Nayar took an idea by storm and changed the idea of the traditional organizational hierarchy. In order to keep an innovative organization, he needs to keep the value of the Employees First. As formerly stated, it is important that the employee feels that his/her opinion and idea is important. Not only will it create a great relationship with the employee, but allow the company to reach greater heights with great innovative products. Nayar needs to continue to raise questions about what needs to be done, observe the company at where it is and what needs to be done to take the company to the next tier of success. He also needs to continue networking with the new generation of employees and consumers and experiment with these new ideas to see what changes, if any, need to be made.
Nayar (2012) had three leadership traits that he believed never goes out of style and are key factors in the global environment that influence what leaders do in leading innovative organizations. Trust, mentorship and empathy are factors that a good leader possesses and use to build a successful organization. These are also skills that leaders share with their employees in their development, which builds a good organization.
Nayar’s creative strategies in persuading his organization to take creative steps forward successfully used the discovery and delivery skills to align his organization in such a way that helped them continue to compete in the marketplace. With these recommendations, Nayar can propel HLC Technologies and other EFCS modeled companies into greater heights of innovation.
References
Change master - CEO Forum Group: http:// www.ceoforum.com.au/.../Vineet-Nayar--HCL/Change-master
Dyer, J., Gregersen, H. & Christensen, C.M. (2011). The Innovator’s DNA, Boston, MA: Harvard Business Review Press
Nayar, V. (2012). Three Leadership Traits that Never Go Out of Style. http://blogs.hbr.org/2012/08/three-leadership-traits-that-n/. Retrieved 1 November 2013.
Nayar, V. (2010) A Maverick CEO Explains How He Persuaded His Team to Leap into the Future. Harvard Business Journal. 88(6), 110-113.
Vineet Nayar-Spark of Corporate – WisdomJobs.com: Retrieved from http://www.sparks.wisdomjobs.com/6-vineet-nayar.htm.