What’s common to these firms?

The largest airline in the United States by number of passengers carried domestically per year.

“To Provide the Best Customer Service, Put your Employees First.” - Colleen Barrett, President

The largest coffeehouse company in the world, with 15,012 stores in 44 countries.

“We built the Starbucks brand with our people, not with consumers. Because the best way to meet and exceed consumer expectations was to hire and train great people. We invested in employees.” - Howard Schultz, Chairman

A privately held Fortune 500 Company that provides various services to residences and firms.

“It is not just what we are doing but what we are becoming in the process that gives us our distinct value.” - William Pollard, Chairman

Guarantees Made to HCL Employees

• We will not give you responsibilities

• We will not respect your aptitude

• We will not treat you equally

Guarantees HCL to Employees

• We will not give you responsibilities– You will have to take responsibilities

• We will not respect your aptitude– We will respect your attitude

• We will not treat you equally– We will treat you fairly

Stepping back in TimeSTATE OF BUSINESS IN 2005

State of Business - Assessment of 2005

Employees

HCL Leadership Shareholders

Competition

Customers

2005

Traditional outsourcers extending focus from cost to innovation, productivity, resilience and flexibility

New generation outsourcers looking for transformational gain

Disruptive technologies and new business models

The “Me too” phenomenon and the need to differentiate

The value volume conundrum – linear extension of business model largely through application business

Increased revenue growth rate and profitability to be in line with peers

Strong aspiration quotient to be leaders in the service space

Employee driven market conditions Recruitment, engagement and attrition

needed new approaches

The Big ChangeHCL TRANSFORMATION

Four basic questions

1. How do you differentiate in today’s world

• By adding value2. Who adds Value?• Employees3. Where do they add value?• Value Zone – the interface between

the Service provider & Customer

4. If Employees add the ultimate value..

What should the role of management be?

Enable, Engage & Empower

employees

How the business runsEngagement

EmpowermentOwners of change

New ProductsNew Propositions

New Markets

Cycle of Transformation

Implementation Challenge

Vision, Mission & Values

Change Management Implementation

“What” of strategy “How” of strategy

What Changed in HCL

From

Output /Outcome Focus

Effort andInput Focus

To

From

IntegratedServices

DiscreteServices

To

-4-

From

New Services

Traditional ADM Services

To

From

Global & Indian IT competition

Indian IT competition

To

From

Individual Identity

Factory approach

To

From

Empowerment and Enrichment

Aspiration

To

C U

S T

O M

E R

C O

M P

E T

I T

I O N

E M

P L

O Y

E E

L E

A D

E R

S H

I P

Departing from Traditional Leadership Model

Customer

Employee

Enabling Function

Management

The Value Zone

Customers

Employees

Why Employees First ?

Employees First Enables, Engages and Empowers employees to maximize the value by creating the WOW in the value zone

Customer

Employee

Enabling Function

Management

The Value ZoneMaximizing the WOW in the value zone

In a knowledge intensive industry, value gets created in the interface between the customer and the employee

EFCS is about the individuals, their individuality and their diversity

EFCS is not……

What is Employees First

Employees First is a philosophy that recognizes employees as strategic to the ownership of the companies functions and its way of working.

The tenets of Employees First

Mirror, Mirror…

1

Accepting imperfections as catalysts for transformation

Trust through Transparency

2

Seeding trust by stretching the envelope of transparency

Inverted Pyramid

3

Reversing accountability by bringing the bottom to the top

Recasting the role of the CEO

4

Decentralizing decision making

EFCS….inspiring change

Our Approach-achieving EFCS @ HCL

The U&I Portal

U&I, is an online forum was formed to bring a new level of transparency in the

organization. Employees can post any question, which the CEO, along with his

Leadership team, would answer. Stretching the envelope of transparency, it gives a

voice to all its employees and ensures that it is heard.

Transferring CEO’s Responsibility

To strengthen the Concept of EFCS further a new section called “MY

PROBLEMS” was introduced in the U&I portal where the CEO shares a

problem faced by him with the employees who then respond with

unique/innovative ways to deal with it.

Employee Passion Indicative CountEPIC

HCL’s top five Passion Indicators

Customer support Collaboration Planning & Organizing

Creativity Interest

Passion being the essence of an “HCL-ite”, EPIC was designed with the aim

of enabling the individual measure and identify his/her passion drivers which

would eventually assist him/her in utilizing those identified passion drivers in

their jobs, thereby, increasing productivity and satisfaction.

Open 360 Degree Feedback

360 Degree Feedback, Employees can rate their managers, even the CEO, and the feedback/rating is made public across the organization. This inverts the pyramid and makes the employee a part of the development journey of the manager and the CEO.

Smart Service Desk (SSD )

Smart Service Desk 2.0, an online problem management system to resolve issues that employee face with the enabling functions. Only employees can close these tickets, if satisfied. This brings in a culture of reverse accountability.

Value Portal

Value Portal, is about incorporating the efforts of every employee into a business strategy that will support performance and profits over the long haul. It requires each member of a team to take ownership of the organizational assets he or she manages and translate organizational strategy into a personal plan of action.

But does EFCS Really work?

In 2005 HCL ,

18000 Employees $ 700 Mn in Revenues

CAGR of 30 % Operations in 18 Countries

79,000 Employees $ 5.7 Bn in Revenues

CAGR of 30 % Operations in 31 Countries

In 2011 HCL ,

Proof of the Experiment

EFCS: Impact Across The Organization

Evidence of BUSINESS SUCCESS:

Evidence of CUSTOMER IMPACT

Evidence of PEOPLE SUCCESS:•HCL has grown by 3.3 times in terms of employees from 18,000 employees in 2005 to 79,000 in 2011.•Won awards and accolades, e.g. Hewitt No 1 Best Employer in India and amongst the Top 25 Best Employers in Asia, one of Britain’s top employers 4th year in a row, one of the 44 most democratic workplaces in the world by WorldBlu.

Proof of the Experiment:•In 2009, during recession, HCL grew +23.5% while most of its competitior de-grew to the extent of -11.8%.

In a survey done by Forrester (external organization) among clients served by multi vendors, HCL has been voted as No.1 by its customer in application outsourced

Transformational Impact Created by EFCS

HCL- Large Pharma Relationship Growth Pattern

IS EMEA - HCM Support

ESS – Multiple Application Support

Short listed - Global Vendor

MRL Testing IS AP – Payroll

support

EAI – TIBCO GHH IS - MSI

Packaging MRL- CDS

support, CALM, Partnernet

GHH - M&O MSD Thailand –

DW Integration IS AP –PS HCM IS EMEA

RIS- CDS,CGA support, ADF,CBT

INFRA support First in Man

Research Managed care Process Consulting MMD Data 3

support SAS support Business

Intelligence Ent Architecture-

METIS App Rationalization

Strategy MSD Singapore Volume Deal MSD EMEA PDA SFA DBA support

GTS – Comet 2.0 EMEA - Portfolio

Mgmt/Univadis Portal Mgmt

HH – CDB, Email Marketing Campaign, DAY & FAST support

HH Banyu ISS – Production

support Infra – DC Tracks,

IBM AS400 , Preclinical M&O PTP BPO services MRL- Integration

Program Mgmt GDS support PS enhancements Web eVoc

GTS – Univadis Directory services EIC, One Large Pharma portal

Solution manager & Global Banking

MMD M&O MRL App Dev FACTS DSS BI

Migration ECCM Search

Technical Architect ISM Framework

Creation Infra GSOC MGCS Project Large Pharma BI

Support EMEA M&O ETL Portal

Development (PR1909312)

Large Pharma HH Siebel Call Center

MMD EA OSI PI Support

MMD Handel M&O MMD IT Quality

portal

GDAM_Integration Infosec_Sustenance

Engg GSHardware_Apps HPC Support Large Pharma HPC

MRL DBA MRL_BasicResearch

&Licensing_M&O Large Pharma O2C SAP Htr Support SM SOP Creation

Phase Data Centre

Consolidation

Team Size 1075

Team Size34

Team Size 450

Team Size 700

Team Size 790

Team Size 225

2005

2006

2007

2008

20092010

Key Performance ParametersResource MixService Quality

CSAT KEY HIGHLIGHTS

HCL CARES C SAT Rating of 6.2 on a 7 point scale for Nov 2010

Value Dashboard (2010)

Value Scorecard - for December2010

Total Ideas generated 18Total Value of Ideas $469,528Large Pharma Accepted Ideas 17Value of Large Pharma Accepted ideas $464,596Ideas completed/realized 14Value of completed idea $432,912

Division Wise Idea Split

Idea/Value Split across different areas

Service Maturity Map

• Integrated Service Management

• Discrete Managed Services

• Project –based

• Transactional

Maturity^

SLA

Pricing Model

Productivity (YoY)

Big Pharma Role

Dependency

Cost Savings

Key Metrics

Transactional

No SLA for Vendor

T&M

NA

All M&O

People

Baseline: Labor Arbitrage

Attrition, On-boarding

Project Based

SLA for provider Box

Fixed/Rate Card

0-5 %

Resource Mgmt, L3

People

5 % Incremental

Response/ Resolution

Discrete Managed Service

End to End SLA

Fixed

5-7 %

Application Mgmt

People, Tool

10 % Incr. to Baseline

MTTR, Biz. Case

Integrated Service Mgmt

Outcome Based SLA

Fixed + Service Catalog

10 % +

Service Strategy, Governance

Tool, Process

15-25 % Incr. to Baseline

Cycle Time, Productivity

1. Strategic Partner Workshop

(A workshop moderated by industry though leaders like Tarun Khanna,

brings Big Pharma & HCL Sr. Leadership onto a common platform to identify a shared vision for the relationship: A

Value Roadmap)

Studio Workshops– Towards a New Thought Relationship

2. Axon: ERP Benefit Realization

Deriving greater ROI on SAP Investments

Moderated by Chris Beiswenger, COO HCL Axon

3. Asset Rationalization & Archival

Execution Plan to accelerate IT Portfolio Optimization in a M&A Scenario

HCL Enterprise Architect Dharmender Kapoor

Taking EFCS Beyond Boundaries

Henley Business School Harvard Business School MIT Sloan School of Management Oxford University ICEDR LRN CIPD La Fosse CIO Submit Leadership Spectrum, Nasscom Wall Street Journal-Leadership Submit

EFCS @ Speaking Forums

There is something unique about HCL’s management model that the world is talking

about…

Most Influential – Five companies to watch: Facebook, HCL Technologies, Craigs List, SKS MicroFinance, LI & Fung

HCL wins FT ArcelorMittal Boldness in Business Award

Acknowledges HCL Technologies as the “world’s most modern management”

“HCL’s Employee First and ‘democratization’ of management concept could ‘bring about a corporate renaissance.”

40

HCL Technologies was amongst the two examples of companies with Authentic Leadership which was presented at the WEF discussion in 2008

HCL Technologies is Best Company(listed in India) in Investor Relations

Why HCL Technologies is Disruptive and Bears Watching– Barry Rubenstein“…though it has not received the hype of a salesforce.com or Google, we believeHCL may very well be one of the contenders to lead the IT services world of thevery near future.”

“HCL’s Employee First as a new and radical management philosophy which willcatch on with the world sooner or later.”

41

HCL is taught at Harvard as a premier case study on strategy and organizational leadership

HCL is featured as a case study in a global best-seller

Darden School of Business has done a case study on the impact created by HCL through its “Employee First Customer Second” practice

IBM and the other multinationals are becoming increasingly nervous about HCL Technologies…

42

What if we What if we invest in our invest in our

employees,anemployees,and they leave?d they leave?

What if we What if we don’t invest in don’t invest in

our our employees employees

and, they stay and, they stay ??

Th

For your attention and participation!

Thank You