Book Excerpt June 25, 2010, 12:20PM EST

Book Excerpt: Employees First, Customers Second

In an excerpt from his new book, Vineet Nayar shows how he built up trust through transparency to create a culture of change at HCL Technologies

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In early July 2005, my A team, the hundred best and brightest brains at HCL Technologies, flew in to Delhi from around the world for a three-day strategy conference. On the second day we talked about the importance of building transparency and trust throughout the company.

Could transparency really be the catalyst to drive trust? I believed so, for several good reasons. Before I describe them, however, it's necessary to understand a bit about the culture at HCLT—a legacy business that had grown rapidly and changed quickly in its early years. As it grew bigger, it gradually slowed down. Change became more difficult and took longer to implement. Too many bright ideas got left on the table.

But I saw that the culture at HCLT was not all about legacy. We had strong leaders who wanted to break free of the old ways. As is true in so many large companies, it was the HCLT organization—the archaic pyramid—that was shackling people and keeping them from contributing all they could.

I believed that one of the ways we could release this talent was to make our culture participative. To get our people to participate more, we had to create a culture of trust and to do that we needed much more transparency. There are five main ways in which transparency builds trust.

First, transparency ensures that every stakeholder knows the company's vision and understands exactly how his or her contribution assists the organization in achieving its goals. Working in an environment without transparency is like trying to solve a jigsaw puzzle without knowing what the finished picture is supposed to look like.

Second, transparency helps to ensure that every stakeholder has a deep, personal commitment to the aims of the organization.

Third, for the Gen Y members of our workforce transparency is a given. They post their life stories in public domains; they expect nothing less in their workplaces.

Fourth, in a knowledge economy, we want customers to be transparent with us, to share their ideas, their visions for the future, and their strategies for solving core problems. Without such transparency, how can we create the technology solutions that will accelerate their growth and strengthen their businesses?

Finally, knowledge companies like HCLT often do lateral hires—people brought in from outside the company—to work on specific projects or initiatives. The only way these outsiders can get up to speed quickly and be as effective as possible is through sharing of information and complete transparency about the strengths and weaknesses of the assignment. The more transparent the process, the more trust that the outsiders felt in the organization.

Getting started, I knew that we must not deal in half measures. We had to do more than crack open a small window of transparency. We had to throw it wide open—do things we had never done before and attempt things that other companies had not tried.

Looking back, the solutions we came up with seem quite obvious. But at the time, I had no easy answers. I appealed to our bright sparks for ideas and asked my managers to reach out and listen, as well. We got a lot of responses. Many of the ideas, although provocative, were too far out, too difficult to implement. One idea, however, made a great deal of sense.

The idea was to open the window of financial information.

At the time, our people had access to the financial information that pertained to their own projects, but they had no way of knowing how their business unit and the whole organization were doing. Nor could they compare the performance of their team to that of others in the company. What if we allowed everybody to see all the business units' and the company's financial data? Wouldn't that be an important step toward greater transparency? Wouldn't it help build a culture of trust—showing that we had nothing to hide and were willing to share both the good and the bad?

I floated the idea. Immediately came the "yes, buts." There were two major objections.