Around 2003 Thomas Friedman sat inside NandanNilekani’s conference room in Bangalore India at Infosys Tech’s headquarters. Nilekani a co-founder of Infosys with Narayana Murthy looked at Friedman and told him “The playing field is being leveled” Friedman had just toured Infosys’s global conferencing center and was at “time: ground zero” of the Indian outsourcing industry. What he meant was the technology platforms for intellectual capital could be delivered from anywhere at the most competitive costs by our global competitors on the cable and wireless infrastructures the US has spent countless billions on to put in place. An infrastructure that was not being 10% utilized compared to the volume it could handle. An infrastructure that was paid for by American investors in the likes of the now defunct MCI with cable stretching across every ocean on the globe. An infrastructure the rest of the world was free to use and charge us back for the deliverables.
They sat in front of a wall composed of 40 flat screens. Nilekani showed how he could hold a virtual meeting of their entire supply chain for any project at anytime on the supersize screen. American designers could be speaking with their Indian software writers and Asian Manufacturers all at once. He told Friedman “We can be sitting here, someone from NY, Boston, SF and London, and if implementation is in Singapore so that person is there too. “That is globalization said Nilekani”. There were 8 clocks US west, US east, GMT, India, Singapore, Hong Kong, Japan and Australia. It summed up the Infosys workday 24/7/365. We can only begin to imagine the human capital issues that could arise:
Today’s presentation is not a report on Friedman’s great work as much as it is a look into the new challenges that face all companies competing in this new landscape. What we are going to explore are today are the challenges of maintaining, retaining and growing the human capital component of successful companies.
Let’s quickly look at these. The technological utility of each event here pushed the world into a more efficient, automated and computerized environment. It may even appear that there is not a lot of human function other than to monitor or implement systems. Yet these flatteners enabled many companies such as Infosys to become the behemoths they are by allowing them to digitize and monetize knowledge capital. Utilizing strategic HRM techniques in attracting the talent needed to move innovative business models forward they changed the face of business in less than a decade.
Infosys was running one of the first 24-7 call centers. By the CEO’s own admission a high stress environment but with the tension of success. A place where they were dealing with the tension of success…high pressure living…not the stress of not having a challenge. At least it started that way. They became the place to outsource to
IT and consulting company co founded in Bangalore India. Over 94,000 employees and approximately 40 locations world wide. They netted out about 1 billion in profits on 4B in revenue providing a full range of IT, software, consulting, project management & maintenance services. Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing as we just discussedThe GDM is based on the principle of taking work to the location where the best talent is available, where it makes the best economic sense, with the least amount of acceptable risk.CONTINUES NEXT PAGE
Over 97% of revenues come from existing customers.In 2000- 2004, Infosys moved from a simple IT implementation/ management company to one that added services including IT strategy and design. This was in line to begin competing with bigger firms such as Accenture and IBM.
The shift showed significant results and correlations.
The only Indian company to win this award and is inducted into the Global Hall of Fame for the same. MAKE recognizes organizations which are world leaders in creating shareholder wealth by transforming enterprise knowledge and intellectual capital into superior products/services/solutions.Of 3 p’s grew out of the socialist heart & capitalistic mindsets of the founders.
Co-Founder of Infosys with Nilekani who took over from Murthy as CEO in 2005. A peek into top management values here…
One of the driving factors early on was financial benefits. (New Employee Type)Well Rounded &Business savvy consultants who can speak to their clients decision makers, not just IT departments.Had to create new strategic partnerships to avoid their work being outsourced to other outsourced nations. Nations like Vietnam were becoming the place outsourcers would begin outsourcing to.To avoid being undercut by competitionin Philippines and Vietnam, Infosys must offer more depth of partnership to their clients which occurs from more innovative performing employees. They were having a crisis…(Training and Dev)The company developed recruiting and training processes to increase retention rates at a time when staff attrition is the biggest problem facing the industry and it worked at first but we will discuss the downside soon.
Led pack with extrinsic reward structure of comp, promotions and beneifts: made millionaires of early employees during the dot-com stock market boom
Used Intrinsic Reward structures as well…From the time Infosys was founded in 1981, the company always tried to ensure it was the Best Employer for potential employees.Health assessment (HALE), Lifestyle enrichment Brought increased standards of living and expectations to a new generation of free market Indians. As mentioned earlier they were very big on the organizational culture of mgts. Top down values.
Disparity of expectations across the employee hierarchy had become complex: Head count doubling every 20 months.The next generation of Infosys employees had expectations of their previous co-workers recognition and reward structureGiven its size organization was becoming more impersonal and compensation package changes were not for the better.In up streaming to compete with IBM/Accenture became more process-oriented and started leveraging its experience to perform repeatable projects…”employees felt they were deprived of the creative and technical ingenuity in the initial years.”
And a peek into what may be an underlying problem fostering some of the issues we will be exploring…This statement was made during an interview with Irene Hell The Independent on Sunday Jan 23, 2005 during the World Economic Forum at Davos Switzerland
Given their fall from grace and possibly realizing that people are more than data delivery vehicles they posed the hand in hand goal of becoming the place their employees wanted to work as well as a top performing company to HR.To answer the Question of how we need to look at what it means to be a Best Performing and Best Employer Company
Mgt leading change, participative leadership, and leading by example. If u Focus singly on profits u disenchant workforce; focus just on employees and slide into complacencySo Strategically implement actions to promote both using five actions:Earn employees and stakeholders trust engage directly with employees: surveys, feedback loops, exit interviews, call in lines, authenticity by management maintain focus of consistency and purpose: Spear head only a few change initiatives at a time and communicate relentlessly Build Collective Leadership Power: assemble core team of leaders in the company whose strengths complement weak areas: A players in the A positions: succession planningDevelop Shared Purpose do employees act like owners? Are they delivering performance to be proud of, are they engaged and are the right things in place to do so? e.g. provided personal and professional growth opportunities.
ISQ = equipping employees with skills and power to serve customers. Example is when Taco Bell found low employee turnover stores enjoyed double the sales and 55% higher profits than stores with Igh T/OTo boost profitabilty across stores they enhanced ISQ by giving latitude for on the job decision making
From Employee perspective:Being able to make recommendations inside that are heard and implemented in the organization: Recognition for such practicesNot just financial benefits, company acknowledgement. Team welcoming and recognition as we saw last week with google.Deliver consistent messages in the organization so employees understand the goals and values & how to accomplish them. CBS Assignment America: State Bank http://www.youtube.com/watch?v=1rXbAY8qHvg&feature=related
This familiar slide from last week illustrates as a reminder what employees are looking for, and we want to emphasize the employees relationship with management and with their company here.Now check this out on how employees can be intrinsically motivated when they love the place they work and how these practices increase the love for the place they work. Source: http://www.greatplacetowork.com/great/index.php, http://www.ccfbest.org/worklife/whatmakesagreatplace.htm (Compassion Capital Fund Online Newsletter)
What happens when employees love the place to work…this chart shows the 100 best places to work outperformed both the S&P and the Russell-Mellon Indexes. As you can see stakeholder returns are an increase of 30.6% over 100 Buy/Hold, 99.83% over the S&P and 90.5% greater performance Russell. What this says is motivated, those who feel that their internal and external equity rewards are fulfilling and those that are recipients of things such as job design and customization outperform. We see the importance of a Porter- Lawler Approach.
The Leveled Playing Field
• Countries could now compete for global
knowledge work like never before
• Friedman interpreted this leveling for what
it was: The World was becoming Flat
• Innovation and Technology had delivered
Columbus proof of a round Globe
• The same paradigm had just changed the
shape of it again: Squashed Flat
• 11-9-89 Berlin Wall
• 8-9-95 Netscape goes
• Work Flow Software
• Supply Chaining
– Google, Yahoo
• The Steroids
– Digital, Mobile, Personal &
Some Top Flatteners for Infosys
“or what the guys in funny brown shorts
are really doing for everyone including
• Who is Infosys?
• How was it Founded?
• Infosys People
• Company Benefits
• Change in Attitude, fall from grace
• The Goal of HR
• What makes a Great company to work for?
• Comparative to Wegmans, Zappos, Coach
• Multinational information technology services and
consulting company headquartered in India
• One of India's largest IT companies
• Infosys has a global footprint: 40+ offices and
development centers in India, China, Australia, the
Czech Republic, Poland, the UK, Canada and Japan.
• Annual revenues exceeded $4 billion on market
capitalization of over US$30 billion.
• Infosys defines, designs and delivers technology-
enabled business solutions
Who is Infosys?
Who is Infosys - cont’d
• Infosys takes pride in building strategic
long-term client relationships.
• Strategy Shift in 2005 to compete with
How was it Founded
• Infosys was founded on July 2, 1981 & started by seven people with $250
• Today, they are a global leader in IT & consulting
– revenues of over $4 billion.
• In 2001 it was rated "Best Employer in India" by Business Today
• Infosys won the Global MAKE (Most Admired Knowledge Enterprises)
award, for the years 2003, 2004 and 2005
• Created a company “of the professional, by the professional, and for
• “Wanted a firm that promised a fair deal to all its stakeholders-
shareholders, employees, and customer alike”
Narayana Murthy- Co-Founder
"We, the founders of Infosys, have donated
from our personal money at least 60
percent of our wealth in cash. ..”
• Infosys’ challenge: build a company that lasts for 200 years
• Hired hardworking, diligent, technically adept highly enthusiastic employees
• 1.5 Million job applicants per year
• The job represents an opportunity for a more prosperous life than that of
• Infosys has a need for a new type of employee
• New Strategic Partnerships
• Training and Development Processes
• The first Indian company to grant stock options
• Made millionaires of many
• Ranked No.1: Business Today Best Employer Survey in 2001 &
• Employee salaries in the top 10-15%
• Issued stock warrants that vested over 5 years to employees
• Invested proceeds of IPO into its 80 acre campus
• Added extensive state of the art technology facilities:
– Dinning, residential, entertainment
– Green space for recreation
• Stock options (5% of market price)
• Indirect Compensation
– Support during emergencies
– Health platform HALE
• Yoga, stress audits, professional counseling etc..
– Hobby, cultural and sports clubs
• Three ways to teach Values
1. Learning value-added through training
2. Emotional value-added through work environment
3. Financial value-added through compensation and benefits
Change in Culture, Fall from Grace
In 2003, Infosys toppled from the Best Employer List
• Employee discontent was on the rise.
• Employees expectations
• Perks of initial years were diminished
• Projects Mundane
"If you have proper data for the transaction,
then you win the transaction. If you don't
have, you don't. So people are very
comfortable with me because I go purely
by data. We have a saying at Infosys: in
God we trust - everybody else brings data
to the table."
The Goal for HR
• The cofounders wanted HR to ensure that
Infosys was on the Top Ten lists of both
Best Performing companies and Best
• How would HR accomplish this goal?
What Makes a Top Performing Company
• Culture that are flexible, adaptive, participative, and
– Operationalize attributes through leader behavior and
organizational structure and systems
• Management Promotes Both Employees and Profits
– Earn employee and stakeholder trust
– Engage directly with employees
– Focus and consistency of purpose
– Collective leadership building
– Fostering shared purpose
What Makes a Top Performing Company
• Satisfied employees = Corporate profits
– A 5% jump in customer loyalty can boost
– This is the Service-Profit Chain
• Employee Satisfaction soars when internal service quality is
enhanced this satisfaction turns to employee loyalty or
commitment increases productivity greater external
service value for customers enhances customer
satisfaction & loyalty.
• Designer, producer, and marketer of
fine accessories and gifts
• 10,100 employees
• Available at over 900 store locations
• HQ: Manhattan, NY
Uncanny ability to figure out what woman want
Innovative & consumer centric
Ability to recruit and retain top performers
Block and tackle
• "trust the people they work for, have pride in what
they do, and enjoy the people they work with"
– is the idea that a great workplace is measured by the quality of
the three, interconnected relationships that exist there:
• The relationship between employees and management.
• The relationship between employees and their
• The relationship between employees and other
What Are Employees Looking For?
Best Employer Scenario
Great Places to Work Performance
Buy & Hold"
S&P 500 Russell 3000
Fotune 100 Best vs. Stock Market 1998-2007
28,561 employees; 97 US sites
HQ: Rochester, NY
Senior management is informative & accessible
Numerous communication programs
5 values embodied at Wegmans
Pay & benefits
Revolutionize how business is done
Best company culture; family-like
Employee perks &
Build atmosphere where people like
to work & clients want to do business
Training & motivation
What should Infosys Do?
• Lessons learned from Coach
• Lessons learned from Weagmans
• Lessons learned from Zappos
• Zappos Clip: http://abcnews.go.com/Business/story?id=5326827&page=1
• MSFT Clip: http://www.youtube.com/watch?v=1rXbAY8qHvg&feature=related
• Wegmans Clip: http://money.cnn.com/video/ft/#/video/fortune/2008/01/22/bpw.wegmans.fortune
• Coach Clip: http://wm-od.cdn.turner.com/cnn/big/business/2007/07/30/lake.lew.frankfort.cnn.ws.wmv
• Top Performing Company Clip: http://www.youtube.com/watch?v=nvPN6bp_tNs
• State Bank Clip: http://www.youtube.com/watch?v=i1MqHclwIsI&feature=related
• Five Secrets of Best-Performing Companies, Chris Ceplenski, Senior Editor , May 08, 2006
• “Diagnosing Complacency in the Work Force” Harvard Business Press Online Business Subscription: Adapted
from A Sense of Urgency, Chapter 2 John B. Kotter, Harvard Business Press “
• Putting the Service-Profit Chain to Work, HBR July-Aug 2008, Heskett, Jones,Loveman, Schlessinger
• HBR “What It Means to Work Here” Tamara Erickson and Lynda Gratton March 2007
• HBR “A Players or A Positions”?: The strategic Logic of Workforce Management, Mark Huselid, Richard
Beatty, Brian Becker
• THE WORLD IS FLAT: A Brief History of the Twenty-First Century , Thomas L. Friedman Copyright
• Wayne Anderman
• Adam Berk
• Vince Rubiera