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When Vineet Nayar became president of HCL Technologies in 2005, the company’s growth had slowed. As the board asked Nayar to step into a leadership role, it made it clear: The time had come for something radical.

Not long after that, Nayar had a course-changing conversation with a customer who canceled his contract. “It was a defining moment,” Nayar says. The customer said, “Vineet, your employees did nothing wrong as individuals. But your organization did not support them.”

That inspired Nayar to coin the company’s new policy: “Employees first, customers second.”

These days, Nayar is that rare breed of leader who actually puts employee engagement first, openly sharing information with his team. Why does he do it?

1. Being transparent with employees allows for change. To develop employees, the company began using 360-degree appraisal technique, “but not the way it is typically used,” he says.

The 360-degree process allows anyone to give feedback to anyone, including to the CEO himself. Results are posted internally for all to see. “We find that this practice is motivating people to change their behavior. They try harder,” Nayar says.

2. It turns fence sitters into transformers. “In any transformation journey, you have to first convince the transformers to follow you and ignore the lost souls. Then you have to get more fence sitters to become transformers,” he says.

One way to do that is by sharing the financials with employees, so they can determine whether they’re contributing to growth.

Sharing financial-performance data accomplished two important things: Employees asked more questions and volunteered more ideas. And people started to make better decisions.

The outcome: Over five years, Nayar (as president, then CEO) helped HCL’s revenue grow from $700 million to roughly $2.6 billion.

— Adapted from “The Thought Leader Interview: Vineet Nayar,” Art Kleiner and Vikas Sehgal, strategy+business.

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