IllustratIon: louIsa Bertman

IllustratIon: louIsa Bertman
Case Study
“How long is this list of escapees?” of operations at Parivar, a mid asked Kumar Chandra, the head –
size Chennai-based IT services company,
as he pointed at the slide projected onto
the conference room screen.
Everyone chuckled, except for Indira
Pandit, the vice president of HR. Nearly
100 employees had given notice in recent
weeks.
“We’re losing them faster than your
people can bring them in,” she said, turning to Vikram Srinivasan, the head of recruiting. “Our turnover rate is up to 35%.”
Vikram shook his head. “This isn’t our
problem. It’s the Indian labor market. And
it may not even be a bad thing. Some studies show that the more frequently employees move around within an industry,
the more innovative it becomes.”
Indira gave him a skeptical look.
“This is to be expected, Indira, especially now that we’re rising above the
second tier,” he argued.
This time only Kumar laughed, and
Indira knew why. Sure, Parivar was growing—in revenue, proftability, and reputation—but it was still much smaller than
companies like Infosys, HCL, and other
leading global providers of businessprocess outsourcing services. In the
past decade, Parivar’s charismatic CEO,
Sudhir Gupta, had saved the organization from bankruptcy and made it an
industry success story—but it was hardly
in the frst tier.
“I need to present these numbers to
Sudhir at the end of the week, and I can’t
do that without a theory about what’s
happening and a solution to propose.
That’s why I called this meeting,” said
Indira.
“What about the ‘People Support’
idea that came up in the Future Vision
exercise?” Vikram asked. Parivar
had just fnished its annual innovation
process. Employees from all over the
company—particularly new and young
ones—were encouraged to join senior
leaders in brainstorming and design
sessions focused on how the frm could
reach its goals for the year. This event,
Can a Strong
Culture Be
Too Strong?
Leaders at an IT services frm contemplate
whether its family-like atmosphere draws talent
in or drives it away. by David A. Garvin
The Experts
Ganesh Natarajan,
vice chairman and Ceo,
Zensar technologies
Daisy Dowling, head
of talent development,
Blackstone Group
HBr’s fctionalized case studies present
dilemmas faced by leaders in real
companies and offer solutions from experts.
this one is based on the HBs Case study
“Zensar: the Future of Vision Communities”
(case no. 311025), by David a. Garvin and
rachna tahilyani. It is available at hbr.org.
David A. Garvin is the C. roland
Christensen Professor at Harvard
Business school.
January–February 2014 Harvard Business review 113
EXPERIENCE HBr.orG
a hallmark of Parivar’s inclusive culture,
was meant to foster collaboration and an
entrepreneurial spirit. One proposal that
had garnered attention was the creation
of a new function made up of managers
whose sole purpose would be to listen to
other employees’ grievances and fgure
out solutions.
“I, for one, love the People Support
idea,” Vikram added. “It emphasizes
Sudhir’s philosophy of genuine caring for
our people.”
“It sounds genuinely expensive to me,”
said Kumar. Indira loved his pragmatism.
“Cost aside, I’m not sure that’s the
direction we want to take.” She pointed
at the screen. “These people have told us
that Sudhir’s ‘love culture’—our attentiveness to both personal and professional
matters—isn’t so alluring anymore. They
don’t necessarily want to feel like part of
a family at work.”
“Come on,” Vikram said. “That’s our
biggest selling point. Recruits love that
they won’t be a cog in the machine, that
our company and its managers—Sudhir
included—will listen to them, that everyone at Parivar matters.”
“That expectation may attract them,
but it’s not keeping them here, especially
when competitors offer a 30% pay raise,”
Indira countered. “That’s what we’re
hearing in the exit interviews.”
Vikram was clearly not convinced:
“We need to go bigger. We should put
our money where our mouth is with the
People Support function, show that we’re
100% committed to our culture of caring.
That’s the best way to reverse the trend.”
Big Brotherly Love
Amal, an associate in his twenties, had
clearly prepared for his exit interview
with Indira. He was checking off items on
a handwritten list.
“Everyone says I’ll hate it at Wipro, that
it’s too rigid there. But it’s Wipro! How can
I refuse?”
“Yes, I’ve heard they have the same
high expectations we do,” Indira said.
“But it’s more process-driven, far less
personal. Here you get more attention
from the top.”
Amal smirked. “Yes, if you’re one of
Sudhir’s clan.”
“What do you mean?” Indira asked.
“Don’t get me wrong. Parivar promised
access to senior executives, and I got it.
But Sudhir doesn’t swing by the ofce,
put his feet up, and chat with just anyone.
There’s an ‘in’ crowd. Only his favorites
get that family-like attention. I guess it’s
understandable—one man can only do
so much. But if I’m not seeing him or
other top people, I’m just stuck at a company that wants to be overinvolved in
my life.
“This People Support idea, for instance,”
he said, pointing to the last item on his list.
He seemed to be on a roll, so Indira just
listened. “I heard about it from my friend
who was in that Future Vision group. You
have to admit it feels a bit like Big Brother.
A whole group of managers dedicated
to walking around and asking about our
problems? We don’t need more people to
talk to. We need more money.” He sat back
in his chair, satisfed.
“Thank you for being so candid,” Indira
said. “This really is helpful, and we wish
you the best of luck.”
A few minutes later, Amal’s manager
poked his head into Indira’s ofce. “Did
you get an earful?” he asked.
“I sure did,” Indira said, gesturing for
him to come in. “I think he’ll be happy at
Wipro—it seems more his speed.”
“You should know that Amal is an outlier. Most people on my team are not like
him. They love Parivar’s culture.”
Thinking about her long list of “escapees,” Indira wondered whether that was
really true.
A New Best Practice?
Sudhir’s ofce, where he regularly held
big meetings, was crowded with inviting,
comfortable couches. Indira scanned the
room as people settled in. It was a typical
gathering: most of Parivar’s senior leaders,
including Vikram and Kumar, and a handful of younger employees.
“I’ve asked Nisha to tell us more about
the People Support idea,” Sudhir announced. “It’s the brainchild of her Future
Vision team. Ready, Nisha?”
Nisha, who looked to be fresh out of
business school, began her slide presentation, describing how the new function
would work. She included a scenario:
An employee is worried about his future
with the company because he’s been
given a time-consuming project that will
involve working late, compromising his
ability to look after his sick mother in the
evening. Aware of the People Support
function, he seeks out one of its designated “listeners,” as they would be called,
and explains his dilemma. The listener
helps him negotiate an arrangement with
his boss that allows him not to stay late
every night. Nisha’s last slide showed
cartoons of all the characters—the employee, the boss, the listener, and the sick
mother—smiling.
Everyone in the audience clapped, and
Sudhir congratulated Nisha. “This is what
I love about coming to work every day:
fresh ideas from smart young people.”
Not surprisingly, Kumar was the frst
with questions: How much would the
function cost? How would it scale up as
the company grew? Who would manage
it? Nisha attempted to provide answers,
but Sudhir interrupted before she got
very far. “We must still work some things
out, of course, and those all are legitimate
concerns. But I think this would be money
well spent.”
Kumar wasn’t satisfed. “OK, so we
won’t discuss specifcs today, but what
about our broader plans for growth? Will
this be appropriate outside India, when
we expand to the UK and the U.S.?”
“That’s also an important issue to
explore,” Sudhir said. “But people
everywhere want their company to care
about them.” With a glance, he indicated
to Kumar that the interrogation should
cease. “Indira, do you have any questions?
This obviously falls into your area.”
Indira shared Kumar’s concerns and
more. But she wanted to ask something
EXPERIENCE
114 Harvard Business Review January–February 2014
new. “Nisha, thank you for this thoughtful
presentation. I was wondering if you’ve
considered how the listeners will be
evaluated. How will we know if they’re
performing well?”
“Retention numbers,” Nisha said. “The
lower our turnover rate, the better the
listeners are doing.”
Indira contemplated the complexity of evaluating anyone on the basis of
turnover, given the volatility in the labor
market. She dreaded delivering the most
recent attrition numbers to Sudhir.
Vikram piped up to ask whether any
other companies in India or elsewhere
had tried a similar program or if Parivar
would lead the way.
“As far as we know—and Nisha has researched it—no other company has done
this before,” Sudhir replied. “Sure, HCL
has its employee-frst culture, but this is
about truly understanding and meeting
our people’s needs. Nisha and I were talking earlier about how someday this might
become a best practice for all of India,
perhaps beyond.”
Later, as everyone was fling out,
Sudhir pulled Indira aside. “Thank you for
going easy on Nisha. We want to encourage young people like her to put forward
bold ideas. But of course I want your honest opinion. We’re meeting on Friday, yes?
You had something for me?”
Honest Skepticism
Indira took the elevator to the fourth floor.
She hoped her colleague and business
school friend, Amrita, would be in her
ofce.
“Thank God, you’re not busy,” she
joked, fnding Amrita with her head down
at her desk. The two women were always
swamped, but they had an open-door
policy for each other.
Indira explained about the meeting in
Sudhir’s ofce, the People Support function, the exit interview with Amal, and
the horrible turnover numbers.
“I’m skeptical of this People Support
idea because I’m not sure we can really
nurture Sudhir’s love culture across an
organization that’s growing so fast. It’s
one thing as a philosophy of how he interacts with people, but building processes
and formal management structures
around it is a whole different story.”
“That’s a tough message to deliver to
someone who has tripled revenue and
quintupled profts with that culture at the
center,” Amrita said. “I’m sure he thinks
this is solving the problem of his limited
capacity.”
“But can you formalize a culture as
distinctive as ours into processes and
roles?” Indira wondered honestly. “Will
this People Support function even work?
And if it does, won’t it alienate more employees like Amal? What if it worsens our
turnover problem instead of fxing it? If
we want to expand to Europe and the U.S.,
don’t we need to be less like a cult?”
Amrita laughed. “You know what
Sudhir likes to say: ‘Cult is part of culture.’”
She paused. “Listen, it’s not your style to
just say what he wants to hear, Indira. If
you think People Support is a bad idea, tell
him. He’ll take your advice seriously.”
Indira knew she had more power than
most HR heads. Sudhir wanted to run a
humane company, and that meant giving
her a say on big issues.
“I plan to be honest with him,” Indira
replied. “But another thing Sudhir always
says is ‘Don’t come to me with a problem;
come with a solution.’ If Vikram and Nisha
are right, People Support could be just the
edge we need against the likes of Wipro
and Infosys, a way to retain our people
and win new recruits. What if this helps
us break into the top tier?”
“Do you really think it will, Indira?”
“I’m not sure, but I don’t have any better ideas right now.”
HBR.ORG
Tell us what you’d do.
Go to hbr.org.
QShould Indira endorse the new People Support function? See commentaries on the next page.
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THE dismal retention numbers at Parivar
clearly show that the company is not doing
a good-enough job of meeting its employees’ needs, so Indira absolutely should
endorse the People Support function. Taking this step might even allow her and her
team to identify and resolve the issues that
are bothering people before they decide to
leave the frm.
This case is based very loosely on our
experiences at Zensar. We have found
that a fun, friendly workplace gives us a
big competitive advantage in recruiting
and retaining employees. In interviews,
prospective candidates ask us whether the
stories they’ve heard about working at our
company are true. And after they join, it’s
the culture that keeps them with us, even
though many of them could fnd betterpaying jobs elsewhere. In fact, our turnover
rate is just 11% to 12% a year, about fve
percentage points lower than the industry
average, and our retention rate for critical
employees exceeds 98%. Our people enjoy
staying with us because of the culture
we’ve built together.
Before Indira moves forward with the
new function, she must be clear about how
to implement it properly. If employees see
it as hand-holding or an intrusion into their
lives, as the departing employee Amal suggested, it won’t work.
At Zensar we have a similar program,
called Associate Relations (AR), staffed
by 27 employees we designate as AR
executives. We train these managers for
six months in how to work directly with
individual employees and their bosses
on sensitive matters that the subordinate
might otherwise hesitate to raise with a
superior. These issues include planning for
maternity leave, negotiating workload, or
navigating a role change. Young associates trust the AR managers because they
are often quite young themselves and they
have the ear of senior leaders, including
our head of human resources and me.
Culture is voluntary and cannot be
forced on employees. A program such as
our AR function or Parivar’s People Support idea should not propagate cultism.
On the contrary, it must be implemented
in a manner that is perceived as fair. The
new initiative at Parivar would be a chance
to show that the company’s leaders treat
everyone equally and don’t play favorites.
Kumar is nonetheless right to ask how
well the company’s culture will transfer
across national boundaries, as we initially
wondered at Zensar. As a global organization, we have found that with minor
tweaks, AR works in Japan, China, Europe,
and even the United States. Everyone,
not just Indians, wants a friendly workplace. Yes, training and paying the People
Support “listeners” will cost money. But
that must be seen as an investment that
will pay for itself in the form of reduced
employee turnover and lower recruiting
expenses.
If Indira spearheads the initiative, rather
than merely endorsing it, she would further
demonstrate that this is not just one of
Sudhir’s pet projects or an attempt to
overdo his “love culture.” With her leading it, the People Support function can
be what Nisha intends it to be: a way to
meet the individual needs of employees, to
retain them longer, and to foster a broader
climate of caring and attentiveness.
The Experts Respond
Ganesh Natarajan is the vice chairman
and CEO of Zensar Technologies.
People Support will pay
for itself in the form
of reduced employee
turnover and lower
recruiting expenses.
What Would You do?
SOmE AdvICE fROm ThE hBR.ORg COmmUNITY
this is work, not family.
It is a monetary relationship, not one based on
emotional ties. Sudhir
should realize that the job
market is hot, and people
will move. To help Parivar
grow, he must build a network of former employees
who now work for customers and competitors.
Jorge lopez, independent
consultant
sudhir’s visioN is to
provide a humane and
exceptional workplace,
and the People Support
idea reinforces that. As
the frm expands, specifics can be tailored to each
local market. The new
function might turn out to
be just the thing that sets
the frm apart.
david aaron stevens,
owner, Stevens Consulting
Before lauNchiNG
People Support, Parivar
must better understand
what makes its employees
happy. What do the workers consider important
in life, and how can the
company create a meaningful link between the
new function and those
key employee values?
Ruben Collin, owner and
cofounder, the Brand
Station
the ProPosed initiative
seems great, but it runs
the risk of overpromising
and underdelivering. It
doesn’t appear to be scalable or to ft the needs of
a global workforce. As a
result, it may cause more
turnover when expectations are not met.
morag Barrett, CEO,
Skye Team
eXPerieNce
116 harvard Business Review January–february 2014
Parivar needs to shelve the People Support idea, at least for now. The proposed
initiative may align with Sudhir’s vision of
a company that cares, but it has no clear
commercial beneft, and the solutions for
individual workers are not likely to halt the
recent avalanche of attrition. By setting unrealistic expectations about management’s
involvement in employees’ personal lives,
People Support risks doing the company
culture more harm than good.
The broader problem for Indira is a
lack of strategic thinking. She and her
colleagues are just shooting in the dark because they haven’t gathered the hard facts
that would explain the appalling turnover
rate. Sudhir, Vikram, and others at the frm
seem to use gut instinct alone to make decisions about talent. As the head of human
resources, Indira must fgure out what’s
really driving attrition and then bring that
information—and practical solutions—to
the team’s attention, even if that means
rufing feathers.
She should start by asking four key
questions:
1. How does Parivar’s culture drive
commercial performance?
2. How is the frm’s employer brand
perceived in the talent marketplace?
3. How does the company assess
prospective talent?
4. Why do people really leave the
company?
In her research, Indira must go deeper
than the passive exit interviews she’s been
conducting. In addition to seeking answers
from a wide array of employees, she needs
to consult outside sources, such as executive recruiters, and to analyze all the data
at HR’s disposal: from cultural surveys to
hiring statistics to performance review
results. The data will identify which elements of the company’s culture are most
attractive to new recruits, how successfully
those elements are being communicated,
how effectively new hires are evaluated,
and how well the company lives up to its
promises. Only if Indira discovers misalignment among the four cornerstones of
the company’s people strategy—culture,
brand, assessment, and employee experience—should she launch a labor- and
capital-intensive remediation program like
People Support.
At Blackstone we face a similar challenge. As a small frm in a competitive talent market, we focus relentlessly on aligning our culture—which emphasizes taking
care of our people—with our HR strategy.
For example, we recently overhauled our
campus recruiting strategy and our communications to better explain the longterm career prospects at Blackstone. We
also conduct yearly confdential surveys
of junior employees to assess whether
their daily work experiences reflect how
we like to do business. This focus pays
off: Even in buoyant markets, our attrition
rate has been below industry averages,
and 30% of our partners have spent their
entire careers with us. Blackstone isn’t for
everyone, so we make a point of picking
employees for whom our culture resonates—and then living up to their expectations. To stem attrition, Parivar needs to
do the same.
Indira is daunted by the high turnover
numbers and, perhaps, a bit scared of
Sudhir—but she shouldn’t be. Superb
HR professionals can rationally analyze a
people problem; craft careful, commercially viable solutions; and advocate for
those initiatives. The turnover challenge
offers Indira the perfect opportunity to
bolster Parivar’s business and her own
career. 
HBR Reprint R1401L
Reprint Case only R1401X
Reprint Commentary only R1401Z
Daisy Dowling is the head of talent development
at the Blackstone Group, a global alternative
asset-management frm.
Indira and her
colleagues are just
shooting in the dark
because they haven’t
gathered the hard facts.
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