Jun 03, 2014

Reverse innovation: How management history was made in a wholly unexpected place, and by wholly unexpected leaders

June 3, 2014 - Sometimes we don’t realize the epochal shift some seemingly natural inflections generate. This is the story of one of them—the story of a few General Electric people who changed forever the way the world runs process operations.

Since I am not known for being a sycophant, the following is not a eulogy. In other words, this is hard stuff that should be part of management school reading (and by the way, Pramod Bhasin’s story is recounted in a Harvard Business Review article)

First, this is a story about leadership, that of Genpact’s former CEO, Pramod Bhasin, and Genpact’s current CEO, NV “Tiger” Tyagarajan, as well as their original management team. Second, this is a story about corporate culture-building, which, when coupled with a rigorous approach to business metrics, enables organizations in a way never seen before.

Leadership first. There are four reasons why Pramod and Tiger are unusually interesting CEOs.

  • Build on no foundation. They built a large and global company in a place where nobody thought anything like this would be possible—a place where brownfield means brown fields! They didn’t moan about resources. They created them and turned it into an opportunity to change the business services world. That place was, initially, Gurgaon, India, a stone’s throw from Delhi, but yet at that time a place with near-zero infrastructure
  • Show real entrepreneurship. Intra, actually. They were quintessential “intrapreneurs” – entrepreneurs in a very large company (GE) who can drive innovation from within and don’t believe for a second that they can’t get big stuff created from scratch in a big and established firm
  • Aim at the big guys. They aimed at Accenture and IBM, and disrupted their model by adding significant global delivery capabilities that simply didn’t exist. They showed it could be done
  • Harness real globalization. Even more importantly, they created a global business model that didn’t exist as such, riding on new (for the time) technology enablers but going well beyond that. They created an organization able to delight customers globally, although they used global and very diverse resources with significant cultural differences between each other, from the US to India to China to the Philippines to Latin America and Eastern Europe, and the main tool used was culture itself

So, let’s talk culture. Not the wishy-washy stuff. The normative kind. Someone said that culture dictates what people do when you can’t see them and guide them, and it is so incredibly more important in operations with tens of thousands of globally located people. You can’t sit on everyone’s lap. Although most people aren’t disciplined by nature, they naturally get shaped by culture—and end up liking that true north. Two main things happened under Pramod’s and Tiger’s leadership: Culture became measurable and was aligned to clients’ satisfaction in completely innovative ways.

A culture you can measure. That culture-building exercise was also powerful—and unique—because of the incredibly creative use of Lean and Six Sigma. That gave Genpact both metrics to measure people’s performance, and gave the company tools to solve problems as process problems, not people problems, which would have encountered resistance due to subjectivity and pride. The killer piece was that Lean and Six Sigma (LSS) almost became a religion that all share, a point of pride, and, ultimately, a significant part of the cultural DNA. Since LSS is a highly quantitative and logical religion, LSS lent itself to open dialogue that transcends individuals’ pride and feelings. That culture then enabled the company to crystallize business process operations “science” into even more sophisticated frameworks, namely, those of Smart Enterprise Processes (SEPSM) and lays the foundation for the next evolution, which will be increasingly technology enabled.

A culture that aligns with clients’ needs. Finally, that culture was aimed at ensuring client delight through continuous and rigorous client satisfaction measurement (Net Promoter Score, NPS), illuminating even more the true north from outside the company. This meant that employees, managers, and leaders wouldn’t sink into internal navel gazing and politics. Instead, they would find meaning in doing great work for great companies out there, and see their NPS rise—or else. They would master their skills and improving visibly on them: Visual management was the clear manifestation, appearing on every wall and pushing competition with oneself and as a team well before gamification was even a word. And they would be rewarded with a sense of “flow” that makes people get into a positive “zone” of performance.

All this, thousands of miles from the places where operations advancements had happened for a hundred years. That’s innovation in management practices.

About the author

Gianni Giacomelli

Gianni Giacomelli

Chief Innovation Leader

Gianni serves as Chief Innovation Leader where he drives and sponsors Genpact’s strategic initiatives aimed at sustaining clients’ transformation into digitally-enabled companies. He also co-leads the Massachusetts Institute of Technology (MIT) efforts to set up a Collective Intelligence Design Lab.