Why more managers need to relinquish control

September 21, 2011, 4:05 PM UTC

By Anand Pillai, guest contributor

In mid-2009, as it became painfully evident that the global recession would be sustained and deep, my company, HCL Technologies, faced a significant dilemma. We’d been telling our 55,000 employees that they were the key to our success. But to reduce operational costs, it seemed certain that we were going to have to lay off hundreds of them.

That’s when CEO Vineet Nayar told all employees point-blank that we had to cut expenses by $100 million, or cut jobs substantially. Faced with this challenge, it was our employees — not the executive team — that did something truly amazing. They banded together and developed 76 ideas to save the company $260 million with no layoffs. One significant idea was to abolish flextime hours, which led to a massive savings on electricity and transportation costs. This was the epitome of the “open source” leadership model in action.

Two years later, organizations around the world have come to appreciate that the latest addition to the workforce — often referred to as Generation Y or Millennials — are equipped with an irrepressible energy and the ability to suggest new and often radical ideas to attain success during times of great challenge. The example above underscores one key point — employees sometimes just need to be asked for their opinion. For this reason, I believe that hierarchical leadership structures where ideas almost exclusively come from the very top are ill equipped to tackle today’s organizational challenges as they discourage innovation, creativity, and accountability.

The message is seemingly simple: we must adapt to meet the aspirations of the upcoming generations if we intend to fully take advantage of, develop, and retain talented employees.

Consider Facebook. Organizationally, it is the vanguard of a dismantled traditional hierarchy. Instead of specific individuals holding leadership positions, different people step forward to lead, depending on the situation and their individual talents. The traditional leader at the apex then is given the critical responsibility of encouraging new leaders at every level.

Wikipedia is another great example of a prominent collaborative forum. Who would have believed that it could become a lifeline of knowledge, despite all attempts by academia to question its credibility?

Creative Commons, Scribd, Project Gutenberg, Copyleft are all built to enable young leaders to emerge with ideas and solutions that stand to change the world. A growing legion of workers is flourishing in work cultures that encourage taking risks and speaking out.

So how do other organizations embrace this kind of behavior? They must redefine their organizations to enable employees to collectively tackle the challenges of the future. I am convinced that this shift will be modeled after “open source” software development, which has yielded tremendous progress and innovation on a global scale.

Here’s how to start the transformation to an “open source” management model:

1. Transfer the responsibility of change from the CEO to the company’s employees

When the CEO steps back and places the onus of organizational change onto the employees, they start to think like entrepreneurs. Even if only 10% of employees participate, this is a massive amount of energy. To do this, we created a social network called “My Blueprint” that allows managers to share plans for their specific business areas and receive feedback from another 8,000 colleagues, including those both above and below them in the hierarchy.

2. Create a culture of inclusiveness

All employees must feel valued and know their ideas are heard and considered, regardless of their title, department, and number of years at the company. In 2007, we launched a tool called Value Portal that connects HCL employees and customers. In this forum, participants can share ideas and give feedback and approval. The best ideas are chosen and then showcased to customers through the portal.

3. Be transparent with your employees

Transparency can come in several forms, but it requires a free and open system of sharing information so that employees feel their company has nothing to hide. When an employer is open and direct with their staff, employees can more easily trust their managers. Some companies share detailed financial information. Some disclose employee salaries and contributions, while others publish performance reviews on a company wiki.

We created an annual event, Directions, at which our senior leadership team meets in person with all employees to discuss strategy and direction. Each employee is encouraged to ask any question to understand his or her contribution to the company. We also use a blogging forum called U&I that allows employees to make suggestions directly to our CEO. Questions, concerns, and comments and their responses are visible to everyone.

As a first step, managers need to overcome the fear of losing control.

Anand Pillai is the global head of talent transformation at HCL Technologies