We empower individuals to find the help required within the organization but it is they who have to drive this process
We believe that bringing in cost saving measures and efficiencies to our clients will eventually bring in more business from existing as well as new clients
In an exclusive interaction with People Matters, Tiger Tyagarajan, COO, Genpact reveals the cultural and people management challenges Genpact faced while carving a unique identity for itself while leveraging the strengths from their captive experience with GE
What is the mindset transformation from an organization that had guaranteed business from the parent company to become a profit center?
When we started in 1997, we didn’t have a ‘cost center’ mentality. We were very clear that we wanted to structure the services delivered to GE as a profit center. Our vision was that we will run the operation as a commercial business as we thought that it is the best way to be successful.
This had several implications: Firstly, the people we hired in leadership positions were commercial people; we brought in people not only with strong operations background but also with strong commercial capabilities and potential. The second thing we did was to get the corporate audit team in GE to determine the prices for each of the services we offered. So instead of negotiating commercial terms all the time, we could focus on improving the services as we were also measured on the cost savings we provided to GE.
In 2002, Pramod and I tried to convince GE to allow us to do work for other companies. At the time GE said that this wasn’t a part of their business model. They weren’t ready for this at the time. It was only in 2005 when Genpact was made an independent entity that we started serving other customers too.
From day one itself, we knew that we were a commercial enterprise and had to act and think like that. We also drew some learning of dealing with our parent company and used that competency with other clients. That helped us create transparency, openness and led us to measure ourselves not only in terms of our profits but also on our clients’ savings. We coined the phrase ‘Virtual Captive’, the essence of which is that you get the benefits of being a captive while actually you’re a third party. This is very different from our competitors as they are not built that way. This is Genpact’s DNA. Our origins, our story and our people create a DNA in the organization which is so deep rooted, it is not replicable. Genpact’s DNA comes from our origins and that gives us the uniqueness of transparency and partnership with our clients.
What were the cultural changes you experienced when Genpact became an independent, third party service provider?
The use of GE jargon was way too much while talking to each other as well as with our clients. While clients were attracted to us because of our GE heritage, they would soon feel apprehensive about whether their partnership will work with us or not since our organization, culture and way of operating was very different from theirs.
Another area where we felt the need for change was that we did not listen to our clients enough. The GE culture was so deeply entrenched in our value system that we did not need to listen to our client’s needs and requirements as we knew GE so well. It was only after losing some deals that we changed. This helped us transform and change many things internally – we changed the way we talked and presented to clients.
This change process is still continuing. I would say 40% of the organization still works for GE clients and 60% with the rest, each of whom have their own unique culture. For junior levels, there is an induction and training program of the culture of the client, but for mid and senior roles, we believe in being thrown into the deep end of the pond – good if you survive, but if you don’t then it means that you are not good enough. We empower individuals to find the help required within the organization but it is they who have to drive this process.
Your core competence is in driving operational excellence for managing business processes. How do you balance the requirement of innovation within the team and the importance of following processes?
We passionately believe innovation is important for overall operational improvement. At the core of Six Sigma philosophy is the understanding of the root causes of variation. If someone can find why something is good or bad and is able to drive that variation out, then you can make it all good. We train people to follow process; we document, track and measure them and then provide them the tools to drive variation out.
We create the right balance by telling people that process has to be followed and that there is a way to implement and execute new ideas. We encourage and reward ideas and create forums to share them. Our compensation too plays an important role in driving improvements and innovation. You can only drive improvements when the process is stable so that helps balance process and innovation.
Innovations in the process can sometimes lead to an improvement that not only reduces the cost to the client but also the billings for Genpact. How do you create incentives to innovate when there is a conflict of interest?
We believe that bringing in cost saving measures and efficiencies to our clients will eventually bring in more business from existing as well as new clients. And we’ve experienced that every year for 12 years. If you succeed in showing the clients that you can bring more value and reduction in costs, they will be happy to give you more work. So we are passionate at driving “destroy your revenues” hard.
Although the first half of this year has been down for you in business terms, yet you have managed to perform better than most of your competitors and the economy in general. How are you driving growth?
Our focus continues to be on creating value for our customers, not only by creating efficiencies but by improving the outcomes of the processes as well. Most of our growth comes from existing costumers. Here, if we come out with more such ideas that create cost efficiencies and also improve the outcome of the process, we‘re sure to encash upon more opportunities from the marketplace.
The fact that most of our business is process-driven helps us maintain our growth trajectory, as it is core to our clients and not a discretionary spend. We have gone proactively to our clients and told them why they are doing something and what they should be actually doing to cut costs. We have reduced our customers’ bills this way. Our strategy is to partner with our clients and to work with them proactively to reduce cost and create growth, which will mean more business and longer term association for us.
How has the economic downturn impacted your business and what have been its consequences on people practices, if any?
Attrition has traditionally been a good indicator of engagement of people during times of growth. Our attrition has always been half that of the industry. However, in the current scenario, attrition is not an indicator of engagement anymore as attrition may be low because opportunities are lower. One of the changes in our people management practices has been to communicate more and create engagement in other ways. There are positive consequences in the availability of talent, especially in the mid and senior level.
What do you think is the biggest challenge when it comes to People Management Practices for Genpact in the short term and in the long term?
Well, there are two challenges as I can see. One has to do with the maturity of the people in the workforce and their exposure in our delivery countries. People often take decisions without looking at the long term. And the challenge here is to create awareness about the importance of career, training and development and opportunities as opposed to a short term salary difference. The current economic cycle is really good in creating that maturity.
The second challenge has to do with us as a company. We grew up as an operating excellence company and took pride in our standard operating procedures and metrics. As a result, the leaders we promoted were people who were great at this. As we became bigger, more complex and got closer to our clients, they solicited us to tell them what they should do in their business to minimize costs to drive business outcomes. Therefore, we need more thought leadership and domain expertise in our leadership while maintaining our operational strengths. We need to find a way to combine the operational capabilities with thought leadership in a way like Google has been able to combine innovation with stable and reliable service.
How are you planning to capture the local domestic markets in countries that were traditionally positioned as development centers or back office operations? Is Genpact looking at India as a domestic market?
India is being defined as a big potential market for us now. We recently put a senior business leader to own and run its operations. There is zero labor arbitrage, so in order to be successful, our focus is on process improvement and redesign end-to-end processes to drive process effectiveness. Sectors that have grown the most and are active with us include telecom, banking, financial services, insurance, etc. The interesting thing about doing business in India is that we as partners have to deliver at par with global standards. Regardless of the maturity of their process today, our clients want to go directly to best in class processes!
What would you transform, if you could, in the organization today?
Gender diversity is one of our main focus areas in the organization. I feel very passionately about it as it makes strong business sense. Our customers sometimes have high gender diversity and they want a similar look and feel with the organization they work with. Additionally, you also need role models amongst the leadership team for the lower levels to look up to and, finally, if you do not attract and retain them, you are cutting out half of the talent pool in the population.
The major challenges for women in our industry are working hours, time difference, travel requirements, etc. But many women leaders in our organization have struck the right work life balance. These efforts have to be supported and complemented with the right policies, processes and systems. In some sense, our industry and our company - given its global work - actually provides more flexibility than a traditional industry to achieve this balance. We have recently launched a mentoring program where young women employees are mentored by senior leaders in the organization.