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Case discussion activity: Can a strong culture be too strong? Screenshot from case study illustration ‘Can a strong culture be too strong?’ Can a Strong Culture Be Too Strong? Authors: Garvin, David A.1 (AUTHOR) Natarajan, Ganesh2 (AUTHOR) Dowling, Daisy3 (AUTHOR) Source: Harvard Business Review. Jan/Feb2014, Vol. 92 Issue 1/2, p113-117. 5p. Document Type: Case Study Subject Terms: *Personnel management *Employee retention *Corporate culture *Employee services *Employee relations programs *Counseling of employees *Employee complaints NAICS/Industry Administration of Human Resource Programs (except Education, Public Health, and Veterans’ Affairs Programs) 541612 Human Resources Consulting Services Abstract:

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The article presents a case study of a business enterprise with high employee turnover which is considering adopting a personnel management innovation, referred to as People Support, involving a group of managers whose role is to listen to and help resolve employees’ work-related problems. It offers perspectives from two business experts who have opposing viewpoints on a family-like corporate culture and on whether the People Support plan is advisable. INSET: WHAT WOULD YOU DO?. Author Affiliations: 1C. Roland Christensen Professor, Harvard Business School 2Vice chairman and CEO, Zensar Technologies 3Head of talent development, Blackstone Group Full Text Word Count: 3297 ISSN: 0017-8012 Accession Number: 93302856 Publisher Logo: Publisher Logo Can a Strong Culture Be Too Strong? Contents Big Brotherly Love A New Best Practice?

Honest Skepticism The Experts Respond Section: EXPERIENCE Case Study Leaders at an IT services firm contemplate whether its family-like atmosphere draws talent in or drives it away “How long is this list of escapees?” asked Kumar Chandra, the head of operations at Parivar, a midsize 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, profitability, and reputation — but it was still much smaller than companies like Infosys, HCL, and other leading global providers of business-process 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 first 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 finished 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 firm could reach its goals for the year.

This event, 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 figure 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 office, 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, satisfied. “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 office. “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 office, 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 first 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 satisfied. “OK, so we won’t discuss specifics 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 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-first 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 filing 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 office. “Thank God, you’re not busy,” she joked, finding 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 office, 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 profits 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 fixing 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.” Ganesh Natarajan is the vice chairman and CEO of Zensar Technologies. The Experts Respond 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 firm. 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 find better-paying jobs elsewhere. In fact, our turnover rate is just 11% to 12% a year, about five 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. Daisy Dowling is the head of talent development at the Blackstone Group, a global alternative asset-management firm. 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 benefit, 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 firm seem to use gut instinct alone to make decisions about talent. As the head of human resources, Indira must figure out what’s really driving attrition and then bring that information — and practical solutions — to the team’s attention, even if that means ruffling feathers. She should start by asking four key questions: How does Parivar’s culture drive commercial performance?

How is the firm’s employer brand perceived in the talent marketplace? How does the company assess prospective talent? 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 firm 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 long-term career prospects at Blackstone. We also conduct yearly confidential 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 HBR’s fictionalized 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. Tell us what you’d do. Go to hbr.org. PHOTO (COLOR) PHOTO (COLOR) PHOTO (COLOR) PHOTO (COLOR) PHOTO (BLACK & WHITE) PHOTO (BLACK & WHITE) ~~~~~~~~ By David A. Garvin; Ganesh Natarajan, Ganesh Natarajan, vice chairman and CEO, Zensar Technologies and Daisy Dowling, Daisy Dowling, head of talent development, Blackstone Group” David A. Garvin is the C. Roland Christensen Professor at Harvard Business School 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 firm expands, specifics can be tailored to each local market. The new function might turn out to be just the thing that sets the firm 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 fit the needs of a global workforce. As a result, it may cause more turnover when expectations are not met. Morag Barrett, CEO, Skye Team Harvard Business Review Notice of Use Restrictions, May 2009Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for the private individual use of authorized EBSCOhost users. It is not intended for use as assigned course material in academic institutions nor as corporate learning or training materials in businesses. Academic licensees may not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by any other means of incorporating the content into course resources.

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Business licensees may not host this content on learning management systems or use persistent linking or other means to incorporate the content into learning management systems. Harvard Business Publishing will be pleased to grant permission to make this content available through such means. For rates and permission, contact permissions@harvardbusiness.org. Detailed Record HTML Full Text PDF Full Text (734KB) External Link Icon Related Information Tools Google Drive Print E-mail Save Cite Export Permalink Share Listen Translate Using the knowledge that you have gained from this topic and other resources that you locate, answer the following questions: What conflicting values are evident in this case in regard to organisation design? What advice would you give Sudhir Gupta about a way forward that resolves the values conflict? Using the knowledge that you have gained from this topic and additional background information that you can find about organisation design, propose one or more structural forms that you believe would be suitable for Parivar. Get business homework help today.

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