Democracy Brings Innovative Solutions out of Economic Challenge

One of WorldBlu CEO Traci Fenton’s favourite stories about organizational democracy in action is how HCL Technologies used the power of transparency to overcome challenges during the economic recession.

Many people have asked Fenton whether being democratic during the economic recession puts a strain on the company or is helpful.

She says she believes when companies build a democratic workplace it’s the hard times that “you really see the value of democracy in action because you’ve built trust within the organization.”

Noida, India-based HCL is an example of this, she says. The $5-billion global technology and IT enterprise has nearly 80,000 employees in 25 countries worldwide, and won a spot on the WorldBlu List of Most Democratic Workplaces in 2010 and 2011.

At one point, HCL CEO Vineet Nayar and the executive team sat down to look at the financial picture and saw they were going to have to cut $100 million from their budget to avoid layoffs, says Fenton.

Because the company already practised open-book management and has a democratic culture, HCL was able to reach out to the employees, share the scenario and ask for ideas.

The employees came back with many ideas, of which 76 were implemented. These ideas saved the company $260 million.

“They saved all this money, their employees were empowered to use their voice, to think together about how to make smart decisions during this economic downturn, and everyone felt good about it,” Fenton tells Axiom News.

Through being transparent with employees about the financial picture, HCL didn’t let go any employees.

Since becoming democratic in 2005 and flipping the corporate pyramid to make employees first and customers second, HCL has tripled its revenue and income and doubled its overall market capitalization.

“I think that’s a great example of when you give power to the people and you trust them it generates loyalty and commitment and it impacts the bottom line that benefits everyone,” Fenton says.

Related Story:
HCL Adopts Workplace Democracy, Grows 21% Year Over Year

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