Talking with a man who’s company has achieved 5% reduction in costs and 7% increase in customer engagement in the last 12 months is an opportunity not to be missed, especially given that he attributes his recent successes to human leadership within the company.
Sudhakar Ram is Group CEO and MD of Mastek, a global IT solutions company based in Mumbai. It was founded in 1982 and now has a staff of 3000, turnover of over USD155 million and is listed in India’s exchanges. Ram is a founding partner of Mastek and has been CEO since 2007. The company has long held a value based mission statement but in April 2014 it launched Mastek 4.0, which Ram describes as being a key part of the company’s conscious journey.
The goal of Mastek 4.0 is to ensure that the youngest Masketeer (the term by which all staff are endearingly described) feels more powerful within the organisation so that every Masketeer has the same level of intent as a board member. That’s a powerful statement but it doesn’t end there. Ram is committed to individuals and organisations being the best they can be. ‘We focus on becoming an admired institution rather than just a successful company’.
Twelve months after the launch of Mastek 4.0, Ram describes the enormous change in how the company feels. It is not only Ram himself who describes the shift in energy and engagement of his staff. Fellow leaders and even customers have commented on the recent changes.
“I see a highly charged and motivated Mastek team compared to last year,” says the IT Director of one of Mastek’s valuable customers.
“We see you as long-term partner and we need you to help us deliver our plan,” says the CIO of another of Mastek’s clients.
Financial gains and improved customer loyalty within a company that feels good about what they do. How has Ram achieved these results?
Two clear messages came through during my interview with Ram, structure and leadership.
Ram believes that all human beings have the ability to rise to the best they can be if given the opportunity. For him, ‘building a valuable, evergreen institution that delivers a win for all stakeholders’ was crucial. The structure and internal processes of Mastek went under the spotlight and Ram made some bold changes:
Everything at Mastek became a team effort. No result is attributed to an individual. Openness, mutual respect and teamwork were at the heart of simple, sincere and straightforward collaborative culture.
Teams set their own goals based on customer needs. These are monitored by the teams themselves on a quarterly basis. Mastek has created a ‘win for all’ environment.
No more appraisals. Teams monitor their own performance based on three main criteria:
Have they developed themselves?
Have they contributed to customer delight?
Have they contributed to the long-term value of Mastek?
Performance is no longer based on 5 tiers. Everyone is considered to be an A and A+ performance can be given where it is due. ‘Traditional performance reviews were laborious and disempowering’. Mastek wants 100% responsibility for outcomes and this includes reviewing your own performance.
No approval needed, whatsoever. Unless approval is required by law, team members approve their own decisions (e.g. training and annual leave) upon consultation with their own team. This creates ‘an environment of trust where every action is taken with responsibility’.
Removal of an entire layer of management so that managing somebody else is not a job role. Taking away any expectations that a manager should or could exercise control over another staff member. Mastek is ‘a living company’ and as such its individuals and the organisation itself must be ‘healthy and act responsibly and ethically in pursuing its purpose’.
These strategies look great on paper but it takes courage to turn them into reality. What challenges did Ram face when he implemented these changes to Mastek?
The first challenge that Ram spoke of was scepticism. Staff were concerned that the changes would not be implemented and that Mastek 4.0 was just hot air. It took 3-4 months of consistently driving the same message and delivering on the proposed changes before staff became more positive about Mastek 4.0. On this issue, Ram is very clear, don’t just say it, do it.
The next hurdle was around client expectations. In Ram’s words customers like to have ‘a single throat to choke’, one point of contact and one source of accountability for their project. Customer’s expressed concerns that by introducing a flat structure where no one person held overall responsibility, communication would be a concern and project delivery would suffer. ‘This fear,’ says Ram ‘is totally unfounded’. With greater focus on the customer throughout the organisation, leaders were able to guide their customers through this transition. Effectively, Mastek asked their customers to trust in their new systems and structures and as soon as projects were delivered above expectations, these unfounded fears soon passed.
Finally, Ram spoke of the challenges in middle management. Having removed the ability to exercise control over others, middle managers experienced a void in their job roles that in some cases affected self-esteem. Ram continues to coach this management level to help them explore their job roles without cause to trouble-shoot staff issues and performance. Thinking in a more strategic and entrepreneurial way whilst using their experience to communicate with customers and be a mentor for junior staff is proving the most difficult transition following the launch of Mastek 4.0.
Ram did not seem at all concerned about the transition that the Mastekeers were experiencing. ‘If it is valued, people step up’ he said. In this case, what are valued are core human qualities that are so often overlooked within business today. Ram is quick to use words like collaboration, responsibility, empathy and courage. He is also very comfortable to express the importance of how the company feels. ‘Touch the hearts of all’ is one of the ideals that is at core of Mastek 4.0 proving that it is not just the financial gains that is important to Ram. One of his proudest achievements is that staff uptake of their payroll giving scheme has risen from 35% to 78% since last year. ‘78% is a huge number of people giving to the local community, I think that number is higher than the average even in the USA!’. Mastek’s values are clearly at the very heart of everything they do.
In speaking about inspiration, listening deeply and being true, Ram’s experience and values shine through. ‘There is no secret to changing your organisation. It starts with one person and if that person walks the walk rather than just talking the talk, the rest of the organisation follows.’ He made it very clear that as Group CEO and Managing Director, that one person whose responsibility it is to step up to the challenge of human leadership is himself. ‘Many people quote Ghandi, be the change you wish to see, it is my job to live and breathe the qualities I wish to see within the organisation. If I want more empathy, I start to behave with empathy and those around me will see that and adopt the behaviour also.’
It was a pleasure to hear Ram speak of his responsibility in this way but also to explore with him the practical changes he has made to a company of 3000 staff that have enabled each and every Mastekeer to become human leaders themselves. It is clear that Ram places just as much importance on the wellbeing of Mastek’s staff, customers and shareholders as he does on the results the company produces. It is so easy to focus on the headlines that Mastek have reduced their costs and increased their customer engagement but equally impressive is the evidence of how the company feels. Here really is an example of human leadership in practice, starting with one man but having a positive impact on thousands of lives around the world.