Luxury brand Burberry and outsourcing giant HCL applied this management strategy to reinvent themselves

He said, she said. To appeal to younger customers, Burberry has shifted some management power to younger workers.
He said, she said. To appeal to younger customers, Burberry has shifted some management power to younger workers.
Image: AP Photo / Joel Ryan
We may earn a commission from links on this page.

They are an unlikely pair overseeing very different companies, in very different industries, in very different countries: the glamorous London-based Burberry CEO Angela Ahrendts and the management-wonky Delhi-based HCL Technologies CEO Vineet Nayar.

But sitting side by side tonight at a Harvard Business Review event in New York City, the two voiced similar philosophy on how to manage work forces that are younger, digitally savvier, and a generation removed from them: Follow their lead.

The transformation started around the same time (he in 2005, she in 2006) and from the same perch of companies not innovating with the times. Nayar attributes the problems to being transfixed by “the glory of the rearview mirror.” They began with a renewed focus on their staffs. In Burberry’s case, a younger work force was needed to lure a younger customer base. Meanwhile, HCL embarked on a strategy of valuing “employees first, customers second.” Nayar later wrote a book with the same title and describes how he had to invert the management pyramid. The two CEOs made similar discoveries: Generation Y cares deeply about public recognition, regular feedback, and being taken seriously, perhaps even more than their compensation packages.

Younger workers, says Ahrendts, are highly emotive: “the higher the creativity, the higher the emotion.” They are always on. “Most companies tell them to get off Facebook,” she says. “I love when they have four different things open. That’s how they live.”

And that’s how Burberrry has been able to create innovative products for younger customers like them.

According to Ahrendts, much of Burberry’s success stems from a Strategic Innovation Council comprised largely of star talent from diverse departments (design, marketing, creative, human resources, among others.) Its only task is to dream. Then an executive council (comprised of more senior folks, including Ahrendts herself) executes that vision.

In case you think this is another bureaucratic corporate subcommittee, the council came up with the idea for Burberry’s new flagship “Store of the Future” on Regent Street in London. The 27,000 square-foot space, Ahrendts says, “blurs lines between digital and physical.”

Meanwhile, when asked for an example of current innovation, Nayar cited an experiment where HCL managers evaluate employees as they might buy shares on the stock market. The managers have a certain amount of points, so-called HCL Heroes, and have to distribute them among teams weekly, based on performance. What Nayar has discovered: “People creating the most value are not at the top of the pyramid.”

One way this is changing the workplace: Junior staff is being listened to more in meetings. That’s no small feat, as anyone who has worked in a large company can attest. Identified as the strongest of HCL’s 90,000 employees, these younger workers’ opinions matter—and are rising to the top.

Notes Nayar: “Generation Y tries to work for a higher cause.”