Reference no: EM131369155

Ganesh Natarajan

Unleashing Employee Potential

"It's not really a textbook leadership style," Natarajan concedes, but treating employees like an extended family has worked for Zensar.

Photo by Stu Rosner

Is it possible to run a successful multinational IT services firm where employees are treated like an extended family and strategy emerges from the bottom up? Those are the key leadership questions posed by Professor David Garvin's 2010 case, "Zensar: The Future of Vision Communities."

Student reaction to Zensar's unusual corporate culture "started with extreme cynicism," recalls CEO Dr. Ganesh Natarajan (AMP 169, 2005), who recently joined Garvin as he taught the case in the elective General Management: Processes and Action. "But by the end of the class it was, 'Wow, this is the only way to make it work.' "

A decade ago, Natarajan took the reins of Zensar, an ailing software company based in Pune, India, with the challenge of charting a profitable future. Almost immediately, he set a new tone of employee participation resulting in a trajectory of sustained growth.

As noted in the case, Natarajan "built an organization that was much like an extended family-one in which he knew employees personally, involved himself deeply in their lives, and adapted his style to suit each individual." But being "warm and fuzzy" doesn't mean being soft on performance. "However nice I am to employees, if they don't deliver, they go. I think that is pretty clear to everybody," says Natarajan.

Natarajan led the company's turnaround by instituting an annual Vision Community exercise, which invites selected employees at all levels to join in brainstorming sessions to identify ideas that could lead to new products and services. "Eighty percent of our success over the past decade has been based on bright ideas that came not from me or my management team but from very young people in the organization," he says. The case ends as Zensar charts an ambitious acquisition plan. Students are challenged to consider whether a larger, more diverse organization can maintain its unique attributes. Two years down the road, Natarajan answers in the affirmative.

As Zensar has acquired IT firms in Boston, New York, Tokyo, and Hyderabad, it has spread its inclusive culture. "People are people; it doesn't matter which nationality or which culture," says Natarajan.

"It's not really a textbook leadership style," he concedes. "When David Garvin first presented the case and talked about how we run a company through love, the students said, 'Oh, my god, are you crazy? What about the shareholders?' But getting students to understand that our connected style can help us win all the deals we want and get all the business results our shareholders want, that's really the broad concept here."

Nor has growth stymied the Vision Community exercise. It remains vital to unleashing the power of ideas. "We have always believed that empowered people and a compelling shared vision build great companies, and Zensar's success is a visible result," says Natarajan.

Q. What in your opinion, would Ganesh Natarajan say to people who belive that people who are too nice to everybody cannot be effective leaders? Why?