The document is a capture of the real life turn around of HR practices in a VC funded healthcare company in India.

1. “A Configuration of Innovations”
The Cloudnine story
About Cloudnine
Driven by the core objective of delivering world-class healthcare services in India, Cloudnine healthcare facilities
herald the beginning of a new era for all woman and child care needs. Cloudnine is the result of the founder and
senior neonatologist Dr. R. Kishore Kumar's vision of bridging the ever- widening gap between Indian and
international standards of healthcare.
Our fundamental principal is that "Maternity is wellness, not illness". Having a child is a very important moment
in any couple's life and this moment needs to be celebrated, not spent in a typical "hospital", surrounded by sick
patients. This is also a time that requires the best possible medical care. Safe motherhood and healthy outcome
for the baby are the key priorities. This is the model we operate on. This is evident in our stellar clinical results -
0% maternal mortality and 99.72% infant survival rate. We promise clinical excellence to customers and
celebrate this journey with them, making them feel pampered and cared-for at every step.
Since inception in 2007, innovation, integrity and quality have spanned our comprehensive portfolio of services
offering
With a well trained and motivated workforce, Cloudnine has achieved and sustained ZERO percent maternal
mortality rate and 99.72% survival rates for babies, despite the high risk cases we undertake. We are immensely
passionate about what we do, and have the support of top-notch investor, Matrix Partners.
Need and Context
In late 2011, after the investment by Matrix Partners, Cloudnine began expanding from a single centre hospital
to a multi centre – multi city operations.
This meant that a closely run business would need to be professionalized with laterals getting hired into
leadership positions. In addition, being an experience provider that is highly people intensive, this mean a 4X
growth in number of employees in a short span of time.
The industry context was that nursing salaries had almost doubled for fresher talent, multi speciality tertiary
care hospitals could pay higher salaries, which led to spiralling attrition for others. Both these factors increased
pressure in a context of high growth as a company.
All in all, in July 2012, overall attrition had crossed 45% and nursing attrition was close to 60% (annualized). 26%
of those who received an appraisal left in a quarter of receiving it.
Breakthrough – what was done?
Based on a deep understanding of the mechanics of the business and the people dynamics, a series of
innovations were implemented. Each of these innovations were one of the following types
1. Original
2. New to Cloudnine
3. New to healthcare industry
However, what was more important was the holistic nature of configuring these innovations into a powerful
combination, one that reduced attrition in half over 18 months.
The innovations were based on fundamental behavioural sciences and in most cases evidence backed. In short,
the approach was through ‘HR Design’. (more details on the approach are available in a free to download ebook
at www.HowManyTheBook.com )

2. In order to make it easy for assimilation, in this write-up, the 7S organizational effectiveness model of McKinsey
has been used to present the innovations.
Strategy implementation Innovations
1. People Strategy: Since the strategy of the company was Focus differentiation, a simple and clear People
Strategy was used. It was “Retain top talent, grow top talent”. By doing so, a subtle, yet definite focus
on performance was communicated across the organization.
2. Net Promoter Score: Given the nature of business, the focus on constantly delivering an experience was
paramount to ensuring that customers spread good ‘word of mouth’. In order to capture this, a Net
Promoter Score based feedback system was implemented. Known to be implemented in sectors like
BPO in India, the Net Promoter Score classified feedback from customers into Promoters and
Detractors, to arrive at a score that indicated the percentage of customers who were ‘word of mouth’
Promoters for the company. By using a tablet based feedback system, it was also made fun for the
customers to give feedback, while using cloud based IT system ensured clockwork consistency in
delivering scores to the top management on a daily basis.
Structure innovations
While healthcare companies have had an entrepreneur-clinician at the helm of units, corporate hospitals have
had business heads at the helm of units. Since both these have their own challenges, the organization went in
for three options
1. Corporate - Unit structure: The company had a clear demarcation of Corporate and unit structures. This
led to corporate departments focussing on larger strategy and also becoming expertise service
providers.
2. Function structure: Having an alignment of functions like People and Finance have a functional
reporting in addition to the administrative reporting ensured that aspects of their roles like ‘conscience
keeper’ could be performed without fear or favour.
3. Networked structure: Having a Clinician head medical affairs and a business head lead the operations
led to breaking of authority based decision making and more of merit based decision making. While
being a little more laborious compared to traditional structures, this led to more robust and longer
lasting change.
Systems innovations
1. HRD Audit: Known to be effective in multiple industries, the HRD scorecard 2500 was used as an annual
“Health check” through self-audit. The results were then published to the Directors. While at one level,

3. this served to set the expectations for the People Department’s team, it also helped in calibrating the
expectancy of People Practices and the increasing valence of the same. Over the years, the self-audited
scores in most dimensions crossed 80% of the maximum achievable.
Staff innovations
1. Family and friends: Given the nature of staff hired, online portals were not helpful in achieving the kind
of expansion required. Hence, a renewed focus was laid on internal referrals. Upto 30% of what would
have been paid to consultants was instead paid to employees. These were stratified to match the
complexity of the skill set being hired. As a result, 85%+ of the hiring was achieved through referral and
direct channels. In addition, since referring a family or friend to work meant putting a relationship on
the line, this had an implication on the culture that the employees perceived and created on Cloudnine.
2. Nursing care incentives: Sharing a part of the success of the organization in the form of incentives to
nursing staff on a monthly basis resulted in a positive work ethic of nurses looking forward to higher
patient loads. This also allowed the Total Rewards to be managed in line with the actual revenues of
the organization. The scheme was made simple and displayed on the notice board of each unit. This
way, the nurses could calculate their incentives on their own and be right about it.
3. Designations matter: Instead of having vanilla designations, an elaborate career path was launched that
reflected the job of the nurses. This ensured a status component and a growth component for the
nurses.
4. Generation Y management: Dr. Debashish Sengupta from Alliance University conducted an awareness
session for supervisors, managers and Directors to sensitize them to the different expectations and the
paradoxes present while managing Generation Y employees. This awareness led to a much lower level
of conflicts at the workplace between managers and employees and consequently higher engagement.
5. Transparency in Total Rewards: A detailed salary breakup and upfront information on the retirals and
other benefits led to a clear understanding and appreciation among employees of the costs incurred by
the company and the actual take home.
6. PPT process and human process of appraisals: While the process and timelines of appraisals was known
and published, efforts were focussed on the human processes of the appraisals. Incharges and
supervisors were trained on how to do a Performance Review Discussion, styles of leadership to be
used to achieve performance vs. development of subordinates and given an understanding of work
values.
7. Basics in place: Nursing hostels were given a makeover and in addition to ensuring basics were in place
(like mineral water for drinking, hot water availability, curtains, etc), satellite television, guest areas,
indoor games, self cooking facilities and “chilling out” zones were created. This ensured that after a
hard day’s work, nurses would not have any kind of dissonance when they left the Cloudnine environs
and returned to rest.
8. Other earnings: Since nurses typically have large financial commitments back home, in addition to their
own educational loans, additional opportunities were created to earn. These included ‘baby bath
services’ for new parents, lounge duties at Cloudnine lounges at malls, etc.
Style (cultural) innovations
1. Owned fun is more fun: In order to engage employees with a high level of ownership of the activities,
Employee fun councils were created where employees decided on the fun activities, including how they
wanted to spend the budget.

4. 2. Armed forces way of recognition: Inspiration was drawn from the armed forces in order to design
recognition (1) Length of service (2) Extraordinary effort (3) Extraordinary results (4) Situation based. In
order to ensure the true nature of generous recognition, a “minimum number of recognitions” was
enforced to kick start the program. In addition to this, peer recognition cards were introduced.
3. Brain proofed policies: Keeping in mind, learnings from neurosciences all People policies were
simplified and made one pagers with the process in built. These were freely circulated among managers
and available to employees. This ensured certainty, sense of autonomy and other dimensions like
significance, relatedness and fairness were not negatively impacted.
4. Vendors to partners: Vendors were invited, given an overview of the business and addressed by the
CEO. By sharing future plans and bringing in a sense of celebration, vendors were made to feel included.
The inclusive nature of relationship also helped them proactively spot talent for Cloudnine’s future
business needs. In addition, a confidential survey that they responded to ensured that the entire system
was free of corruption, fear or favour.
5. Did you Thank? Is a system of thanking nurses who complete their committed time with the company.
A People representative meets the individual with a bar of chocolate and a thank you card that requests
the employee to continue to stay on Cloudnine.
6. Human Metrics: Instead of relying on conversational diagnosis and solutioning, bi annual sampling
based surveys were carried out to arrive at specific concern areas. The results were analysed to arrive
at solutions. Eg. In 2013, in a survey of 133 nurses using the Role efficacy instrument, factor analysis
indicated the presence of three clear factors that intrinsically were valued by nurses. This was further
actioned upon in designing a values implementation and Customer promise roll out.
Innovations in the area of Skills
1. Differentiation & equity: Specific sub-skills among employees were identified, their availability in the
market was mapped and differential pay for those sub skills were included in the salaries of employees
as variable pay. This motivated employees to learn newer skills and prevented employees who had
specific skills from leaving the company just for better pay.
Impact
Overall attrition fell from 47%+ in July 2012 to 24% in December 2013
Nursing attrition fell from 63%+ in July 2012 to 24% in December 2013
Employees who left in the same quarter after appraisals fell from 26%+ in May 2012 to 1.65% in October 2013.
Sustainability
In order to build the cultural capability within the organization, People Department facilitated a process where
with the help of an external facilitator, members of the Board arrived at a Customer promise and three core
values of Cloudnine.
These were then rolled out through small group training programs where each of the CXOs facilitated a group
of 15 to 20 employees. All employees were also given a Customer promise card that they wore with their ID
cards – the difference being that they signed the customer promise with their own authority. Employees were
given pocket diaries where they could note down critical instances when they displayed customer centric
behaviour. Special Cloudnine pins were made for employees who exhibited 20 instances of Core values
behaviour. At the time of writing this article, efforts were ongoing in the area of alignment of performance
management systems and total rewards to the core values.
Any questions or clarifications may be addressed to siddharthn@cloudninecare.com
All trademarks, copyrights used in this article are acknowledged.