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Bird's Eye View

Goutam Das     December 11, 2019

By 1991, Vineet Nayar, the former CEO of HCL Technologies, thought he was done working at HCL. He had joined the company in 1985, when it sold computers, and over the next six years, wore many hats. Nayar worked in different cities, heading sales as well as product management. And then, he was bitten by the start-up bug. During a cocktail conversation at President, a hotel in Mumbai, he told Shiv Nadar that he planned to move on.

Nadar, HCL's founder and the current Chairman, is known for his persuasive powers. After the cocktails, the two men talked all night. They flew to Delhi the next morning for another round of conversation in HCL's office. Nadar then invited Nayar home and the two ended up talking through the night, again. By the end of it, both had become friends. Nadar incubated HCL Comnet, a company that would subsequently make a name in managed IT services, network security and infrastructure management services. He appointed Nayar as its chief executive.

"There were three things that drew me to Shiv. One, his mind was way beyond what he was doing. Therefore, he could see potential in me that I could not see myself," Nayar reminisces. Second, age is not a barrier in Nadar's mind. By the early 90s, Nadar was already a don of India's IT industry but he forged a friendship with the much younger Nayar. "Third was his humility and humanity. He wishes to relate with people at an emotive level," Nayar says.

These traits, in fact, enabled Nadar to incubate many other businesses, retain and develop talent and forge significant partnerships. Over the following decades, all this helped HCL metamorphose from a hardware company into an IT services giant and then to a conglomerate with interests in healthcare and talent management solutions as well. HCL Enterprise, today, generates revenues of over $9 billion, employs 1,47,000, and operates in 44 countries. HCL Technologies, the IT services company, established in 1999, had a market cap of Rs 1,52,752 crore on November 4. It is India's third-largest in the pecking order of IT services companies topped by TCS and Infosys. HCL displaced Wipro to claim the third spot in 2018/19.

It has been quite a ride for a company born in a Delhi barsati, in a difficult-to-do business era - 1976.

India's Original Angel

Nadar made several interesting points about the company's early years in a September 2006 interview with Knowledge@Wharton.

When HCL or Hindustan Computers Ltd was launched in 1976, Nadar's most difficult challenge was getting permission from the government to make computers. India was a regulated economy. "We were unlikely to get permission ourselves, so we had to find someone, such as a state government, that had been given permission and get into a joint venture. The government of U.P. joined the venture, and that's how we got the approvals. Interestingly, our toughest challenge was not designing or making computers but getting the government's approval to produce them," he said.

Nadar, and his co-founders, funded HCL through money generated from selling calculators - about Rs 20 lakh. He had created a marketing company to sell calculators. HCL, subsequently, became one of India's biggest Make-in-India stories. By 2006, only three computer manufacturers in the world that started out in the 1970s survived. Besides IBM and Apple, there was HCL.

Nadar, as Nayar explains, was ahead of his time. He could spot opportunities, assess risks, and make bets. His risk appetite turned him into today's equivalent of an angel investor. He funded a range of companies while mentoring a generation of entrepreneurs.

Nadar established Far East Computers in Singapore, HCL America, Hindustan Reprographics and invested in NIIT, among other companies. When computers were becoming popular, Nadar was clear that there was an opportunity in learning. Rajendra Singh Pawar, who worked at HCL, came up with the idea of training people since there was a skills gap. NIIT was founded in December 1981.

"NIIT was a result of brainstorming with Shiv. I was involved in corporate planning (for HCL) and the constraint to growth was skills. That constraint was an opportunity. There was a shortage of talent and there were limited faculty. Shiv became the biggest investor in NIIT and the founding Chairman," Pawar, now the Chairman of NIIT, recollects.

As an investor, Nadar, of course, brought to the table stuff beyond money. Entrepreneurs such as Pawar benefited from his mentorship and strategic mind. While some business leaders are good at vision setting, others are better at details and execution. Nadar, Pawar says, had both. "He can look at the 30,000 feet vision but then be immaculately detailed. Shiv ranged from the most abstract to the most concrete," he says.

Rajeev Sawhney, who worked at HCL for over three decades and quit as the President of HCL Technologies Europe and the Global Head Public Services in 2012, points to another seminal contribution Nadar made to Indian IT - HCL, besides spawning entrepreneurs in an era when capital was tight, became the breeding ground for future technology leaders. C.P. Gurnani, CEO of Tech Mahindra; Sandeep Kishore, CEO of Zensar Technologies; R. Srikrishna, CEO of Hexaware; Kamal Nath, CEO of Sify Technologies - all worked at HCL organisations. The current President and CEO of HCL Technologies, C. Vijayakumar, joined HCL way back in 1994 as a member of a team that designed and implemented India's first fully automated trading network at the National Stock Exchange. Sawhney went on to become the President of Strategic Business at Mphasis and is now Chairman of Zokyo, an advisory firm.

Nadars gumption gave confidence to the Indian technology industry: "That we can do it ourselves and build strong research and development (R&D) practices. In India, we built the first 16-bit disc-based computers, and wrote our own operating systems. There was a huge amount of indigenisation done because India was a closed economy. R&D guys flourished under Shiv," NIIT's Pawar says.

In 1988, HCL developed a fine-grained multiprocessor UNIX computer (the system used multiple chips in tandem), three years ahead of international peers Sun and Hewlett Packard. In 1991, it forged a joint venture with Hewlett Packard that heralded HCL's entry into contract R&D. It is here that Nadar the entrepreneur is a cut above the current breed of high-flying start-up kings and queens. "One criticism I have of the current crop of start-ups is that entrepreneurs now build a company to sell, and build it on very thin differentiators. Nadar, or entrepreneurs of that age, contributed substantially more. You created a multiprocessor UNIX system that the world had not seen before, for instance," says Nayar.

Not that Nadar always succeeded. HCL shut down computer manufacturing in 2013. But then India did not become a hardware exporting nation because of a quagmire of issues, including unfriendly customs policies. India had little cost or competitive advantage compared to other countries as a manufacturing destination.

Legacy Beyond Tech

For all his contributions to the Indian technology industry, it could be his philanthropy around education that could create the deepest impact. EdelGive Foundation and Hurun Research Institute recently released the 'EdelGive Hurun India Philanthropy List 2019', a ranking of the top 100 most generous philanthropists from India based on their contributions between April 2018 and March 2019. Shiv Nadar led the list, with a contribution of Rs 826 crore towards education, ahead of Azim Premji (contribution of Rs 453 crore) and Mukesh Ambani (Rs 402 crore).

In 1996, Nadar established SSN Institutions in Chennai. In 2011 came the Shiv Nadar University, a private, multidisciplinary, research-oriented university. There are Shiv Nadar Schools across NCR. Then there is the VidyaGyan Leadership Academy, a rural residential leadership school with two campuses in Bulandshahr and Sitapur, where children from families with annual income less than Rs 1 lakh are groomed at no cost to the families. Presently, there are over 1,300 students across the two schools.

"One of the assumptions Shiv made was that if we need to solve the poverty problem in the country, we need to do it by creating leaders who come from the grassroots and give them leadership qualities. He wanted to do that outside the government system," Nayar says. "This also reflects the mindset of a person who is looking at a multi-decade return rather than a multi-year return," he adds.

As in business, Nadar remains focussed on the future even in philanthropy.


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