It's not all about growth

Shiv Nadar, chairman and CEO of HCL Technologies, a subsidiary of Hindustan Computers Ltd, looks back on 30 years of the company's history, as well as looking forward.

by Knowledge@Wharton
Last Updated: 23 Jul 2013

The company's original vision was to focus on revenue growth, and it went from zero to $3.5bn from 1976 to the present day, with most of the growth in the last four years. In the early days, IBM left India because of government policy, in which international firms were required by them to dilute their equity. Nadar does not think in hindsight that this was necessarily good for his company. IBM, he said, created a market for computers and in this environment HCL would have grown faster.

In the early days, they paid high wages to attract new recruits and expected them to have an entrepreneurial character. HCL worked on client-server architectures and relational databases when other people were not taking these risks. Nadar said that they did not have any 'mental baggage', unlike Indian IT companies today.

They produce quarterly reports and go on CNBC, he continued, reporting on how many new employees they have, how many Fortune 500 companies they have signed up and how many million-dollar companies were added. Nadar questioned whether this growth-led approach should go on and on. Do they want to produce as many jobs as Indian railways he asked (they employ 1.5 million people)?

Transformation and not increasing the scale of people is the next wave for companies such as these. He believes that in the future companies will be like IKEA where it's a brand or a franchise and a 'set of forces' which are making it all happen. But you do not know where the manufacturer is, who is designing the furniture or who is encouraging customers to buy its goods. Work will be 'redistributed within and across countries'.

At HCL, he said, they will reduce the number of their clients from 500 to 200 to ensure they provide the best service possible. Otherwise, he said, they'll just be a 'project company'. He added: 'We could drop off the table and it would make no difference to the customers' lives; they would just continue to run as if nothing had changed.'

Source:
Knowledge@Wharton
HCL's Shiv Nadar
Ravi Aron
Review by Morice Mendoza

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