Mumbai: India’s information technology (IT) industry is still too risk-averse, Shiv Nadar, founder and chief strategy officer of HCL group and chairman of the Shiv Nadar Foundation, said in an interview. Edited excerpts:
How do you read the current environment for doing business?
If I judge from the body language, there is a fair degree of optimism. I have been noticing it right from the middle of last year. There is a general sense that the terrible period is behind us. I had a general feeling that the big companies will get by. I was with top CEOs (chief executive officers) in 2009, and they were clearly shaken. Top leaders of Wall Street and elsewhere, shaken.
Breaking it down: Nadar says big companies need to break up into smaller units and encourage those subsidiaries to innovate and lead the rest of the organization.
The ones at the top did get by, because if they are seeing a decline somewhere; there is also growth elsewhere, like in emerging economies. Global companies have throbbing operations in these countries. There were always a large number of Chinese and Indians working for these corporations.
They are saying they will relocate these people, launch new brands, and get by. In the process, those who are not global will fall by the wayside. There are leaders who are trained to think globally, and that is something which is going on right...
Are Indian IT companies still too risk-averse, following set patterns?
That is very true. They have just put down a series of dots, and link it in a particular manner. There was Y2K, dotcom, Internet, etc. etc.; then what? What happens when things shake up? For example, Google showed up and asked Microsoft, are you there? Microsoft listed in ’86, in ’96, on one day, six major analysts put a sell call on Microsoft (Corp.), as when Microsoft was asked about their strategy for the Internet, they said they had no strategy.
So are we now at an inflection point, where a shift in strategic focus is required?
Absolutely. The future of how they will work is not how they have worked in the past. In the past, it was about relocating something. In the future, there are going to be various components of doing business that have to be looked at.
Are you satisfied with the way the two companies, HCL Technologies Ltd and HCL Infosystems Ltd, have shaped up, or do you want them to be different?
Both of them are big companies. Given their size, the flexibility built inside their structures is very good. Any more, and it would have become very loose. Both the companies have taken on their opportunities very well. HCL Infosystems has a very young CEO, probably the youngest in the industry. It is a fantastic time to do business overall.
There is a general feeling that both are taking the same path, even competing in certain cases.
No, maybe just a 1% overlap. The service portfolio is too wide.
You have said that innovation does not come out of big companies, but out of small “garage operations”. So what is the way to go about it?
We have to keep innovating. Organizations have to break it up into smaller pieces. I have talked about the “fractal organization”. Those smaller pieces should innovate and lead the rest of the organization. There will be parts that will be thinking about technologies of the future, and you need to nourish them.
Your thoughts on succession planning? You have been saying that (your daughter) Roshni will not take over day-to-day operations of HCL.
She has her own mind. If you see historically, only Tom Watson, senior and junior, at IBM (International Business Machines Corp.).
That’s been the only succession. And it is not a very old industry—maybe 60-70 years old. You have to be very skilled in this industry. I grew in this industry, we created the very beginnings of this industry. We made the first PCs (personal computers) in the world.
That advantage she doesn’t possess. So she will choose her destiny.