FROM OUR ARCHIVES: The Sounds of Success

The figures speak for themselves-starting with a none-too-high capital base

of Rs.1.83 lakhs in 1976, he today commands a group of companies where the total

assets deployed are Rs.35 crores. Today the total shareholders’ funds employed

in the group of companies is Rs.9.65 crores. In a short period of nine years,

starting from scratch, e has built a business house which is one of the biggest

names in computers today. The flagship of the group, Hindustan Computers Ltd (HCL),

is the third largest computer company, the largest microcomputer company and has

the largest installed base of computers in India.

An electrical engineer from PSG Tech., Coimbatore, Nadar graduated in 1967.

After spending a year with a consultancy firm, he was selected as senior

management trainee in DCM. His first assignment was to implement the project on

readymade garments. The textile division wanted to change its image from a

manufacturer of low-priced cloth to upper-end textiles. Nadar reasoned that

readymade garments giving "excellent value for money" be made,

utilizing the distribution and manufacturing strengths of DCM. This differed

from the corporate view of going in for high fashion readymade garments and he

was overruled. The company launched the "Lord Jim" shirt campaign.

Planned and executed by Nadar., Lord Jim was an unmitigated disaster. Nadar just

did not understand the high fashion business and started his career with a

resounding failure.

Yet, there were lessons to be learnt from this failure. The shirts were being

made by numerous fabricators and hence the quality varied. He found a direct

correlation between quality and sales, even though the brand name was the same.

The moral was: "it is possible to build capital out of competence."

Despite the failure of the campaign, Nadar’s abilities as a planner and

executor were evident (even after 15 years, people still remember the brand

name) and he was given charge of the marketing of the Data Products division of

the company, a decision which brought him into the world of electronics and he

has not looked back ever since. DCM Data Products launched the first calculator,

Moscal, in India, and commenced R&D activities for computer manufacture.

It was here that Nadar learnt that electronics was a game where the key words

were product identification and marketing.

Huge profits could be made by selling large numbers before others entered

(the first DCM calculators were priced around Rs.10000). In 1976, therefore, he

took the decision to break away from DCM and start his own organization.

The break from DCM was not very clean; he left with five other key persons.

The intention was to manufacture computers.

But, the money to invest was just not there. This did not worry him as he

believed that capital was not necessarily inherited and he had the competence to

generate it The first task undertaken, naturally, was calculator marketing.

Televista was approached and the first deal was struck. A marketing company,

Microcomp, was formed. It must be said to its credit that, within one year,

Televista brands were the largest selling calculators in India. But there was no

scope for creating the kind of money that was necessary for computer

manufacture. The association with televista therefore was shortlived. Nadar

decided to manufacture his own calculators under the Omron brand name. The

product was positioned at Rs.199/-. A powerful advertisement campaign was

unleashed (the first of the marketing blitzes). Ignoring the traditional dealer

network of electronic stores, mass distribution channels such as Akbaraly’s

were used. Omron became a hot selling brand and the money was created for HCL.

UP Electronics was approached, an excellent rapport was established with its

managing director Col. BK Rai and HCL was formed as a joint sector company. Some

more people were taken away from DCM and the Micro 2200 and the 8C were

launched. Both the products, backed by highly aggressive marketing, were instant

hits. And that was just the start...

Starting one new company every year (Microcomp. HCL, FECL, HIL,IIL, HRL,

Network, ICSL and NIIT), Nadar is the main force behind the group. Though the

original group which started the company comprised six DCMers (and Nadar himself

likes to say that it has been a group effort rather than an individual one) most

people would agree that he is the dynamic entity that has guided the group in

the past nine years. No doubt, he is the general who has marshalled his able

lieutenants into a winning combination. Besides being able to start a company,

Nadar also knows when to discontinue one.

When calculators became highly competitive at low price levels, Nadar made

Microcomp inoperative. IIL was dealing in import of electronic typewriters and

plain paper copiers. There are now manufactured by Network and HRL and

therefore, IIL also become inoperative in 1980. In fact, whenever there is an

adverse or a highly defensive situation, Nadar looks for opportunities.

Adversity is looked upon as an opportunity.

The foremost thing about Nadar is his ability to see opportunities. He moved

into computers while calculators were doing flourishing business. He was the

first one to cash in on the word processor market. Looking at the opportunities

outside India, Nadar turned to the Far East and became a marketer of computers

and an agent for a number of peripheral manufacturers.

His strategy in Singapore was similar- find out a product positioning slot

and push. FEC stressed on computerization and not computers. This meant

handholding the buyer right through the implementation stage, an activity that

no micro manufacturer was willing to undertake. The response was good. With a

steady growth ever since, FEC has operations in Singapore, People’s Republic

of China, Malaysia, Indonesia, Thailand, Brunei, Pakistan, etc. He foresaw the

opportunity that lay in office products. Companies like Godrej and Remington

continued to sell mechanical typewriters while Network went in for the

electronic typewriter which was sold at an astronomically high price. Push

button telephones, plain paper copiers, test and measuring instruments,

printers, micro film readers, are just some of the products being made by the

group. In a lot of these markets, Nadar entered others even though of it. He

reacts very fasts and very quickly to market conditions. He went into peripheral

manufacture at a time when most people did not even think that the industry had

too much of a chance. Already, data acquisition Systems and Electronic PABXs are

being contemplated as the next activities of the group.

Not that there haven’t been failures. Timing is vitally important. The

electronic cash register made by HCL was a flop right from identification to

execution. But Nadar has the ability to take cold decisions. The ECR product

line was dropped, as had been the case with the calculators.

Essentially, Nadar has woven his organizations as strong, fast reacting,

aggressive sales forces. Marketing has been the biggest strength of the group.

All HCL campaigns are advertisinzg blitzkriegs. The panzer divisions move out,

pulverizing the opposition and conquering the market. Even his detractors, and

their are many, hold a grudging admiration for the way the HCL marketing

campaigns are planned, timed and executed. To date, Nadar personally sees and

monitors all the marketing campaigns of the company with the skill of a seasoned

campaigner. (But then business is war, after all). Nadar is a master craftsman.

He is a very good judge of the person sitting opposite him. A man of few words,

he manages the conversations skillfully by probing for things that would either

weaken his adversary or make an associate feel great. He always listens to

ideas. He also believes that, "all projects will always appear to be

good." He ranks them and then goes on to drop nine of the 10 propositions.

The 10th is given shape and implemented with enormous vigor.

Nadar knows his people very well and gets fierce loyalty from them. Nadar has

often been accused of nurturing short-term policies. In recent years, he has

also made himself inaccessible. He is averse to publicity. Nadar is power-driven

and hates to share it. And at 39, Nadar carries on playing the game according to

his own set of rules. Yet, no doubt, the most difficult thing about being that

successful is determining exactly how one can go on being a success.

This piece was first carried in Dataquest’s 25th issue in 1985