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.

SHIV
NADAR

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

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