Product services, not product may be new way ahead: HCL

Reinventing every 18 months is very important, says Vineet Nayar, vice-chairman and joint MD, HCL Technologies. He says, HCL junks its own business models and gets to new markets.

Going ahead, product is going to be packaged as part of the service and is going to be offered on a per user per month, per usage basis. “I am not convinced about product being the right way because product services may be a new way,” Nayar says.

Also Read: Focus now on under-penetrated infra services: HCL Tech

Below is the verbatim transcript of Vineet Nayar’s interview on CNBC-TV18

Q: You started by saying that life is all about chances and choices. A choice that you have made, that’s gone horribly wrong and a choice that you have made that’s turned into a billion dollar opportunity?

A: I was talking about this bank that we walked away from. I think it was a wrong choice because it virtually closed down the dream of many people and we came very close to being gone with it.

Q: Was it ego that got in the way?

A: I think it was a big ego. When you are young and I was very young at that time. I think it was ego rationalised into business decision.

The bet which went fantastically well is we always were clear that we have to reinvent ourselves every 18 months. So, we will junk our own business models and get to new markets. In that process we discovered this concept called the remote infrastructure management.

So, we were an extremely successful Indian enterprise doing this satellite business and we stopped doing it and we started searching for new ideas and that’s how we searched remote infrastructure management and that idea lead us to a billion dollars.

Q: How much of business is actually testosterone driven and ego driven?

A: Ego plays a very large role in decision making unfortunately. The best thing you can do is to be very far away from decisions.

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Q: How do you stay far away from decisions as a leader?

A: By having everybody else take the decision. So, I have always learnt – the whole employee first customer second mantra was 500 small decisions in a company are better than 5.

I believe I am incompetent, I do it that way and that was the birth of employee first customer second. I have always believed in pushing down decisions and that’s the way it happens.

Q: Lets just look at what's happening in technology today and especially as far as Indian technology is concerned today. You don’t know which version of the immigration bill is going to go through, will it have the outplacement clause, will it not have the outplacement clause, will you need to hire more offshore, will you need to hire more locally, how do you actually plan for this? How do you future proof your business with that degree of uncertainty?

A: I have a simple mantra and pardon my using this example. After you get married you know that you cannot go back to your college friends. The business model which you have will become obsolete. The immigration bill will come in today or tomorrow and therefore you know for sure that part of your business is going to be less competitive or going to become obsolete. That is easy, the difficult part is are you going to remove your best and brightest from those businesses which you know are going to become obsolete and throw them into the zone of uncertainty and say find me an answer not here but somewhere else.

What we do in HCL is what we call exploration. Our best and brightest are always exploring and not our best and brightest are in defending our current positions because of which we are outperforming the obsolescence.

Q: What are the large service organisations which have billion dollar revenues doing to propel the growth of products?

A: Large companies are like a big boulder running down the mountain and the management team is trying to hold the boulder because the ideas are becoming obsolete. So, a whole lot of challenges they are faced with. We must understand there is no one right answer. So, is product the right way? I am not convinced about product being the right way because product services may be a new way.

There are a lot of people who are thinking on those lines, are innovating on those lines. Some of that innovation is within the large companies, a lot of that innovation is outside the large companies and irrespective of where it is happening in the industry, its good for the industry.

Q: If product is not the way to go as far as the Indian tech sector is concerned, what could be the next big idea for the Indian technology sector?

A: What is going to happen is that the product is going to be packaged as part of the service and is going to be offered on a per user per month, per usage basis. India is extremely good on service provision. Be the company the world really needs to buy services from very easily.