Secret Diary of an Entrepreneur / CEO-2018

"My Mother told me, You are selling your soul"

Secret Diary of Vineet Nayar — Part 3

Vishal koul

It was 2005. I had started asking questions around the purpose of life and the frugality of leading a life in the pursuit of profit. I wanted to do something dramatically different that had a purpose. Once again, I did not know what and how, but I knew the why. My mother, Anupama and I formed Sampark Foundation so that we can give back to the disadvantaged India when we had the energy to do it. At that point, Shiv came to me and said why don’t you come and lead the transformation at HCL Technologies? I thought that would be a bad decision from Shiv’s point of view; predominantly because I had never run a large company. And a turnaround is different from a start-up. I told him I was the wrong candidate for that role. But Shiv is very persuasive. Once he wants something, he gets it. So, a few long dinners and months later, I agreed; and I am glad I did.

Heading the transformation at HCL was like home-coming but also a difficult challenge as I had to learn, adopt and execute fast. I had a fantastic team, the best in business and the board, led by Shiv, was very supportive of bold moves. So, I was the only weak link in the chain and that is how I saw life in those early days. Yes, I was nervous and had a fear similar to the one I had felt while running behind the train at Ratlam. 

We had to choose our battle in terms of who we wanted to fight. I decided to fight the big ones. My 10% rule! Let’s fight IBM. Let’s not fight with Indian IT. So, we started gunning for large total outsourcing deals. That change in focus had high risk but was a blue ocean strategic move that worked for us. The second question was ‘how do we fight this battle?’ We fight it with a new management thought — employees first, customers second. The ‘employees first, customers second’ as a disruptive management thought came about by asking three fundamental questions. Question one: what is our core business. The core business we are in is to create unique experiences for your customers, and thereby deliver unique value to our customers. Question number two: who creates these unique experiences, the unique value? The obvious answer was, the employees. So, the third and final question: if the employees create the unique value, then what should the role of the management be? And we said, that the role of the management cannot be anything other than enthusing, encouraging and enabling employees. Thus, was born employees first, customers second. We turned conventional management upside down and inverted the pyramid. That is the only way we could increase the passion level in the organisation to a level similar to that of the Bombay team raring to sign the next condolence card. 

My appraisal was done by 100,000 employees and, it was posted on the intranet for everybody to see. I said that if my ratings were below a certain level, I will lose the right to lead. While I was putting up a brave front, I was also thinking to myself, “Holy shit, what have I got myself into!” But then, when people saw the leader taking the risk and surviving, the managers started seeing this as a new form of leadership. The resistance started waning. The whole strategy was to raise the motivation level in the organisation. You can accomplish anything. You just have to trust your employees, and raise their energy level and aspiration. I still remember our pitch to attract new talent — it said, ‘We are looking for plumbers.’ The idea was that there are organisations that are perfect — they have no flaws, no problems; but our organisation has lots of leaks, a lot of problems. So, if you are a plumber, where should you be working? That pitch worked. 

‘Employees first, customer second’ became a rallying call. We would back our employees no matter what. Customers would often insist on working with a particular employee, especially if there were ego clashes or ethnicity issues. But we would push back and not take the easy way out. Over a period of time, the customers would come around. Whenever we faced such sticky situations with a customer who did not understand our employee-centricity, my best advice was to give it time. Don’t say a yes or a no. Just let it go, let time pass, like a river. Once you let things drift, the person changes or his decision changes. 

I made it a point to meet all our employees every year face-to-face across the world. HCL Town Halls in India had around 5,000 people. One of the core aspects of employee first was to get rid of the halo around the CEO and get employees to stop looking at the top for directions and decisions. What fun we had! We would start the meeting with a dance. I would dance to a Bollywood song. I can’t dance for nuts but I used to, and then everybody would join in. A superhero moment was making my R&D team from Chennai dance on their chairs! 

One Town Hall I can never forget was when we were celebrating the success of our trouble ticketing system. I used to call them gods — managers of the main departments such as finance, HR, admin and so on. If the employee wants to do something, the god will often say, well, you can’t, quoting some rules or regulations. So we created a trouble ticketing system, where an employee could open a ticket on the gods and the gods have to resolve it inside a certain period of time. 

In the first week, we had 10,000 tickets and 99% of them were resolved within two to three hours. The next week, we had 20,000 tickets, again 98-99% got resolved. So I called all the gods and had a celebration. There were some 500 people in the room. I was raising a toast and congratulating everybody, when a girl, about 21 or 22 years old, stood up and said, Vineet, I have a question. It is a vivid memory. I said, yes, go ahead. And she said, Vineet, “I have not met…” — and these were her exact words — “I have not met anybody else as foolish as you.” I said, “I have teenagers at home and I have heard that statement before, but please tell me your reason for saying so.” She said, “How can you celebrate the fact that there are 20,000 problems in your company, and celebrate with the people who have created it in the first place?”

I was dumbfounded. It was an obvious point, but I had completely missed it. I drove from there straight to my office. It was 1 o’ clock in the night. I sat in my office throughout the night, asking myself, “What did I miss?” The next day, I announced a change in the plan. “We are going to incentivise gods on the days employees have no tickets,” I told everyone. So, we called it the ‘no ticket day’. We were not incentivising speed of closure but the fact that there is no ticket at all, which meant that every policy will be discussed with employees, they will do roadshows and they will take inputs. Now, the gods were most afraid that when they announce a policy, they will get tickets. And all this was because of that girl. That is the power of employees first. If employees are empowered and you create an environment where they can call the CEO a fool, great things can happen because everyone is aligned — looking outwards and not inwards.

When it came to creating big wins, it was always about doing the unimaginable. I can never forget the deal with Reader’s Digest. Their CEO, Mary Berner, was outsourcing and she had decided to give the order to a competitor of ours. I called her and asked her for five minutes of her time. She agreed and asked me where I was. I said, India. She said, okay, we can do it India time, so that it is convenient for you. 

So, it was decided that we will have the call at 9 a.m. EST. After disconnecting the call, I drove straight from the office to the airport, took a flight, landed at 6 a.m. in the morning in New York, and by 9 a.m. I was at her door. I went in and she said, “We were supposed to have a call.” I said, “How many people will fly across the Atlantic just to have that five-minute chat with you?” She called her CIO and said, “Please change the decision.” We won the deal and at 3:30 p.m., I caught the flight back to Delhi without having checked into a hotel and the deal in my bag. 

You can’t always pick every battle and do stuff that is unimaginable. So, don’t go after stuff you don’t believe in. But for stuff you believe in, you have to go with a ferocity that nobody thinks is possible. It’s about conviction and how ready you are to stick your neck out. We had made a pitch to a UK-based client, promising him a total saving of $160 million. It was a huge saving but he did not believe us. We decided to take with us a large cheque, literally — an artwork of a cheque with $160 million written on A3 paper. Our man loved the idea, but still would not believe us. We said we’d leave it with him so as to let it sink in. The next day, he met us and said that he would like to go with the deal but needed a guarantee. We said, he could reward us with a 5% bonus if we achieved the target. If we did not, then we would offer him a 5% discount. We made the deal because he could not take his eyes away from that A3 cheque on his wall.

Another spectacular win was the Axon deal. The Axon acquisition was very critical for us because till that time — 2007 — nobody was taking HCL seriously. Irrespective of our employee first, customer second strategy, nothing had changed. The company was ready, but nobody was taking us seriously. We needed to do something big. We decided to go for the Axon acquisition. Besides, the moment another Indian IT company arrived at the scene, we saw an opportunity for fairly large coverage, for free, in this battle. If we could take Axon from under their nose, the world would stand up and take notice.

The dilemma was that we had to make the acquisition, but not by paying a higher price. We had to make the other company blink, because if we make an offer and they got into a pricing war, then our board would not support such a move. So, our primary job was to make the other company believe that we are illogical and irrational — after all, the biggest fear you have of anyone is when the person is illogical, they’ll do crazy things like bidding till they go bust. So, we just kept sending feelers to the other team through various channels, trying to convince them that we will bid them out of the scene. So, we had six months of dance, and they blinked: they didn’t revise their bid. The deal was ours.

This is really an art. And Shiv is a master at that! I have not seen anyone better than him in such complex negotiations! I have not met a better mind than his in my life. There is a critical difference between a manager and leader. A manager helps you deliver more and a leader inspires you to do it in your own way. Shiv was clearly the latter. I had ideas and knew how to implement, but he fine-tuned them. He chiseled out the rough edges. 

Nothing in business is always going right — we were in a deep mess, many, many times. He totally trusted me, and that’s how we accomplished what we did. That’s why I always say, the HCL transformation is not my doing. It is his doing and that of a brilliant team that put their heart and soul in making that magic happen. Our transformation from $700 million to close to $4.5 billion in six years was a fairy tale and we were one of the few companies that grew even during recession. By the time HCL Transformation phase 1 was complete, our market cap had gone from the low of $1.4 billion to over $10 billion. I think the board was convinced that we are in good shape. We had a good second-in-line in place. Shiv and I had an agreement that I will go back to Sampark Foundation. And I did.

The biggest influence in my life has been my mother. She was my closest friend and my soul mate. She was rare with her praise and harsh about making sure all of us do the right thing. She had seen life from close quarters and wanted all three of us to turn away from meaningless pursuits of wealth and recognition. My mother was after me more than the others because I was the one always arguing but she would win most of them. She was truly the one reason why Sampark happened. She was not one to mince words. “You are selling your soul,” she told me. “If a person of your talent is not working for the society, then you are wasting your life.” She would provoke me. “By wanting more and more success, you are only inviting unhappiness,” she would say. She defined four stages of happiness: financial security, recognition, giving and, finally, growing an understanding that none of the three were of your making. She said, you should not be stuck chasing the first two. That you have to give up these two to gain the third. Then, you have to learn the fourth. Plus, she said, and rightly so, if you want to see something change, you have to give it time. She said, you need at least 15 energetic years to make any change. It took me some time to act on it but I did. I had decided that Sampark is not about money, it is about my time. From 2005 to 2013, we gave away millions of dollars in cheques to a lot of NGOs. Anupama and I were convinced that none of them made any impact. That’s when I decided to quit my job. I was 50. My mother was decidedly against calling it the Nayar Foundation. She said, “The day you do it, don’t call me your mother!” She came up with the name ‘Sampark’.

My wife is a very different person — she has a heart of gold and a passion for education that I have not seen in anyone till date. She supported me, as always and we started working together. She in the lead, and me following for a change. She decides what we do, the brain, and I execute that vision in the best way possible. We wanted Sampark to come out of our house, not out of a garage, not out of a commercial building. I bought the house next to mine, where we are headquartered now, as the first step. 

The India we had seen — in villages — was an India that had 150 million children whose first meal was from the mid-day meal scheme. Most in the fifth grade could not count beyond 99 or construct simple sentences. The urgency for change was hard to miss. It was a problem that spoke to me. We wanted to solve the problem of scale with limited resources. So, frugal innovation became the central theme of Sampark Foundation inspired by my friend Tim Brown, the CEO of Ideo.

Since my parents come from Punjab, we started there. After one year of tremendous effort, it became clear that we had failed. Whenever anyone asked me about our work there, I would say we are working with 5,000 schools, blah blah blah, and they would be very impressed. But I was convinced that we were fooling ourselves. I still remember the conversation with the Sampark management team. I said, I am pulling the plug, we are getting out of Punjab, because we don’t have the political support and our intervention lacks the excitement to become irresistible. This system is not keen to change. And we don’t have the resources or the products to make the system work. Let’s get out and say Punjab is a failure. Whose failure? Our failure. 

Around the time, I heard of this ex-governor of Chhattisgarh, who was very progressive. A friend of mine, Arun Seth knew this ex-governor, General Seth. I called him and asked if he could introduce me to him and he did. I met him and shared with him our vision and how we believe we can transform Chhattisgarh’s education system. Then, I asked him, if he could introduce me to the chief minister. He looked at me and said, the chief minister of Chhattisgarh is in the hospital taking care of his wife (she was very sick at that time). I said, I don’t mind meeting him at the hospital. He laughed, and said, well, that’s not the point!

Anyway, that meeting took place in the hospital. Honorable chief minister Raman Singh saw merit in what we were doing. And I said that we wanted to do a state-wide implementation — 32,000 schools in one go. And he agreed. That led to the launch of Sampark Smart Shala, which is a outcome-focused, frugal innovation that uses audio technology, a voice mascot called ‘SamparkDidi’, toys, folklore, board games, teacher-training modules, and a mobile app combined with rigorous monitoring in collaboration with State Governments.

That was a big battle to win and we won many more  We won the right to impact primary education of our children in Uttarakhand and Chhattisgarh and Jharkhand and Haryana and UP and Himachal. Today we have 7 million children in our programme across 76,000 schools and it costs less than $1 per annum per child for them to benefit from the Sampark Smart Shala program. Three years from now we will have 200 million children across 200,000 schools. That is my dream. 

However audacious the dream may be, my philosophy at Sampark remains the same — put the doers at the centre. At HCL, it was the 100,000 employees and, here, it is the 200,000 teachers. All others are simply facilitators. The difference, however, is that HCL’s 100,000 employees reported to me directly, but these teachers don’t. But then leadership was never about exercising control, it’s about encouraging and inspiring people to act. Then simply seeing the magic unfold. 

In life, I am very, very grateful to a lot of people — I am very grateful for the teachers I got, and to have Shiv as my friend and mentor and to have worked with some amazing Comnetains, HCLites and now Sparks. But most of all, I am very grateful for my mother. If you have a rock solid mother in your life, you cannot fail. She was a simple girl from Jalandhar. Her father was a cigarette vendor at the railway station. During partition, she was standing on the ledge of her house and she saw a Muslim man’s head being cut off. As if those scars were not enough, she lost her husband when she was very young. She survived a lot in life. But she never ever expressed regret. Never. 

The last four months I spent with her during her battle with cancer changed me as a person forever. She had so much to give even in her last few days. That is a life worth living. She inspired me at every step. She also was my professional guru, in addition to Shiv. She would look at my quarterly earnings call on CNBC and have two pages of notes on the things I did wrong! She shaped my core beliefs about ethics, values and society. 

Anupama reinforced that. She made me more empathetic. She was the first person I met as a friend. We met very early in school. As she has been with me for so long, she has had a tremendous influence on my thinking about people, friends, society, etc. She is also the one I fight with the most. 

One of the great things that I have been blessed with is a fantastic family. My two brothers Neeraj and Vibhu and my cousin Mukesh are rock solid supporters without whom I would have tumbled down from the hill long before it was time to climb. After my dad’s death these three have been my support group who I run to in trouble, which is quite often. They are my Panchayat. I laugh the loudest, dance the hardest and drink the most with them. They have least, sorry, no respect for me or my opinions and tolerate me only because I happen to be their brother. We love life and we love it when we spend it together. Without them I wonder where I would be, but it is best not to tell them that because I would have to pay a price for admitting it! 

Life has turned out great, but it’s not been easy. I had my share of ups and downs. I am sure I have made many more mistakes than an average leader, however, sometimes when you work with the right set of people, things just happen. For me, victory in life, not just in business, was always snatched from the jaws of defeat. The high point has always been chasing the impossible trains. Impossible trains that create meaning in life, and are for a purpose beyond wealth and recognition. 

This is part 3 of a three-part series. You can read part 1 here and part 2 here.