Founder, HCL Technologies
Shiv Nadar Foundation: Funding Large-Scale Edu Drives | CNBC-TV18 Classics Timeless Conversations
Shiv Nadar got his first taste of city life when he was 22. In 1976, he, along with a group of eight engineers/entrepreneurs, all former employees of Delhi Cloth & General Mills, started HCLTech , which is now one of the largest IT firms in the country. Shiv Nadar is now on a mission to empower those who have the potential but not resources. With an aim to bridge the socio-economic divide and create a more equitable society based on meritocracy, he created the Shiv Nadar Foundation to fund large-scale educational initiatives. An initiative of the Shiv Nadar Foundation, VidyaGyan is specifical...
About Shiv Nadar
Shiv Nadar, the founder of HCL Technologies and the Shiv Nadar Foundation, has spoken extensively about his background, his approach to business, and his philanthropic work. He has described growing up in a village and being raised by a mother he credits with instilling financial discipline, stating, "In my personal life I have not borrowed; my company has not taken a single rupee from anyone as a loan or as a equity." He has characterized success as being defined by "how little money you need" and has advised that "there are only two kinds of people: one who is successful, other could not take the decision." In addresses to students, he has encouraged embracing failure as a test of growth, saying, "If you don't fail, you haven't tested yourself." Nadar has detailed the founding of HCL in 1976 with a capital of one lakh 87,000 rupees and the subsequent creation of the Shiv Nadar Foundation in 1994, which he said was established with the purpose of "transforming the social fabric by creating leadership academies." He has described the foundation's work as focusing on "creative philanthropy" and "corrective philanthropy," with initiatives like the VidyaGyan school and the Shiksha program aimed at addressing illiteracy. Nadar has stated that the foundation has spent "in excess of 5,000 crores" and that its efforts are intended to "stand well beyond the lives of the founder." He has also emphasized that he does not hold employees or partners to contracts, asserting that "people finally do business with people."
Transcript (56 segments)
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Narrator0:05
He got his first taste of city life when he was 22. He put together a motley bunch and started a garage operation that is today one of India's largest technology companies. He works for a company today that employs over 60,000 people and has done India's biggest technology acquisition. Shiv Nadar is now on a mission, a mission to understand the heart of business.
When Shiv Nadar founded HCL in 1976, his vision was to take a microprocessor and change the world. In the over three decades since, his goal is the same but his means are different. From building a corporate entity that would last beyond him, he's now on a mission to empower those who have the potential but not the resources or opportunities.
So to bridge the socio-economic divide and create a more equitable society based on meritocracy, he set up the Shiv Nadar Foundation to fund large-scale education initiatives.
It spread across 20 acres, it has a hostel for 700 students, it has 30 classrooms and a sports complex spread across 80 acres. This is Vidya Gyan, and no, we're not in Delhi, Mumbai, Hyderabad, or even Bangalore. We are in Bulandshahr, in the heart of Uttar Pradesh. This is the latest social enterprise of the Shiv Nadar Foundation.
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Interviewer1:34
I came to meet Shiv Nadar at the site of his foundation's latest initiative, the Vidya Gyan School located in Bulandshahr in Uttar Pradesh. Now, it is often said he is a product of education, and this is what drives him to create world-class educational institutions from schools to colleges and soon to Shiv Nadar University. Let me start by asking you, what was the genesis behind the Shiv Nadar Foundation? What made you, in that sense, start an organization that was primarily, you know, started or founded with the purpose of giving back?
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Shiv Nadar2:09
This started with my mother one day asking me, she said that you've learned a lot, now have you stopped by anything? Think what you want to return. I said I have plenty of time to do that. She said, plenty of time will never come, at any time you should just set off doing something. I said, what is that we can return? I said I'm a product of education, let's see if I can return something in education. And we founded the first engineering college, this is little out of Chennai. And when we began, it was a fairly modest effort because the funds available with me 15 years ago was very limited, but it has started very sound basic principles that whatever is being taught would be taught to the standards in which it should be, and two, the entry will be truly meritocracy. And we built a world-class institution.
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Interviewer3:11
And why the decision not to do an HCL Foundation? Why the decision to do a Shiv Nadar Foundation?
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Shiv Nadar3:15
The goals which I had of what I wanted to return to society is much larger, so I could not impose what I wanted to do on the operating companies because shareholders, you think this is the way really going forward, you know, to have this sort of arms-length distance between the listed entities or the corporate entities and an individual entrepreneur or promoter's philanthropic vision.
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Interviewer3:41
Yes, because the corporation may not have a philanthropic vision. The corporation is likely to have a corporate social responsibility, which is different. And what you're hoping to do with SSN, with Vidya Gyan, and with the Shiv Nadar Foundation, which could be in sheer scale, because if you take each of these, they're done with huge scale.
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Shiv Nadar4:05
It represents my thinking, but the corporation cannot go about doing that.
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Interviewer4:08
The various initiatives of the Shiv Nadar Foundation, let me start by talking to you about Vidya Gyan, which is your most recent baby in that sense. It's a school that, you know, that started in Bulandshahr just about a year or so ago. Why the decision to actually come out in the middle of nowhere in Bulandshahr and do this school?
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Shiv Nadar4:27
See, there are three kinds of Indians: Indians who have settled overseas, the city-bred urban Indians, and then rural Indians. Overseas Indians generate about a trillion dollars worth of economy. Amongst the balance trillion dollars which is generated in India, 70 percent is urban, 30 percent is rural. And the 30 percent rural doesn't leave much of money behind. If you see 190 million people, seventh largest nation, most populous nation on its own right, but if you see the education data, it's depressing. 43 percent of women are still illiterate, right? 45 percent of fifth-standard kids don't read, 20 percent of second-standard kids don't recognize letters. We thought that in this area, the leadership has to be evolved where the problem is. So we thought that we will come here, set up a school, rural, for meritorious students. We'll just uplift them from age of 10 and bring them and place them in a school which is world-class in the world. It's a very big project. This project, the provision that we made is for 10 years, right? There are four schools, 1,400 students each. If you're building an infrastructure which is 500 crores, and then the upkeep and running, and because the whole thing is free, it will cost another 125 million dollars. So it's a project which is, you know, a thousand-crore project which we committed ourselves to.
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Narrator6:13
The vision of the Vidya Gyan schools is to build future leaders from rural India by providing them with high-quality school education that they wouldn't have had access to otherwise. Hand-picked with assistance from the state government, the brightest students from hundreds of villages in Uttar Pradesh are provided a world-class education absolutely free of cost. The first Vidya Gyan school opened for admissions in 2009. The curriculum is geared towards bringing high-achieving students from rural India into a competitive environment up to the level of urban students.
When these kids came to Vidya Gyan, they were very introvert, they were very hesitant, they would not mix up with each other. But then, over the period of nine months, they have shown remarkable change in terms of academic, physical, and emotional growth.
So these children are provided with every facility that they could ask for and more: excellent infrastructure, extensive sports facilities, state-of-the-art equipment, and trained faculty willing to impart knowledge. In its first year of operation, Vidya Gyan has already changed the lives of over 200 children like Kajal, who is proud to be the head girl of the school today.
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Kajal7:46
I used to study in my village school.
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Narrator8:21
Brimming with confidence, these children are eager to learn and hungry to showcase their newly acquired skills. We are told this year they're planning to put up a play on the foundation day, but on one condition: the play must be in English. Clearly, the many hours spent in the language lab are paying off.
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Interviewer8:42
Vidya Gyan in UP is being done in partnership with the Uttar Pradesh government. We know governments hate to give up control. What was your experience like dealing with the government to get Vidya Gyan up and running here?
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Shiv Nadar8:54
See, we put the rules correctly. Financially, all money is ours, they don't have anything, there is no subsidy. We said that we won't take any steps even if we give. And number two, they are part of an activity but not part of the project. It has its own board, so it has a formal board in which they don't play any role, but in the selection process they help it because when we go, we go to panchayat schools.
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Interviewer9:23
But when you reached out to the panchayat, what was the reaction?
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Shiv Nadar9:28
First is incredulousness. Why are you here? I would imagine, why would you be doing this? Because we want to do it, there's nothing more, you know, iconically explain why we are wanting to do this. Of course, I argued very passionately, and they said that this man is serious about it.
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Interviewer9:49
But it's a transition for these two as well. They're from the poorest of poor villages from rural India. This is so far removed from what they're used to and the surroundings that they've grown up in. It's very touching.
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Shiv Nadar10:03
Those who don't have four sets of clothes, here they change clothes four times a day. You know, if my daughter Roshni would live here and study here, she would have studied exactly the same way they are doing, as well as any state of society from any city with any exposure, despite the fact that their parents are not with us.
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Narrator10:28
And her friend Lakshmi, who stopped the school, the transition has been an easier one. Both toppers at the government schools they were attending, and both from economically underprivileged families, but eager to learn, they're making the most of this opportunity they have.
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Lakshmi10:46
I live with joy because the teachers are very good, the principal is very caring, the facilities are very good. Like we have computers, science lab, math slab, language lab, library, and so many other things.
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Interviewer11:06
You know, now that the government has seen what you can do with Vidya Gyan, and this is only the first sort of school in the set of four that you actually want to do in UP, have they come back to you and asked you to help them with their own primary schools to actually, you know, improve the infrastructure within their own primary schools?
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Shiv Nadar11:22
They have. The education is a problem, they know that we are serious about it. So we are working at another program, we have not signed the agreement with the state yet, by which we would take over the job of educating. But we will introduce a lot of technology there.
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Interviewer11:45
Okay, take me through what you hope to do with Project Shiksha, because that's a more mass-based learning module that you're going to be running.
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Shiv Nadar11:52
Learning per se comes out of teaching, which is in a telecast mode. In a large school, what does the teacher do? Well, it's a telecast. Now you can replace it with an actual telecast. You don't need a qualified teacher to do that. So we have to do that by a course which we are doing it in a control and command structure, connecting it through satellites. All these kids who get left behind, who are weaker, who need interactive work, we get a super teacher connected through the computer system in their respective school and connect it with the satellite and then interactively teach.
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Interviewer12:32
So to your mind, if I were to ask you to list the top three challenges, what were the top three challenges to get Vidya Gyan up and running?
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Shiv Nadar12:38
It's up and running. The challenges will be now scale it. We believe that this should be the best school in the world. It must have best practices of the world. So it has to come into a consortium of schools which follow the best practices.
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Narrator12:54
But almost a decade and a half before Vidya Gyan was even conceptualized, the Shiv Nadar Foundation established the SSN institutions in the Cyber Corridor of Chennai. Rated as one of the top 10 private engineering colleges in India, SSN has also brought on board Carnegie Mellon University as a partner. A 250-acre campus on Chennai's Cyber Corridor houses the SSN College of Engineering, the SSN School of Management and Computer Applications, and the SSN School of Advanced Software Engineering. The mission was to create a global knowledge institution enabling world-class scientific research.
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Interviewer13:36
Let me talk to you about your first love, and that was really SSN. It's almost a decade-plus story that you started. Where do you actually see SSN going from here? Because it's one of the top 10 engineering colleges in India, private top 10 engineering colleges in India. You've already managed to get in a global affiliation with Carnegie Mellon. So where do you actually see SSN going from here?
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Shiv Nadar13:57
Yeah, when you go to Harvard, this time I was talking to the faculty of Harvard. See, what difference they make is, at the end of everything, in a Harvard Business School, what do you learn? He says you learn to learn. When I was an engineering student, I was very interested in physics, but there isn't any physics department passed by which I could have gone to study. So integrating an upcoming young mind needs a wider scope, and not just to be compartmentalized: arts and science and commerce. And you see, in my lifetime, life expectancy has already come to 85 or so, right? In their lifetime, it'll go well past 100. They have plenty of time to study. If you want to see this serious about preparing them, it has to become a full university.
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Interviewer14:49
But what is it like bringing Carnegie Mellon on board as far as SSN was concerned? How easy or difficult was it to convince them to join hands?
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Shiv Nadar14:56
It was very easy, very easy. Why would you say that? Because Raj Reddy was on the other side. So I said, what will it take to take Carnegie Mellon there? Sir, you can take it, but it's expensive. I don't know how you're going to get the students. I said, we'll get the students, I'll give them all scholarships. So he said, that's a good beginning. But you know, it's a very stiff amount. I said, I know it's a very stiff amount, I'll support it for 10 years, then it'll stand on its own. Then after that, he said, how will they pay for the education when they come to Pittsburgh? I said, you're going to pick it up, Raj. So he was very serious. As a single individual, if he could do that much, as an institution, Carnegie Mellon will pick up.
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Interviewer15:43
So are you looking now at bringing in more foreign partners on board? And who are we talking about?
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Shiv Nadar15:48
Who, I can't say, but joining partnership this year, and then they'll steadily go on.
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Interviewer15:57
You know, you were generous and kind to actually support the venture for the first 10 years, but it has to be sustainable if it needs to, you know, if it needs to continue for the next 20, 30, 40 years, and if it needs to scale up as well. So how does, how have you worked out the business model for each of these institutes?
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Shiv Nadar16:13
The business model for not-for-profit will have to be backed by something that gives it continuity. There are many alternatives that we are working with by excess assets, right? So if you take an institution like Stanford, it's 8,000 acres and they have, you know, land which they develop into housing near Palo Alto, which are sold, and then many of these sites were let to corporations, and the corporations may come from Stanford itself. We can start a similar thing. For the next 10 years, the funding plan is in place. It's only post 10 years we are just acquiring land, even as we speak, this will go towards us sustaining it over a long time. Most of the foreign universities work on an endowment system, and that's really how they keep going. Finally, it will come, finally, we'll have to play a role and take over these institutions. You know, these are not institutions which continue to be run by families. You have not come here to own a university, okay? We have come here to create one.
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Narrator17:29
Shiv Nadar's vision has been translated into reality by the SSN board, which has industry veterans like A. Srinivasan, founder of Redington, as well as scientific minds like Dr. Arunachalam, the former Scientific Advisor to the Government of India. I'm Professor M. Ananthakrishnan, former director at IIT Madras. Shiv Nadar's daughter and CEO of HCL Corporation, Roshni Nadar, is also on the board to help chart the future of SSN.
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Interviewer17:59
But as the institute grows, how will the relationship with the Shiv Nadar Foundation evolve, especially in terms of funding?
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Shiv Nadar18:08
You need a leader for starting of an institution. Foundation has provided the leadership, but as we grow, it will be a mere core funding. Rest of the funding will be coming from various institutions. I find, for instance, the research laboratories and the research center will be sustained to a large extent by project funding that you get from various agencies, including governmental agencies.
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Narrator18:40
The future of over 4,000 students who've already passed out and the 3,200 currently enrolled, including Aarti, seems bright. A fourth-year student, Aarti, like her classmates, was chosen on merit. The SSN institutions offer undergraduate and postgraduate courses in electronics, biomedicine, chemical engineering, and even an MBA. They also have programs in science and humanities.
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Aarti19:10
People here are all the educated creams of the top schools all over the country, and everybody who come here, and we've got different scholarship schemes here which helps us by giving us a lot of kind of money for whatever we study. It's kind of like, it kind of reduces the burden which we have on our parents. So in that sense, it's a great help for the whole country because people who kind of get good marks and don't have enough money to study can come to SSN because they can get their education for free out here.
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Narrator19:41
Over 400 scholarships worth over four crore rupees are given out every year. These are based on academic performance as well as need. Fifty percent of the students admitted to the postgraduate programs in engineering are awarded scholarships. In order to promote social equity and justice, the toppers from rural government higher secondary schools are given direct admission to the undergraduate programs with a full scholarship.
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Student20:12
After SSN, I want to do my MS in this college or it's abroad. Then my main aim is to, after that, I have to spend my money for any one of the students studying in this college. I have to spend my half of the money for helping those students like me from the village side.
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Narrator20:36
Following the Anna University curriculum and approved by the All India Council for Technical Education, besides an emphasis on academic excellence, the SSN campus also provides facilities for all-round development of students.
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Interviewer20:51
Let me talk to you about now your next venture, and that is the Shiv Nadar University. I believe you're talking to foreign partners for the Shiv Nadar University as well. Where do things stand with that plan?
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Shiv Nadar21:01
The response that we have received from the best schools in the world is extremely encouraging. What do we start with? The response is never 'will be' or 'will we not', right? You know, some of the things which we also made clear is that we don't want to get tied up with a single institution. We want to have multiple institutions because people are good in multiple areas. We haven't completed meeting everybody, we would do that by July.
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Interviewer21:30
So how do you, how do you, how does this work? You know, you allocate a certain amount of your dividends every year, or how does this work for you? Because we're talking about a lot of money. Vidya Gyan is a thousand-crore rupee project.
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Shiv Nadar21:43
Yes, it's still holding HCL Corporation. They've been holding itself since 1976. These are dividend-paying companies since 1976. In between, I had found ventures which have sold, all that amount is all sitting somewhere. I learned this from Gates Foundation. Gates Foundation runs like a business organization. This place runs like a business organization with all the rules.
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Interviewer22:10
So it is important to, in a sense, corporatize a social enterprise or even a philanthropic effort.
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Shiv Nadar22:15
Absolutely, and that's, otherwise it'll become a series of projects. Each project may have something, if you add it all up, it may be, you know, transitional.
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Interviewer22:25
So Shiv Nadar, to your mind, what would the heart of business be?
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Shiv Nadar22:29
Heart of business is to come out of business learning what you have played for a larger common good.