Shan’s Blog

Wipro Chairman, Azim Premji is set to take his flagship company, Wipro, to new heights. This much is obvious, after the company made several recent acquisitions. He has plans to open BPOs in other places across India like Vizag, Mysore, Kolkata, Chennai. He also wants to open a BPO and a integrated centre in software development in Bucharest, to service clients in Germany and France.

But Premji is pushing for more, almost-Mittal style but he’s ambitious to grow Wipro organically as well.. As he told CNBC-TV18, “I think we have demonstrated in the last 8-9 months about the number and the frequency of acquisitions we’ve done. But what people have not realised is how much homework we have done before making these acquisitions, and I still feel we should be doing more.”

He says that in the next six months, everyone in Wipro will know that they are smart risk-takers and he thinks this will lead to “more innovations and not to more inorganic growth, because we are not looking at acquisitions as a growth strategy, but we are looking at it as expertise building.”

He adds, “We have had an innovation process for about six years but what we have done in the last six months is that, we have gone into a new structured process called quantum innovation. Today, innovation projects’ business accounts for 5% of our revenue, which is about $100 million a year or about Rs 500 crore a year. Out target is that in three years, it will bring in 10% of our revenues.”

He also, is one of the few CEOs who has a succession plan in place, that may or may not include his own sons. But it is process that gets reviewed every year by the board and he’s hoping to fine-tune it.

Excerpts from an interview given to CNBC-TV18

Q: One of the ultimate innovations possible is likely to be in the area of succession planning as far as Wipro is concerned, I know you very often said that in India people confuse ownership with management. How do you plan to address that because in corporate India, succession planning is being treated in a casual manner?

A: Succession planning is fundamental to people’s business. We have a very structured process at the board level. Succession planning extends to the top 75 people in the organization - in terms of who is ready today and who is ready in the next 2-3 years and who is a potential five years from now.

This is a regular process, which goes on all the time. So, if you are asking me whether  successors to me have been identified in the organization, then ofcourse we have. We would be a fool as an organization, if we did not have that as a systematically thought-through process, which we review in depth with our board of directors, atleast once a year. We intend to keep improving on that process.        

Q: Is there going to be a new CEO anytime soon?

A: I am the CEO for all practical purposes today. So, when I will decide to retire there will be obviously a person who takes over from me.

Q: A critical challenge that is facing the IT industry is the attrition rate, especially on the BPO front. So, are there any innovative ways, in which you have managed to track attrition because it’s been fairly high, even as far as Wipro is concerned?

A: We have been able to tackle it but not to our satisfaction - attrition control is never to one’s satisfaction. We would like to have attrition which is below 10% and we are running at about 12%-13% rate of voluntary attrition. I think at the end of the day, it is leadership and the most important investment one can make to have people continue with you and have people enjoy continue with you is, to see that the supervisor is a good person as a supervisor.

Q: Speaking about leadership, one of the other things that Wipro prides itself on is the fact that, you have a very entrepreneurial culture and you have gone on to produce leaders who been gone on to have their own startups. But people also say that they are forced to be entrepreneurial, because there is a lack of flexibility at the top and hence the high profile exits. How would you react to this?

A: I think to our credit and our pride, we have been able to produce people who had the guts to strike out and make a success. Some of them have failed and many who left have come back to us. We are completely open on that policy and you can talk to virtually anyone of them - they are still strong ambassadors for Wipro - and they found that the training they got at Wipro was probably the most valuable training they have ever got in their careers. So, we are very proud of them. And we are not defensive about the fact that some good people have left us - we have lost some good people and we have lost some not-so good people.

Q: When Vivek Paul left did you feet personally let down?

A: I think one comes to a stage in leadership, when you try to build up a cultivated sense of insensitivity to issues. Ofcourse, you feel personally let down but you take it in your stride as it is part of the game.

Q: Did he leave on account of differences with you?

A: I think there are certain healthy differences, which always have to be encouraged. But I think we worked reasonably as a team, so it is gossip to say that he left over differences with me. Ofcourse, we always debated issues, we disagreed on issues and we have to take a final call on them. Sometimes he had his way, sometimes I had my way. I think we still work well as team.

Q: What are the areas that you would actually like to work on, or the areas that you think still needs to be beefed up, with regard to the current restructuring that you have undertaken?

A: I think we need to build more intimacy with the customer. We need to build more proactivity with our customers and we need to build large customers - larger in terms of selling multiple services to them and being much more proactive with them. I think we can  grow faster than we are at the moment. And we need to invest more for the future and be less sensitive to the quarter-on-quarter pressure from investors.

Q: But that is the nature of the game isn’t it, everybody from analysts to stockholders  is looking at the quarterly performance. Do you feel pressured sometimes?

A: We do and we also feel pressured that we are making wrong decisions because of the pressure. But I think we are trying to find a balance via the media, which is still healthy. Some of the pressures are good because it gives a lot of financial discipline. While, some of the pressures are not good because it makes you sacrifice the investments you would have liked to make, if that pressure was a little less intense.