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 Wipro
and its charismatic silver-maned chairman Azim H. Premji, 59,
are no strangers to exits. In the past six years, the company
has seen five vice chairmen leave, with at least two boasting
public profiles of the sort that prompts the original question:
What will happen to Wipro now?
Now that this question is being asked again,
in the wake of the exit of Vivek Paul (it comes soon after the
exit of Wipro bpo's Raman Roy), the energetic 46-year-old American-style
CEO of Wipro Technologies who built the software arm of the company
from a Rs 1,042-crore middle-weight to a Rs 6,075- crore (2004-05
revenues) biggie, it is time to answer it. In the long term, nothing
will happen to Wipro that would have anyway not happened.
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"On the day I joined Wipro, I knew
I would never succeed Azim"
Vivek Paul
Former Vice Chairman/ Wipro and CEO/Wipro
Technologies |
Most challenges Wipro faces at this point
in time (see Wipro's Challenges) are no different from those faced
by other it companies of its size and complexity. "I remember
the same questions being raised in 1999 when Soota left,"
laughs Sudeep Banerjee, President (Enterprise Solutions), referring
to the exit of Ashok Soota, then Vice Chairman and the man widely
seen as having built all of Wipro's technology businesses. "What
people do not understand is that Wipro is an institution."
There's no denying that; yet, Paul's exit and the story behind
it are worthy of being chronicled; they are case studies in organisational
dynamics that raise intriguing questions on the role of a CEO
in a company almost wholly-owned by one promoter. Here, reconstructed
from interviews with the reticent Premji (Business Today was the
only magazine he granted an interview to after Paul's exit), Paul,
and current and former executives, is the true story.
Paul has always been a high profile CEO;
over the past two years he became the face of Wipro Technologies,
even, Indian software. That not everyone within Wipro liked this
is evident. "People credit Vivek with things he did not do,"
says Banerjee. "It was a team effort." The self-effacing
Premji may have been uncomfortable with the kind of publicity
Paul was receiving.
Bangalore's tech circuit is well aware of
the intense rivalry between Wipro and Infosys; part of Paul's
brief, says a senior executive at a large competitor, was to overtake
Infosys. That hasn't happened. "When Paul took over in 1999,
I think Infosys was actually behind the then combination of Wipro
Systems and Wipro r&d," says V. Chandrasekharan, former
President, Wipro Technologies (Enterprise) and now CEO, Aztec
Software. "Since then Wipro has fallen behind."
VICE CHAIRMEN GALORE
Wipro has seen five vice chairmen in the
past six years. |
| NAME/ RESPONSIBILITY |
DURATION
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|
Vivek Paul
Headed global IT services business
LEFT TO: Join private equity firm Texas Pacific as
Partner |
July 1999-
June 2005
|
|
Ashok Soota/
Head of IT services
LEFT TO: Found MindTree Consulting |
January-
August 1999
|
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Arun Thiagarajan
Led domestic technology business
LEFT TO: Join HP. Currently with WeP as Chairman |
January 1999-
Sept. 2000
|
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P.S. Pai
Ran consumer care
LEFT TO: Retire from Wipro and join Murugappa Group
|
January 1999-
2002
|
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D.A. Prasanna
Ran lifesciences and healthcare
LEFT TO: Join Manipal Healthcare |
April 2002-
January 2003
|
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Paul admits that Wipro is short of the 4x4
vision he unveiled when he took over ($4 billion or Rs 18,000
crore in revenues by 2004), but insists that this was an evangelical
message that sought to motivate employees. "Except for revenues,
all other goals we set out to achieve, we did," says Paul.
"We became a player in the Global Top 10 it services (club)
by market cap(italisation), net income, head count, and breadth
of service offerings."
WIPRO'S CHALLENGES
To be fair, some of these are
generic to the industry. |
The People Challenge
With over 50,000 employees, Wipro will have to build processes
that can hire, train, deploy and motivate people in bulk
The Growth Challenge
It is easy to grow a $150-million (Rs 660-crore) company
at a CAGR of 28 per cent over a five-year period; it is
tough to grow a $1.5-billion (Rs 6,600-crore) one
The Execution Challenge
Projects are increasingly becoming more complex and often
need to be implemented across geographies
The Market Challenge
In terms of pure software services, Wipro is #3 after TCS
and Infosys, and it faces competition from MNCs such as
IBM, Accenutre, EDS, CSC and Cap Gemini
The Visibility Challenge
Paul was the face of Wipro; now that he is gone, the company
will have to find a new public face
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| "WIPRO IS A JUGGERNAUT YOU CAN'T STOP" |
 There
have been some high-profile exits in the group, including
that of the vice-chairman and the head of your BPO business.
Is there an organisational restructuring happening?
It is not happening, it has happened! You know our new
structure. Vivek and Raman were good leaders. Both contributed
immensely to Wipro, and then they wanted to do something
else with their lives and careers. We respect that.
Were there organisational and directional differences
between Vivek Paul and other members of the top management?
Will Wipro relook at how it shares wealth with its employees?
I really think that the strength of Wipro is that we don't
have, never have had, and never will have a bunch of "yes
men". All of us disagree all the time, and that is
why each one of us has value. Vivek is not leaving Wipro
because of any differences. As I said before, he sees the
next few years as the next phase of his life, where he wants
to do something different and I think all of us should respect
that. Please stop seeing ghosts where there are none.
We are constantly relooking at every policy, including
our compensation and remuneration policies. Having said
that, I continue to find this "wealth sharing"
question intriguing when we were the first to structure
employee stock options in 1985, and just to quote another
instance, we (recently) distributed Rs 340 crore in the
form of Restricted Stock Units, which is the largest stock
grant in the history of corporate India.
Will you continue to retain the post of CEO (operational
head) or is there a plan to bring in a new individual?
I do not intend to run operations. That is the job of our
business leaders. What I will continue to do is to focus
on setting strategic direction, on leadership development
and, of course, meeting customers, which is what I have
been engaged with for several years, if not decades.
As for the future, obviously I have thought through all
issues of my succession; after all, I will not be around
for eternity, though Wipro will be.
I can tell you, though, that we do structural and succession
thinking every year-as a robust and tight process-and not
just for myself, but for about 100 of the top leaders in
Wipro, and every year the lookout horizon is three years;
and in the next three years we have not planned any change.
Given the overall macro-economic conditions especially
in your major market, the US, where is the group headed?
I think what India has been able to do is to drive a disruptive
change in the global it industry. Global delivery is now
the structural underpinning. And if you look at it from
that perspective, (there are) tremendous opportunities for
companies like us who have led this structural transformation;
the new structure is just in place, the volume shift is
happening. Even if there is zero growth in tech spending
in the global markets, companies delivering value in the
new structure will continue to grow.
Coming back to the succession issue, as the single
largest shareholder in Wipro with an 84 per cent stake,
what are your succession plans?
No one has a succession plan as a shareholder. You are
just a shareholder, and the shares pass on to your family
or to institutions that you may want to pass them on to.
No one should mix up ownership with management.
Do you plan to induct your sons into the business?
Or will ownership and management be two different parameters?
I think that's the right way to view it; ownership is different
from management. I can understand your intense curiosity,
but the fact is that from a structural and succession perspective
we look every year at the top 100 leaders, and we have no
plan that includes my children. You ask this again because
you are mixing up ownership with management.
Vivek was widely seen as Wipro's face in key markets
like the US and Europe, and also as the man responsible
for Wipro's spectacular growth in the last six years. Will
his absence hurt Wipro's future growth?
Let me take a cricketing analogy. Allan Border led the
Aussies from strength to strength, and then Mark Taylor
and then Steve Waugh... but if you like cricket you equally
value the contribution of Warne, Hayden, McDermott, McGrath,
Marsh and many others; each one of them was invaluable.
The Aussie juggernaut didn't stop when Border retired. Wipro
is a juggernaut you can't stop; we will all miss Vivek,
as we miss Border.
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| ...Paul, in turn, is said to have been
upset that some part of the software business was looked after
by Suresh Vaswani, widely seen as
one of Premji's blue-eyed boys. |
This (Wipro's inability to catch up with Infosys)
may have irked Premji, as could have the fact that the latter's
before-tax profit margins are higher than the former's (33.89
per cent as compared to 26.4 per cent in 2004-05). "Paul
was focussed on talking about revenues, but Premji was more focussed
on squeezing out profits," says Sridhar Mitta, a former Wipro
employee who launched the company's R&D practice and now heads
incubator e4e Labs.
Paul is also said to have been irritated at
the fact that in Wipro's scheme of things, he, the CEO of the
jewel in the crown, was on an equal footing with the heads of
other divisions. "Premji likes to encourage turf wars among
his chieftains," says a former Wipro employee who now runs
his own tech firm. "He believes this keeps them on their
toes." One such turf war, the buzz goes, erupted between
Paul and Suresh Vaswani, President, Wipro Infotech. Not just does
Wipro Infotech oversee all it operations in India, West Asia and
the Asia Pacific, Vaswani also heads two of Wipro Technologies'
fastest growing verticals, Infrastructure Management Services
and Software Testing, reporting directly to Premji. "There
was dotted-line reporting to Vivek for those two service line
verticals," says Vaswani, brushing away this theory.
WIPRO'S A-TEAM:
13 executives will now report directly
to Chairman Premji. |
 A.L.
RAO
56/Chief Operating Officer
A 25-year veteran of Wipro, the diminutive Rao used to head
the telecom practice; a follower of Sri Sri Ravishankar, his
role will largely be administrative. Used to report to Paul
 SURESH
VASWANI
45/President/Wipro Infotech
A protégé of Premji; initially handled all
domestic software operations, but expanded empire to West
Asia, Asia Pacific and two service lines, Infrastructure
Management and Testing, for Wipro Technologies. Has always
reported only to Premji
 GIRISH
PARANJPE
47/President/Finance Solutions
The rising star who oversees a division growing at around
45 per cent (CAGR, last five years); has been made a kind
of super-CMO (Chief Marketing Officer) with CMO Jessie Paul
reporting to him
 T.K.
KURIEN
45/Managing Director/Wipro BPO
Has spent a mere five years in Wipro, but is already
seen as another young executive blessed by Premji
 PRATIK
KUMAR
39/Executive Vice President/ HR
The people man, his role will increasingly become crucial
 SUDIP
NANDY
47/Chief Strategy Officer
He is credited with the much-touted 'string of pearls' acquisition
strategy. Reports to Senapathy on the M&A part and to
Premji, on the strategy one
 SURESH
SENAPATHY
48/Corporate Executive
Vice President/ Finance
A wily number cruncher who is credited with overseeing
both good times and bad; has been with Wipro for 25 years
 SUDEEP
BANERJEE
45/President/ Enterprise Solutions
Another two-decades-and-more vet, his division brings
in more than half of Wirpo Technologies' revenues. Used
to report to Paul
There are others who report directly
to Premji. The list comprises Vineet Agrawal, President,
Wipro Consumer Care; Richard Garnick, Chief Executive (Americas),
Wipro Technologies; P.R. Chandrasekhar, Chief Executive
(Europe), Wipro Technologies; Sambuddha Deb, Chief Quality
Officer, Wipro Technologies; and Anurag Behar, Managing
Director, Wipro Fluid Power
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Paul and Premji are also said to have differed
on Wipro's m&a strategy, with the first preferring aggressive
big-ticket deals and the second advocating a more conservative
'string of pearls' strategy. Then, differences seem to have risen
on Premji's desire to induct his elder son Rishad, a Harvard Business
School alum now with Bain & Co., into the company. "Stop
seeing ghosts where there are none," says Premji. "At
this level, no one leaves for such reasons," adds Paul.
With Paul out, almost all senior executives
report directly to Premji. That's pretty different from how things
work at TCS; Chairman Ratan Tata is content to allow CEO S. Ramadorai
run the place. As it is from Infosys where the hierarchy is pretty
well laid out (the CEO, again, gets to do his own thing, but there
are four levels within the board itself) "There are no plans
to hire a replacement for Paul," says Pratik Kumar, Executive
Vice President (HR), Wipro, claiming he was deluged with calls
from headhunters offering potential replacements once Paul announced
his departure. "Though A.L. Rao has been appointed COO, all
of them (senior executives) are peers." "There is certainly
a need for a CEO, whoever it may be," counters Mitta. "Amorphous
leadership is not good for Wipro."
Then, Wipro Technologies has always had a
CEO whose job it has been to draft strategy blueprints, integrate
offerings from business units and present a single face to customers.
His name is Azim Premji.
-additional reporting by
Rahul Sachitanand
| Q&A: VIVEK PAUL |
 "
If you own 84 per cent of the company, you would want to run
it "
Why now?
Why not? (laughs) This is as good a time as any! I am
just 46 and pretty young. After a six-year successful stint,
it was time for me to move on, do new things. Wipro is in
great shape, everything is humming along, there is great
momentum. I am proud of the things we have achieved at Wipro.
You have talked about 'push and pull factors' as the
reasons behind quitting. While the pull factor (the challenge
of a new job) is obvious, what were the push ones?
Again, too much is being read into it....
Were there any differences of opinion between you and
Azim Premji on organisational and directional issues?
I am not saying there were no differences. Between two
individuals there are always differences. See (pauses)...
the day I walked into (Wipro) I knew I would never succeed
Azim. If you have $14 billion (Rs 61,600 crore) of your
wealth invested (into the company) and hold 84 per cent,
obviously you (read: Premji) would want to run the company
in a manner you would like.
Eventually you would like your children to know about
the business. It would only be reasonable that at some point
he would like to bring (them in)... But if you are asking
whether that was the reason I left, no. People at these
levels don't leave because you are not feeling good about
something or that you are irritated. It is because I wanted
to do different things.
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