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Fast And Steady
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While most large Indian IT services companies look the same to a casual observer, each one of them has certain unique strengths. Research and development and telecom are Wipro's; unfortunately, these two segments were hit the most. There was a virtual bloodbath in the global telecom market. Chinese vendors such as Huawei and ZTE, which do not like to outsource much work to Indian firms, took away market share from the likes of Nortel and Alcatel. Wipro suffered greater collateral damage than its Indian peers as clients dialled back on spending.
That was also when Azim H. Premji, chairman of Wipro, who is also its biggest shareholder (79.17 per cent) famously experimented with the ‘joint-CEO' model. While the model was unwieldy, it yielded some results. The firm improved its market share in BFSI (banking, financial services and insurance), the largest spender on outsourced technology services (from 22 to 27 per cent of its revenues).
In other strongholds such as infrastructure management services, testing and validation, package implementation, the company managed to not only keep its market share on a growing revenue base, but in several cases increase it.
However, the co-CEOs had to go, and Premji quickly put T.K. Kurien, the man who had turned around his BPO business, in charge even as he continued to lead overall strategy by pushing for higher investment in fast-growing verticals such as healthcare, energy, utilities, and retail.
Son and potential heir Rishad, the chief strategy officer, is being carefully exposed to the world in orchestrated media appearances after having been under wraps for the past four years.
In the past, Premji has repeatedly asserted the separation of ownership and management; but Rishad — by all accounts a talented young man and a real chip of the old block — is likely to steer the company in the future. For the present, Kurien has been tasked with executing strategy and ensuring that the company leads the next wave of growth even as he battles utilitarian issues like lowering attrition.
But here's the interesting thing: as if in recognition of the slowdown in business and lower revenue growth — Cognizant beat Wipro to become the third-largest IT services company — Premji took a big cut in salary of over Rs 6.5 crore, or roughly 80 per cent.
If that is a CEO recognising his value to the company, then it worked: Premji became the second most ‘value'able large company CEO as a consequence. Men may come and men may go, but Premji will continue to guide his company with a steady hand, for years to come, if not forever.
(This story was published in Businessworld Issue Dated 26-12-2011)