Business Lessons from Wipro's Chief

Says Azim Premji of the Indian IT-services giant: "Select the right people, give them the right environment, and then don't get into their hair."
Written by Patricia O'Connell, Contributor

Azim Premji is the chairman of Wipro Ltd., India's largest publicly held tech-services company, with annual revenues of $900 million. Wipro was a vegetable cooking-oil company begun by Premji's father 45 years ago, but Premji has turned it into a powerhouse of software services, with the ambition of putting Wipro among the top 10 tech-services companies in the world.

At his sprawling corporate campus in Bangalore, India's Silicon Valley, Premji recently spoke to Manjeet Kripalani, BusinessWeek's India bureau chief, about how he runs his company. Edited excerpts from the interview follow:

Q: You have a reputation for monitoring your business closely and keeping tight operational control. Exactly how do you do that?
A: Wipro's strength is the depth of its leadership. And the first principle of nurturing and deploying effective leadership is that you should select the right people, give them the right environment, and then don't get into their hair.

I spend a lot of time hiring, developing, and promoting talent. Once I have done that, my operational involvement in the businesses happens through clearly defined operating mechanisms, which include a strategic planning cycle -- an exhaustive three-year look ahead that we do every December/January.

January through March, I'm involved in the operating plan discussions with the business units –- the who, what, and when to achieve our goals for the next year. April through May we look at our talent pipeline.

Beyond those three processes, my operational involvement with the businesses for the rest of the year is limited to in-depth quarterly reviews. I prefer to spend my time directly with customers understanding what they need and what we can do better. Equally, I spend time with employees trying to get a firsthand feel for the pulse of the organization.

Q: You also have a reputation for being very demanding with employees.
A: I have a simple rule: I demand of others only what I demand of myself. And one must constantly raise the bar of what you expect from yourself. Only when you challenge yourself and others do you help people to grow. Also, every day the market is raising the bar, and so every day the demands on us as a team grow.

Q: How do you encourage entrepreneurship within the company?
A: The rules of the game are the same for every Wipro-ite, whether for me or the 22-year-old who joins us today. In my experience, a culture that inherently respects each individual as an equal is in itself a great motivator. Also, empowerment isn't a theoretical concept in my book -- I have learned from practice that this is one of the biggest motivators of all.

It's a crucial element in encouraging what I call "intrapreneurship." Wipro is working hard to be a more "failure-tolerant" organization. That may seem incongruous in a performance-driven culture, but people have to know that they will not be hanged for having taken risks and having learned by making mistakes.

Q: Why did you turn General Electric away when it wanted to buy a stake in Wipro in 1999?
A: We're clear that our vision of creating a global leader can be met by partnering with customers and suppliers and need not necessarily entail sharing of ownership.

Q: What are the potential obstacles to making Wipro a top 10 info-tech services player?
A: The list can be endless. I don't want to dwell on issues of market risk -- my guess is as good as anyone else's. There are organizational risks we must manage. We have to make sure we're moving fast enough. There's no substitute for speed. We can't afford to be complacent in any part of our business. Complacency makes you restful, and that kills the organization.

Are we listening to the customers enough? We are here to create value for the customer, and we should never lose sight of that.

Finally, are we conscious that others are trying hard? This is a point which is nuanced. It's easy to get so focused on competition that you lose sight of yourself and the customer. It's a little bit like a 100-meter sprint. You have to be conscious that there are world-class sprinters at your heel, but if you look back you lose the race, because you lose that extra fraction [of a second that put you in the lead]. The trick is to know who's at your heel without looking back.

Q: How do you feel about Infosys being No. 1 in the industry at a time when growth is slowing for Wipro?
A: I'm happy with the success of Infosys. I don't know where you get the impression that our growth is slowing. We continue to grow quarter-on-quarter at above-industry rates.

More importantly, we're better positioned than anyone else to fully leverage the changed nature of the global IT marketplace. We've mastered the global-delivery model, and thanks to the rapid expansion of our services lines, we're better placed to service the needs of global customers -- from business process outsourcing to systems integration to package implementation.

Q: Critics and rivals say Wipro hasn't really taken the lead in many industry areas, such as corporate governance, or set standards.
A: We certainly haven't taken the lead in public relations and media handling. We're trying to catch up. But beyond that, I would completely disagree: Wipro came out with the first employee stock-ownership program in 1984. We published segment and consolidated results in the mid-1980s, way before it became fashionable to do so or was mandatory. We've raised the bar on quality [for everyone else] with such programs as Six Sigma.

From the early '80s, our investment in research and development have led the way for the Indian IT industry. Our R&D-services business is head and shoulders above anyone else -- by industry estimates we are one of the largest R&D service providers in the world. And this is because early on, we invested when required.

Q: What did you learn in the transformation of Wipro from a consumer-products company to IT services?
A: The transformation of Wipro continues every day, and that's the way it should be. One key choice that we made early on was: As much as Wipro will change and transform, our values won't. They are our anchors and our beacon. One other thing that hasn't changed is my personal involvement in the hiring of all senior managers.

In short, this is what I've learned: Have a stomach for risk. Don't agonize over failures, learn from them and move on. There's no substitute for hard work. Never forget the basics of business -- they are the same for all businesses. Listen to the customer, and create value for them. Never stop driving down costs, and focus on execution. And last, trust your intuition.

BusinessWeek Online originally published this article on 8 October 2003.

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