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IIM-B Management Review
March 2003

Azim Premji, Chairman and Managing Director of Wipro Technologies, graduated in Electrical Engineering from Stanford University before the sudden demise of his father compelled him to take on the mantle of leadership of Wipro. Under his leadership, the fledgling Rs 70 million (US$1.50 million) company in hydrogenated cooking fats has grown to a Rs 35 billion (US$715 million) IT Services company, ranked by Business Week among the top 100 technology companies globally. In 2000, an honorary doctorate was conferred on him by the Manipal Academy of Higher Education. He was also adjudged the Business Man of the Year 2000 by Business India. He is a member of the Prime Minister’s Advisory Committee for Information Technology in India.

Premji believes in creating teams of highly charged individuals to deliver superior performance, investing significant time as a faculty in leadership development programmes. He was the prime mover in making Wipro the first Indian company to embrace Six Sigma, the first software services company in the world to achieve SEI CMM Level 5 and the world’s first organisation to achieve PCMM Level 5. Premji equates quality with integrity – both being non-negotiable. In an email interview, Premji shared with Prof S Krishna his formula for a successful company, and the way Wipro has developed entrepreneurial leaders with a firm commitment to the company's values. He also discussed at length the work undertaken by the

Azim Premji Foundation, a not-for-profit organisation established in 2001. Sustained by his personal financial contributions, the aim of the Foundation is the universalisation of elementary education.

The interviewer, S. Krishna is Professor, IIM Bangalore and Chairperson of the Post Graduate Programme in Software Enterprise Management.
skrishna@iimb.ernet.in


SK: Wipro has been perhaps the most successful adapter among Indian corporates, evolving with increasing success from soap and consumer care to computer hardware and then onto software and services. What do you think is the principal strength that has enabled Wipro to make such successful moves?

AP: When I look at where we have come, what gives me tremendous personal satisfaction is not so much the success, but the fact that we achieved this success without compromising on the values we defined for ourselves. Values combined with a powerful vision can turbo-charge a company to scale new heights and make it succeed beyond one’s wildest expectations. Add to that our ability to attract and retain the best talent and our continuous pursuit of quality, and you have a high-performance organisation that can continuously re-invent itself and succeed.

SK: Wipro, we learn, is open to acquisitions. Would divestitures also be a possibility?

AP: All actions of Wipro are driven by the value that they provide to the customer. An acquisition will be done if we feel that it would enhance our ability to deliver value to the customer. Similarly, we will not hesitate to divest in any of the businesses if we believe we are not well positioned to deliver value to the customer.

SK: How do you see the ownership and management of Wipro Group in the long term — is it going to be in the pattern of family owned firms? Will it remain a multi-entity organisation?

AP: Wipro is a professionally managed company with a portfolio of businesses, and I see it continuing that way. The ownership, on the other hand, is a dynamic variable.

SK: Do you believe that the target of $80 billion exports of software and IT services by 2008 being projected by McKinsey and others could be achieved? What do you see as the principal challenges in achieving this?

AP: I believe that India has the potential and the perseverance to achieve the target. Our challenges would be: ensuring that India is perceived as a riskfree place to outsource work to; delivering higher value to the customer than the competing nations; continuously training our people for higher value-added work; and major upgradation of our infrastructure, whether it is power, telecom or transport.

SK: How do you see Wipro’s part in this $80 billion IT pie? How will it be achieved?

AP: Wipro will have a significant share of the Indian IT services business. We plan to achieve this through a combination of organic and inorganic growth. Inorganic growth would include entering into new products/services and geographies, as well as acquisitions to enhance the value of our offerings and improve our customer coverage. Over the past year, we have acquired Spectramind in the ITES space, the Global Energy Practice of the American Management System, Ericsson’s R&D set-up in India, and the Healthcare IT business of GE in India. Wipro has also forayed into the Middle East and Asia Pac market and has seen good wins in the last one year.

SK: There has been considerable talk in IT industry circles about moving up the value chain through products or IT consulting, diversification to new markets like Japan and so on. In reality the numbers do not show any significant progress along these lines. In fact the movement appears to be down the value chain into IT-enabled services. How do you think these issues could be addressed?

AP: Moving up the value chain should really be seen as capturing a larger and larger share of the value which a customer is sourcing from outside. This would include IT consulting and products, as well as ITES. Our customers would like to outsource all levels of IT services to a service provider. With the acquisition of Spectramind, Wipro is well positioned to capture a bigger share of the CXO’s wallet.

SK: What are the unique HR practices at Wipro especially in terms of attracting and retaining talent that set it apart from other companies? Considering the number of spin-offs that have originated from Wipro, the environment in the company appears to be particularly conducive to the entrepreneurial spirit. Could you comment on this? What are your views on ESOPs, and why?

Among several attributes is the fact that Wipro leaders develop a complete business perspective early in their career. Wipro leaders get early general managerial/CEO responsibility to get a good rounding, and exposure to all aspects of the organisation: finance (eg. P&L), operations (process, quality, cost etc.) and people perspective. This helps them develop the ability to see the big picture early in their careers. The feeling of ownership is built through higher responsibilities early in the career. We strongly believe that strong ownership feeling and multiple opportunities lead to a passion for hard work.

Our leadership development programmes play a major role in developing leaders. We have several life-cycle leadership programmes like the Early Leaders Programme, New Leaders Programme, Wipro Leaders Programme, Business Leaders Programme and Strategic Leaders Programme, each being targeted at a particular stage in the life of a leader. Finally, it is the self-confidence to stand up for one’s view that builds entrepreneurial leaders. Our 360-degree feedback process helps personal development and builds confidence. Wipro is a meritocracy competing with some of the best people builds tremendous confidence. I believe ESOPs are a good way of sharing wealth with employees.

SK: With recent events involving Andersen, Enron, etc, ethics has been a front-page item of late. How do you inculcate ethics in your employees?

AP: I believe values should be driven from the top. I take every opportunity to talk about values to Wiproites. Wipro was perhaps the first Indian company to articulate a set of Beliefs that guided our business conduct, way back in the early 70s. Today, the four Core Values encapsulated in the Wipro Promise (Human Values, Integrity, Innovative Solutions and Value for Money), form the foundation of our organisation. The Value Booklet and the Integrity Manual define the way Wiproites should conduct themselves. They guide Wiproites through the tough choices they may be faced with. We have also introduced a helpline known as ‘Wipro SOS’, comprising senior members of the company who have helped mould our values. They are always available for guidance on any ethical issue that a Wiproite may face.

SK: Do you believe that each country should evolve its own management style? Is there an Indian management style that you would recommend to Indian managers or managers in India?

AP: I find the debate on management style fruitless. I have found that people excel when they are provided a fair, free and apolitical environment. At Wipro we strive to provide an open culture which encourages diversity of opinions. Operating as we do in a global environment, we try to bring in the best practices of our customers and associates.

SK: What is your prescription for successful leadership? How important do you think role models and mentors are for the young? As a young man, who was your role model?

AP: Over the last 30 plus years that I have steered Wipro, I have experienced both a generous share of success and an equal amount of challenges, difficult times and failures. Role models are important as they set the aspirations and ambitions. I have looked up to several of them at different times. I admire Gandhiji for his self-confidence and leadership qualities.

SK: Your love of simplicity is legendary. Could you tell us something about your early life, your roots and your philosophy and what shaped it?

AP: I had a normal childhood. My father and mother have been a great influence on my work and life. The only advice my father gave me was to conduct myself with values and that I think has helped me all through life. I lead a simple life, and consider integrity the fundamental value. We ran a factory on captive power generation for 18 months because we did not want to bribe the concerned people to get an electricity connection. That sums up our philosophy.

SK: What were your expectations when you took over Wipro in 1966? Would you have done anything differently? Any special personal projects for the future?

AP: I took over the Company during what was a very difficult time for me. I was just 21, and had no experience in the business. What I knew was that I could not expect anything without giving it my complete self. My vision was to build Wipro into a professionally run company that would make India proud. While I am not free to discuss future business projects, on a personal level, I would like to get more involved in the Azim Premji Foundation work and see more success in what we have set out to do.

SK: The Azim Premji Foundation has been active in the field of education. Given the magnitude of the problem, how do you propose to ensure that the efforts of the Foundation will have a significant impact?

AP: We are engaging with the Indian education system in two ways: Firstly, through the Foundation, our mission is to catalyse the Universalisation of Elementary Education (UEE). There are today nearly 50 million children who are out of school in India. The dropout rate between standard 1-4 is 42% and between standard 1-8 as high as 58%. A significant percentage of third standard children do not know reading and writing. At the Azim Premji Foundation we believe that sustained UEE is possible only through the improvement of learning levels in school and dramatically improving all that happens inside the school. Working in partnership with the government, the Foundation focusses on rural areas. The theme that we are working around in the identified geographies is ‘Guaranteeing Learning’. Our approach has the following essentials:
- Partnership with the government
- Partnership with the community
- Large scale initiative
- Focus on improvement of learning
- Time bound plan for withdrawal and handing over responsibility to relevant stakeholders.
Currently, the geographical coverage of the Foundation is 3500 villages in Karnataka and 2500 villages in Andhra Pradesh. The Foundation is also supporting school learning improvement initiatives in three cities in Gujarat. In the first year of its operations, the Foundation has facilitated the process of mainstreaming for about 50,000 children through bridge courses, supported remedial teaching for 35,000 children who required special attention, and imparted computer based curricular education in about 35 rural schools covering about 10,000 children. The Foundation also conducted a specialised training and development programme for 100 top education officers across Karnataka state. The second initiative is the ‘Wipro Applying Thought in Schools’ programme, the aim of which is to transform the education system to deliver a high quality of learning. The knowledge economy demands people who can think creatively and critically, solve problems and make decisions, and are self-directed lifelong learners. Such individuals are really the output of an education system that delivers high quality of learning. The building blocks of our approach to transforming the education system are:
- Transform the teacher into a ‘reflective practitioner’ who is herself a thinker and learner
- Help school leadership see their role as leading this transformation
- Help parents change their view of the true purpose of education in the knowledge economy
- Help education administrators change the curriculum from being content heavy to ability enhancing, and transform the examination system from focussing solely on testing memorisation skill to also assessing abilities such as creative and critical thinking and problem solving.
Currently, the programme has reached out to 700 teachers in 40 schools across Delhi, Bangalore and Hyderabad.

SK: What words of advice would you give to young techno-entrepreneurs and techno-managers starting out on their careers?

AP: First, do not lose sight of your goal. In happier times, it is easy to create a rosy picture of the future. But when things become tougher, many people
lose heart and become unduly pessimistic. Leaders who persist in the face of all difficulty are able to overcome them and achieve the goals they have set for themselves. A leader must learn to accept reality without loss of self-confidence. It is important not to become complacent and arrogant. That can make you lose touch with reality. And when that happens, it is easy to err in one’s judgements. At the same time never lose your confidence in your own ability to face issues, simply because of a few setbacks along the way. Thinking global is another important aspect of leadership. In today’s networked environment, physical boundaries have lost their meaning. Every ripple in the world has its impact in the domestic sphere. Leadership lies in motivating average people to do superior work and keeping superior people with you by providing them sufficient freedom.