On Building an Indian MNC

Let me begin with a confession. When I began my career in Wipro

in the late Sixties, I had never thought that Wipro will become a multinational

company or that it will grow to the size that it has. I guess we constantly

wanted to stretch and outdo ourselves. At no stage did we want to rest on our

laurels or become complacent. It was this burning desire to do better and better

that drove us, and our growth happened almost as a corollary.

There were at least three major environmental game changers that

helped us in our journey. The first was the opportunity created by the exit of

IBM from India in the late Seventies, which opened up the market for

minicomputers. Wipro pioneered the superior 16-bit microprocessor based computer

with a full screen visual display unit. This, along with a very strong emphasis

on customer service, soon made Wipro Computers a market leader.

Azim Premji, chairman, Wipro

The second major event was liberalization. When the economic

reform programs were launched, borders were thrown open. This brought in

opportunities, sometimes in the guise of challenges. Global brands entered the

Indian market, raising the level of competition. This turned into an opportunity

when we realized that this opened up a global market for our resources. We had a

great R&D setup that could be used as a "lab-on-hire" across the

globe. There was an inherent factor advantage that India had in terms of the

competitively priced technical talent. There was a great demand for it and Wipro

grew its Software Services business overseas. But we retained our domestic

leadership in the manufacture of computers. The Y2K at the turn of the last

century further fuelled growth, but as a company we had a much smaller footprint

in that business.

The third major event was outsourcing. Outsourcing is not a new

phenomenon. It began with manufacturing many decades ago and then happened to

services. It was based on the logic that whatever could be done with greater

efficiencies and effectiveness outside was best outsourced. Globalization made

businesses realize that if you are not the best in the world at what you are

doing, you should not be doing it.

Apart from globalization, the other key driver has been the

desire and pressure to become more efficient, reflecting in margins. Economic

downturn led to a completely altered competitive landscape. Continuous

improvements on cost saving and cost restructuring have become important for

many organizations to survive. Outsourcing has helped organizations in releasing

capital funds and financial resources for more strategic purposes.

Simple tactical reasons have also led to outsourcing. For

instance, one-time specialized jobs were good candidates for outsourcing.

Customers could leverage specialized knowledge outside the organization for a

specific purpose rather than building it in-house. Strategic benefits allowed

our customers to focus on their own business without getting distracted by

having to manage a non-core function like IT,

While the external events shaped our opportunity environment,

there were internal dimensions or pillars that helped us make the most of these

opportunities. These pillars were: Ambition, Ethics, Excellence and Innovation.

These were laid at a time when the organization was still very small. And like

some of the habits we pick up in early childhood, they have remained firmly

embedded in Wipro, even as we grew from a little organization in the remote town

of Amalner in Jalgaon District to an organization that is spread eagled across

many continents of the world today.

We defined Wipro Values (or Beliefs as we called them) in the

early Seventies, long before it was a fashion to do so. We institutionalized

them in all our dealings. Excellence was pursued with a missionary zeal. We were

the first to introduce CEETOP standards, an international standard, for our

hydraulic cylinders. Innovation, again, began with packaging our cooking oil in

flexi-packs. These continued through the pioneering of Quality initiatives such

as CMM, Six Sigma and Lean in our IT businesses. We have continued innovation in

our Products, Services, Business Models and in different approaches to reach our

customers. We were the first PC manufacturers to have dealers, for instance.

Today, we do consulting both in Process and High Technology areas and can offer

end-to-end services for our customers. Innovation is a very important

corporation initiative and I am driving it with the same passion we drove

Quality.

When I look around I see an air of optimism. I am happy that it

is not only the IT industry but many organizations from different industries

that are nursing global ambitions. While the IT industry, worth $36 bn, grew 28%

last year, the Consumer Finance industry, worth $37.5 bn, grew 35%. The

Automotive industry, worth $34 bn, grew 15% and Healthcare, worth $22 bn, grew

42%. The Telecom industry, worth $20 bn, grew at almost 15% and Media, worth

almost $8 bn, grew at 19%. India surpassed China as the fastest growing mobile

phone market two months ago. Acquisitions by Indian companies in the past 6

months, has exceeded $15 bn dollars. There has been a quantum leap in the

ambitions of the Indian leadership like we see in Pharmaceuticals,

Biotechnology, Auto Ancillaries, Textiles, Steel to scale up to global levels.

Building an Indian MNC today is a realizable ambition. The key

to success will continue to be the pillars I mentioned. In addition,

organizations will need to remain agile in spite of size and have the ability to

look around corners. They will also need to attract the best talent and groom

leadership that can tackle global challenges and team up with a completely

diverse workforce.