‘Wipro stands for credibility’ – Azim H Premji, Chairman Wipro

Every morning, Azim H Premji drives to his corporate office at
Du Parc Trinity at Bangalore, and walks up to his 10th floor office, to keep in shape. As
the Chairman of India’s most valuable IT company, Wipro, Premji has been spearheading its
growth actively for the last few years. A very private person, Premji is very media shy.
Ever since he took over the stewardship of Wipro Industries at the age of 21, when he had
to drop out of standford University due to the sudden death of his father, Premji has
never looked back. Today, he prepares Wipro for a new role in the global marketplace and
personally supervises the action, from quality initiatives to meeting customers, to
meeting his lieutenants Ashok Soota, Arun Thiagarajan and PH Pai, amongst others. In his
three-decade role as the Chairman, Premji has recreated the entire ‘look and feel’ of
Wipro from a vegetable oil and soap maker to India’s most venerable IT company. Today, as
it gets ready to step big time into global markets, Premji is betting on Wipro’s
time-honored brand equity, a down-to-earth value system and an organic passion for
quality. That Wipro is the first Indian company to be SEI-CMM Level 5 and that he is
shooting for Six Sigma by 2002 only add weight to this very fit man. Excerpts from a
conversation with L Subramanyan on how he is going to make Wipro globally very fit:


You had initiated a massive
restructuring program last year, down to changing the logo and creating a new brand
identity. Also, Wipro has undergone a series of reorganization changes in the last four
years. What is the rationale of the current restructuring?
The basis is the changes that happen in the IT business, changes that happen in all
industries, and more so in high-growth industries. With rapid changes, business changes,
and depending on these business changes, market changes. The organization structure must
get aligned to meet these changes. There is an opportunity in the software business and
with a dedicated service level, we are positive that in the integrated business we will
get benefits. And we have plans to grow ahead of the industry, both in terms of sales and
profitability. Also, in the systems sales and communications services, we want to give it
a focus it deserves and build our objectives on it, and build customer confidence.

Is that the reason why Ashok
Soota was shifted to software and services business?
Now these are two independent issues. With the changes in structure, we expect to grow
significantly faster and move up the value and price chain. And Ashok [Soota] has been
with us, he has a proven track record, he understands technology, our value system etc….

Then what was the reason to get
a rank outsider, especially from the user side and not from the industry side to head the
domestic systems business?
We’ve never had people from the industry. Ashok Soota was not from the industry.
Earlier people in Wipro, Ashok Narasimhan, Pai were also not from the industry. Arun
(Thiagarajan) is a strong leader, has a proven work record of running businesses,
understands technology and is a fine individual. Also our culture and value systems are
compatible with ABB. Like Wipro, ABB too is a down-to- earth, middle-class company.

…especially in a tough year,
when you have actually dipped last year as far as domestic systems revenues are
concerned…
…We will grow much ahead, significantly ahead of the industry in the PCs, servers
and notebooks areas to about 20% and much more significantly in the next year. Very
clearly, we want to make business much more profitable.

One place where there seems to
be no focus is the consumer business. What are the plans for this growing market?

In consumer business it is difficult to make money. Globally, probably only Dell has been
able to do it. But obviously it is a big segment, and so we cannot ignore it. There are
obviously some areas where we have to get our acts together, be more cost-effective and
have customer-service focus. In the next 2-3 months, we will enter this market in which we
will have a strong brand. It is a price-conscious market and we have strong price
positions.

What was the objective of the
entire brand-building exercise that you undertook last year?
The objective has been a refocusing of the organization. Aligning the organization
toward customer orientation. The new brand forms a part of our orchestration to align with
the customer. The content is the same, but with a different focus. The new identity is a
part of a renewed strategic focus. An identity which in visual and content form is
compatible to our promise statement. We have defined the identity of Wipro to the rainbow
flower which symbolizes our mission statement and diverse businesses. And the idea is in
tandem with it-the new brand stands for credibility.

What about the brand itself? You
went in for a new look multicolored sunflower…
We wanted to create a much wider brand of Wipro. The idea is to make Wipro an
extremely powerful corporate and home brand. In the next three years, we plan to invest
around Rs125 crore on building the brand. Through corporate branding, advertising, direct
marketing, relationship marketing etc. We want to show that while we are a diversified
business, there are a few things that will run common across all our brands, be it IT or
consumer business.

Has the extensive campaign been
successful in creating a unified image of a diversified organization? Do you think that
the IT business is so huge that the identity may be subsumed by the IT image of Wipro?
What the campaign has got across are four values: human values, integrity, value for
money and innovation. From the survey (post campaign), the campaign has been successful.
IT figures prominently because it is a significant part of the business. Our major
businesses are IT, consumer items and services. We have to create an organization-wide
brand for all our three businesses. We don’t think we will get identified as an IT company
only, as a brand builds from all products. Soon you will see high visibility of Wipro
branded products. For example, Wipro Santoor, Wipro Sunflower oil etc. We will endorse our
products with the Wipro brand and will get association with the brand, which was not there
earlier.

In the global context, you have
stated that you will be playing in the services market, and not in the products market…
Wipro will be a global brand in software and services context only. Our target
customers will be corporates who have a need for external services. The entire brand
building of software and services will be focused on these-relationship marketing, profit
focus, participation in terms of speaker slots etc. We will not be (engaged) in mass
advertising.

… What about global product
opportunities?

It is not our priority. I am not saying that the scope is not there. But we feel that
services is bigger opportunity globally. It is just a point of view.

Coming to the domestic market,
in retrospect, do you think the hybrid brand Wipro-Acer was actually a mistake, and do you
think you lost marketshare due to this?
Yes, I agree it was a mistake. Otherwise, we would not have changed [the strategy]. We
did not capitalize on our individual strengths and brands, and therefore lost on our
marketshare. The success of any JV is dependent on mutual self-interest. That’s what makes
it tick. Mutual interdependence, mutual value-adds lead to success in the market.
Resources are not a problem.

Most Wipro watchers believe that
Wipro is one company which does not realize its potential. Do you agree?
Yes we did not realize our brand equity in the market. We under-estimated the brand.
Otherwise, we may have had a higher marketshare. The problem was an ambition problem, an
aspiration problem. The fact is now we have organized systems and services and it shows
how seriously we are viewing this business. Major opportunity is customer services.
Customers are not fools and buy what is value for money.

In this context, do you see any
Indian brand becoming a global brand in the future, especially in the PC market?
No Indian PC brand manufacturer has ambitions to go global, as the priority is for
software and services business. For, a big global brand, you need global volumes and
global resources and global ambitions. In PC business, there are two things: brand and
distribution. How do you generate strong customer pull? Indian companies don’t have
resources or a priority to do it. PCL did, and failed.

How do you account for the
phenomenal market cap that Wipro appears to have achieved. Is it a bubble?
Stock market has expectations from us and where there are reasonable expectations,
we’ll meet them. Where unrealistic, obviously we won’t be able to meet those expectations.
Stock prices quote, what the rule of sum is. Exceptions to this are, the internet stocks
and a strong brand equity. Most stock markets are driven by MNC brands and what amazes me
is how deep an understanding of the market they have. Whether it [Wipro’s market cap] is
over-priced or not is not for me to say. We will perform the best and the stock market
will behave the way it does. I cannot say anything beyond that.

You had a legendary rivalry with
HCL, spanning over half a decade. Now both companies are pursuing again a similar path. Do
you think HCL is ahead of you again?
I don’t agree that HCL’s performance has been higher. Eventually the yardstick of
success is your investors, employees and your customers. As far as investors are
concerned, we are ahead. As far as customer satisfaction goes, surveys after surveys put
us ahead. As to employees, we hire people from HCL and not they. Traffic moves out of HCL
and not away from us. And to us that’s the acid test.

..But they have been more
aggressive than you?…

But we’ll be successful in market, more serious in market place, whether we are aggressive
or not. We will grow in marketshare.

As you head into the global
gameplan, is there any one concern that is uppermost in your mind?
In hi-tech business you must be constantly with or ahead of technology. You must have
state-of-the-art products or you can’t be very successful in this industry where rates of
are obsolescence very high. With computer technology being so open ended and with people
who determine this making products and technology openly available to everyone that’s not
a problem. For example, Intel, MS etc. What’s important is to maintain lead times
comparable to anyone in industry.

Personally, what is your mandate
in the revised structure?

I spend time with customers in all businesses and employees, particularly with new
employees. I spend considerable amount of time with mission quality. I spent time with
brand (building) and was involved in a big way in the development of new brand. During the
next three years, we will focus on R&D-we have Ashok Ganguly in our Board who was the
worldwide head of R&D at Unilever. It is ultimately going to be innovation and we can
systematically upgrade the quality and skills of our people.

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