April 03, 2020
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The Rs 14,000 Crore Man

A mix of integrity and acumen has made Wipro's Azim Premji arguably the richest Indian

The Rs 14,000 Crore Man

THERE is a quality of reticence to Azim Hasham Premji, 53, that offers a marked contrast to the pyrotechnics being unleashed by his companys stock on the Indian bourses. Wipro Ltd, the infotech and consumer products firm whose chairman Premji is, now boasts the third highest market capitalisation in the country (Rs 14,427 crore, as per the bse closing index on January 15, 1999), next only to Hindustan Lever and itc. Yet Premji would only say: The effect of spiralling infotech stocks has certainly rubbed off on Wipro.

An effect that has made Premji possibly the richest Indian alive, with a personal net worth of Rs 11,000 crore, since he is estimated to control around 77 per cent of Wipros equity. Yet he still thinks nothing of waiting for the traffic to clear at Bangalores Trinity circle before crossing the road to address a press conference. Known to be ruthless in his quest for results, Premji is seen as a man who would never demand more than he himself contributes. Says a former colleague: He is a fighting general, who despises headquarters. Hes constantly meeting troops, pumping flesh, evangelising, asking tough questions and more important, asking people to ask tough questions.

The ability to think ahead of his time has been the hallmark of the Azim Premji style of management. Says Ashok Soota, Wipros vice-chairman: He has a long-term vision, which he takes the trouble to articulate, and a great sense of timing on when to enter a business. This helped transform Western India Vegetable products, a single-location oil mill that hawked Sunflower vanaspati, into the Rs 2,000-crore Wipro Ltd.

In 1966, Premji gave up his engineering studies at Stanford University to take over the family business after his father passed on. The 21-year-old Premji was now in charge of a 20-year-old firm that, by his estimates, had not done too well. He galvanised it into action, hiring professionals from the iims and introducing packaged cooking oil. By the mid-70s, he was ready with his first diversification, an entry into fluid power. And soon after, the engineer had found his true calling. Wipro, renamed as such in 1977, started manufacturing computers.

Says Dilip Ranjekar, corporate vice-president, human resources: By the late 70s, Wipro was hiring top talent, people who could generate new business ideas and head implementation teams. Sridhar Mitta came in to kick off Wipros r&d effort, which has now blossomed into the US-based subsidiary, En Think. P.S. Pai, vice-chairman, consumer care, led the development of brands like Wipro Baby Soap, Sunflower, Santoor and Wipro Shikakai.

But the defining moment in Wipro's evolution was Premji's vision that the future lay with infotech. Says Bhaskar Pramanik, managing director, Sun Microsystems India: As far back as 1980, when the idea of a Manufacturers Association of Information Technology was mooted, what struck me about Premji was his total disinterest in creating a cartel or furthering his own interest. He was looking to expand the infotech market in India. His was the country's point of view. By 84, Wipro was set on the IT path, with Soota the spearhead for a business that would soon dominate the Wipro portfolio.

If Premjis total belief in a professionally-run group predates similar moves by liberalised India Inc by almost three decades, his lasting stamp on Wipro will surely be his insistence on integrity. In 1987, he refused to pay a bribe of Rs 1 lakh to ensure power supply to a manufacturing facility at Tumkur in Karnataka. Instead, Wipro generated it's own power, a move that cost them close to Rs 1.5 crore. Says Subroto Bagchi, vice-president, Lucent Technologies, who once led the Quality Mission in Wipro: Premji has gone on record to say that in Wipro, integrity is non-negotiable, to that add quality. He leads that movement in a deep, personal way. No member of the Premji family is employed in Wipro, and sons Tariq and Rishad have to earn their place in the corporation. The fact that Wipro does not bid for contracts where bribes could influence the final decision has helped bolster its position in sensitive deals, like defence and space contracts. Says Ranjekar, Integrity is a sound proposition in the long run. It builds customer and employee confidence.

Not many industry players would agree, though. Software professionals are known to consider Wipro as not an exciting place to work in. An image fuelled largely by Premji's decision to fashion a value-for-money organisation even in the midst of plenty. He travels economy class, stays at 3-star hotels and drives a Ford Escort. But despite not being the industry's top paymaster, Wipro still has an attrition rate of 17.5 per cent, while industry average is seen at 22 per cent. Theres also the criticism levelled against the Wipro employee stock option plan: it covers just 600 of 9,000 workers. Says Ranjekar, We now have a stock plan that has been offered to 1,000 employees, where after a vesting of two years, the stockholder gets a return based on the net worth of his division. Those exacting standards are balanced by empathy. Once, asked to sanction at least half of an employee's Rs 17 lakh medical bill for a final bone marrow transplant, after all entitlements were over, Premji took a moment to decide that you cannot give somebody half a life. Wipro picked up the tab.

The reason why Wipro is a place where some of the brightest minds build careers is that Premji can take disagreement like no other. For, he believes that only when one can work with people who think radically different from you can you assemble top performing talent, and those radically different ideas are what he is after.

Company insiders also say that in Premji's worldview, loyalty must be rewarded with loyalty. When the decision to enter financial services came unstuck, Premji stood by his team and took personal responsibility. Another failed sortie, the joint venture with British Telecom, was given a decent burial when telecom services failed to perform according to plan.

Premji's ability to balance vision with pragmatism has worked to Wipros advantage. Although its foray into infotech began with product software Instaplan, its non-acceptance hastened Wipros entry into software exports. A segment that earned it Rs 283 crore for the first half of 98, at an operating profit of Rs 99 crore. This will in turn fuel the global thrust that Premji's planning. Says Soota: Apart from two wholly-owned subsidiaries in the US, we are now in Canada, Europe and Japan in a significant way. Employee strength overseas is set to double from the current 1,000. Adds Soota, Even if you take a cost per person of $150,000, it is a significant amount of investment that we plan in the coming months.

Wipro says its all set to storm the world software market, riding on the Software Engineering Institutes Level 5 certification of its quality process'the only company globally to have two units at Level 5. The decision to embrace the Six Sigma Quality initiative is seen as Premji's most dynamic move, next only to the one that launched Wipro into IT. Six Sigma means that given a million opportunities to make mistakes you make only 3.4!

All this required a level of personal commitment from the chairman that threw up some piquant situations. Says Bagchi, I was once seated next to him at a very long and involved Six Sigma presentation. At these meetings, the rule was one could not come and go. Suddenly I sensed he was getting up. I asked him what he was doing; he wanted to go round the corner. The break was 45 minutes away. I told him he could not go now - it did not look nice. He looked at me and said, what if he was bursting - I told him so be it. Azim Premji looked at me with disbelief and sat down. All rules in Wipro apply to him first. No exceptions.

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