Bangalore: Wipro Ltd’s chief strategy officer (CSO), K.R. Lakshminarayana, who will hand over his role to chairman Azim Premji’s son
Rishad Premji in February, is candid about what went wrong for the technology firm over the past few months.
In an interview, Lakshminarayana, who is set to become the chief endowment officer of the Azim Premji Foundation and affiliated entities, said Wipro did not call the economy’s return to growth in time, and when it did, it was not agile enough to effect a quick re-orientation. Edited excerpts:
What went wrong for Wipro?
The market is growing, and we did not call the growth correctly. We thought the slowdown would be much more prolonged. And we took more fundamental actions and also executed them very quickly. I don’t think any of our peers made the call correctly either, but in contrast, they possibly took less fundamental actions and possibly moved slower. That benefited them when growth came back. But we were not able to respond quickly. A large organization is like a steam engine. Had the slowdown continued, we might have done better because we were geared for it.
Taking action: Wipro’s chief strategy officer K.R. Lakshminarayana. Aniruddha Chowdhury/Mint
What kind of fundamental actions did you take?
We downsized our recruitment team, for example. When growth started, applications, etc., were coming in, but we were unable to respond quickly. Another thing we did was we started looking at the bench in absolute numbers rather than as a percentage. When growth came back, we had only a finite bench and this became a problem. I still think that is the way to go, but we need to revise those fixed numbers upwards.
Strategically, I think we got two out of three calls right. We saw the slowdown coming, and we called that. We also got the call on whether there would be a double dip. But we did not call the growth in time.
You made a strategy presentation to the board. What is the strategy going forward?
It is the CEO’s call, but broadly, we will focus on a few elements.
The first is what we are calling momentum markets and mass markets. Momentum markets could be geographical, sectoral or even technology, like cloud (computing). These are where we participate in very rapid growth. Mass markets is where we gain market share.
The second element is differentiating those verticals where one has to invest for growth, like BFSI (banking, financial services and insurance). We have a portfolio challenge, where fast-growing BFSI is under-represented.
The third element is improving operational efficiency and here is where the focus on non-linearity comes in.
There will also be a huge emphasis on simplification and improving organizational ability. The market has changed dramatically. Earlier, it was cost. Now, everybody is more focused on topline and growth. We need to respond to that.
What will be the immediate challenge for CEO Kurien and Rishad Premji now?
The fundamental challenge now is the portfolio. Historically, since 2000, we have always been overweight on technology—telecom, semiconductors, etc.,—and less weighted on financial services. When growth came back to the markets, all of it was in financial services and we have only 27% in our portfolio, compared with 36% at
Infosys (Technologies Ltd) and 40% at TCS (Tata Consultancy Services Ltd).
We have a better balance of the technology vertical now though. In 2000, it was 55% of our revenue, and it is down to 30 % now. It is being corrected further.
The problem in the last few quarters had more to do with fulfilment than strategy.
What kind of investments will you need to make now?
The first bucket is investment in client relationships. We need to build across the spectrum. We have to mirror the clients in the structure of our organization and build a delivery organization aligned to the customer.
The second set will happen on domain—industry knowledge. The third set of investments is in building solutions, where we are already doing quite a bit.
What are the execution hurdles?
The first is the alignment of resources to delivery. The second risk is inability to invest not because of money, but because you are not able to find the right resources—domain expertise, for example. Another is slippages in timelines. Then there are external risks; Basel III regulations are going to be prohibitively expensive for financial organisations.
What are you leaving for Rishad in terms of key lessons?
A couple of things, like you can’t do strategy without a customer focus. It has to be centred around customers. Then, the relationship between technology and strategy has to be well understood. Then, execution is always key.
In fact, now that the strategy has been laid out, Rishad’s initial focus, for a few months, will be execution.