Wipro: Leadership in the Midst of Rapid GrowthPublished: March 30, 2005 in Knowledge@Wharton
Vivek Paul is, as the pundits say, a man on the move. In 2004, Time magazine picked him as one the year's 25 best young leaders. BusinessWeek named him as one of the best managers of 2003. His resume is enviable: Ten years at GE, most recently as head of GE's global computer tomography business, reporting to GE's current CEO; before that, positions at Bain & Co. and PepsiCo.
Also enviable is his record at Wipro. As vice chairman of the Indian conglomerate and CEO of its Wipro Technologies, he took the global information technology services company from $150 million in 1999, when he joined the company, to its current $1.3 billion, representing about 75% of the corporation's total income.
Speaking at a recent Wharton West Leadership Conference, Paul shared his thoughts on leading an organization as it goes through such rapid growth, not only in revenue but in employees. Wipro has been adding about 2,500 new people per quarter, net of replacement for attrition, with its total employee population now at 39,700. It started as a vegetable cooking oil business some 45 years ago, launched by the father of its chairman, Azim Premji, who still owns 83% of the company.
The DNA of Talent
When he joined Wipro, Paul didn't start with something as grand as a vision: "First we had to earn the right to have a vision," he told conference attendees. "When I came on board in 1993, the company wasn't performing well on its operating metrics ... We had to just grind away and improve those first."
But, when the vision came, it was grand indeed: To be among the top 10 global technology service providers by the year 2000. That meant massive changes in scale, as well as in technical sophistication and quality in three arenas: service lines, processes, and talent. Talent was Paul's focus in his presentation to the Wharton group.
"We knew we couldn't develop from a small local leader to a large global leader if we didn't develop talent inside the company. We could never hire all the talent we needed," said Paul. So he and his team set out to discover "the DNA of building talent." Given the software engineering culture of the company, Paul good-humoredly admitted that it was probably more "nerd-like" than most. "Everything is process to us, and the people side is one more clear, detailed process that needs to be nailed down, element by element."
The Wipro team started with three propositions: Talent can't be a goal in itself; vision and goals must go hand in hand; talent and performance metrics must go hand in hand. They adopted a framework for people development, devised by the Software Engineering Institute at Carnegie Mellon, which views employees in five maturity levels, gradually evolving skills so that they are not asked to implement behaviour without the tools to do so successfully. Levels 1 and 2 are the basics -- skills that managers need to simply manage and develop people. Level 3 means defining specific workforce competencies, over and above performance metrics. Level 4 integrates competencies and qualitative performance assessment; and level 5 is a process of continuous improvement.
To achieve Wipro's people-development goals and thus its global vision, "we saw we needed training in four areas," noted Paul. "First, we had been a software factory and now our people needed to understand the business context of their customers. Second, we needed to be prepared for shifts in technology -- for example, the growing need for web skills. Third, we needed to provide a cultural toolkit for the 10,000 or so employees who are working away from home at any given point in time, on assignments ranging from three months to two years. We have done that for the U.S., the U.K. and Japan. And, finally we saw the need for behavioural skill training since there's a big difference around the world in communication skills, interpersonal skills and relationship management."
The effort has resulted in 40 state-of-the-art classrooms on the sprawling Wipro campus in Bangalore -- India's equivalent to Silicon Valley. It is a web-based "world campus" where courses can be broadcast to 1,000 people at a time around the world, and where 240,000 person-days of training are held annually. How can you take so many people out of the business, for so many days? "We measure very carefully and practice tight cost management," said Paul. "We ask ourselves: What does training cost us as a percentage of sales? How are we getting productivity out of it?"
And, if Paul had to cite a single factor that's most important in deciding that training is critical in such a high-growth environment, it would be responses to regular employee surveys, which ask questions like: Why do you stay at Wipro; what do you say about the company to others; and what makes you aspire to do your best here? "Among the top three answers to each of those questions is, 'Wipro provides great learning opportunities,'" said Paul. "The core of how employees think about us and value us revolves around training. It simply isn't something we can back off from."
Given Paul's focus on learning, it was no surprise he came prepared to share with conference participants some of his own most important leadership lessons. "The first I learned in the jungles of Bangalore, at an elephant camp. When you visit such a camp you see these gigantic elephants tethered with a small stake. I asked the trainer: 'Why do they stay tethered when they could so easily pull up the stake?' He told me: 'Well, the elephant is tethered as a small calf; when it tries to pull up the stake, it learns it can't do it ... and it never tries again.' That's an amazing parable about how we always tend to underestimate ourselves. The lesson for me is: Don't let self limitations hold you back.
"The second lesson was one I learned from Jack Welch when I was at GE. Welch loved international trips. Whenever he came back from one, he told people that he would get out of the elevator at the office and say to himself: 'This is my first day at GE as CEO. The previous guy was a real dud. So how can I do better than he did?' He understood that as a leader you always have to be reinventing yourself; you have to have some tool that helps you to abandon past behavior and look with fresh eyes at your task.
"The third lesson has come out of my good fortune in working with and observing lots of really good managers in my career. But I have also seen that success makes many of them blind. They refuse to take feedback or be open to new ideas. They block off opportunities for growth. What I [realized] from that is the importance of taking your job seriously, but not yourself."
In response to a question from the audience about whether Indian technology companies still share a lot of information with each other, as they did a few years back, Paul responded: "We were like kids growing up together in the same neighborhood. There was a lot of sharing. There's a lot less now. Even three years ago, there was only a small chance that we would be competing. Now we are competing all the time." Another participant asked whether the outsourcing backlash in the U.S. has hurt the company. "We certainly saw a lot of that [backlash] last year," Paul noted. "We decided we shouldn't dive into the trenches, so we did a lot of talking about it. During the worst of the press, we grew 60%. Europe jumped in as it became more aware of outsourcing. The perception of the problem far exceeds the reality, since only about 3% of job losses in the U.S. are related to technology outsourcing."
Not being blindsided by either failure or success is Paul's intention as he moves Wipro to the next stage of its development. Asked what he sees as the biggest challenges of the next five years, Paul cited two "inflection points." The first is to finally reach his stated goal of becoming a truly global business. Wipro's employee base is still 85% Indian; he wants it to be 50-50, Indian and non-Indian, throughout the organization, from the board of directors on down.