Wipro chairman Azim Premji on Friday tore down the software major’s dual CEO model by elevating TK Kurien to the position of chief executive officer, taking industry observers by surprise. Its joint CEOs Suresh Vaswani and Girish Paranjpe will now exit the company, after a three-year stint in the hot seat. Kurien, currently the president of Wipro EcoEnergy, was known to be a favourite with Premji, having impressed him in his various capacities as BPO head and as president of its consulting practice. He will take over the IT business from February 1.
There are two theories being put forward by analysts and company sources for the surprise change of guard. The first theory is about how the joint CEO model has failed to work at the highest level, with Premji having to intervene frequently to take decisions.
Firms like Cognizant (No.4 in the software pecking order) have been snapping at Wipro’s heels of late and peers like TCS have opened a wide lead, and these are facts that have disturbed Premji of late.
The second theory doing the rounds is that Premji preferred the 50-year old Kurien to hand-hold his son Rishad Premji (currently the company’s chief strategy officer), before opening him up for higher positions.
Before the joint CEO model was floated, Wipro’s software business was led by Vivek Paul, who left the organisation after a few successful years at the top. He was said to have differences of opinion with Premji at the time of exit. But unlike Paul, Kurien has been with Wipro for 10 years and is expected to fit into the top slot more easily.
Soon after the announcement, Kurien had this to say about his immediate plans to FE: ?The new strategy is pretty much laid and I need to see how it fits into the overall portfolio and our growth drivers. We have a quarter left to deliver, and I will have immediately focus on that. Now the team needs to be energised to make sure they deliver both short term and long term,? Kurien said. Responding to a question from FE, Premji said, ?The strategy we have for the organisation is fundamentally right. But we believe it requires to be executed more rapidly, more quickly and with more throughness. Wewill re-look at some of the emerging market opportunities within the next two-three months. Will there be fundamental changes in the company from this top management change? Nothing which is earth-shaking but everything that amounts to finetuning,? he added.
Premji did not accept that the joint CEO model was a flop, though almost all the analysts that FE spoke to, as well as key Wipro insiders agreed that it was not a strategy that could be carried forward. ?In a downturn, we had to bring the complimentry skills of the joint CEOs to lead. It has been very successful. The market opportunity is now again exploding. We think a simpler, faster and a leaner structure and a different leadership is required,? Premji noted. The chairman hoped reconfiguring the firm will now result in faster growth. ?We have underperformed relative to the competition and as a company. What we are trying to do is significantly improve performance going forward,? he noted.
Outgoing joint-CEO Suresh Vaswani said Kurien had a diversity of experience in the company that would help. ?Kurien has made success of various businesses at Wipro. He did a solid job with telecom, BPO, consulting, energy. He was involved in the creation of the consulting business. He is conceptually strong, a very strategic thinker from a customer perspective,? Vaswani told FE. Kurien has been with Wipro for more than 10 years. Prior to that, he was the CFO of Wipro GE. Karthik Ananth, director of market expansion at consulting firm Zinnov said that the leadership change will lead to a state of flux in the near term.
?The timing of the movement as we enter the crucial Q4 will also have certain implications. As joint-CEOs, they were most definitely executive sponsors for a number of critical customer relationships and there will be an impact on the CEO-connect with customer stakeholders. It is quite possible that Wipro might lose some ground to competition in the near term as things settle down. This movement will test the leadership depth at Wipro,? he noted.