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  1. Future ready: Winds of change at Wipro

Future ready: Winds of change at Wipro

The IT firm is now at an important juncture where the CEO-COO structure could make a big difference

By: | Updated: March 30, 2015 11:32 AM
Wipro, Wipro COO, Wipro Abid Ali Neemuchwala, Wipro India, Wipro CEO, TK Kurien, Tata Consultancy Services, TCS, Business news Wipro CEO TK Kurien Kurien not only strengthened the marketing team, he reshuffled portfolios to rejuvenate the organisation.

In its biggest management change in the last four years, Wipro named Abid Ali Neemuchwala its chief operating officer (COO) on March 16 and effective April 1, 2015. India’s third largest IT services exporter will be hoping Neemuchwala brings some momentum than the company has seen in recent years. Although chief executive officer (CEO) TK Kurien, who has been at the helm since in February, 2011, has brought in several changes to generate efficiencies, the company hasn’t quite grown at a pace it would have liked to. Kurien not only strengthened the marketing team, he reshuffled portfolios to rejuvenate the organisation.

The appointment of Neemuchwala certainly came as a surprise as he had spent 23 years at Tata Consultancy Services (TCS), a rival of Wipro; industry watchers believe his arrival could result in some changes in the top management of the Bangalore-headquartered firm.

The initiatives that Kurien took have not really had the desired impact on Wipro’s financial performance, which has been below par when compared to that of its peers like TCS or Cognizant. Not surprisingly, the Azim Premji-owned firm kept the appointment of the COO a closely-guarded secret with only a few select executives of Wipro involved in this exercise.

A senior Wipro executive on condition of anonymity told FE that bringing in a new COO reflects the maturity of the organisation where it is able to absorb an outside talent while also having the space for the internal leaders. “This is an established practice where the COO can focus on the operational aspects while the CEO concentrates on the future direction of the company,” he explained.

Wipro has been quite clear that there is a clear demarcation of the roles between the CEO and COO, whereby the latter’s responsibilities will include the entire service lines, geographies like continental Europe, Africa and Latin America as well as marketing function.

Wip-growth

In response to queries from FE, Wipro said, “Specifically, we are looking at consolidating service lines, making it an integrated play, drive focus on under penetrated and emerging markets, bring in efficiencies in internal business processes, and enhance Wipro’s market visibility .”

Prahlad Rao, director, Thomas Assessments Pvt Ltd believes bringing in Neemuchwala is good move. “It helps to segregate the role of CEO from a COO where one really works on the business while the other works in the business,” Rao observed, adding that it helps differentiate between what is current imperative operationally and future imperatives in terms of business.

Kurien was clearly bogged down by managing the two planks of Wipro where one has to singularly and intensely focus on both the elements. According to Wipro, the appointment of a COO would free up much of the bandwidth required for the CEO to focus on strategic initiatives, which will fuel growth in the coming years.

Kamal Karanth, MD, Kelly Services India, said, “In a more complex atmosphere of today, somebody has to be there for doing the operational thing while the other has to really plan for tomorrow.” Many organisations which focused on execution have not been able to find the time to prepare for the future.

In the new role, Kurien will be able to concentrate on the bigger vision and by interacting with business verticals can get a better understanding of the market. Neemuchwala, who comes with impeccable credentials, is expected to bring a lot to the table. As Kurien himself put it, “Abid brings invaluable experience with his track record of building and scaling businesses. I am confident his deep understanding of technology and expertise in all facets of IT & BPS businesses will help  power our businesses to greater heights.”

Wipro has never shied away from getting top level executives from other companies to work for it. In the past it hired Vivek Paul as the CEO, who came in from General Electric and more recently the IT major has hired executives such as Shaji Farooq from Infosys and Satishchandra D of TCS. To be sure, less was expected from them than is expected from Neemuchwala. A chess buff, he was till February the head of TCS’ BPO business and is credited with having built up the operations in that unit which currently accounts for 12% of TCS’ revenue. Known to have an eye for detail, Neemuchwala is said to be experienced in the operational aspects of the IT services business; is understood to have ensured the smooth integration of acquisitions with TCS and has a reputation for being able to handle large deals . Even after taking over as Wipro COO, he will be based in the US.

The entry of Neemuchwala has already had a certain ripple effect within Wipro as a couple of executives have left. Further, a few changes have also taken place. Rajan Kohli has taken over as the head of the newly created digital business by Wipro. The other big change has been that Rishad Premji, chief strategy officer, will now have additional responsibility of the chief technology officer reporting to him.

The big question which now arises is whether bringing in Neemuchwala will eventually mean that he is going to take over the mantle of Wipro, as Kurien will be completing five years in February 2016. It may not be that simple.

Karanth of Kelly Services believes that in some cases there is a clear path of succession where the COO working closely with CEO is able to take over and lead the company with a clear vision for the growth path. People familiar with the working of Wipro believe that this may not be true in this case and that Neemuchwala may not automatically take over as the CEO of Wipro.

That’s because there are equally well-qualified and experienced executives within the Wipro stable who could eventually take over as the CEO. Secondly, there is no clarity on whether Kurien will actually step down after his five-year tenure in 2016. Lastly, and perhaps the most important, Neemuchwala will have to deliver the goods and that will depend on how quickly he gets a grasp of the company’s operations. The management has been circumspect in its observations on succession planning simply saying that “Wipro has a robust succession planning process, involving both internal and external candidates, which is reviewed from time to time”.

Wipro is now poised at a very important juncture where the CEO-COO structure could herald far reaching changes for the company and bring in a much needed fresh perspective. As the IT major said, “Over the past two years, Wipro has taken a number of incremental steps to provide “One Wipro” view to the customers. The implementation of the Chief Operating Officer structure is the culmination of these changes.”

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