Wipro's CFO Suresh Senapathy
The only business that perhaps still continues from the time I joined the company is the hydrogenated oil business (Sunflower vanaspati). The revenues from it are much the same as they were then - Rs 40-50 crore. From 1980 onwards, the company has gone into a variety of businesses. We have
diversified into the consumer care business , from oil to soaps to cosmetics, lighting and furniture. From there we moved to Wipro Infotech, infrastructure engineering. Always, the organisation has evolved - evolved to meet the need of the hour. When I joined, Premji used to run the whole company; he used to be head of the factory, head of sales and head of finance, etc.
If you have seen the last 10 years, we were perhaps the first ones to start 'verticalization' of the company where we had financial services, R&D, enterprise services under separate verticals. Then, we started practices. Post 2007 was more of a consolidation phase. We got into the SBU, or strategic business unit, mode - we got R&D, enterprise and BPO all together. In 2011, we are making much more transformational changes in terms of policy framework and solutions. The IT industry is moving from a phase of satisfying a demand to creating demand. A customer used to come and say he has a particular requirement: can we meet it? Now, operating with customers as our trusted partners, we say to them: what can I do for you to help you save money, get you new streams of revenue, make you more efficient? It is about creating trust, making sure that you understand the business, operate as a trusted partner.
Why now? Why not a few years ago? These sort of variables would have operated even then.I won't say it is sudden and it is not that it was not at all prevalent in previous models. But the new model allows you to do more of this. You are now looking at the entire power centre in front of the customer in the form of a client engagement manager. All of us are enablers making him deliver to the requirement of the customer. There are 150-200 accounts that constitute 70-80 per cent of our revenues. Therefore, he has to be the face of the company demonstrating trust. He has to be fully empowered to take decisions. He has to understand the customer most, the Wipro backend the most, he should be most demanding of the backend. We are looking at all kinds of differentiation at the front end with full empowerment, supported by the backend who are enablers.
Do you have examples of this model achieving greater client satisfaction, or resulting in bigger deals? Absolutely. In the past, we were comparable with many of our peers as far as million dollar accounts, 5 million, 10 million, 20 million dollar accounts were concerned. But when it went to 50 and 100 and 200 million dollar accounts, we fell short. But the initiative of the last few quarters is taking us in a direction where we are also building those 50 and 100 million dollar accounts. The number of 100 dollar accounts has gone up five times from a year back. Today, we have more than $150 million accounts and hopefully we would be quickly reaching $200 million run rate accounts.
Earlier, what was the variable? Wasn't customer satisfaction one of them? It was, but it wasn't heavily linked to the variable pay of the teams. One of the biggest determinants now is the customer satisfaction.
Can customer satisfaction be captured very accurately and be linked to variable pay? Maybe not. The way we go about it is the customer's perception of the business. The feedback comes from multiple levels. We also corroborate that feedback with third party surveys which are done once a year. We also look at: are we getting more revenue from the customer?
How are profit margins trending? Margins contracted last quarter. Are you doing a trade off to get growth? The biggest change we agreed to among the decisions that we took was to give the compensation increase of both onsite and offshore in the first week of June. Earlier we used to have cycles that were at two different points of time, so impacts averaged out. Here, the impact became much more severe at one point in time. It meant a dip in the margins which would be recovered over a period of time. It was important that we communicate a message to the employees: every 1st of June we will do the promotional increases and compensation increases. It was meant to enhance satisfaction levels and get a certainty in the minds. The margins would recover through productivity drives.
The broader view was we would get margins back to original levels. In the industry, we have seen margins higher and lower than ours. Over a period of time, we will improve them. In the short to medium term, we will do more of investments to be able to get lot of solutions built, processes built and investing more in support and maintenance. The objective is to get back to a threshold level of margins and after some time get a margin expansion. But in the interim, after you get your threshold levels of margins, reinvest in the business.
Is the company looking to GE as an inspiration? GE influence seems to be pervading the system.GE has been a good partner to Wipro for several years. We started the joint venture in the late 1980s and it has been doing well. It has brought us closer in terms of top management levels who understand each other. There is mutual admiration. There is a lot to be learnt and we keep learning because we interact with them very frequently. But there are many other examples whether it is Cisco or Microsoft or Apple, etc. We keep on fine tuning strategies and it helps us from a best practices point of view. But we don't follow any company blindly.
Are there similarities in the working style of Vivek Paul and TK? There are some similarities but there are dissimilarities too. I think both are ruthless. In terms of people, business, costs to be taken off, or revenues to be introduced (they are similar). TK is quite strong in strategy; he can experiment; he can take risks in business and with people. He is extremely agile and decisive. All these attributes come because he is very well read and very well networked.
So why wasn't TK made CEO earlier? And it was also clear that some of the other leaders were not performing. So this change was long overdue.
Every change has its appropriate time. The requirement three years ago was to have a structure which is joint as a stage when perhaps none was ready to have taken control. Who were the two best guys to work together? The situation post Lehman became so dangerous. It worked well in 2008/09 and we did well in large part of 2009/10. So could we have changed six months before? These are all conjectures.
Wipro had a problem of plenty in terms of leadership. Is there a vacuum now? I don't think so. It has good depth in leadership. It will continue to have so. The organization is so large and there are people who have worked for so many years in the company. They are the acceptable leadership as opposed to a leadership thrust from outside. For each of the leadership positions, we have successors lined up. There are at least three successors for a direct report of TK. We see who are ready. We have clusters of three. You have a reassessment every year - their strengths and weaknesses or development needs are assessed. HR helps. But there is a format. I do it for all my direct reports.
When did the company really have a leadership crisis? Was it when Soota left? Soota's was a very visible leadership. Even Premji was not so well known. When the exit happened, you needed a visible leader. That was why somebody came from outside - Vivek Paul.
The lateral CEO hire option does exist. But the kind of experience that you get here versus lateral, you stick to which works better. We never got a lateral at the top end because we always had leaders who can work. Many Wipro leaders have gone and created empires outside. Same thing with GE - they have not acquired talent from outside. You have multiple businesses, the way management process works - you generate lot of leaders ahead of time. As a company, we are prepared to take those challenges. People, given those opportunities, have delivered far superior results. I have experienced it myself. When I was just one and half years in the company, I was made the finance head for one of the largest factories in the company.
Are people with a finance background on the rise in this company? Look at TK and Manish Dugar's background. It has happened before. Look at Girish Paranjpe, he was CFO of IT business. TK Kurien became BPO head. Raman Roy was a finance guy. Anurag Behar who was running infrastructure is a finance guy. Because of the role that they play, the exposure that they get, they tend to be more acceptable. In Wipro, the percentage is not as high as in many other companies. In Indian companies, not many have strong CFO roles. I take a lot of pride in mentoring them.
People also say you are a shadow CEO… We position ourselves as co-pilots. All of us finance guys. There is an expectation of delivery. Wherever there is a CEO, there is a CFO. Given the organization which is people based, and financially metric driven and the governance structure that we have in place, finance guys tend to get a lot of role and exposure in a company like us. Therefore, they tend to be automatic choices for leadership roles.
Last words?Given the way that the market is emerging, the uncertainty that is there, we have to be much more dynamic in our strategy and much more front- end and partner better with customers. We have been strong in the technology area and we need to build this edifice of business so that we get into business transformation. Understand the customer, the business he is in, differentiate the front end and standardize the backend so that the cost of delivery is better optimized than at present.
Special 
