Premji then on Joint CEO approach.
These verticals and horizontals are headed by executives who were expected, after Paul's departure, to function as CEOs. But, Premji got roped into the day-to-day functioning, and inevitably he was overburdened. "It pushed too much of the operating load on me and was getting counter-productive," says Premji.
Premji is confident that the new arrangement will work. In an interview with India Knowledge@Wharton, he said, "We believe that two people who have worked together for more than 10 years and been in the company for more than 15 years would be able to work very well as a team. The fact that 75% of our revenues come from global markets, the fact that we are growing at 30% a year in a service, highly people-intensive industry, we figured that a two-man team at the top would be stronger than one man at the top. I continue to be executive chairman, but they are the joint CEOs of our IT business." (Read a transcript of the interview with Premji about the joint-CEO arrangement.)
Girish Paranjpe and Suresh Vaswani, the current Joint CEOs of the IT business have decided to step down from their responsibilities effective February 1, 2011. Acknowledging their contribution, Mr. Premji said, “Suresh Vaswani and Girish Paranjpe have been with Wipro for the past 20+ years and been an integral part of the Wipro leadership team. They have made significant contribution to the company in the critical years of its expansion and played a stellar role in the success of the IT Business. I want to personally thank them for their contributions to Wipro and wish them the very best in their future endeavors.”
Commenting on the appointment of Kurien, Azim Premji, Chairman Wipro Limited said, “The Joint CEO structure was one of the key factors that successfully helped us navigate the worst economic crisis of our times. With the change in environment, there is a need for a simpler organization structure. Over the last 10 years, Kurien has been instrumental in building and scaling many of our businesses successfully. His track record with customers, passion for excellence coupled with strategic thinking
and rigor in execution makes him uniquely positioned to lead Wipro’s IT business through the next phase of growth.”
After Wipro reported disappointing numbers for the second quarter in a row, investors might have had enough.
The recent change in top management was another clear sign of the company’s troubles and the stock is now likely to lose its preferred status among large cap technology stocks.
On Friday Wipro said its consolidated net profit for the October- December period grew 9.6% from a year ago to 13.19 billion rupees ($290 million), just under the 13.22 billion rupees forecast in a Dow Jones Newswires poll.
Consolidated revenue at 78.29 billion rupees was also below the 80.25 billion rupee forecast.
But investors were most disappointed with meager 1.5% growth in business volumes for its IT services –well below the 3.1%, 5.7% and 6.5% growth posted by Infosys Technologies Ltd., Tata Consultancy Services Ltd. and HCL Technologies Ltd., respectively.
It is difficult to operate a large company with diverse interests under shared leadership. It becomes more challenging when it’s a family owned enterprise. Guess Wharton has a new case study in its hands now.