In a nondescript office near Paddington station, one of India’s richest men
goes on the defensive. “Yes, I am going to pass over large sums of shares to
my foundation,” says Azim Premji, founder of Wipro Technologies. “You will
see it in due course. But write about it then, please.”
He makes a gesture, as if to say, let’s move on. He wants to talk business,
but the world keeps coming back to his wealth and what he intends to do with
it.
That’s because even outside business, Premji works with intensity. He is
pouring money into his own educational foundation in India. One of its goals
is to keep girls from poor families in school for longer, with the hope of
reducing the birth rate. In a country that still remembers its government’s
vasectomy campaign of the mid-1970s, it is controversial stuff.
For Premji, who owns 79% of Wipro, one of the world’s biggest software support
groups, the questions are a distraction right now. Wipro, worth £7 billion
by market value, is locked in battle with local rivals Tata Consulting and
Infosys as India’s technology firms ride the recession, refocusing on the
Middle East and Asia to compensate for falling revenues in America and
Europe.
They also face fierce competition from western firms such as IBM, EDS, Cap
Gemini and Accenture. Wipro has recently outstripped its local rivals in
organic growth after years of underperformance.
It is also sniffing out new opportunities. Last week Wipro and Tata were
rumoured to be in negotiations to buy Citibank’s IT systems. In December
Wipro bought Citi’s Indian-based subsidiary, Citi Technology Services.
“We will grow this year,” says Premji, “though it won’t be at the 16% rate of
last year. First, there is a significant slowdown taking place, there are
budget cuts, deferment of decisions . . .”
Short, articulate and courteous, Premji likes to number his arguments. He is
similarly well-composed to the eye: white hair pulled back, tightly clipped
grey moustache, unassuming suit and tie. Sitting in shirtsleeves in Wipro’s
London base, flanked by an assistant, he looks tired but alert, more like a
modest bookkeeper than one of the world’s great billionaires.
Now 63, he has headed Wipro for 42 years, transforming his father’s groundnut
oil business, Western India Vegetable Products, first into a computer
business, then into a technology giant, with a “flat-earth” vision of global
outsourcing that has revolutionised the way multinationals operate.
Wipro Technologies, headquartered in Bangalore and with revenues of £3
billion, has become the world’s largest provider of independent research and
development services, working with tech partners like Microsoft and Cisco.
In Britain it provides IT services for big firms, including Tesco, Wm
Morrison and Friends Provident. Beyond IT, Wipro also runs consumer
products, medical systems and engineering divisions.
“We are the second-largest hydraulic cylinder company in the world,” says
Premji.
And there is a new sustainable-energy division he has high hopes for. In
short, Premji’s empire is vast, and he is one of the most influential
business leaders in Asia – famed as much for his modest lifestyle as his
wealth, and important as living proof that Muslims rise as fast as Hindus in
India’s mixed society.
He has tried stepping back from Wipro, handing control to chief executives,
but always returned. He now sits as executive chairman, with two chief
executives under him. Why two?
“Because they have complementary strengths, we felt we needed the extra
horsepower and they work well as a team. In retrospect, given the catharsis
the world has gone through, it has been the right decision.”
The company has also been rocked by scandal. Earlier this year news leaked
that Wipro had been banned from World Bank contracts until 2011 after
offering “improper benefits to World Bank staff” in the 1990s. These
benefits were the chance to buy shares in its 2000 American float – an offer
Premji still insists was above board. However, news of the ban came shortly
after the collapse of Indian rival Satyam, whose founder confessed to
falsely inflating profits.
Mud sticks – especially to firms that are majority-owned by families. “Ours
was an issue of interpretation,” says Premji defensively. “Our advice was
that it was completely legitimate to do it.”
Overall, he agrees, corporate India took a hit to its reputation. But it has
recovered. Wouldn’t it be better, though, if Wipro shares were more widely
held – and not just by customers? Premji’s baggy brown eyes narrow. He
prefers to list the reasons why he hasn’t needed to sell more.
“First, we ran a tight ship able to fund all growth requirements. Second, we
were the first Indian company to launch a stock-ownership programme in 1984,
and if you analyse how much stock options we have compared with Infosys,
it’s cumulatively much more. Third, I don’t think we have ever been seen as
less professional than other companies.”
Premji has always been stubborn. Born into an affluent Mumbai family, his
early ascent came after his father died at the age of 51. Wipro already had
investors who did not fancy the chances of the 21-year-old son, even if he
had read engineering at Stanford in America. “They wanted the company sold,”
says Premji. “It made me determined to prove them wrong.”
Spotting an opportunity, he took the firm into technology after the Indian
government exiled IBM in 1977. Wipro first bought a Cincinnati-based
computer firm to gain know-how, then built an Indian mini-computer. Later,
when foreign companies returned to India, he sought to rent out his research
team’s expertise, rather than lay off its members. Wipro’s outsourcing
business was born. The key to its success is that he remains a businessman,
not a techie.
“It means I ask the stupid questions that sometimes are very wise.” And that
business-first ethos is now engrained in the Wipro culture. “It’s easier to
teach bright people technology than technicians the fundamentals of business
management.”
Others are struck by Premji’s adherence to training and values. Steve Hamm,
author of Bangalore Tiger, a study of Wipro’s rise, has also cited the
industrialist’s lack of ego, and his thought-out approach.
“He thinks a lot about the basic things that must be done to build an
excellent company and a strong management team.”
Premji insists the Indian outsourcing giants will benefit from this downturn,
as all multinationals seek further economies. But will an Indian IT giant
ever buy one of its larger western rivals? He shrugs. Wipro has always
preferred to buy small.
“What’s the sense in buying a £10 billion company? There’s too much work
involved. It’s nice being big, but not critical to strategy.”
He is more worried by the creeping tide of protectionism in the West. He cites
America’s recent decision to clamp down on H1B visas for skilled workers –
which could halve the number of Indian IT specialists entering the country –
as a dangerous precedent.
“If we get into protectionism, then the West is going to get a wave of
protectionism in response, and that is going to turn back the clock 20
years.”
And it will be America and Europe that suffer, he warns, because they will be
excluded from the only growth markets left – in Asia, Africa and China.
“You are not going to grow at 10% trading in London, are you?” he says.
Will he stay at the top for much longer? For the foreseeable future, he
confirms. He has a son working his way through Wipro Technologies, who has
already done time at Harvard, General Electric and Bain, so the succession
is well-prepared. As to the foundation, he is not saying how many shares it
will receive, or when that will happen, or even how it is funded now.
He is, however, clear as to the organisation’s aims: better training for
teachers – he is setting up his own university – and longer education for
children. He launched the foundation shortly after Bill and Melinda Gates
created their own charity. Not for nothing is Premji sometimes called
“Bangalore Bill”.
“We’ve got 3.5m children in 25,000 schools in India involved, and we want more
involvement with schools, and to get girl children involved for longer.
Often mothers take them home for help. Better education means they will be
better at family planning and healthcare.”
Isn’t it unusual for an industrialist to get so involved in social policy?
Yes, he says, but it’s become “harakiri” for politicians to discuss
population growth. So they don’t.
Anyway, time is up. One last question: is it true he still flies economy
everywhere? He laughs. “Only in Europe. When I fly out of India, I fly
business.” Then he nods, puts on his jacket and says goodbye.
The life of Azim Premji
VITAL STATISTICS
Born:July 24, 1945
Marital status:married, with two children
School:St Mary’s High School, Mumbai
University:Stanford, California
First job:general manager at Western India Vegetable Products
Salary:£180,000 including bonus, plus £59m in dividends. His private vehicle
Premji Invest controls £600m of investments elsewhere.
Homes:Bangalore and Mumbai
Car:silver Toyota Corolla
Film:Slumdog Millionaire
Music:Hindi vocal music
Book:The Enchantress of Florence, by Salman Rushdie
Gadget: “My Garmin personal GPS, useful for when I go trekking in the forest.
I’ve got lost five times.”
Last holiday:southern India
WORKING DA
The chairman of Wipro wakes at his home on the outskirts of Bangalore at
5.30am. “I put in an hour or so of work before heading to our campus,” says
Azim Premji. “It’s thinking and quality time that requires no disturbance.”
At Wipro he divides his time between customers and employees. “I do a lot of
teaching and interactive sessions.” Another third of his time is spent in
planning and interview meetings. “I do a detailed review with the chief
executives once a quarter and a strategy plan once a year.”
Premji finishes by 7pm. Once a week he will entertain customers or employees
in the evening. Otherwise he will read at home. He travels abroad five times
a year.
DOWNTIME
Premji relaxes by trekking in the forests around Bangalore. “I go about 15
times a year, sometimes for a couple of days, sometimes for a week. I go on
my own or with family and friends.”
He is renowned in India for his modest lifestyle. He eschews personal
security, except in Bangalore. He also drives middle-range cars and flies
business class only on long-haul journeys. “In India, conspicuous
consumption is socially sensitive. I have a brand image of being very
conservative and I want to preserve that.”
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