INTERVIEW: AZIM H. PREMJI
"I am in a Catch-22 Situation" "Applying Thought" says Wipro's new corporate motto. But however
much its chairman, Azim Premji, tries to do that he is unable to fathom the rise and rise
of his company's value -- and his wealth -- on the stock markets. In an hour-long
exclusive interview with Senior Assistant Editor Rohit Saran, the
distressingly down-to-earth Premji explains his discomfort with wealth and how his company
generates it. Excerpts:
 What does being one of the world's richest persons mean to
you?
I feel like a zoo animal. My privacy has been invaded. Moreover, I don't think I am
the world's second richest person as some reports say. While my worth is being tracked
virtually on a daily basis, the wealth of others is being reckoned at last year's values.
The price of a Rs-2 Wipro share is today close
to Rs 9,000. Does that make you happy, scared or confused?
Any position of power or wealth means an enormous responsibility. Higher the share
price goes, higher are the investors' expectations to perform. If the price rises to
unrealistic levels, it leads to unrealistic expectations.
So, is the price unrealistic?
I have no comments on that. In the company we concentrate on doing our jobs and as far
as possible insulate ourselves from what happens in the stock market. There are some
rumours going around. One is that Microsoft is taking a 10 per cent equity stake in Wipro.
We have denied that. We also denied the rumour that the company is undertaking fundamental
changes.
If a common investor asks you whether or not he should
buy Wipro shares, what would you advise?
My advice to him would be to make his own decision. If I say yes, it means that the
price is good. If I say no, it would imply that the price is too high. I am in a Catch-22
situation.
You own close to 75 per cent of Wipro shares. Isn't
this the right time to sell some of them?
Divesting stake means raising money. You should raise
money only when you have a strategy to use that money. The moment we have a strategy we
will raise more money. There is speculation that we are planning an ADR issue. You can't
just take the niceness of the timing to raise money if you don't know what to do with it.
In terms of ownership Wipro is closer to a family-run
business. But actually it is a very professionally-managed company. Aren't the two
features conflicting?
They would if you impose succession which is unmerited and is based on blood
relationships. It is very important not to make those compromises.
Have you thought about succession?
Without a doubt. You can't have a company of this size without a succession plan in
place.
Will your successor be from the family?
A. Fortunately, I don't have a family member old enough to succeed me.
But you were very young when you succeeded your
father.
Wipro was then just $ 2 million (current size about $47 billion). This is not the size
of responsibility you give in inheritance. It is a very major responsibility to investors.
Whoever succeeds me has to be the best qualified for the job. It can't be a parochial
decision.
You are known to be a stickler for values. How
deep-rooted is the culture of ethics at Wipro?
I would go to every conceivable length to preserve integrity at Wipro. Once, it took
us 18 months just to get a dedicated power substation activated because we refused to
bribe. The power was for use in our vanaspati plant, which is heavily dependent on power.
Yet we ran the plant for 20 months on captive generation which cost us dearly.
Wipro has a clear policy that for all reimbursements one
has to spend the money to claim them. An employee in our Mumbai office travelled in second
class and claimed reimbursement for first class. We found out about it and fired him. He
was a union leader and the entire Mumbai office was on strike for two-and-a-half months.
But we didn't take him back. There is no point talking of integrity and not doing it when
it comes to the bite.
Has adhering strictly to values helped the business?
I have no doubt about that. It has brought us more customers than we have lost.
What do you expect from your employees?
I expect them to be totally honest. Honest with the people who report to them, honest
with the people they report to, honest with their colleagues, honest with their customers,
honest with their suppliers and honest in their interface with society.
How do you ensure that?
My experience is that people are generally honest. Most of the people I know who have
made compromises were very unhappy making them.
How did you get into it?
We first decided on it in 1979. That was the time IBM was asked to leave the country.
This brought about a complete transition in the computer industry. The computer technology
was going through a catharsis. The mainframes were getting challenged by micro
processor-based mini computers.
We saw that trend. We got technology at a reasonable price from a US company. We realised
right at the beginning that computer companies in India were not investing in after-sales
services. We positioned ourselves as a company with leading edge technologies and a strong
emphasis on after-sales services. That became a winning proposition.
Does the IT industry require a different kind of
management style?
This is an industry where technology changes very fast, and with that changes customer
requirements. Unless you update constantly, you are outdated. This means companies must
invest heavily in training and retraining. It is the most training-intensive industry in
the world today. We invest about 8-10 per cent (Rs 15-18 crore a year) of our total
compensation package on training people.
How do you keep up with the changing ideas?
I read management books and magazines and attend professional workshops regularly. We
use global consultants.
Who is your most admired businessman ?
I admire (GE CEO) Jack Welch a lot. Michael Dell of Dell Computers is inspiring too. I
admire Mahatma Gandhi for his concept of trusteeship. It is very relevant today.
Read the full-text of the Interview |
