NEW DELHI: Azim Premji’s greatest legacy, according to business historians, may not be that he created a large information technology (IT) services company. This, despite the fact that he scaled up Wipro Ltd from a fledgling $2-million revenue company in 1966 to over an $11 billion diversified business conglomerate, largely comprising of software services and consumer care by the end of March 2019.
Compassionate capitalism is what Premji’s 53-year stint at Wipro can be best described as he has donated two-thirds of his wealth, worth $21 billion to charitable causes.
To be sure, Premji had decided to give more than half of his wealth to charitable causes, 12 years before he signed the Giving Pledge in 2013.
But how would Premji describe his stint at the company?
“Leading Wipro from 1966 till now has been the greatest privilege of my life. It has been an extraordinary journey—growing from being a small vegetable oil company to the diverse global business that we are today," Azim Premji wrote in a letter to employees on Thursday. “I want to thank all of you as well as all my colleagues from the past for their contribution and dedication."
In a piece in Mint earlier this year, Dileep Ranjekar, CEO of Azim Premji Foundation, recalled Premji telling General Electric CEO and philanthropist Jack Welch in 2001, “I am very passionate about the foundation and am willing to commit half my wealth to it."
“To make capitalism acceptable in a country like India, one should be able to create and share the wealth and I believe Mr. Premji would always be remembered for the latter part more. I hope the young billionaires follow him as a role model and help in making capitalism much more acceptable in a country like ours," said V. Balakrishnan, a former chief financial officer at Infosys.
Another hallmark of Premji’s stint has been his ability to retain people. Despite Wipro seeing departures of many executives, including Ashok Soota, chairman of Happiest Minds, and many founders of Mindtree Ltd, Premji has been able to retain many senior leaders. At least a dozen senior leaders have stayed at Wipro for over two decades, according to Mint’s analysis. This includes Suresh Senapaty, a former chief financial officer of Wipro, and currently, a board member on Wipro Enterprises and Wipro GE Healthcare, Wipro Consumer Care chief executive Vineet Agrawal and Dileep Ranjekar, CEO of Azim Premji Foundation.
“One legacy is that he (Premji) created an organization that ran his business with the highest standards of corporate governance and integrity. A second and which I think is a bigger legacy is his ability to nurture and develop leaders with entrepreneurial traits," said Soota.
When it comes to business, however, Premji may not be ascribed the most successful business leader.
Sample this. At the end of 2003, Wipro ended with $625 million in revenue, a tad behind $754 million in revenue reported by Infosys Ltd and $1.04 billion in revenue reported by Tata Consultancy Services Ltd. However, over the next 16 years, the gap between Wipro and its rivals has only widened, with Nodia-based HCL Technologies Ltd, even edging past Wipro to become the third largest IT services firm last fiscal year.
Since 2013, Wipro has managed to grow more than 7% in a year only once, and this has only widened the gap with its peers.
At the heart of Wipro’s underperformance has been what many call is poor execution by the company.
Mumbai-based Tata Consultancy Services ended with $20.91 billion in revenue in the year ended March 2019, almost twice the size of Infosys, which ended with $11.8 billion and far ahead of Wipro, which ended with $8.12 billion.
For now, Wipro continues to be in the midst of business restructuring and the company is still far away from turning the corner.
Still, some executives like Soota believe that it will be unfair to judge Premji on the performance of Wipro’s IT business.
“In consumer care, Wipro’s Santoor is now a bigger brand than Lux. However, in IT business, despite being a late entrant, Wipro until 1999 was the second largest IT firm (behind TCS). It subsequently slipped and is now behind two companies (Infosys and HCL Technologies Ltd). I believe he (Premji) should have never run the company after Vivek Paul left. This is because his biggest strength is not in implementing but in value addition. Or, rather allowing people to make decisions. So I will not hold it against him because actually he was not running the company himself but allowing people to run it," said Soota.
