Leading an Indian giant through a downturn

What will it take to lead an Indian IT company through the coming economic downturn? Julian Goldsmith hears Wipro's strategy from chairman Azim Premji.

Azim Premji, the man in the driving seat of Indian outsourcing company Wipro for more than 40 years, is still very much at the centre of the company's drive for growth.

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What comes through time and time again in speaking with the chairman of the IT and BPO specialist is his focus on the long term view and his concern with the welfare of the societies from which Wipro - a company worth around $5bn and present in more than 50 countries - draws its personnel.

For his leadership role in Indian IT, Premji has earned a spot on silicon.com's Agenda Setters list of the top 50 movers and shakers in tech three times over the past five years - coming in at number 31 last year and holding a decent chance of making the list again in 2008.

silicon.com caught up with him as he was on his way to the airport, travelling back to India from a whistle-stop round of meetings in the UK.

He yawns occasionally and is clearly tired. He is known for sometimes punishing tours overseas but his thinking is clear. He is able to reel off the numbers about his company and the Indian IT industry without any hesitation.

Clearly the failing world economy is a concern to global businesses such as Wipro. Premji takes the pragmatic view of many leaders of dominant companies: if he continues to do the things that put him in front in the first place, Wipro will come out ahead of its rivals.

"The calculated growth in India in 2008-2009 is set to be 21 to 24 per cent growth on a $40bn base of experts. Last year it was 28 per cent. We think industrial growth rates will reflect that trend. Leading companies in India will grow faster than the average companies," he says.

Premji sees improving productivity and building up consultancy services as possible ways of riding out the downturn.

He said: "Leading companies use slowdowns as opportunities to gain market share over rivals. We did that in the dot-com meltdown and we are doing it again now."

Energy, utilities and manufacturing are likely to be the leading sectors in terms of business growth for Wipro, as the emerging consumer markets of India and China demand more consumables and energy. Financial services is the market for Wipro's services that will be hit hardest, says Premji.

Caution will be key going forward. "The one obvious threat to the business is the uncertainty in global markets. Is it going to get worse? In the US, possibly no. In Europe maybe a little. We need to watch the oil situation. We need to be careful of the uncertainty Russia has created [after the recent military conflict in Georgia]," he says.

The increasing globalisation of talent is one trend Premji believes will affect Wipro's fortunes. Although the company has a global reach, its skill base is concentrated in the Far East. Premji points out there are approximately 500,000 engineers in India, compared to about 30,000 in the UK.

Wipro's competitors are already opening talent pools all over the world. Rivals such as Accenture and CapGemini are establishing R&D centres in the emerging markets of China, Russia and South America, Premji notes. Meanwhile Infosys has bought a SAP specialist based in the UK in August.

At the same time, customer expectations have risen, prompting Wipro to review the level of service it offers to its customer-base.

He said: "We have to be more proactive in the way we market our services. We get paid on solutions, not just time and materials."

One of the achievements Premji most values is his involvement in fostering talent. He is head of a foundation that contributes to the funding of 2.5 million children's educations across 20,000 schools across India. He believes it's an ethic UK companies and government would do well to adopt.

He said: "In the UK and the rest of the Western world, young people are losing interest in building careers [in engineering]. They want easier and more exciting jobs. It's important that UK companies get involved in creating excitement that these careers are good careers. The government should train teachers how to teach science more creatively. Otherwise, the West will be starved of technical talent. This will only create social tensions."

Earlier this year Wipro entered a new era with the appointment of co-CEOs Girish Paranjape and Suresh Vaswani.

However, it would be a mistake to presume this is a sign Premji will be taking a back seat from now on. He remarks as we pull in to Heathrow that he will be taking a red-eye flight, so he can avoid wasting daylight hours in the air. He will be going straight to the office as soon as he touches down.