Expect more acquisitions, including “one big one,” is the message from
chief executive Thierry Delaporte, as he looks ahead after 15 months at the helm of India’s fourth largest software exporter. Year-on-year growth will “approach 30% by end of the third quarter,” Delaporte tells Alnoor Peermohamed in an interview. Wipro’s $1.45-billion acquisition of British IT consultancy Capco earlier this year is driving growth, but its impact and the cost of rising attrition will test the Bengaluru company’s profitability for at least the next few quarters, he cautioned. Edited excerpts.
You took charge amid the pandemic and would have begun with expectations. Have those been met?
The decision to take this role was made in April 2020. At that time, I had no clue that Covid would last for so long; it’s been 15 months. So that has been probably the biggest gap to my own expectations.
Exactly a year ago, we moved into execution mode. I think we’ve delivered on each of the chapters. Reflecting on those 15 months, I was very clear in my mind on what we needed to do at Wipro.
We’ve been really fast at defining or agreeing on who are the key people who are going to drive this organisation forward, and (there has been) really great mobilisation from the bigger team. There’s a very strong morale. I’m really blessed to see that people have trusted me. I’m pleased with how we’ve performed over the last quarters, and even more importantly, I’m more confident about what’s ahead of us. I think the company has become a different company.
How easy or difficult was it to do this remotely?
There’s nothing easy. You don’t ask yourself if it’s easy or difficult. We’ve made bold steps, changed an organisation that has not changed in 30 years. We changed about 30% of the top 200 leaders of the organisation. It’s significant, it’s unprecedented. You haven’t heard of any scandal, noise or destabilisation because we’ve handled it with care and with attention to people. We’ve also brought in a lot of talent from outside, which is also helping us drive the culture of persity that I really want for this organisation. Was it easy to do? I don’t know.
We made the biggest ever acquisition (Capco). It was bold, it was the right thing to do, and it’s delivering great results. Some people in the market assume it’s never been done by an Indian company, it’s never going to work and so on. I try to never listen to these kinds of fears. We’ve just focused on what we believed in. It works if you do the right thing.
What were the three things that had to change at Wipro?
I am going to start with the things that I didn’t want to change, that I wanted to protect. Wipro is a unique company, by its governance, its DNA, the spirit of its founders. I want to protect this mindset, this culture and values.
My first responsibility is to make sure that we remain this company, driven by a sense of purpose and attention to the world around us. What needed to change was assertiveness about strategy, running operations, making decisions and sticking to it.
Second, raise the bar in terms of ambition, and third is a ruthless focus on accountability and outcome. This requires a simplified organisation (with) clear accountability. Simplicity is beautiful and I always favour simplicity over perfection. It’s not about, are you a good person. Of course it’s important, but do you deliver results? The culture of this organisation was not outcome-based; it was effort-based. It’s like in sports — at the end of the day, you need to be a skilled player and score some goals to win.
Wipro is outpacing Infosys and TCS in growth. How much longer can you sustain this?
We will probably approach 30% year-on-year growth in the third quarter. We’ve said we will get to 27-30%. I’m not going to give you a number for next year, but I think we’ll continue to grow well. We are firing on all cylinders. And then we’ll continue to do (more) acquisitions, and possibly one big one. The only driver will be strategic intent.
Has the explosion in demand for technology services in the past year provided you with a tailwind?
In 26 years in this industry, I’ve seen periods of great growth, like this one, and I’ve seen very tough times. I can play in different weather, but you play differently. This time, it was a game of market share and that was very clear for me from day one. This obviously would have been a different strategy if the market had been different. It’s difficult to predict, when we see what has happened over the last 15 months, but I would say, unless macro changes happen, this trend is here to last for several years.
It’s a war for talent out there. What is Wipro’s strategy?
It’s a war, and I see this at two levels. I’m convinced that the best performing company in our industry is the one with the best talent in terms of quality — people who understand the business and how technology can be leveraged to transform. Those are the people we are focusing on, that we are hiring. Then, of course, it’s talent in terms of quantity because there’s so much demand and we see this with the attrition today. And I think, unfortunately, it’s going to last.
We need to integrate a lot more freshers. Wipro has been very shy compared to some of its competitors in the past. This year, we’re going to go with 16,000-17,000 and next year we’re going to have 25,000-30,000 (freshers).
Primarily in India?
Primarily in India, but also in Asia, the Philippines, Europe and in America. Frankly, till a year ago, we were not tapping the talent pool in Europe. We were going for talent in the US. Now, we’re doing it more.
And this, again, will be primarily at the fresher level?
Primarily, I would say, not mostly, as you also need to hire laterally. My view on attrition is it’s not going to slow down for at least another three to four quarters.
Will India become less attractive for IT services?
India has the best concentration of talent in the world by far. Should we only rely on India to address our growth? The answer is no. But will there be a country that will outpace India? Not at all.
I think India is producing more engineers than America, Germany, the UK and France combined, and the quality of talent in India is really strong. You have places like Mexico, Poland, Romania, the Philippines and Vietnam, where you get good talent, but you never get the quality of talent at this scale.
You said attrition isn’t going away, but at 20.5%, has it topped out or is it going to get a lot worse?
It’s going to get worse, (but) there’s always a seasonality, typically in the last quarter of the year. People tend to stick around. The more you invest in new technologies, the more attractive your talent becomes.
What are some of the technologies that Wipro is investing in?
I would invest more in 5G than in quantum computing right now, and more in artificial intelligence. I’m big on engineering services. I believe there is a massive market ahead of us. And because we are Wipro, and we’re born in the engineering world, I believe this is our land as well.
How is your equation with the Premjis?
I couldn’t have dreamt of a better chairman. Rishad and I are working extremely well together. We speak every week for 90 minutes and have a very close and direct relationship. Mr (Azim) Premji is less close to the business, but he’s still very aware of what’s happening. I get all the support I need.
So, would it be safe to say you have Infosys in your sights?
You know, Salil (Infosys chief executive Salil Parekh) is a friend. We’ve known each other for 20 years. I have a lot of respect for him and a lot of respect for Infosys. It’s a formidable competitor. But whoever is ahead of us is in our sight.