Premji springs a surprise, sacks two joint CEOs

Premji’s abrupt decision to replace the joint CEOs, two of the most visible faces of the company, with a trusted chartered accountant has rattled the industry.

Though the company note said they will help in transition till March 31, Wipro moved with alacrity to remove their names from its website on Friday. The two joint CEOs were also absent from the company's third quarter result announcements.

An old-time senior Wipro executive said the company usually gives time for parting employees to negotiate new jobs. “It is surprising that the company let go the people who have been with it for decades so quickly,” he said.  A senior vice-president (VP), who has worked with Vaswani and Paranjpe, said the two recent bad quarters were just an immediate trigger. The joint CEOs failed to deliver on three crucial fronts.First, Wipro was unable to face the intensifying competition especially with Cognizant threatening to overtake it. “The loss of the number three position to Cognizant would be a branding and a PR disaster. And the company seems to be just helpless in facing this challenge,” he said.

Secondly, they could not shift the company focus from margins to growth, the way Cognizant and HCL are doing. “Obsessed with profits, Wipro has let too many large deals slip away and lost market share,” he said. “Premji is not an IT man and does not get involved with technicalities. He focuses just on metrics and they failed to persuade him to sacrifice profit for growth,” he said.  

Thirdly, they also could not provide a strong central strategic direction to Wipro, which delegates key decision-making power to individual business units. “While a bottoms-up system has built an entrepreneurial culture and made the company a launch pad for many budding CEOs, it is a recipe for disaster during a crisis,” he said.
“If the joint CEOs could not deliver, it was not because of the lack of trying. Many before them had failed to bring about these changes as well,”he added.
The system of joint CEOs brought in too many checks and balances, conflicting directions and confusion among the ranks, he said. It was assumed that the Joint CEO arrangement would be reviewed after three years. One of them would eventually take over.

“Premji’s decision would be hard on Vaswani as Paranjape seemed to have had some inkling about it,” he added.

But the decision to elevate T K Kurien, who along with Anurag Behar and Pratik Kumar, forms Premji’s inner circle, has not come as a surprise.

Unlike Kumar, more of a support-function expert, and Behar, who has moved to Premji Foundation, Kurien is Premji’s turnaround specialist. He took charge of an ailing Wipro BPO and revived it in a few months.

A senior Wipro BPO executive, who has worked with Kurien, said he decides fast and does not set up committees to suggest solutions. “He can keep you awake all-night long, make you redraft a presentation 10 times and approve it 10 minutes before the meeting,” the BPO executive said.

‘Mercy killing’
As a chartered accountant, Kurien has an eye for detail and, reportedly, one of his favourite phrases is “mercy killing.” He would rather let go people or a business early than let them linger on to harm the company. 

The joint CEOs were too diffident to rub Premji the wrong way, who wants someone do the right thing even at the risk of pissing him off, said the BPO executive.
“Kurien is rich as his father-in-law is from the Malayala Manorama family. He works for passion and not money. He won’t let even Premji come in the way,” he said.
“Premji has found a new CEO, who can piss him off,” he added.