That Rishad Premji thinks differently was evident during his tenure as the Chairman of the trade body National Association of Software and Services Companies (NASSCOM).
Rishad, the elder son of outgoing Wipro Executive Chairman Azim Premji, who will take over his father’s role on July 31, 2019, changed the way the industry body measured key metrics. NASSCOM now shares the survey of business confidence of its members, instead of the annual forecast, given the changing industry landscape.
That out-of-box thinking is what will perhaps help Rishad, as he and CEO and now also MD Abidali Neemuchwala, lead Wipro through several challenges in the post-Azim Premji era.
According to his father and industry seniors, Rishad, who holds an MBA from the Harvard Business School, has the qualities to meet the challenge.
In his email to employees, Premji said, “Rishad had been an integral part of the leadership team since 2007, most recently as Chief Strategy Officer, and has an intimate understanding of the company from operations to strategy.”
“Rishad brings to this role new ways of thinking, experience, and competence that will lead Wipro to greater heights,” he added.
Premji’s younger son Tariq Premji is a board member of Wipro Enterprises, the parent company of Wipro Consumer Care, and the Foundation.
Krishnakumar Natarajan, co-founder, Mindtree, said, “Having closely associated with NASSCOM, I had the advantage of working closely with Rishad. His understanding of the technology business and his ability to take charge will definitely Wipro to newer heights.”
So what are the challenges that Rishad is up against?
Unlike what it should have done, Wipro held off on firing all cylinders in the past few years and lost its third largest IT services firm position to HCL Technologies. Its revenues now stand at $8.12 billion as opposed to HCL Technologies’ $8.6 billion, $21 billion for TCS, and $11.8 billion for Infosys.
The company had the lowest revenue guidance of -1 percent to 1 percent for FY20 compared to its peers. This is despite restructuring effort by the top management in the past three years.
When Neemuchwala took over the CEO in 2016, he restructured operations, and included an increased focus on digital revenues, besides shedding the unprofitable low-end service businesses. He also restructured their global healthcare business after the Trump administration scrapped Obamacare, a big focus area for the company then.
While the digital portfolio has paid off and accounted for about 35 percent of the total revenue, Wipro’s legacy business has not improved. An analyst pointed out that profitability was also affected as the company is still shedding unprofitable businesses. However, they are in a much more stable position now, compared to three years back.
Yugal Joshi, Vice President, Everest Group, a consultancy firm, said, “The key challenge for Rishab and Neemuchwala is to bring market-leading growth.”
This means that to keep up with changing trends, Wipro needs to balance next-gen services, which typically come at lower tickets and the traditional business, that usually yields large deals.
“They will also have to invest in talent who can orchestrate such large deals for them, understand clients better, enhance their thought leadership and value proposition for the new world,” Joshi added.
Crucial to navigating through these challenges, will be the rapport between Rishad and Neemuchwala, who comes with a proven track record.
Before taking over as Wipro CEO in 2015, Neemuchwala was the COO at Wipro in 2015. Prior to that he was associated with TCS for 23 years from 1992 and was mentored by current Tata Sons Chairman and then CEO, N Chandrasekaran.
Over the last four years, Neemuchwala and Rishad have worked together on several fronts. Rishab’s focus on digital along with Neemuchwala vision was key in Wipro’s restructuring strategy. Neemuchwala and Rishab worked together to prepare the plan.
In an email to employees after Premji’s retirement announcement, Neemuchwala said, “Rishab and I have worked closely over the past four years, forging a strong working relationship. This cohesive and collaborative leadership will be a great source of strength for our company.”
Rishad, in his mail to company employees, has been equally effusive in his praise for Neemuchwala. “I have a lot of respect for Abid’s strong strategic and operational depth and his sincerity in leading our company. I believe that our strong working relationship, along with the leadership team will be a great asset for our company.”
It is probably this rapport and partnership that will define the next era of Wipro.