{"id":4157,"date":"2020-02-09T04:30:00","date_gmt":"2020-02-09T04:30:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/wipro-successor-abid_021020\/"},"modified":"2021-12-09T09:37:02","modified_gmt":"2021-12-09T09:37:02","slug":"wipro-successor-abid_021020","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/wipro-successor-abid_021020\/","title":{"rendered":"Wipro must appoint a ruthless CEO with teeth to escape its current predicament"},"content":{"rendered":"<p><img decoding=\"async\" src=\"\/storage\/app\/media\/2020\/Empathy.png\" \/><\/p>\n<p>When Wipro\u2019s CEO Abid Neemuchwala announced his resignation it was a shock for employees and the industry as a whole.. but it was less of a surprise to those who knew him well. Abid&#8217;s a humble, really nice guy with an incredible work ethic and intelligence.\u00a0 He also has a smile that lights up a whole room.<\/p>\n<p>The poor man was clearly exhausted after four grueling years trying to steer an oil tanker that clearly needs a more aggressive leader with a clear mandate to make painful changes.\u00a0 Don\u2019t mistake us here \u2013 Abid is one of the service industry\u2019s greatest strategists and inspirational figures, but Wipro is not ready for this type of leader.\u00a0 It needs someone who can drive <em>aggressive change<\/em> &#8211; and fast &#8211; to a company that has lost itself in its heritage culture and is slipping behind several the India-heritage services leaders in this cut-throat market.\u00a0 Being a &#8220;safe pair of hands&#8221; is table stakes these days for offshore-centric services, and the winners are moving aggressively with onshore investments and outcome-driven delivery models to win the hearts and minds of clients.\u00a0 While Wipro\u00a0has its bright spots (read on), it&#8217;s lost ground to some of its competitors and its next CEO has to make some deep changes to personal, structure, leadership and strategy if it wants to closes these gaps quickly.<\/p>\n<p><strong>With the recent CEO changes at IBM and Cognizant, Wipro needs to look more at Cognizant\u2019s recent changes if it wants to set itself on a new course for growth<\/strong><\/p>\n<p>Meanwhile, leadership changes elsewhere in the market have seen IBM change CEO\u2019s \u2013 a prospect that could see the lumbering firm recover market dominance and growth after several years of confused direction and taking a pounding from the likes of Accenture and TCS.<\/p>\n<p>In addition, Cognizant went through a similar situation with Francisco D\u2019Souza, who\u2019d overseen an incredible rise of the firm, but struggled to make painful changes as the firm\u2019s leadership became complacent and lost their edge in the market.\u00a0 Their response has been to appoint a dynamic young leader in Brian Humphries, whose goal is to reenergize the firm\u2019s leadership and culture.\u00a0 He has already made many leadership changes, brought in several outside executives and created a culture of urgency right across the firm.\u00a0 \u201cIt was like Cognizant suddenly woke up after falling asleep\u201d was the feedback we received from several of its clients.<\/p>\n<p>While both IBM and Cognizant seek deep changes within their internal culture with new leadership, they are very different beasts and require very different leadership styles.\u00a0 IBM requires someone who&#8217;s lived and breathed the culture and knows how to make the right changes to align with the right strategic direction.\u00a0 Cognizant needed a leader to shake up a terrific firm that had become a victim of its own success and was suffering from complacency.<\/p>\n<p><strong>Wipro\u2019s board must seize this opportunity to redefine itself \u2013 and fast<\/strong><\/p>\n<p>However, that change was planned, Wipro\u2019s doesn\u2019t seem to have any real <em>plan<\/em> behind it \u2013 and belies a degree of chaos and anarchy that could become disastrous for the firm. In a complex and unstable global political environment, clients look to providers to bring stability and simplicity \u2013 impromptu leadership changes and boardroom dramas, while fodder for analysts and journalists, go straight to the top of the risk register in existing engagements and can see some clients back our before the ink is dry on new deals.<\/p>\n<p>Infosys learned this the hard way, when its leadership troubles became an almost comic roadshow in 2016\/2017. Wipro already has enough to contend with in a market gripped with buyer cynicism, hyper-competitive incumbents, and geopolitical uncertainty \u2013 at the very least it must find a replacement for Abid\u00a0who will get the firm back on track and reassure the market that 2020 will be a year of progress, not chaos, for Wipro.\u00a0 In addition, the next CEO must have the empowerment to make tough decisions without the constant micromanagement of the Wipro\u00a0board in order to making rapid improvements to its&#8230;<\/p>\n<ul>\n<li>Current <strong>vulnerable market position<\/strong>;<\/li>\n<li>Mostly <strong>middling performance<\/strong> across\u00a0market segments;<\/li>\n<li>Articulation of &#8220;<strong>Why Wipro<\/strong>&#8221; to clients, partners and prospects.<\/li>\n<\/ul>\n<p><strong>The market reacts to the shock exit of Wipro\u2019s CEO<\/strong><\/p>\n<p>Unsurprisingly, the market has reacted somewhat negatively to the impromptu departure of a leading IT services firm\u2019s CEO \u2013 stock price dipped on the news after a relatively healthy opening to 2020. Under Abid, the firm pushed hard into the digital services space \u2013 and since he took up the mantle in 2016, closed the <a href=\"https:\/\/www.horsesforsources.com\/wippirio_102016\" target=\"_blank\" rel=\"noopener\">acquisition of cloud services firm Appirio<\/a>, as well as design agency DesignIT among others to support the firm\u2019s strategy to move out of highly commoditized IT Services and BPO, and take a bite out of the more lucrative and rapidly growing, albeit ill-defined, digital technology and services market.<\/p>\n<p>The firm push to build out digital and design capabilities has, to date, had mixed success. While the firm has been able to blend technology, strategy, and design successfully for some core clients \u2013 it has struggled to expand at the same rate as some of its competitors (see below). Furthermore, its traditional IT services business came under more pressure from the hungrier mid-tier firms, such as LTI, Mindtree\u00a0and Mphasis, while its closest market competitor,\u00a0HCL, has been playing a market-cap neck-and-neck race with the firm as it elevates its reputation in the market.<\/p>\n<p>Under Abid, Wipro also struggled to keep its market share \u2013 falling further and further behind the rapid growth of TCS and Infosys. A market signal not lost on investors and market commentators when the CEO announced his resignation.<\/p>\n<p><a href=\"https:\/\/www.horsesforsources.com\/storage\/app\/media\/2020\/TWITCH%20REVS%202017-2019.png\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"\/storage\/app\/media\/2020\/TWITCH REVS 2017-2019.png\" width=\"600\" \/><\/a><\/p>\n<p>Unlike some of its competitors \u2013 such as Infosys \u2013 which have managed to keep their heads above the double-digit growth waterline for the majority of recent quarters, Wipro has only just managed to keep itself in positive growth territory. Under Abid, growth accelerated briefly at the start of his tenure, but has been on a bumpy decline since as the firm struggled to make the most of its digital acquisitions and take on rivals in the highly competitive IT services market. Even with relatively high margins, the results just weren\u2019t healthy enough for an industry that thrives on scale \u2013 and its subsequent success is marked on revenue growth. With the last few<!-- pagebreak --> Quarters in mind, it\u2019s not hard to imagine the pressure Abid was under to make siloed and fiercely defended business units perform and rejuvenate what was one of the most promising firms in the industry.<\/p>\n<p><a href=\"\/storage\/app\/media\/2020\/WIPRO%20GROWTH AND PERFORMANCE.png\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"\/storage\/app\/media\/2020\/WIPRO GROWTH AND PERFORMANCE.png\" width=\"600\" \/><\/a><\/p>\n<p>Part of its struggle to maintain market share is it\u2019s become increasingly tough to figure out what Wipro stands for. It\u2019s marketing patter touts its Big Bets in Digital, Cloud, Engineering Services and Cyber Security, but while Wipro has a strong footprint in most services but has struggled to stand out from the crowd as a leader in any.<\/p>\n<p><a href=\"https:\/\/www.horsesforsources.com\/storage\/app\/media\/2020\/WIPRO%20PERFORMANCE%20HFS%20RPTS.png\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"\/storage\/app\/media\/2020\/WIPRO PERFORMANCE HFS RPTS.png\" width=\"600\" \/><\/a><\/p>\n<p><strong>Wipro\u2019s on the hunt for a new CEO \u2013 and much like Cognizant, plans to look outside of the firm and industry<\/strong><\/p>\n<p>After having his teeth kicked-in by over-powerful business leads, entrenched siloed service lines, and acquired design agencies that, if we\u2019re honest, must have just felt awkward in meetings with old-school traditional IT Services leads, Abid decided enough was enough. And now the search is on for his replacement. After a nail-biting wait from analysts, employees, and the media, Wipro announced that the \u201cboard of directors has initiated a search to identify the next chief executive officer. Abid will continue to hold the office of CEO &amp; managing director until a successor is appointed for a smooth transition and to ensure that business continues as usual.&#8221;<\/p>\n<p>The word on the street is the board are looking outside of Wipro and potentially out of the industry to find Abid\u2019s replacement. Cognizant, following a similar strategy has found relative success by bringing in Brian Humphries, an unknown in the IT Services space. Wipro could do the same, a fresh pair of eyes on the sprawling and undoubtedly messy delivery network could find opportunities and solutions internal talent could not.<\/p>\n<p><strong>What\u2019s a must have on the new Wipro CEO\u2019s to-do list<\/strong><\/p>\n<p>A new CEO will be in an unenviable position \u2013 Wipro\u2019s market share is diminishing, it has a sprawling and, for many, confusing delivery network that needs rationalizing, and disparate business leaders all pushing in different directions. Getting on top of this is a major challenge \u2013 and one even a talented leader like Abid struggled with over four years. To turn Wipro\u2019s fortunes around they must:<\/p>\n<ul>\n<li><strong>Rationalize, not acquire: <\/strong>At least for the first few months, opening up the war chest may seem like the natural way for a new CEO to make a stamp on a firm. But with Wipro, acquisitions have a checkered past, and even those that have worked have taken several years to fully embed. Instead, the firm should focus on turning around creaking business lines \u2013 and above all, get them talking to each other. A process Abid started, but sadly failed to finish.<\/li>\n<li><strong>Build a truly distinctive vision for the modern enterprise: <\/strong>KPMG has its powered enterprise, TCS has business 4.0, HCL has Mode 1,2,3 \u2013 what\u2019s Wipro\u2019s vision, and how does it plan on delivering it. In a complex world where buyers are battered with bullsh*t, a clear vision goes a long way. A huge part of this process will be deciding which service lines to really push talent and resources into \u2013 being a leader in everything is unrealistic, Wipro new leadership needs to carefully prioritize.<\/li>\n<li><strong>Listen to the market: <\/strong>Wipro\u2019s biggest issue right now is it\u2019s looking at it\u2019s closest competitors \u2013 and throwing a tantrum when a big deal for HCL pushes them above in market cap. Instead, Wipro&#8217;s\u00a0leadership <em>must<\/em> listen to the market, speak to clients and look at solving real problems. A new CEO from outside the industry could go a long way to bringing fresh perspective \u2013 and a fresh lens to view and plan for Wipro\u2019s success.<\/li>\n<li><strong>Be unafraid to cut deep to re-energize\u00a0the culture:<\/strong> Many of the longstanding senior Wipro\u00a0managers remain in place &#8211; and some have lost touch with the market.\u00a0 While this situation is not too different from other heritage services firms, Wipro&#8217;s\u00a0leadership has not had the courage to remove many of its leaders who are struggling to stay ahead of the curve.\u00a0 It&#8217;s time Abid&#8217;s\u00a0successor shakes up the status quo\u00a0and bring in new blood with aggression to take on the competition and hustle harder than ever to win new deals. The firm needs to move away from rigid leadership stagnation with too many stale decade-plus veterans who are impeding progress.<\/li>\n<li><strong>Re-organize the firm around how clients <em>want to buy<\/em>, not how Wipro&#8217;s\u00a0become structured over years of fiefdoms:<\/strong> Far too many clients complain that working with Wipro\u00a0on solution architecture is challenging &#8211; each solution area often requires different policies, procedures, pricing etc.\u00a0 Wipro\u00a0has lost many deals because its rigid structure often impedes its ability to take a <em>portfolio approach<\/em> to address clients&#8217; needs. While there has been some progress made to structure relationships around business outcomes, for example in business process services and digital, the firm needs to re-think how it goes to market and services its clients if it wants to hit back hard on the Infys, HCLs, Cogs and TCSes of this world.<\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt; font-weight: bold; color: #f26418;\"><strong>Bottom Line: Abid\u2019s Impromptu departure belies a degree of chaos at Wipro \u2013 and his replacement will have their work cut out for them.<\/strong><\/span><\/p>\n<p>Ultimately, Abid\u2019s rapid departure tells the market one thing \u2013 chaos is brewing at Wipro. Radio-silence from the firm about the departure, and the fact many employees found out when the business media picked up the story is doing little to settle nerves in the market that Wipro is in utter disarray. The board must rapidly find a replacement to calm nerves, and one that will bring much needed fresh perspective to a firm that for the last few years has grappled with a modernizing CEO taking on the mammoth task of turning the fortunes of a traditional IT Services leviathan.\u00a0 Whether they opt for an internal or external candidate is not nearly as important as ensuring the next candidate has the <em>juice<\/em> to fire low performers and bring in staff to work tirelessly to restore Wipro&#8217;s\u00a0former glories.<\/p>\n<p><span style=\"color: #ff6600;\"><img decoding=\"async\" style=\"display: block; margin-left: auto; margin-right: auto;\" src=\"\/storage\/app\/media\/2020\/Phil and Abid.jpg\" width=\"600\" \/><\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"color: #ff6600;\"><em>\u00a0Abid\u00a0showing off that smile&#8230;<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When Wipro\u2019s CEO Abid Neemuchwala announced his resignation it was a shock for employees and the industry as a whole&#8230;..<\/p>\n","protected":false},"author":3,"featured_media":4158,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,81],"tags":[303],"organization":[],"ppma_author":[19,36,38],"class_list":["post-4157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-process-outsourcing-bpo","category-it-outsourcing-it-services","tag-enterprise-irregulars"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Wipro must appoint a ruthless CEO with teeth to escape its current predicament - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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