Wipro's new CEO: Can foreign executives succeed in Indian IT firms?

Wipro's peers TCS and HCL Tech have always placed faith in long-timers.

With the appointment of Thierry Delaporte as the new Wipro CEO, two top executives in two big companies in Indian IT sector are now foreigners.

Last year, Cognizant appointed former Vodafone executive Brian Humphries as the CEO.

These appointments come at a crucial juncture for these companies.

For instance, if it is growth for Wipro and Cognizant, it would be stability for Infosys as Salil Parekh took over as the CEO after the turbulent tenure of SAP executive Vishal Sikka.

Parekh knew his task was cut out. His predecessor Sikka was appointed as CEO in 2014. He was the first non-founder CEO to lead the company.

"According to executives, Sikka's product mindset did not work for the company and eventually led to his departure. Then came Parekh’s appointment at a time the company was looking for an executive who would bring in stability," said Pareekh Jain, founder, Pareekh Consulting.

For Humphries, the focus had been to restore Cognizant to its former glory, when it was one of the fastest-growing IT companies. After Humphries took over in April 2019, he took drastic measures to cut down costs and focus on growth.

Between April and September, there have been many high profile exits. These included restructuring of the company's sales team, moving away from Facebook content moderation business and handing pink slips to more than 7,000 mid and senior executives.

Experts Moneycontrol spoke to said Humphries is doing everything right early into his tenure.

In case of Wipro, the more pressing issue is growth. Delaporte, former COO, Capgemini, will have to push for growth and bring in large deals.

In the last couple of years, the company has barely seen 2-3 percent growth under Abidali Neemuchwala. For FY20, the company's year-on-year growth was 1.6 percent.

Neemuchwala had joined the company in April 2015 as the COO and was elevated to the position of CEO in 2016. He resigned on January 30, 2020 citing personal reasons.

Are external candidates better suited?

Not really. For, two of the top IT firms, TCS and HCL Tech, are headed by long-timers.

Rajesh Gopinathan joined TCS in 2001 and rose to the top position. He was the chief financial officer from 2013 to 2017, when he was elevated as the CEO. His predecessor N Chandrasekaran joined the company in 1987 and took over as the CEO in 2009.

HCL Tech's CEO C Vijayakumar too is a long timer. He joined the company in 1994 and became the CEO in 2016.

"It worked well for TCS and HCL Tech. However this does not mean that it is the only way to go. For some, having an external candidate helps," another former executive said.

For Cognizant, it has helped. The same cannot be said for Infosys and Wipro, where promoters' influence continue, said a former executive in a top IT firm.

In the past 15 years, Wipro has had five CEOs. But TCS had only three, Subramaniam Ramadorai, Chandrasekaran and his successor Gopinathan.

The issue, the executive pointed out, is that firms like Wipro and Infosys have not groomed internal candidates.

In Wipro, after CEO Vivek Paul's exit in 2005, Azim Premji assumed the role for three years till 2008. Between 2008 and 2011, the company was led by Girish Paranjpe and Suresh Vaswani, both of them old-timers, who quit in 2011 on grounds of personal reasons. By then, Wipro's growth began to slump.

TK Kurien was the CEO between 2011 and 2016, post which Neemuchwala became the CEO. He too quit in January 2020 for personal reasons. Given this, the new CEO Delaporte has a huge task ahead of him.

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