5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro.

at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

STRATEGY

Delaporte performs a surgery and

a brain transplant at Wipro. Add a
radical shift from TCS, Infosys.

Getty Images

Employees of Wipro Limited walk at the company headquarters in Bangalore on July 17, 2019.

Synopsis

Delaporte, who joined as the CEO in June 2020, has changed the company’s operating model. He has
jettisoned over 70 senior leaders, brought in a slew of others, and called time on the “string of pearls”
merger strategy. He has also made the largest acquisition in Wipro’s history. Has Wipro nally found its
change-maker?

In the middle of 2019, then ipro CEO Abidali Neemuchwala held a meeting with
his senior executives. It was late in the evening in India, Neemuchwala was based
in Texas, and the topic of discussion was “change”.

Neemuchwala told the executives that at Tata Consultancy Services, he had had
great success driving change with his “3A model”. First, he made his teams ‘aware’
of the change, then they would ‘accept’ the change, and nally they would ‘adopt’
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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

the change. But at Wipro, he had discovered the “5A model”.

The senior leaders on the call started smiling, one of the executives present on the
call told ET Prime. They thought that if 3A was good, then Wipro would have
bettered TCS with the 5A model.

But that was not the case.

Neemuchwala told them that at Wipro, he had made his teams ‘aware’ of change,
then they had ‘argued’ about it for six months, and that even when they ‘accepted’
the change, they just made vague ‘attempts’ at it for another six months, before
nally ‘adopting’ it. The change was taking far, far too long at Wipro, and
Neemuchwala said something had to give.

What gave was Neemuchwala.

He resigned in January 2020, and when a group of senior leaders asked him what
he would have done di erently, he was blunt. He said he would have removed
more of Wipro’s senior leadership than he had.

Thierry Delaporte, who joined Wipro in June, has clearly learned from
Neemuchwala’s tenure. While Neemuchwala removed just seven senior executives
in four years at the company, under Delaporte, over 70 have left since October last
year.

The winds of change blowing at Wipro are more in the nature of a hurricane.

In six months, Delaporte has radically changed the company’s operating model,
jettisoned over 70 senior leaders, brought in a slew of others, including ve new
members to the company’s executive committee, called time on the “string of
pearls” merger strategy, and made the largest acquisition in Wipro's history.

In November, when the company outlined the operating model change, chairman
Rishad Premji said Wipro would not be afraid to be bold, shake up the apple cart,
and make tough choices.

Since then, the cart has been thoroughly overhauled and tough decisions have
been made. ET Prime talked to former Wipro executives, analysts, and experts to
chronicle the changes to learn where the company is headed.

A skilful surgery
When Delaporte came in, he wanted to talk to Wipro employees. But not direct
reportees, or even people who reported to his direct reportees. He wanted to talk to
the junior layers, hoping to get a sense of where the company was and what he was
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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

working with.

From July to September, he spoke with over 200 employees — in groups of 20 —

and asked them several questions such as, “How often does your leader meet you
or your clients?” and “How does Wipro work together? ” The answers were not
encouraging — junior employees said the leaders rarely met them or their clients
and there were cases in which two teams within Wipro were ghting over the
same deal rather than work together.

“What he basically learned was that there was an entire layer of management that
could be quickly removed because it wasn’t really adding anything to the company.
Then he went about it surgically,” says a former Wipro executive who recently left
the company.

The exodus began in October, and is continuing.

President Anand Padmanabhan, who joined Wipro in 1987, left the company a few
weeks ago. President Milan Rao, who joined the company in 2017 from GE
Healthcare and was considered a potential CEO contender, has left as well. Chief
operating o icer Bhanumurthy BM will retire in the current quarter.

A huge chunk of executives left in December. Including Rohit Adlakha, who was
both chief digital and chief information o icer, and Arjun Ramaraju, who was SVP
of the company’s energy vertical. Anuj Bhalla, an SVP and who headed global
delivery left this month. In addition to the 70 senior leaders who have left, about
300 general managers have also left, according to media reports.

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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

When a new CEO joins a company, there is a level of management churn. But
Wipro’s has been far more, and in a shorter period, than the Indian IT sector has
seen.

“If you look at Wipro now, it is essentially a new company. When this happens,
executives start thinking about what they might want to do with their careers.
Delaporte had come in with a mandate to change, and they have been very open
about it. In any company, where there is both a new chairman and a new CEO, you
should expect many changes,” says a second former senior Wipro executive. He
pointed out though, that Wipro was still a good company with a great fabric.

For an IT company, a management exodus is typically concerning. The IT business

is all about relationships, so when several senior leaders leave, it can weaken a
company.

The closest parallel is with the upheaval that Cognizant experienced when CEO
Brian Humphries took over. But the rst former Wipro executive quoted said there
was a key di erence. “Thierry did it with a scalpel. It hasn’t hurt the company.
Humphries did it with a neutron bomb. There is still fallout.”

The brain transplant

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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times
The brain transplant
To make up for the executives who left, Delaporte has brought in a slew of outside
talent. Even that he has done in his own way, focusing on national and gender
diversity as a key part of his hiring strategy. Wipro has brought in over 10 senior
and regional leaders and would resemble the markets it served, unlike rivals such
as Infosys and Tata Consultancy Services, whose senior management is mostly
Indian.

“There is now a new cadre of leadership joining our executive team. All key
positions have been lled. And I am very pleased to say that my executive team is
truly diverse that is not typical of our industry,” Delaporte said in his post-earnings
conference call with analysts.

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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

“The way to think about this is that Wipro has had a brain transplant,” says the
former Wipro executive.

Besides, the company has a whole new way of working. It has just four P&Ls now,

down from 27, and is supported by two service lines. The new operating model (we
wrote about it here) is radically di erent from TCS and Infosys, which have bet on
multiple P&Ls to drive accountability and agility. He wants global account
executives to be a quarter of the company’s top leadership and to never be more
than three layers below him in the management hierarchy.

The model went into e ect in January and, for a company that previously spent six
months arguing about change, the pace of adoption has been surprising.

“By early February, we were pretty much at full speed in the new model…. I am
myself also very impressed by the way the organisation has shifted to the new
model and the way the leadership has jumped into the new roles,” said Delaporte.
Better still, in the middle of
this upheaval, Wipro has
"Thierry did it with a scalpel. It not lost a step. Based on its
hasn’t hurt the company. projections for the rst
quarter, the company could
(Cognizant CEO)Humphries did
post 11%-13% growth in
it with a neutron bomb. There is FY22, Delaporte said. Wipro
still fallout." has not grown in double
digits since FY13. The
— A former Wipro executive
company also won two
large deals in the previous
quarter. That is again
something that has not happened at Wipro for many years.

“The market only cares about numbers, not really what the company is doing
internally. Wipro has just been disappointing the market for a decade, and now the
numbers under Thierry are reasonable. I would say the market has been surprised
by the pace of the initial turnaround,” says Girish Pai, an analyst with broking rm
Nirmal Bang.

A broken string
The cornerstone of Wipro’s acquisitions was its ‘string of pearls’ model. Wipro
would buy a number of small companies and then keep them separate to avoid
overwhelming them.
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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times

But Delaporte thinks that it doesn’t work.

In strategy meetings in July last year, he questioned the model, stating that while
the acquisitions might have been good, the larger company had seen very little
bene t and it resulted in a great deal of waste, says an executive present in the
meetings.

Take Designit, a strategic-design consultancy that Wipro acquired in 2015.

Designit was key to Wipro’s digital strategy, but even years after being bought out,
Designit employees even had business cards that were di erent from those of the
Wipro employees. This made it harder to sell a uni ed solution to customers, who
were uncertain whether to treat Wipro and Designit as one company or two.
Worse, was the nancial impact. In 2015, Designit was loss-making, and it was still
losing money in 2020, says the rst former Wipro executive.

Delaporte is integrating Wipro’s many acquisitions into the main company and
has hired merger integration specialists to ensure Wipro does not repeat those
mistakes with its newer deals.

This is important, because last month, Wipro agreed to pay USD1.45 billion for
nancial-services consultancy Capco, its largest deal ever. Most companies might
have slowed their acquisition engines for a while, but on the rst of this month,
Wipro announced a USD117 million deal for Ampion.

While the acquisitions are crucial, analysts point out that it is also important to
see how Wipro grows without the deals.

Culture change
At the centre of the issue is the question of whether the new models and new
people mean that Wipro’s culture will change. And if so, how much? Chairman
Rishad Premji has been running sessions on the impact of the changes on the
company’s culture, executives say.

“At the heart, the fabric of Wipro is great. It is a great company,” says the second
former Wipro executive. “It is important to see how these changes work. It will
take a few quarters for that to play out. I don’t know the impact on culture. For
that, we will have to wait.”

Delaporte, too, understands that. Every week, he holds a meeting with 25 Wipro
executives — mostly junior-level people selected on the basis of their birthdays —
to understand how the company is doing and how they are adapting.

Given that Wipro is focussed on the future, they will have a lot to talk about.
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5/3/2021 Wipro | TCS: Delaporte performs a surgery and a brain transplant at Wipro. Add a radical shift from TCS, Infosys. - The Economic Times
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(Data support by Rochelle Britto; graphics by Manali Ghosh)

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