CEO Abidali Neemuchwala wants to double Wipro revenue to $15 billion in 4 years
Abidali Neemuchwala wrote a mail to Wipro employees on his first day as CEO on Monday that his target is to double the firm’s revenue to $15 billion, with an operating margin of 23%, by 2020.
Many will see this as extremely ambitious, because it suggests a compounded annual growth rate of 17% over the next four years. Wipro is expected to grow this year at just about 4%, to $7.9 billion. That’s about half the growth rate that TCS and Infosys are likely to register, and it is Wipro’s own lowest since 2009-10, when it grew 1.6%.
Nonetheless, Neemuchwala, who has taken over from TK Kurien, expressed confidence in the mail: “I have no doubt that this is a goal grounded in reality.”
In doing so, Neemuchwala might have taken a leaf out of Infosys CEO Vishal Sikka, who some months ago set a $20 billion goalpost for Infosys by 2020. Sikka had then said such stretch goals were necessary to set a direction and nudge its employees.
“Wipro has a legacy of 70 years even as the average age of our employees is only in the twenties,” Neemuchwala said. “Today, speed is of essence and decentralized decision-making will make us nimble. Over the past several months, we have collapsed and simplified processes to create a more agile organization. Simplification is a journey.”
He said he has little doubt that the company must begin to think like a startup — where there is nothing from the past that is so scared that it can’t be questioned — and create a workplace that is a melting pot of diverse ideas.
“We need to behave differently in our day-to-day interactions with our peers, our teams and our clients in line with what we want our future DNA to be. We have a work cut out and there is a lot that needs to be done. We will continue to show zero tolerance among us who violate our values and are not aligned to our strategy,” he said.
Reacting to Wipro’s challenges, Peter Bendor Samuel, CEO of outsourcing research firm Everest Group, noted that the company has two businesses, the fast maturing labour arbitrage business that faces declining growth rates and pressurized margins, and an IP-led or digital market that stands to have explosive growth, but which will require a different business model and investment philosophy. “Like all disruptive business models, the natural enemy of the new is the old. The open question for all the existing service providers is how they will navigate through this challenge and can they adopt the new business models while driving the old ones,” he says.