From leaving Stanford at 21 to becoming the ‘Czar of Indian IT Industry’ - Azim Premji’s thought that brought success to Wipro

Earlier named as Western India Vegetable Products Ltd, Wipro has an interesting fact penned in its book of history. Initially, Wipro had nothing to do with software! Instead, it manufactured hydrogenated cooking fats.

It was after the untimely demise of Azim Premji’s father Mohamed Premji, that the young 21-year old electrical engineer from Stanford University had to drop out of his college and take over his father’s company. So, how did this electrical engineer, with no exposure to the ‘cooking fats’ business, establish a big empire?

Image: Gulbanoo and MH Premji | Gulbanoo was a doctor who helped found a children's hospital; and MH Premji founded Western India Vegetable Products, later renamed as Wipro

The 21-year-old CHAIRMAN!

When 21-year-old Premji took charge of the company, the shareholders were quite sceptical of Premji’s capability of running the business smoothly. In spite of that, he stayed motivated in his vision of making the company successful. After spending a lot of time learning about the company and its manufacturing process, the company expanded its offering to a wide array of items including hydraulic cylinders, toiletries, soaps, and lighting products under Azim Premji’s leadership.

My grandmother Dr Gulbanoo Premji with my parents at Amalner. She was chairperson of Wipro from 1966-83 & a huge support for my father in the early years. She was also the most generous person I knew. Her values shaped Wipro’s philanthropy ideals. #75YearsofWipro #TheStoryofWipro pic.twitter.com/jnFDnWNoW8

— Rishad Premji (@RishadPremji) January 12, 2021

The BIG leap

During the 1970s, when the Morarji Desai government was in power, the government issued aggressive policies against foreign companies. As a consequence, IBM, one of the leading hardware companies in India had to take the exit door. Azim Premji saw this as a great opportunity for Wipro to expand its wings.

Azim Premji in his early days

On June 7, 1977, Western India Vegetable Products Ltd. changed its name to Wipro Products Limited. It entered the hardware business in 1982 and later expanded into IT services, providing software solutions. In 1982, company nomenclature was changed again from Wipro Products Limited to Wipro Limited.

A Crucial Step

The year 1989 turned out to be one of the crucial years in the history of Wipro. In this year, Wipro formed a joint venture with General Electric (GE) for the manufacture and distribution of imaging products called Wipro GE Medical Systems. This merger proved to be so advantageous for Wipro that after this deal, Wipro started to flourish.

Initially, Wipro was selling a wide variety of items and there was not a single target product. So, GE’s collaboration provided Wipro ultrasound scanners, which they could sell as their target product. Also, GE provided them with a management model ‘Six Sigma’ to increase their working efficiency as they were struggling with efficiency management.

Throughout the late 1990s and early 2000s, Wipro continued to thrive with IT being its core business. Wipro launched a Business Process Outsourcing (BPO) unit in 2002 to further strengthen its place in the competitive market. Premji’s guidance and determination took Wipro to new heights and it became one of the first software companies to get SEI Level 5 certification! Analysing Wipro’s Growth Revenue is an important factor to check if a company is moving ahead steadily. Analysing Wipro’s growth in the last few years, there has been a significant increase in their revenue which is a good sign of their growth in terms of services offered. The IT giant also witnessed an increase in its net profit margin(NPM) from 14.98% in 2012 to 16.78% in 2021. Additionally, the average 10-year Return on Equity(ROE) of Wipro is 20%, which is significantly better than the desired 15% mark.

Source: Craytheon.com

But is revenue and other technical growth parameters sufficient for aspiring candidates to join Wipro? ‘No.’ We need to look at attrition rates of different IT companies to understand how Wipro performs in terms of its employee retention. 

Latest Attrition Rate Trends in IT

Source: Hiring Spree

The attrition rate is projected to increase over the next few quarters which is a great concern. By March 2022 it will be close to 12% and for June 2022, it would be 15.5% which is the highest as compared to some of its counterparts. So, this gives you more insight into the employee retention aspect, which is a great concern for Wipro.

Wipro’s Contribution during Covid-19

Due to the pandemic, many people lost their jobs and migrant workers were forced to go back home due to stringent measures announced by the government. During these tough times, it becomes imperative for the privileged section of society to help the underprivileged survive. In such a generous endeavour, Azim Premji and Wipro were never behind. As per Azim Premji Foundation’s report (till 15 June 2021), they have reached over 15 crore underprivileged people in more than 100 districts. They have served almost 54 crore meals to the most vulnerable. Amazing, right? 

Azim Premji is an inspiration for all of us. Be it business or philanthropy, he never settles for less. Azim Premji once said, “Success is achieved twice. Once in the mind and second time in the real world.” He did what he said. He showed great willpower and motivation even after his father’s demise to run the business when he was just 21. It was his business acumen and motivation to expand the business that took Wipro to new heights. We all can learn from him that even after so much success, the need to serve the underprivileged must always be there.

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