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Middle Managers Who Act As Routers Have No Future: Wipro CEO Kurien

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Middle Managers Who Act As Routers Have No Future: Wipro CEO Kurien

Wipro CEO T K Kurien says major organizational restructuring lies ahead as large information technology (IT) services companies like his keep pace with the demands of a digitized world.

 

Significantly, he also speaks of an organization that is built on speed as opposed to being built on scale, which is how most IT services companies have grown traditionally.

 

Building such an organization will not be simple. In an exclusive interview with Boom Live’s Govindraj Ethiraj, he describes how the demands of speed will change the very nature of organisations like Wipro in coming years.

 

Ethiraj: What are the big trends that you are seeing in your customers particularly in the context of going digital?

 

Kurien: There are two sets of customers. It is evident that some 40% of capital expenditure for any enterprise is going to be in technology. The funny thing is that this 40% is no longer controlled by the Chief Information Officers (CIOs). So what’s happening is that in many organizations, the CIO’s role is slowly getting relegated to none.

 

Once you build for speed, you have to lower head count and be quick in terms of response and the ability to integrate and understand the customer’s problems.

 

Our job as an organization is to ensure that the CIOs remain relevant. At the end of the day, there are the biggest buyers, they have been our biggest buyers and it’s important for us to train them to be relevant to the future. And yet, we have to address a completely new segment out there. The problem with the new segment is it requires very different skill sets, different speeds. It’s not something that you can do using your current organization model.

 

So, in a way there are two ends of the spectrum that we are handling; one built for speed, and the other one which is built for scale. For large organisations like ours, innovation comes very hard. It’s much easier in small organisations. Once you build for speed, you have to lower head count and be quick in terms of response and the ability to integrate and understand the customer’s problems.

 

In Wipro, we have 700 people doing travel. That number would come down to 20.

 

Ethiraj: Give me an illustration of what is changing and which is exposing a gap in your learning?

 

Kurien: Let me give you one simple example that I talk about every day. A couple of years ago, a customer of ours came to us and said, “You know what, if I look at my enterprise, between operations and technology, I have today about 700 people handling the most basic function that runs at every enterprise, which is travel.”

 

So, the question that was thrown at us was that, “Hey listen! There are secretaries, there are travel departments, there are external vendors, everybody is working on this. So, is there a way by which we can fundamentally look at this process and see how you can disintermediate it?” So, about a year ago, we started developing a product that could do this.

 

Now we have come up with a product where if you are sitting in Bombay today and you want to go to Bangalore – on your mobile phone there’s an app; you click the app and you put your schedule on your calendar assuming that you have to be on Brigade Road in Bangalore at two o’ clock in the afternoon. It will then tell you specifically which flights you should take based upon the traffic in Bangalore.

 

Then, based upon the flights if you got linked back to a particular airline, only that airline will only show up in your schedule because that’s your corporate travel. The minute you press the button, tickets get booked, the boarding pass gets sent to you and the boarding pass also lands in your phone. That’s the level of integration that sits in these kind of applications.

 

Now, this came out of a customer idea. We have implemented with three customers already, we are implementing within Wipro. In Wipro, we have 700 people doing travel. That number would come down to 20. Just an example of how things can completely change when you use location, mobility and context, to really take information and use it effectively.

 

Ethiraj: You have been asked before about headcount, do you see it coming down?

 

Kurien: I think it’s going to be tough given the social context. It’s easy to do using technology; it’s tougher using it given the social context in mind. We, as an industry, have evolved by adding head count. We have got a whole bunch of middle managers and senior managers who have seen that model. Once you see something happening for 20 years, you believe that’s the only reality. That’s the problem. So, I think it’s going to be the biggest problem that we are going to have in that area is going to be internal change management than the external change management.

 

The challenge is going to be how we break up organization into two; one that runs fast and worries about growth, the other one worry that manages growth and worries about costs. So, it’s a different approach altogether.

 

Ethiraj: Are you also being self critical of your middle management?

 

Kurien: I think that’s true. It’s not middle management by itself and I wouldn’t define middle management very clearly. There’s middle management that really adds to technology and I think that’s fabulous to have. We absolutely need those guys. And those are people we really treasure.

 

There are other people who just manage people and that’s the game that you don’t want in the future. Because, having a person who sits as a router, routing traffic from one end to the other, communicating upward and managing downwards is not a function that you require long term. That particular skill set is not going to be required any more.

 

Ethiraj: As you look ahead, in the context of this digital future, what are the key challenges and opportunities ahead ?

 

Kurien: I think the opportunities are very clear. The opportunity would be really around building solutions for scale. This means that the partner ecosystems that we work with are going to be very different from the partner ecosystems that we were used to in the past. That’s the first big opportunity the way I see it.

 

The challenge is going to be how we break up organization into two; one that runs fast and worries about growth, the other one worry that manages growth and worries about costs. So, it’s a different approach altogether.

 

And the last piece which I think is an opportunity and a threat is that while we are trying to figure out the first two, our competitors and not sitting by waiting for us to figure it out. They are attacking us every day. And how do we manage competition given the customer base that we have. If you give up customer base today, tomorrow you are finished. That’s a reality.

 

Ethiraj: Who is your customer in a digital age?

 

Kurien: I think the CIO is going to remain a customer; he is going to become and remain an important customer. The other segments; the Chief Operating Officer (COO), the Chief Marketing Officer (CMO), the Chief Financial Officer (CFO) are going to become critical for us.

 

There is going to be a movement out. So for the CIO, the only example I am going to give is that if you go back to 1929, and if you go back to just the automobile industry, there used to be a role that was called the head of utilities. In Ford Motor Company in 1929, the second most powerful guy was the head of utilities because Ford ran the largest tire shop, the largest glass shop, the largest steel plant in the world and if you did not have utilities, you were dead in all this. Right now, you go back to Ford Motor Company and ask them who is your head of utilities; chances are that nobody will know about that guy.

 

Roles depending upon the complexity get relegated when complexity itself is removed. The future is going to be about simplification and removing complexity. So, the CIO’s role has to be completely morphed into becoming an integration officer rather than just remaining a technology guy or the information guy. I think that’s the challenge for them.

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