Thierry Delaporte’s exit from Wipro’s corner office a year before his term was supposed to end wasn’t a surprise, in view of the IT major’s indifferent performance under his watch. In the third quarter, for instance, the company reported a 12% year-on-year profit decline. With a 6% profit growth in the same period, HCL Technologies displaced Wipro from its position of the third largest IT services provider in India. The acquisitions Delaporte made turned out to be expensive and the weakness in consulting business added to the overall disappointment. On top of that, Wipro saw at least 10 senior-level exits last year alone due to the perceived dissatisfaction over the “outsider” Frenchman’s attempts to restructure the organisation.
Wipro is no stranger to CEO changes — four of its six CEOs in the last 16 years stepped down before completing a full term. In any case, historically, any newly appointed outsider CEO, who has tried to change the status quo in the short term, has had to pay a high price when the situation failed to pan out as planned. But Delaporte’s exit has rekindled the unfortunate debate over whether it is yet another example of an expat CEO biting the dust in India. A back-of-the-envelope analysis of India’s top 20 business houses showed that of roughly 180 CXO-level expats recruited over five years, at least 50-60% resigned prematurely, many within two years. A Harvard Business Review article a few years ago pointed out that India’s share of expat CEO exports stood at 30% and imports at 3%. This is in sharp contrast to many countries. The number hasn’t changed very significantly since then.
Partly, this could be an Asian problem where promoter-driven businesses rule the roost. Asia’s relationship-driven business environment with a premium on loyalty is a hostile setting for expat CEOs to bloom. It is often about culture. Caught between Indian employees and multicultural clients, expats end up being close to neither, which impacts business. India Inc has also played its part in the aversion of expats to take up roles in the country. The Vishal Sikka saga in Infosys is a prime example of that. Sikka had to quit abruptly after some of his decisions that did not conform to the culture of Infosys were questioned publicly. Wipro’s former vice-chairman Vivek Paul, an India-born American national, quit after what was believed to be a clash of ideas with the promoters. Later, Paul said Indian managers loved to be in a cocoon.
Also Read Bumps on the road: New BoT terms for highway construction may throw pvt investors into risk-aversion mode E-commerce needs a bulwark The elephant in RBI’s room The giant has arrived: India’s rise as a global power creates a tightrope of domestic and international aspects Microsoft CEO Satya Nadella hit the nail on the head when he said that countries which are not expat-friendly would likely miss out on the global technical boom. Nadella, of course, took care to mention that he remained hopeful about the land of his birth. But the point wasn’t lost on anybody. It is unfair to deprive India Inc from making use of the best talent available globally, more so when the world is being increasingly perceived to be one large market without boundaries. A CEO is supposed to be a professional from any part of the world working under the supervision of a board of directors, and their nationality should hardly be a concern. Delaporte’s successor, Srinivas Pallia, may well succeed in opening up new frontiers for Wipro going by his stellar record in the company so far, but that should have nothing to do with whether he is “home-grown” or an expat.
Thierry Delaporte’s exit from Wipro’s corner office a year before his term was supposed to end wasn’t a surprise, in view of the IT major’s indifferent performance under his watch. In the third quarter, for instance, the company reported a 12% year-on-year profit decline. With a 6% profit growth in the same period, HCL Technologies displaced Wipro from its position of the third largest IT services provider in India. The acquisitions Delaporte made turned out to be expensive and the weakness in consulting business added to the overall disappointment. On top of that, Wipro saw at least 10 senior-level exits last year alone due to the perceived dissatisfaction over the “outsider” Frenchman’s attempts to restructure the organisation.
Wipro is no stranger to CEO changes — four of its six CEOs in the last 16 years stepped down before completing a full term. In any case, historically, any newly appointed outsider CEO, who has tried to change the status quo in the short term, has had to pay a high price when the situation failed to pan out as planned. But Delaporte’s exit has rekindled the unfortunate debate over whether it is yet another example of an expat CEO biting the dust in India. A back-of-the-envelope analysis of India’s top 20 business houses showed that of roughly 180 CXO-level expats recruited over five years, at least 50-60% resigned prematurely, many within two years. A Harvard Business Review article a few years ago pointed out that India’s share of expat CEO exports stood at 30% and imports at 3%. This is in sharp contrast to many countries. The number hasn’t changed very significantly since then.
Partly, this could be an Asian problem where promoter-driven businesses rule the roost. Asia’s relationship-driven business environment with a premium on loyalty is a hostile setting for expat CEOs to bloom. It is often about culture. Caught between Indian employees and multicultural clients, expats end up being close to neither, which impacts business. India Inc has also played its part in the aversion of expats to take up roles in the country. The Vishal Sikka saga in Infosys is a prime example of that. Sikka had to quit abruptly after some of his decisions that did not conform to the culture of Infosys were questioned publicly. Wipro’s former vice-chairman Vivek Paul, an India-born American national, quit after what was believed to be a clash of ideas with the promoters. Later, Paul said Indian managers loved to be in a cocoon.
Microsoft CEO Satya Nadella hit the nail on the head when he said that countries which are not expat-friendly would likely miss out on the global technical boom. Nadella, of course, took care to mention that he remained hopeful about the land of his birth. But the point wasn’t lost on anybody. It is unfair to deprive India Inc from making use of the best talent available globally, more so when the world is being increasingly perceived to be one large market without boundaries. A CEO is supposed to be a professional from any part of the world working under the supervision of a board of directors, and their nationality should hardly be a concern. Delaporte’s successor, Srinivas Pallia, may well succeed in opening up new frontiers for Wipro going by his stellar record in the company so far, but that should have nothing to do with whether he is “home-grown” or an expat.
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A needless debate
7
14
10.04.2024
Thierry Delaporte’s exit from Wipro’s corner office a year before his term was supposed to end wasn’t a surprise, in view of the IT major’s indifferent performance under his watch. In the third quarter, for instance, the company reported a 12% year-on-year profit decline. With a 6% profit growth in the same period, HCL Technologies displaced Wipro from its position of the third largest IT services provider in India. The acquisitions Delaporte made turned out to be expensive and the weakness in consulting business added to the overall disappointment. On top of that, Wipro saw at least 10 senior-level exits last year alone due to the perceived dissatisfaction over the “outsider” Frenchman’s attempts to restructure the organisation.
Wipro is no stranger to CEO changes — four of its six CEOs in the last 16 years stepped down before completing a full term. In any case, historically, any newly appointed outsider CEO, who has tried to change the status quo in the short term, has had to pay a high price when the situation failed to pan out as planned. But Delaporte’s exit has rekindled the unfortunate debate over whether it is yet another example of an expat CEO biting the dust in India. A back-of-the-envelope analysis of India’s top 20 business houses showed that of roughly 180 CXO-level expats recruited over five years, at least 50-60% resigned prematurely, many within two years. A Harvard Business Review article a few years ago pointed out that India’s share of expat CEO exports stood at 30% and imports at 3%. This is in sharp contrast to many countries. The number hasn’t changed very significantly since then.
Partly, this could be an Asian problem where promoter-driven businesses rule the roost. Asia’s relationship-driven business environment with a premium on loyalty is a hostile setting for expat........
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