Wipro’s Change in Leadership – a Sign of a Larger Industry-wide Problem? | Sherpas in Blue Shirts

Posted On February 10, 2011

When Wipro Technologies announced the stepping-down of its two joint CEOs, it cited needs for growth and a simpler organizational structure as the primary reasons. Perhaps. But rather than speculate on the validity of these statements, I believe the move is a very clear sign of the inherent paradox in the offshore linear business model.

Let’s look at the facts. In the pursuit of growth, offshore providers’ headcount has skyrocketed. The bait they have frequently used to attract and retain people is an onsite trip, often for an extended time, to the client’s operations. However, given the inherent bent of these providers to offshore more services and a limited ability to send people onsite, providers now commonly lure existing staff with opportunities to progress into team lead or management roles.

However, with employee bases expanding above 100,000 for large Indian providers, and approximately 90 percent of the workforce in India at any given point of time, the opportunity to establish different management titles and growth paths is limited. Nevertheless, because Indian employees cherish management or lead positions, however immaterial they may be, they are frequently promoted into these roles after three years within the organization.

But the providers can’t play this game for long. Employees will quickly realize the great wall of inertia they are facing in terms of a career path and growth. Additionally, this strategy results in a significantly complex management structure, especially on the delivery side.

Therefore, despite having a reasonably agile business organization, the providers are finding it tough to meet the need for flexibility and agility in the new environment. They continue reorganizing their business units and changing business leaders, without acknowledging that a bloated delivery management organization and a lean business management organization cannot co-exist. To be lean and agile, service providers must be so on all fronts.

What strategy do you think Indian providers can leverage to tackle this paradox? How can they make their delivery and their business organizations more lean and agile, while also offering sufficient incentive for employees to remain?

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