On Wednesday, Bangalore-based Wipro announced its Q4 results (profit up 7.7% to Rs1,481 crore) and forecast muted revenue growth for its main IT services business (which contributes about three-quarters of the group’s sales). Wipro said it expects June quarter revenue from its IT services to be around $1.55 billion, some 0.6% higher than the March quarter figure, and much lower than analysts’ expectation of a 2-4% rise. That was enough provocation for the stock market to savage its shares by 8%.

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Amid all the issues, Wipro’s CEO TK Kurien, just one year into his job, remained unfazed, focusing instead on building a stronger and more aggressive organisation. The time has come, he told Suparna Goswami Bhattacharya soon after the results, for companies to differentiate themselves. And said Wipro will show how:  Q: What were the factors behind your lacklustre guidance?A: The kind of pick-ups we expected from the deals did not happen this quarter. So, going forward, the situation looks much better, but we have factored in the time it usually takes to finally execute a project.

Q: You lost the No. 3 slot to Cognizant. What are the plans to regain it?A: It is just a number game. More importantly, I feel you are No. 3 or No. 1 based on how your customers rate you, not what you think about yourself. Ultimately, in the long term, our ambition is not to be No. 3 but No 1. It may sound like smoking pot right now, but reality is, we want to be the No 1 player.

Q: You have linked customer satisfaction and productivity to variable pay. How well has this worked?A: It is difficult to say how much it has paid off, but here are some statistics: customer satisfaction has improved by 20 percentage points. This has been the highest increase in the history of Wipro.

This is a big, big change. In the past, we have been picked up for not being very strong on the client mining and hunting front. So, we have done a couple of things on this front as well. We have identified 138 core accounts and have a dedicated team to mine these accounts. We also have a separate team to hunt for new clients.

Q: How bullish are you about the Indian IT industry?A: I am very bullish. There is plenty of opportunity. Our technology is going through a massive change. Our core business is also getting far more competitive. There is no longer any differentiator.

This is an interesting place to be in. The way companies differentiate will determine how well they perform. We are really seeing a cusp of change. The way players look at the next big change and how they react to it — that will determine to a large extent the difference between winners and losers.

Q: From the time you took over as CEO, things have changed a lot. How would you rate yourself and your team on deliverables?A: I would give a positive rating … in fact, I would say very positive — there is no question about it. Like in everything else, we have done our basics right. The next phase — of differentiation —  is going to be a difficult  one. The team is charged and ready to deliver.  

Q: Last year, when you were asked to lead, what was your first reaction?A: I have always believed that a good company has three things — customers, people and culture. We were outstanding in all three.  I think I was confident. I guess it is the nervous energy that got us  where we are today. Having said that, the fact remains we have a long way to go. What you are seeing now are baby steps.  I feel when you take over as CEO, the legacy that you leave behind is important. If the company does well after you have left, then you will have achieved your goals.

Q: How much have things changed internally?A: Big change has happened on the employee front. For instance, look at the attrition level. It was inconceivable last year. If we compare this quarter with last year’s fourth, it has dropped by 6.5%. That’s a pretty dramatic change. On top of this, we are pretty clear that we maintain the commitments we give to our employees. We announced last year that every year on June 1, employees will get their hikes. We will stick to this.

So, even though other companies have said they are not going to do it (give hikes), we are committed to giving one.

Q: What are the things you like in rivals such as Infosys, TCS, Cognizant and HCL — things you would like to adopt at Wipro?A: Let me not go there. I will tell you why. Every company has to have its own strategy. We are very clear that at the end of the day, we have to be in front of our customers, which means we have to be proactive, be on the edge and add value to our customers.

Also, we want to live to our promise. Compensation is a very big example. I personally believe it is completely wrong to go after employees and tell them, ‘you won’t have any increase in your salary this year even if your customer situation or the market situation is bad’. After all, the cornerstone of any great organisation are its employees.

Q: Going forward, do you see the labour arbitrage getting negated, compared with some other emerging markets, considering that Indian IT staff salaries are growing at 8-10% annually?A: You can’t have cost as your differentiator for a long time. It has to come from value-addition and not just cost. Now, when this crossover takes place is something all of us are struggling with. So, fundamentally, that is something we are trying to see, what can be done to reach the next level.

Q: There is an added impetus to large deals. As a company, is this your new strategy?A: Last year, we won ten very large deals. Our endeavour is to chase deals on a proactive basis rather than a reactive basis.

Q: So, has the win ratio changed over the last one year on this count alone?A: It is not the win ratio, but the value-addition that has changed. Because, when you chase deals in a proactive manner, you are putting your value proposition in front of your customer, which is highly differentiative.

Q: How do you plan to differentiate yourself from peers?A: I would rather have my customers talk about it. This is an important part of our philosophy which is that you have to relate through what your core beliefs are.  You can’t be saying one thing and doing another thing.