Wednesday, June 11, 2008

Azim Premji: Leadership Essay Outstanding Business Leaders of Asia


1.0 Introduction


"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."
Charles Darwin

Globalization has transformed the pace of change in the 21st century. In the early to mid 80's the pace of change was relatively slow. But since then Asia and the rest of the world has experienced rapid changes in the social, cultural, political and environmental contexts. This change has led to a shift in consumer needs, product changes, business expansion and an over all transformation of business ethics.

Alvin Toffler once said, that people, who fail to learn, unlearn and relearn will be termed illiterate in this new millennium. Organizations are subject to the same principles. No organization is devoid of change. Any business that does not respond to the rapidly changing social, cultural and political environments will cease to exist. To this extent the aphorism, change is the only constant in this world holds true.

Change involves people and wherever there are people there will be anomalies. The only way to manage change productively is through successful leadership. The old saying, 'You can lead a horse to water but you can't make it drink' provides good advice but more appropriate would be, 'You can manage a horse to water, but you must lead it to drink'. Herein lies the essence of leadership.

The difference between a great company and an ordinary one is the quality of leaders. Right through history we are reminded of this fundamental truth. Behind every successful business today is the benevolence of a great leader. Ford as we know it today exists because of the vision of Sir Henry Ford, the Virgin Group has reached unparalleled heights due to the efforts of Sir Richard Branson, and Reliance Industries in India emanated from the determination of Dhirubhai Ambani.

A leader as Henry Kissinger very rightly says is someone who gets his people from where they are to where they have not been. In the Bible, Moses led his people of out Egypt, Martin Luther King fought for the freedom of every black American and Mahatma Gandhi freed the people of India from the reigns of the British. These are all examples of great leaders who did extraordinary things.

India is fast becoming one of the most important countries in terms of developing world business. With an economic growth rate of 8% (with the aim of increasing this to 10% a year), and a middle class larger than the entire population of the USA, Indian business is set to have a global impact to rival that of China. (Source: Searjeant, G (2006). 'India to Increase its Public Spending', The Times, 1st March)

Indian business leaders have realized that their jobs are changing. They can no longer be benevolent rajahs. They need to explain their actions at home and globally. For this, they must educate themselves in the 21st century's key issues surrounding the "business of business": ethics, globalization, sustainable development, corporate social responsibility, corporate governance and climate change. In other words, honesty, integrity, accountability and business acumen. Leadership from the business elite that lacks these qualities has failed. Honesty and the trust are the very foundation of ethical values that must and will always be at the core of every company and business decision made in the pursuit of equitable wealth creation.

The personal integrity of a chief executive is at the heart of a company's culture and reputation. To lose it means a long, rutted road to redemption that may even be in vain.

One such Indian Business leader who embodies this change is Azim Premji.
He was running a small business until he saw the potential of computer software to change the world. He is now one of the richest men alive and has ploughed billions into a charitable foundation that bears his name.
Azim Premji is often referred to as 'India's Bill Gates'.

The way ahead is not easy; rather it is lined with tuff competition, increasing consumer demand, soaring growth rates and an unpredictable world economy. But the one to tread down the road less traveled is whom we call a leader.


"To be successful on a global scale for the year 2020 and beyond requires Indian companies to fast track the growth of their home grown management skills and leadership abilities to operate confidently anywhere in this world"
- Stephen Manallack

The new age business community is beginning to discover that a pessimist is not a good leader, but equally precarious is wild optimism that can lead to a kind of arrogance. While pessimism was a core feature of leadership in India, it is now hard to find with new leadership being driven more by dreams and determination. This wild optimism has seemed to have missed Indian business leaders at least as seen from their prudent decision making skills and public intonations.

Former U.S president Bill Clinton synopsizes this thought when he once said in a speech of his: "We all need to find as few demons as possible – and as many dreams as possible".


2.0 Azim Premji – Wipro Limited

Azim Premji founder and chairman of Wipro Limited, India's biggest and most competitive IT Company based in Bangalore is one of India's most successful business leaders. His success story is an inspiration to budding entrepreneurs. He has been India's richest man since 1999 with an estimated wealth of $ 6.7 billion. Yet his influence comes as much from his nonconforming personality as from his sheer wealth. His success can not only be attributed to his charismatic personality but also to his profound educational background which gives him the competitive advantage in business as used in business parlance.

At the age of 21, Premji was forced to leave Stanford University where he was pursuing an engineering degree to return to India so that he could take over the family business after the sudden demise of his father. At such a young age he had to shoulder the responsibilities that came with a business built by his father.

Self confidence, belief and determination combined together forms the bedrock of a great leader. Azim Premji's capability as a leader was first questioned at the first annual general meeting attended by him. A shareholder doubted his ability to handle the business at such a young age and thus advised him to sell his shareholding in the company. This infuriated Premji and gave him the motivation and inspiration to prove the rest wrong. The maxim 'Stand tall in the midst of adversity' has been proven true by Premji in not one but many occasions.
Under Premji's leadership Wipro has metamorphosed from a Rs. 70 million company in hydrogenated cooking fats to a pioneer in providing integrated business, technological and process solutions on a global platform. Today Wipro technology is the largest independent research and development service provider in the world. Thus it would be safe to say that he did indeed prove the doubtful shareholder wrong.

Another very crucial facet of a leader is foresight. He must possess the ability to think and look beyond his times. To explore hidden opportunities and cease them when the time is right. Premji dreamt a dream and when the time had come he went ahead and made it happen. What he inherited was a vegetable oils and soaps business but it is only because he had the foresight to see growth opportunities in the IT sector that he is today the chairman of one of the three billion dollar IT enterprises in India. Under his leadership Wipro has embarked on a journey of continuous expansion and diversification.

In 1975, the company diversified from vegetable oils to hydraulic cylinders and fluid power components. They also produced soaps, toiletries and baby care products. Wipro also started manufacturing light bulbs with General Electric. When GE moved out of India in 1997, Premji saw this as an opportunity for growth. That's when Wipro entered the IT industry. They first started manufacturing hardware and later went on to software development.

Fundamental also to the disposition of leaders is Integrity and Premji is known to be a stickler for it. He refuses to give bribes to get his work done. He had to wait 18 months to get an electrical substation for the vegetable oil manufacturing unit. The company incurred very high costs as they had to run the unit on captive power generation for 20 months. But he preferred the extra financial liability rather than abolish his ideals and values.

Every leader must strive for excellence. With the rapidly changing global economy everyone strives to be the best. Leaders cannot settle for anything less than being the best. Being average is just not enough.

In the knowledge based industry India has the advantage of being a quality leader. India has scaled the boundaries of quality when it comes to IT. At Wipro quality is their primary concern. Whether it is quality of product or service, to them the customers must always receive the best. Anything short of that is unacceptable. This belief in excellence propelled Premji to put Wipro on the world map by making it the world's first SEI CMM Level 5 software services company and also a leader in Six Sigma to quality in India.

"Wisdom lies neither in fixity nor in change, but in the dialectic between the two".
- Octavio Paz

Leaders must be willing to adapt to change. Wipro faced the need to change when Vivek Paul the CEO left the company. Premji promptly saw that the business needed to get closer to the customer and it was time to empower his resource pool of talent. The business was then segmented into sub companies and each one approached the customer in an autonomous way. With this reorganization Wipro tried to bring leadership closer to the customer and they achieved this by delayering the organization and empowering business leaders.

People are fundamental to organizations. They form the epicenter of the business and thus every leader must realize and accept this cardinal truth if he wants his business to succeed. Wipro's primary concern is its employees. Training is of utmost importance to the organization. As part of the regular on-the-job training, leadership is a core element. Leadership training is provided at the entry level and continues as the employee scales the heights of the corporate hierarchy. Azim Premji's success can be found in his approach to leading people to achieve more. "We give people major responsibility even if they are only 60% ready. Our experience is that people are pretty elastic when you give them responsibility, and they just grow rapidly with the job".

One of Wipro's oldest leadership development initiatives is the Wipro Leaders Quality Survey which started in 1992. Wipro endeavors to nurture top class business leaders. This framework comprises of 8 qualities which are based on the vision, values and business strategy of the company. This is a 360 degree process which starts with obtaining feedback from respondents and ends with each leader mapping a Personal Development Plan (PDP) based on the feedback received.

James McGregor Burns (1978) first introduced the concept of transformational and transactional leadership.

Azim Premji can be classified as a transformational leader. According to Burns a transformational leader is one who offers a purpose that transcends short term goals and focuses on intrinsic needs. The leader takes a visionary position and inspires people to follow.

Wipro's vision focuses on attaining leadership in the areas of business, customer and people. They aspire to achieve leadership in the following ways:

Business leadership – To be among the top 10 Information technology service companies globally and the No. 1 IT company in India
Customer leadership – To be the number one choice of customers through innovative solutions and Six Sigma process
People leadership – To be the top 10 preferred employers globally by creating an environment of empowerment, intellectual challenge and wealth sharing.
Brand leadership - To be among the 5 most admired brands in India

Thus by articulating this vision and leading his employees to see the long term benefits of his dream, Premji has very successfully built an organization that transcends its own need for financial gain for the good of the customer.


3.0 Shahnaz Hussain – Shahnaz Hussain Herbals


Look around the world today and you see a growing number of women leaders, whether it's in business, politics, sports or any other field. There has been a paradigm shift in the way the world perceives women. From being primary 'care givers' they are now considered as 'decision makers'. Today women mean serious business. Gone are the days when women dwelt in the shadow of men. Their lives centered on their home and family. Today they are more independent, confident and are well equipped to take on whatever the world throws at them.

Thus it would be just to say that some leaders are born women.

When it comes to leadership and management, women "tend to lead in circles rather than pyramids" (Brody, 1994). In other words instead of creating a competitive and hierarchical environment they prefer to work in a more co-operative manner. The success of women in managerial positions can be attributable to their superior creative problem solving and intuitive management skills. They adopt a more interactive approach to management by encouraging employee participation and also attempt to "enhance other people's sense of self worth to energize followers". (Brody, 1994)


Shahnaz Hussain is an excellent example of female entrepreneurship in India. She is one of the most prominent personalities of the corporate world.

Her company Shahnaz Hussain Herbals is one of the largest manufacturers of herbal products in the world. The Shahnaz Hussain group based in New Delhi, India was worth $ 100 million in 2002. She has received a number of accolades for her endeavor to take the beauty industry in India to unimaginable heights.
Some of these awards include, "One of the Leading Women Entrepreneurs of the world", "The Arch of Europe Gold Star for Quality".

"The very essence of leadership is that you have to have great vision"
- Theodore Hesburgh

At the epicenter of Leadership lies vision. Without this core element leaders will perish. It is in possessing a vision and inspiring others to embrace the vision that makes ordinary people extraordinary and that's whom we call a leader. According to Warren Bennis, vision is the "guiding purpose" and the "compelling goal". There is however a clear distinction between managerial and Leadership vision. The former motivates performance improvement and the latter shows an organization what it could become.

To that extent Shahnaz Hussain is a leader with great vision. When she first decided to enter the cosmetic industry in India, she wanted to do something different. Something no one had ever done before. So instead of using chemical cosmetics in her salon she decided to go the natural way. Her prime differential advantage was that she capitalized on the goodness of Ayurveda in cosmetics. Ayurveda is completely natural and no one had ever thought of this ground breaking idea before. No sooner had her products dominated the Indian market that it quickly gained global appeal as well. She took the ancient Indian tradition of Ayurveda to every corner of the globe.



Having conquered the global market she now wants to take cosmetology to where it has never been before – space. People who go to space suffer a lot from skin problems. Hence she is focusing her attention on creating products that would prove to be beneficial to astronauts. Who would ever think of using cosmetics in space – I wouldn't, you wouldn't but Shahnaz Hussain did.

As her company grew, so did the people who worked for her. She inspired people to share her dream. The ability to see into the future and cease opportunities that lies ahead is what defines a true leader. As Alan Kay said, "The best way to predict the future is to invent it".


An Inspirational leader functions from the heart, engages other people and provides them with an energizing vision. Shahnaz Hussain is an inspirational leader. Being a woman in man's world is not easy and achieving success to the extent that she has is both inspirational and provides other women the motivation to follow their dreams.

I would like to highlight four characteristics of inspirational leaders and prove to you how Shahnaz Hussain possesses these very same qualities. Firstly, Inspirational leaders set the pace. They do not force people to do anything that they are unwilling to do. Rather they lead by example and inspire others to model and manifest their positive attributes. The Shahnaz Hussain brand has grown to include 400 different kinds of products and 200 different beauty centers worldwide. From the 1970's to date the brand has scaled great heights and continues to grow. All along the way she has provided her employees with passion and motivation to build a brand which is not only renowned the world over but a brand they are extremely proud of.

Secondly, Inspirational leaders believe in the future. At every step she didn't settle for the best. Her hunger to be better than the best provided her with the impetus to keep going and growing. After having established her brand on this planet she now wants to explore the realms of space. Her foresight is also reflective in the fact that she is a pioneer of vocational training in cosmetology in India. She started professional schools at a time when only apprenticeship training was established in India.

Thirdly, they connect people to the larger story. One fundamental responsibility of leaders is to provide people with the understanding that their lives have meaning and that their work matters. By continually researching and developing new kinds of products, providing solutions to growing skin problems etc Shahnaz Hussain keeps the hope kindled in the hearts of her employees. Hope that ensures that the best is yet to come and innovation can never cease to exist.

Lastly, inspirational leaders help people believe in themselves. It's not enough just to get people to share your dream but rather to get them to believe it is possible to change that dream into reality. Great leaders help people believe in themselves. The fact that the Shahnaz Hussain brand has grown so extensively goes to show that people are increasingly partaking of her vision and are willing to be a part of that dream.

As Joel Barker very accurately says, "Vision without action is merely a dream. Action without vision just passes time. Vision with action can change the world".


4.0 Conclusion

This essay goes to prove that leaders don't do different things, they just do things differently. Each one of us possesses the innate quality to lead. It's up to us to decide whether we want to capitalize on this gift and use it for the advantage of mankind. Be the change you want to see.

As Andy Warhol so rightly said,

"They always say time changes things, but you actually have to change them yourself". There can be no growth if we keep doing things the same way. Learn from tradition, cultivate ideas and embrace experimentation.

The macrocosm of business is experiencing a paradigm shift in both the needs and wants of consumers. Competition is more poignant and this has led to a growth of a large number of businesses around the world. The age of slow incremental change has given way to a more rapid and fast paced rate of aggrandizement. Thus the future promises to be both industrious and unpredictable at the same time.



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