Why really did Vivek Paul quit Wipro?

Disclaimer: Everything that follows is merely speculation on my part, in my individual capacity. Everything I have written below is based on the information freely available in the public media, like the newspapers and the magazines. I have no access to any non-public or confidential data/documents which support or refute what is written below. Specifically, I don't have access to any information or documents internal to Wipro, nor have I been privy to any discussions, which support or refute what is written below.

Background info:

Rediff Article: Why Vivek Paul quit Wipro: The inside story
Rediff Interview: Vivek Paul: It was the right time to go
Times of India Interview: Why Vivek Paul really quit Wipro


I was very surprised when I heard about Vivek Paul's resignation as the Vice Chairman of Wipro. The reason is that Wipro still has a long way to go in dominating the world software services market, and there are still a lot of great things he could have achieved through Wipro. Why really did Vivek Paul quit Wipro? The question has never been satisfactorily answered.

Vivek Paul's 4-by-4 vision - to make Wipro a 4 billion dollar company by 2004 - was not realized yet. Regarding this vision, Vivek Paul admits in the Rediff interview, "Wipro didn't get anywhere close." Granted that 2004 passed by before the 4-by-4 vision could be achieved. But, I don't think Vivek Paul is the kind of person who would abandon his vision just because the deadline he set for himself has passed. He seems to be the kind of person who would be all the more determined to achieve the vision or something bigger.

In the same interview he says that he asked himself, "Do I declare a new vision and sign up for it?", then decided not to do so, and quit! That is not very convincing!

"The inside story" from Rediff tells us that Vivek Paul quit Wipro because he had become "restless" within Wipro, and wanted to do "something else". It is hard for me to believe that Vivek Paul felt "restless" because he did not have anything more or anything exciting to do within Wipro. There are still a lot of miles for Wipro to travel on its way to the top, and Vivek Paul simply does not come across as a restless young buck who gets bored and changes tracks just for the sake of change. No, if he felt "restless" and frustrated, there must be some other reason.

In the TOI interview, Vivek Paul was asked, "Was there any kind of pressure that forced you to quit?"

His answer: "Well, there was some push and pull. If you have $15 billion ( market capitalisation of Wipro) in family business, how can you not tend to it? I would do the same if I were in his position."

I am willing to bet that the above quote alludes to the main reason for Vivek Paul's departure from Wipro: he did not foresee significant and lasting rewards and returns coming his way for all the work he was doing for Wipro. Granted that Vivek Paul earned one of the highest salaries among Indian professional managers, but that is nothing compared to the giant organization he was building with sweat and soul. When you build something like that, putting the best years of your life and your best efforts into it, you expect more than just periodic compensation and a relatively tiny share allocation.

It is true that Azim Premji has often said that his sons won't have easy unearned right-of-way into Wipro management and start tending the company. However, he has never said that his sons won't get the over 83% of the company that he holds (Source: Wipro Shareholding Pattern for quarter ending Mar 31st 2005, see the percentage sub total of "PROMOTERS HOLDING").

I am speculating that Premji fully intends to retain this over 83% of the company within the family. This must have made Vivek Paul realize that despite putting in so much effort to build up the Wipro business, in the long run, he would be nothing more than just one of thousands of Wipro employees who came, worked hard and left. He must have realized that even after producing great results for the company, he would not have anything really significant (comparatively speaking) and lasting for himself.

I feel that this is really why Vivek Paul quit Wipro. This is also the reason why many senior managers and super-achievers quit Wipro often at the height of their careers in the company, and venture out to work for others or start their own businesses. After spending a certain number of years with Wipro, senior people seem to leave with a certain disappointment, and a belief that they could achieve more for themselves elsewhere. Is that a case of the person growing bigger than his role and seeking higher goals, or is that a case of the person hitting a glass ceiling within the company beyond which he does not see rewards commensurate with his contributions?

Wipro seems to believe that bright young people will come in and put their best talents, energies and efforts to help the company achieve success, and that they will do all this just for the thrills and satisfaction of a challenging job well done. That is true to a certain extent. Every year, Wipro manages to find people - at junior and senior levels - who do precisely that.

However, Wipro should not get complacent and think it is invincible. It should carefully consider the cost of consistently losing senior people, and the effect that has on the company's growth. Wipro is a large, robustly administered company and a senior person leaving now and then may not affect the status quo adversely. However, there is a cost to growth: not only because the senior people take away with them valuable knowledge, experience and drive, but also because these people almost always add fuel to Wipro's competition.

Wipro should realize that it is not an organization like the country's defense forces. Bright, capable young people join the defense forces. They put in good work. They rise to the highest levels. They work for a monthly salary during their entire careers, and retire with a pension. That cannot happen in the business world. In capitalist organizations, people at the highest levels want to own a part of the business and share in the profits. Not just draw a salary and retire, no matter how high the salary is. A company which does not fulfill this aspiration, cannot keep the loyalties of its senior-most people.