Azim Premji targets primary education; he believes that even a semi-educated girl can work wonders . she will have a small family and ensure health, hygiene and cleanliness

He was once labelled as 'the richest Indian', but Mr. Azim Premji, the CEO of Wipro, will soon be known as .one of the most concerned Indians' as he works for primary education all over the country. The composite photograph shows him speaking at the last meeting

Wipro deals in information technology, hardware, software, edible oils, soaps, lamps, laptops and other fastmoving consumer goods. But are you aware that it has set up a foundation that addresses primary education in 16 states covering 60% of India's population?

But why is Mr. Azim Premji, once labelled the "richest Indian", discharging his social responsibilities only in the field of primary education?

That's because he strongly believes that even a semi-educated girl, when she grows up and gets married, will have a smaller family and paymore attention to cleanliness, hygiene and primary health care.

"But the most primary reason is that this (working at the level of primary education) helps in the character building of a society. Working with young people builds the character of the country - this is absolutely fundamental (an incontrovertible fact)."

Mr. Premji shared this vital bit of information during his interaction with members at the last meeting. The meeting itself, which was a joint affair along with the Rotary Club of Bombay Mid-Town, had a sell-out attendance, with members standing in the aisles to hear himspeak.

In a brief presentation at the beginning of his afternoon in the company of Rotarians, Mr. Premji made a staid, sedate presentation on the ten virtues of leadership that he had culled together in the course of a long, illustrious career. (The complete, unedited text of his speech is reproduced on Page 6.)

When Wipro meets TCS and NRB Bearings. Pankaj Baliga of TCS snapped with Mr. Azim Premji of Wipro at the last meeting. While Trilochan Singh Sahney (NRB Bearings) is at left, at right is Dr. O.P. Mehra of Bombay Mid-Town who introduced Mr. Premji

The other side of Mr. Premji emerged only after he was through with the academic part of his talk. The question-answer session that followed saw him in his element, thrusting at the Finance Minister here, sparring with the Prime Minister there, assailing parents for their children.s conspicuous consumption and warning of social unrest unless certain tendencies were kept in check.

'30% OF INDIA'S 5.5 MILLION PRIMARY TEACHERS DO NOT ATTEND SCHOOL -THEY ARE UNIONISED'

Mr. Premji started the Q&A session by revealing that in 1977, on account of policy decisions taken by Mr. George Fernandes, the then Industry Minister, IBM quit India in a huff although it had 65% of market share. ("IBM in those days was a different IBM; it thought the world could not survive without IBM.")

Around that time, his company was looking for an opportunity to get into a high-tech business without spending too much money and a business that would give it recurring service revenue. Finding a sudden opening, Wipro took the plunge into uncharted territory by starting to make microprocessor-based mini computers.

They were an almost instant success when launched in the late .80s, as the company focused on aftersales service. From there, Wipro moved on to global software services, building the global model of remote delivery. Today, that accounted for about 88% of its total revenue.

Shailesh Haribhakti noted that Wipro had moved from being a leader in India to being a world leader. What were the key differentiations that helped one become a leader on the global scene?

Mr. Premji said the most important quality for global leadership was a high degree of inter-cultural sensitivity. An organisation could not become global merely by having an employee population that was global. It had to have a leadership population that was global.

Seeing is believing. And so is hearing. There was a full house when Mr. Azim Premji rose to speak. The meeting of the Rotary Clubs of Bombay and Bombay Mid-Town was held in the Rooftop Restaurant of the Taj in Bombay on Tuesday, December 11

Out of 400 employees working for Wipro in Japan, about 35% were local Japanese; out of 3,500 employees in Europe (including the UK, continental and northern Europe), about 1,500 were locals. Thanks to a recent large Swedish acquisition in the field of engineering, Wipro now had 2,500 local Europeans working for it.

In the US, the proportion was lower, though the company had about 8,000 to 9,000 people working there on jobs for one to five years. These figures did not look bad in terms of its global delivery model because 70% of the people had to be based in India. But they did not look very good if one looked at the percentage of people in leadership who were local.

"And that is the biggest challenge to face, because your momentum of familiarity in the organisation makes it very difficult for global leaders to fit in well; that.s what we are struggling with. We have a number of initiatives to drive that successfully. But more than anything else it requires a change in mindset of the top 200 people in the organisation."

Lauding Mr. Premji for being involved with 2.5 million children in 17,000 primary schools, Suresh Jagtiani wondered whether Wipro could synergise with the Rotary Club of Bombay.

At which Mr. Premji made some astounding revelations. He said that his Azim Premji Foundation worked only in the area of primary education up to Std. VIII and only in the villages of India. Besides, 95% of its work involved the state governments.

For, "the reality is that 90% of primary education in the villages of India is controlled by the state. There is free education, the midday meals are free, uniforms are free, school books are free. We do not operate in our Foundation in the cities of India".

Wipro was trying to establish a not-for-profit university for training teachers in primary education . because the biggest shortfall in primary education was the quality of teachers.

"There are 5.5 million teachers teaching in primary education... and 30% of them never attend school. That's a reality. They're all unionised and they.re probably the highest-paid professionals in an Indian village; they are extremely well paid because of their union.

"And we accept this situation, the community accepts this situation, even though the children of the community leaders and of the community wives go to the same schools; clearly, there isn't enough push-back (or feedback).

"We are trying to get involved with some social groups in community interventions to at least make the community aware (about the fact) that they have the Right to Information Act and that they can ask a lot of very embarrassing questions to state and local authorities to make them accountable."

Mr. Premji said his foundation had created about 250 CDs in 13 languages for use in village schools for teaching and for learning. These CDs were given freely to anyone who wanted to use them to train people in villages or in other local setups.

But it was not as simple as it appeared, because (more information) had to be grafted on to school lessons to make them acceptable to school authorities. Only then could one hope to enhance the process of learning and understanding. Clearly, the sensitivities of the state and of the school authorities had to be kept in mind.

Wipro had another initiative "Applying thought in schools", in the cities and was engaged with about 800 schools through 30 partners who had been trained and with whom it now worked actively. They were like "an extended arm" of the initiative.

The work on this particular aspect had been going on for about six years and it had helped build for the Foundation a .reasonable amount of credibility and "a reasonable amount of voice in being able to influence the future policy of primary education in the country".

This was a single-minded, unitary focus and had been decided upon deliberately because it was felt that trying to do too many things in social service would end in the effort becoming thinly spread and yield results that were not likely to be long-lasting.

A member asked whether corruption was likely to decrease over a period of time.

Mr. Premji felt that corruption had significantly reduced over the past ten to fifteen years in larger organised industries. The liberalisation process unleashed in 1990 had opened up the markets to competition both from within and outside India. This had made businesses more active in facing the competition.

Many people did not realise that corruption led to an increase in transaction costs; therefore, the absence of corruption could result in lower transaction costs. In general, however, Mr. Premji felt that corruption existed in certain pockets in industry but there were many in which it was not prevalent to any significant degree.

He did add that "I think sometimes we as industrialists contribute to that corruption because it's a convenient way of getting cycletimes cut or creating opportunities".

Catching up with Kekoo. Mr. Azim Premji greets Kekoo Gandhy as President Dr. Rumi Jehangir and Hon. Secretary Paul George look on. In the second picture, Mr. Premji is snapped with Tarjani Vakil and Indu Shahani

Azim Premji says the wealthy cannot travel without security in Russia, Mexico...; but they're safe in India

Next, Pankaj Baliga of TCS (the top Indian IT company) wanted to know what exactly India had to do in order to make a difference in the hardware sector.

Mr. Premji said he could see a revival in manufacturing in India, including in the globally-competitive manufacturing areas. This process would soon acquire greater momentum not because of special economic zones (these would merely be the facilitators for it), but because of external factors.

"I think the world, which has been excessively biased towards sourcing from China, now wants a diversification in risk, particularly the western nations. Also, I think the western nations are concerned about intellectual property rights in China. India is relatively better off because we have stronger IP laws.

"And India is reaching a scale because of the domestic consumerism of an infrastructure sub-supply industry which is really the lifeblood of end-product engineering or endproduct manufacturing industry. You will see a significant scale-up in the manufacturing competitiveness of Indian companies. And that will overflow even to hardware products."

Mr. Premji pointed out that Wipro had a 50:50 joint venture with General Electric Healthcare worth $400 million a year which exported products worth about $150 million to GE worldwide. These were fairly high-tech products such as ultrasound, cardiology equipment and so on, specially designed, engineered and manufactured in India for global requirements. These were supplied at 25% less than what they would cost if bought from an alternative source.

Thus, at least in electro-mechanical products with reasonably high software content, India was becoming increasingly competitive. Dell was setting up a manufacturing facility; Nokia had already done so; automobile manufacturers were looking at arrangements for low-end cars; and auto ancillaries were growing at 35 to 40% a year. (Auto ancillaries already accounted for $6 to $7 billion a year, most of it exports.)

What did he have to say to the youth, what with "everybody running after big bucks", asked PP Kalpana Munshi.

Mr. Premji appeared a bit anguished for a moment, but quickly got into stride, narrating his experience with 150 Chinese engineering graduates who were mixed with students from similar colleges in India. Surprisingly, despite their language handicap (lack of fluency in English), the Chinese students performed among the top 20% of the class.

The Chinese students were not from institutes like the IITs and the Indians were from the regional engineering colleges. But "the Chinese performed better because they worked harder. As simple as that..."

Mr. Premji then cautioned the audience and stressed that Indians had to learn the strong values of hard work because the country was facing competition from more "hungrier" countries such as China, Vietnam, Eastern Europe, Mexico and Africa.

"If we do not wake up to the fact that we are under global competition in a very open (global) economy, we'll start losing the success that we have attained over the past five years or so, we.ll lose all of that."

Turning to the crux of the problem, as enunciated subtly by Kalpana, Mr. Premji said the younger generation was indulging in too much of conspicuous consumption.

"I would blame the parents for this. This is ridiculous. You don't see this anywhere in the western or American world - how much parents indulge children. Apart from hat it does to their values, which I think is important, you are going to generate into a mass (a large number of) people a very acute sense of gaps between what they have and what they see happening on TV, which in my opinion can lead to very serious social unrest. As a people we are very docile and very peace-loving; don't disrupt that critical thread.

"Today, you cannot go anywhere in Mexico without security guards if you are wealthy. You cannot go to many parts of the world without security guards if you are wealthy. You cannot go to Russia without guards. If I have to go to Russia, my security department would insist that I have a security guard.

"But you don't need that in India... I don't travel with security guards in India. I don't have security in India."

Noting that there were several problems that plagued the country, Fakhruddin Khorakiwala wondered why Mr. Premji had chosen primary education over everything else to fulfil his social responsibilities as a businessman.

It was here that Mr. Premji opened his heart and stated that he wanted to help build the character of society and of the country through his efforts in primary education. This effort could yield other benefits, too, but it was something most people did not realise.

Wipro's Chief is very clear: Management is execution and results; airy-fairy strategies do not contribute more than 10% to success

First, it had been established that even a semi-educated girl in a village, when she became a woman and got married, had a smaller family; the correlation was absolutely incredible. It had already been seen in Kerala and in Tamil Nadu that wherever the education levels of a society went up, the family size reduced.

"Population is a serious problem . that nobody is willing to take up since the Gandhis (and the family planning fiasco). So it (primary education) reduces family size, which is extremely important from the point of view of a healthy society, and also in terms of the affordability of a family."

The second reason, which was backed by several studies, was that if the girl child was educated even up to the Sixth or Seventh standard, there was a higher consciousness of primary health care. And instituting primary health care was a prime concern.

As for primary education, health care and other areas being issues of governance which required huge amounts of money, Mr. Premji said large sums were indeed set aside in budgets. But it was not used well because those who were supposed to use it were not trained in how to spend it and were just not aware that they also had to be accountable.

His foundation had found it possible to work with most state governments; even though 30% of the unionised teachers did not report for work, 60% of the teachers were serious about their work and 30% were outstanding.

"So there is raw material there that you can work with to get results.

"And if you follow a fundamental principle - of giving all the credit for what you do to the politicians and to the bureaucrats, then they don.t interfere with you!

"That's very fundamental, that's the most important success factor - give them all the credit. Don't play high profile and they'll support you - because their careers are furthered because of that."

Asked about the strengthening of the Indian rupee and its impact on IT companies, Mr. Premji said it was not merely a question of a strengthening rupee but of a weakening dollar. Its movement from April 1, 2007, onwards showed that the rupee had appreciated against the US dollar by 9.5%; against the British pound by 5.5%; and against the Euro by 0%.

About 70% of India.s global trade was in dollars; 75% of Wipro.s trade was in dollars. And this was a huge challenge. Industries such as software and BPOs would survive because they were of a certain scale and had enough head space and margins to be able to absorb the shock till they fixed their fundamentals and emerged on top of the situation.

But industries such as textiles, carpets and the medium and smallscale sectors "could get very seriously hurt". The point to note was that the small-scale and the medium-scale sectors were important ancillary suppliers to the large-scale sector.

Already, the textile industry had lost about 30,000 jobs over the last three months; if one were to take the textile industry and its suppliers, then the total number of job losses was about 100,000 in the last three months.

The government was aware of all this, but it was not able to manage the capital flows coming into the country. And an even bigger issue was the fact that there was no unified thinking in the government on to how to address the problem.

"The Governor of the Reserve Bank of India has one view; the Finance Minister has another view; the Prime Minister is sitting on the fence; the Economic Adviser has a view but he is not pushing it through; (Planning Commission Chairman) Montek Singh Ahluwalia has a view... I don't think these five people have sat together."

It was imperative that together they decided what precise action needed to be taken, and when, so that there was better management of the capital flowing into the country. Unless they did so, the problem would keep growing... it was not going to go away. They had to address the problem with certain fundamental economic initiatives.

As for Wipro itself, the organisation felt that the rupee would keep on firming up by 2% to 3% every year over the next five years and the dollar could go down to a value of Rs. 30.

IPP Harry Singh Arora was worried about growing GNP which meant more cars, more consumption and more global warming. And that was already recognised as a major global challenge. "What do you think should be the model for India? As we keep trying to boost our economy, where are we headed?"

Mr. Premji was clear-sighted if a bit blunt on this, saying that he did not understand economics well enough. But what he did understand was that it was necessary to create wealth in order to distribute wealth. And a good way of creating wealth was to drive up the GDP growth rates. This would generate income and wealth and, by force of osmosis, a lot of that wealth would trickle down.

"I think the policy we are following today seems to be reasonably sound. If we can have a good, healthy growth in the economy and use whatever subsidies we have intelligently, without leakage, I think we are on the right course."

But he ridiculed the political decision of giving an annual subsidy of Rs. 100,000 crores on petroleum prices (rather than allowing the prices of petroleum products to go up in line with international crude prices). This (subsidy) was criminal because about 40% did not reach the consumer in terms of "end benefit". And another 40% reached consumers who could well afford to pay higher prices. "But these are political decisions."

One member wanted to know what he thought about American management theory in his company and in the Indian environment.

Mr. Premji was more blunt this time, saying he didn't know if there was anything such as an American management theory, an Indian management theory or a European management theory.

"I think management theory is of use because it activates the mind to think in more conceptual terms. But at the end of the day, management is results. You have to accept that. Management is execution. A lot of the airy-fairy strategies are very important but they don.t contribute more than 10% of your success in business; 90% of your success in business is consistent, very high quality execution. That's less fun, of course."

When the perennial PDG Manibhai Doshi asked whether his surname Premji helped him in business, the speaker almost brought the house down by saying that it probably would have helped much more in business if he had been named Wipro!

The vote of thanks was proposed by President Dr. Rumi Jehangir, who hoped that Mr. Premji would consider becoming a Rotarian once again in a category in which the attendance rules would not have a major role to play.

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