There is no substitute for passion and hardwork; just follow your instinct, stop theorising and grab all opportunities that come your way. Chairman of Wipro Azim Premji had all the right advice for entrepreneurs in his inaugural address at the TiE Entrepreneurial Summit 2008, which kicked off on Tuesday.
"Failures are a wakeup call and true entrepreneurs learn life's true lessons from their failures. Learn to listen and learn to learn from youngsters who have fresh ideas and older people who have years of experience and wisdom. Don’t succumb to bribing and other malpractices; practicing unflinching integrity at all times will not only reduce your transaction costs drastically but will also win you the confidence and respect of all your stakeholders," he said.
He cited the example of the time when Wipro had to forgo 40 per cent of its profits, when they refused to bribe the Chief Minister of a State for power allocation. Although the company had to use generators for one and a half years, for as long as the Chief Minister was in tenure, they were never asked for a bribe again.
Premji said he learnt his first lesson when he took over the family business —Western India Vegetable Products Ltd. — after his father’s death in 1966. At the company’s AGM, a shareholder said Premji was not the appropriate person to head the company, as he was only 21 years old, with no qualifications or experience to back him up. "That single incident got my spirits up and I was determined to take on the challenge thrown at me. It was a passionate turbo-charge, on which my subsequent successes were built. Another lesson I learnt as a young man is that it is important to reach out to people and learn from their collective wisdom and experience. I sought advice from my mother and other wise people."
Emphasising the importance of going against the grain and thinking differently in entrepreneurship, he cited the example of his company diversifying into a relatively obscure field of manufacturing high pressure hydraulic components in 1976. "We decided not to import and build the technology from scratch. Today we are the largest independent hydraulic cylinder company with 65 per cent market share in India and have factories in Finland, Sweden and India," he said.
Entrepreneurs, he advised, should drop ideas that are too big, expensive and impractical to execute. "It is important to cut your coat according to the cloth. For instance, we wanted to manufacture scooters as the market for two wheelers was booming in the early eighties. But, we dropped the idea as it was not practical for a small company like ours."
But Wipro had a backup strategy and decided to get into Information Technology instead. "We put together an outstanding team of 300 R&D engineers and worked with IISc to come out with a great product — a mini computer. Our R&D team was five times the size of our sales and marketing team and when we decided to scale it down to 50 people, we didn’t fire the rest of the engineers but spun off another division, offering global R&D services. Today, we are the largest third party R&D services company with 19,000 engineers; it contributes 30 per cent to our total business."
Closing comments: Nothing upsets a customer more than over-committing and under-delivering. The suggestion to budding entrepreneurs is to ensure consistent value delivery. "These are interesting times when successful companies will come out much stronger while the not-so-strong will cry out to the government for help," Premji said.
The Key
* Continual leadership assessment
* Talent review, training and strategic planning processes
* Build ‘intrapreneurs’ who run separate Profit &Loss accounts in the company
* Offered ownership of the company to key individuals
* Willingness to try new things and take failure in its stride
* Explored growth in FMCG, Infrastructure and IT
* Institutionalised the process of innovation
* Embrace diversity in the workplace
