Second in a series of India Ahead conversations with visionaries, future builders and thought-leaders on what it will take to drive India’s growth over the next 25 years.
Cultural change is a prominent agenda item for most CEOs. It is also one of the most challenging aspects of an organizational transformation to execute—and sustain. In 2020, the Indian software giant Wipro took on the task of reshaping the culture of the company, which has more than 220,000 employees across six continents. The Bangalore-based organization, which started as a vegetable oil–manufacturing firm, is now India’s third-largest IT services provider by market capitalization.
After becoming Wipro’s executive chairman, in July 2019, Rishad Premji felt that the company’s performance did not reflect its true potential. Premji strongly believes that people and culture determine a company’s success and failure as much as strategy, if not more. He is on a journey to make Wipro “a high-performing organization that still has a soul, that is empathetic, vulnerable, collaborative, and decent.” Instead of using complicated messaging to communicate—and implement—an elusive concept like culture, Premji has chosen five simple, commonplace habits to promote this change.
McKinsey’s Anuj Kadyan sat down with Premji at Wipro’s Bangalore office to dig deeper into these habits and Wipro’s cultural-transformation program, Premji’s motives for committing his own time and energy to this initiative, and whether it is even possible to measure the impact of such cultural changes. This is an edited excerpt from the interview.
McKinsey: Wipro is an institution with a very long history, strong culture, and values. What was the motivation behind this renewed focus on cultural transformation?
Rishad Premji: I’ve always been a big believer that people don’t experience your values; they experience your behaviors. They experience the way things happen, implicitly and explicitly, inside an organization. That defines the smell of the place—the culture of an organization.
I have always been a big believer in culture. To me, culture represents the soul of the organization. When I took over, in July 2019, I realized that while we had developed strong ingredients that help a company become successful—things like strategy, people, investments, and purpose–they were not producing a decent dish, which is our performance. We had struggled through the decade of 2010 to 2020 as a company.
I spent a lot of time in the first three to four weeks trying to understand what was happening and why we were not delivering the potential that we had as a company. I discovered in those conversations that the challenge was our own selves to some extent—our ways of working, how we collaborated, the silos in the organization, the trust factor, and the willingness to work across the aisles. It became very evident that we had to transform the way we work together to help us unlock our potential. That is how the journey began.
McKinsey: The architecture of Wipro’s cultural-transformation program places a big emphasis on cultivating five core habits. What are these habits and why were they chosen?
Rishad Premji: The discovery of the five habits happened by accident. After my one-on-one conversations, the top 15 company leaders came together to set up four task forces—on collaboration, nonnegotiable behaviors, stewardship, and metrics. These teams spent an enormous amount of time among themselves, meeting alumni, people across the organization, and, in some cases, talking to customers to figure out what we needed to do to improve our performance.
When these 15 leaders were debriefed later, we learned that the task forces were hearing a lot of the same things in different words, so we decided to demystify and bring it all together.
We were also very clear that we wanted to focus on behaviors, things people could control as individuals. There was nothing “aha” about these habits. They were powerful in their simplicity. We also tried to make sure that they were universally applicable and would not get lost in language, local culture, and nuances. My 14-year-old daughter would understand them and be able to interpret them in the same way as somebody sitting in Hyderabad, Manila, Cincinnati, or London.
The first habit is being respectful, which is about being inclusive, communicating transparently and authentically, even when it comes to feedback. The second is about being responsive, both to our clients and inside the organization, and making decisions at speed and taking risks. The third is about always communicating—with stakeholders inside the organization and with customers, as well as sharing bad news quicker and faster. The fourth is about demonstrating stewardship. It is about having a strong mindset, having a ”can do” attitude as opposed to a cynical attitude, and sharing your best people and helping other parts of the organization, even if there is no benefit to yourself. The last one is about building trust across the aisles. In an organization where 100,000 new people have joined in the past two and a half years, the element of trusting people before you know them is incredibly important to getting things done in a collaborative manner.
McKinsey: Did you have to redesign the components of the program as a result of the pandemic, since it dramatically changed how you engage with the workforce?
Rishad Premji: We initially held off for one or two months because we thought this would pass. Then we realized we have to learn to work in this new reality. We did not have to change the format that much. But we have missed the camaraderie and connection that builds with in-person sessions. That doesn’t happen in virtual sessions. Nobody is talking to each other in virtual sessions; people are only interacting and engaging with the presenter.
McKinsey: Culture change is a major leadership challenge. According to our research, 70 percent of transformations fail because of culture. What motivated you personally to take on such a challenge?
Rishad Premji: Culture is one of the most important elements of an organization. I am a strong believer that strategies, investments, and ideas can come and go, but the way you exist as an organization matters tremendously. I felt it was my responsibility to lead it from the top. Frankly, I didn’t overthink this. I went with the flow, and we were very candid about the fact that we were discovering this ourselves. We also recognized very early on that it was important to change our ways of working, because that was becoming a roadblock to our success.
I made these points in sessions with our employees. I’ve done 89 sessions over 300 hours, meeting 28,000 of our employees in small and big groups across the world. I find it incredibly energizing to do these sessions. It is all about telling stories. In a two-hour session, we spend about 30 minutes using a PowerPoint presentation. The rest is about telling stories from inside and outside the organization. That is what resonates with people, and it’s how they learn.
During one session in Pune, someone was discussing these five habits in the context of the traffic lights on Indian roads. Honestly speaking, till about 30 months ago, even I used to debate whether I should stop at a red light late in the night if nobody else was there and I’d had a long day. But I remember distinctly that if someone else stopped at that light, the likelihood of me stopping went up 100 percent because someone else had become my moral compass. That person could make me look bad for breaking the law. So, I tell people to think of the journey of the five habits as if you were stopping at a traffic light. You know you should stop because it is the right thing to do. Invariably, other people will start stopping too because you will become their role model. That is the power of leadership. People observe what you do and not what you say.
McKinsey: What is your overall aspiration for this initiative?
Rishad Premji: These are fundamentals and basic building blocks. These five habits are something we expect from you, whether you are performing well or not.
We are on a journey of building a high-performance culture, which is driven by objectives and outcomes. We want a culture that is less about input and effort and more about results—being growth focused and bold. So the question is how can you build this strong high-performance organization? Oftentimes, people associate that with being a bit rough and abrasive. I am a big believer that you can build a high-performing organization that still has a soul, that is empathetic, vulnerable, collaborative, and decent. The five habits help to provide that balance. These habits provide a very strong foundation for what is necessary to build a high-performing organization.
McKinsey: How do you know these cultural-change efforts are working? What are the metrics of success?
Rishad Premji: I’ve struggled a lot with this, and we have had a lot of discussions inside the organization. We are very sensitive about measuring these behaviors and habits. There are no one-strike or two-strike rules. We want to institutionalize this in our thinking, so many of our people processes are incorporating it, including our appraisal process and salary increase process.
We typically had two components in our review-planning cycle—performance and potential for performance. We’ve now added a component called values. Additionally, our 360-degree feedback process, in which the top 10 percent of our organization in terms of rank rates their team members, peers, and bosses, used to be based on leadership more broadly. We have now made it singularly focused on living these five habits.
In terms of informal mechanisms, we have a very strong rewards-and-recognition philosophy, which now has a specific focus on habits because we want to drive positive reinforcement. We formalized this about eight months ago, and we have seen tremendous pickup in terms of recognizing good behavior, both monetarily and nonmonetarily.
We have a culture council with 15 leaders across very diverse backgrounds. We have a culture officer in the organization now—a senior vice president who spends 60 percent of her time leading this effort. We have about 75 “habit champions” in different parts of the world, who are passionate about this issue and are becoming the face and the energy behind this.
McKinsey: Wipro celebrated its 75th anniversary in 2020. What’s your vision for Wipro at 100 years?
Rishad Premji: For a technology company that is getting disrupted and disrupting continuously, it is difficult to think of how the world will look 25 years from now. I will be proud if we can still maintain who we are at our core—our values and ways of working. The brilliance of the last ten years for Wipro has been that purpose has become much more core to the organization. Sixty-seven percent of Wipro is now owned by a foundation, so as a company, we are tied irrevocably to philanthropy.
As an organization, we should also not ignore the issues affecting the communities in which we live and breathe—including climate change, diversity and inclusion, and social inequity. These are things we have to take seriously and find ways to help as an organization. For example, we have committed to becoming a net-zero company by 2040.
I would hope that in the next 25 years, we still keep these efforts at our core and in addition focus on our performance and how we thrive and compete as an organization in the technology industry.