Jan 20, 2009

Business - Q&A Vivek Paul

There has been much speculation about you joining Satyam. Are you open to being the CEO of Satyam ?
First of all, it is not my
Vivek Paul
place to assess whether I can do the job, and neither has anyone contacted me. I am touched by the messages of encouragement I have received and appreciate the expressions of confidence. But it would be my bias that the job go to Generation Next, if not right away, then shortly after operations stabilise. Also, the great team I built at Wipro is now scattered across the industry, and many are now CEOs in their own right. Also, I have met many talented leaders across the IT industry, so many options exist.

What do you think of the Satyam situation?
Like everyone else, I am really saddened. It is an example of how someone can not only build a great business, but also bring it to its knees. Like many others, I thought of Raju as a friend, and so it feels like a personal let-down. Nevertheless, in all approbation, we must be compassionate, for we know not what compulsions drove him.

Do you think Satyam will emerge from this with only a slight damage?
I have received many calls from customers and competitors, all with the single-minded view of how fast they can exit. I am sure there is a calm in Hyderabad now, but not so in the markets, and this will only manifest itself once customers have made alternative arrangements and start pushing the eject button. Moreover, some of Satyam’s delivery managers have been seen visiting competitors, offering to bring a willing customer and all their team members en masse to the other company. Satyam immediately needs to have someone with credibility, untouched by the past, calling on customers and promising consistent delivery and safety of their data and IP, as well as settling down employees.

So the right CEO can pull Satyam out?
Any CEO will have his work cut out. He will have to do this salvage act at a time when customer demand is shrinking, and competition is very hungry, and I don’t just mean Indian competitors — Chinese and US competitors are calling on the Satyam customer base. Whoever comes in will also be swamped under the burden of the clean-up — you don’t know who is tainted, what is real and what is not, customers that may stop paying, lining up financing, dealing with all lawsuits and regulatory investigations and penalties, etc.

The costs of lawyers, lawsuit settlements and fines will add to the growing size of loans to be repaid and limit how much value can be built. Satyam needs someone who can build a great team, is willing to work long hours, and have the confidence to take on a situation that looks difficult with uncertain rewards. But if just the employment of the thousands of employees can be saved, that alone makes it worthwhile. And as I said before, there are many candidates.

What are your thoughts about the Wipro-World Bank issue? Are we going to see more industry issues?
I may be biased because of my loyalty, but it is really situational. At the time of the IPO, Wipro’s slim allocation of IPO shares to “friends and family” and also requiring a statement confirming that no conflict existed with company policy, was viewed as very conservative and out of line with the norm of other tech companies floating an issue.

Today, after nine years, the context is very different and so is the impact. I am not endorsing that it was right. It is just that the practice was very different at that time, and if anything, Wipro was very conservative. I cannot speak of all companies, but I think the industry still retains the quality of its reputation.

So what’s next for you?
For a few months now, I have been seized with what techies in India are going through right now. While companies seek to preserve their margins, employees face the burden of cutbacks in employment, salaries and deferments in joining. They now have to show themselves not just as tech experts, but as leaders, as independent thinkers and build rich profiles. I am urgently working on launching a tool by the end of February to help Indian techies do just that, while interacting and learning from each other, and also help with the growing entrepreneurial zeal.

Looking beyond, I am working to raise an investment fund that will allow me to work with many Indian companies, particularly as global ambitions rise. Fund-raising is tougher right now, but on the other hand, valuations are becoming more realistic, private funds are more in demand as public markets get tougher and investors want a say in the company’s governance rather than merely passive holdings. A few other options have also emerged since I left TPG. With so much change, this is a good time to be independent so that I can assess my options. 2009 will be an interesting yea