Technology
Expat exits: Why foreign-born CEOs don’t last the distance in Indian IT firms
Summary
- Caught between Indian employees and multicultural clients, expats end up being close to neither, which impacts business
Thierry Delaporte’s exit as Wipro’s top boss comes a year after Brian Humphries, another expat CEO, was removed by the Cognizant board. There are issues, beyond managing profit and loss, that expats have found challenging in India. Culture, for instance. Mint explains:
What exactly happened at Wipro?
Average revenue growth in the last 10 years was in single digits. It added $2.5 billion during that time in an otherwise high growth period for Indian IT. Post covid, the growth accelerated due to digitization and automation. This period also saw Wipro slip in the IT services pecking order with rival HCL Tech overtaking it to emerge in the top three service providers, along with TCS and Infosys. Its operating margins were also under pressure. In 2023 alone, Wipro saw more than 10 key leaders exit, including the CFO, Jatin Dalal, who joined rival Cognizant. Retaining talent was becoming a challenge.
How did Wipro do under Delaporte?
Delaporte started off on a great note in 2020 with a $700 million deal with Metro AG, but could not sustain the momentum. In March 2021, Wipro’s most expensive buyout, the $1.5 billion Capco deal, turned out to be a huge culture mismatch between Capco’s western style consulting to Wipro’s India-based delivery model. Capco, a London-based BFSI focused consultancy, was meant to bolster Wipro’s BFSI consulting but had only a marginal impact on the Bengaluru’s-based services provider’s revenue. Delaporte’s big bet could not stem Wipro’s slide. And it has mostly struggled in its turnaround efforts.
Which other companies hired expat CEOs?
Only a few IT services firms have tried it. Vishal Sikka, the first non-founder CEO at Infosys, was based in US with: and was from non-IT services area. Brian Humphries, an American who worked at IT hardware and telecom companies (HP, Dell and Vodafone) was CEO of Cognizant. Thierry Delaporte was hired at Wipro from Capgemini. But these experiments ended up on a sour note.
So why don’t expat CEOs click?
It is often about culture. Caught between Indian employees and multicultural clients, expats end up being close to neither, which impacts business. The size and complexity of tech services business can be overwhelming. Expats opt to stay away from India; Indian employees like their bosses to be ‘visible’. “If certain strategies militate against the core Indian-ness, the disconnect can cripple the company," said Ramkumar Ramamoorthy, partner at Catalincs and ex-CMD, Cognizant India.
Will expat CEO hiring continue?
Artificial Intelligence (AI) is the biggest disruptor today. It calls for a different approach from legacy IT maintenance-type tasks and needs new thinking, working closely with clients. This will mean deeper engagements with global clients and even higher quantum of onsite work. Expats should be a good fit. Yet, firms are expected to be a lot more circumspect when it comes to expat CEO hiring, as two of them, at Wipro and Cognizant, haven’t worked. Boards may play it safe and opt to hire an Indian with global experience.
