This is the third and final part of a three-part series on Ratan Tata. This part focuses on the dynamism, the independence and the integrity of the man who raised the Tata group to a position of international prominence.
Based on an article by Girish Kuber in the Sunday edition of Loksatta dated 23 Dec 2012
Translated by Runa Mookerjee
Series Editor DOAonline
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Ratan Tata was a mold breaker and a trend setter. An architect and structural engineer by training (he holds a B.S. in architecture and a Master’s in structural engineering, both from Cornell) Ratan Tata’s inclination for path-breaking thinking was evident even in his automotive ventures – the Tata Indica and the Nano. As an architecture student, Ratan Tata’s favorite subject was ‘Design;’ it was one that remained close to his heart throughout his career. Doodling new designs was a favorite pastime of his, and both the Indica and Nano were born out of his sketches. But this is just one small part of the story.
Following the liberalization of its economy in 1991, India threw open its doors to trade and foreign investment. Foreign MNC’s began to enter the Indian marketplace. At the same time, it became opportune for Indian companies to enter global markets. Ratan Tata was one of the first to capitalize on the opportunity. At a time when most of the Indian industrial sector was inflexibly inward-looking, Ratan Tata steamrolled into the global marketplace. He built alliances with – and later took over – several international companies including European steelmaker Corus, the luxury automaker Jaguar Land Rover, and Tetley, the tea giant. Till then, ‘TATA’ had merely been a well-established Indian brand. Acquiring an international portfolio brought it global recognition.
There was a time when Indian companies were seen as an easy target for global acquisitions – Swaraj Paul’s attempted hostile takeovers of DCM and Escorts were a result of that perception. Ratan Tata sent out the message that the tide had turned. Today, over half of the over US $100 billion revenue of the Tata Group comes from companies situated outside India. That’s an interesting statistic for a typically ‘Indian’ brand.
Ratan Tata’s bold moves broke the barriers of traditional ‘Indianisims’, bringing in a new respect for Indian companies in general and the Tata brand in particular. In fact, such was the uptick in the confidence in the group that local companies in Britain looked towards Tata as a partner of choice. So much so, that some employee unions welcomed Tata as a ‘the best option’ in the event of a takeover. The path that Ratan carved out set a new trend.
Naturally, not all of Ratan Tata’s decisions during his tenure as CMD of the Tata Group were stellar successes. In retrospect, it is evident that Corus was a loss-making deal; the Jaguar Land Rover deal became profitable only later on. However, as JRD believed, to achieve success, you have to be ready to take risks – and that’s what Ratan Tata did. But he did so, without breaking the rules. His integrity has protected him from any hint of the scandal that often surrounds industrial tycoons. Barring the Nira Radia tapes, corruption-related controversy never touched Tata. However, the tapes did bring to light the deeply tainted business environment of the telecom sector, one that can actually suffocate a ‘clean’ operator.
The Tatas also distinguished themselves from other businesses by focusing on strategies self-sustained growth, rather than following the government subsidiary-benefits model embraced by many other companies. Government subsidy can be a profitable wave to ride. But as the Tatas realized, it is also one that can suddenly collapse, leaving the companies that depended on it completely stranded. Thus, unlike other companies, they never sought to make quick profits by exploiting government subsidies. The Tata group’s growth story is entirely their own, a fact often overlooked by those who think solely in terms of company size or profitability.
The Tata’s course of action has had its difficulties. In the game of profit and loss, at certain points you may incur more losses than gains, and when others rush ahead, you may begin to worry if you have missed the boat. What JRD would do at such times, was to step back and evaluate his strategy. But he never lost confidence. So once, when asked if he felt that he was falling behind his faster-growing competitors, he replied, “Form is temporary, class is permanent.” That is precisely what Ratan Tata proved. Critics generally wait for business icons to fall. But that is a fate that Ratan Tata skilfully avoided. He retired on his own terms, content.
Renowned Maharastrian saint and poet Samarth Ramdas said that an ideal king is an ‘Upbhogshunya Swami:’ someone who does his job, expects no personal profits from the position, gives it up as if it was ‘shunya’ (nothing) and then moves on to a higher plane. Ratan Naval Tata fits the description perfectly. He often expressed the desire to retire, but had to postpone his scheduled retirement three times. Finally, at the accomplished age of 75, he was able to step down.
After much headhunting, he zeroed in on Cyrus Mistry, who at a few years shy of ‘50’ is the ‘young scion’ who has ascended to leadership of the Tata Group. Now “apro” Cyrus will deal with pressing questions such as what to do with the sprawling TCS and Tata Indicom businesses. Ratan Tata completed JRD’s unfinished projects and dreams. Now, it is up to Mistry to carry the legacy on. Should he succeed in carrying forward the unique Tata mix of integrity and dynamism, he will have forged another link in the chain of Tata leaders who transmit their values and success across the generations – a continuity that is another quintessential Tata trait!
This is the second of a three-part series on Ratan Tata, fifth Chief Managing Director (CMD) of the Tata Group. This part focuses on the changes he brought in his tenure of over 20 years as CMD from 1991-2012, bringing the robust, independent companies that made up the 144-year old Tata Group, under a strong unified brand.
Based on an article by Girish Kuber in the Sunday edition of Loksatta dated 23 Dec 2012
Translated by Runa Mookerjee
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Tata Group’s product range spans commodities from table salt to automobiles. About 7% of the volume of shares traded daily on the volatile Indian market consists of those listed by the Tata Group’s diversified holdings. The group contributes 3% of India’s corporate tax and 5% of its excise duty. That’s twice the amount paid by any other Indian industrial house. Some won’t think much of these figures. Others will point out that there are business houses that are even bigger. But few of them command the strong brand recognition that the Tata Group does. So, how did the Tata Group become such an instantly (and even internationally) recognizable brand?
To understand its transformation, you have to go back into the history of the Tata Group. Ratan Tata was appointed CMD in 1991. However, in line with the group’s tradition, his grooming for this position began from 1962 onwards. He was trained on the different aspects of the business gathering valuable experience on the job. That was during the royal and benevolent JRD period. At that point the Tata Empire had branched out into many areas, each with its own brilliant leader. Many of the Tata businesses were independent successes and their heads were big names in their own right. However, they were each pursuing their own interests rather than that of the group as a whole. This lopsided hub-and-spoke arrangement had become a problem for the Tata Group overall: the branches were overshadowing the tree.
Ratan Tata was the first to realise that for a group to become an internationally recognized corporate brand, it must have a strong core and a strong individual identity. It cannot allow itself to be overshadowed by its own divisions, no matter how successful or profitable they might be. Therefore, in order to free his group of internal maladies and make it healthy from within, his first action as a CMD was the trimming haphazard offshoots. In fact, it could be said that before Ratan Tata built anything, he sold many businesses. In the ’90s, Tomco was sold to the Levers, and the group exited pharma and the textile businesses.
Even before this, Ratan Tata had to face a battle with Russi Mody in order to be recognized as JRD’s successor. Mody, had been appointed by JRD himself to head up TISCO (later Tata Steel). So, many were therefore shocked when was fired by JRD and the TISCO board. Critics felt that having ousted Mody, the Tata group faced a decidedly bleak future. However, the board’s decision was proved right when Mody, desperately sought help, even roping in the likes of Laloo Prasad Yadav in order to to retain his position. The move however backfired on him and helped establish Ratan Tata’s supremacy as the more astute leader. However, Ratan Tata, ever the gentleman, never said a harsh word about Mody, nor did he exult over him in his ‘moment of victory’.
After this, Ratan Tata’s focused on strengthening the ‘Tata Brand’ – and he took several steps to secure this goal. Tata Sons is the Tata Group’s parent company. Thus, the head of Tata Sons is the head of the entire group of industries under the Tata banner. But, the Tata Group’s holdings in Tata Sons were surprisingly low at the time. Had a rival bought out a majority stakeholder, he would have technically become one of the controlling holders of the entire Tata Group! Recognizing this risk, Ratan Tata began to increase his holdings in Tata Sons and also to increase the holdings of Tata Sons in various group companies.
Yet another of his decisions in this respect, was to mandate that every company under the ‘TATA’ umbrella begin paying a royalty to Tata Sons. This move met with sharp criticism: no one had ever paid a fee for the privilege of using the TATA family name. However, this practice became a trendsetter.
Tata also noticed that TELCO and TISCO, the group’s most powerful companies, had names which gave them strong independent identities. And it wasn’t just about the names. A well-designed logo is a great way to establish and distinguish a company’s products (the inverted pen nib, for example represents ‘Parker’ pens, while Lamy’s high quality writing instruments are easily distinguished by the U Clip shaped grip on its cap). However, many of the group’s companies were using the TATA name but, with their own logos or symbols. Ratan Tata rebranded TELCO and TISCO, Tata Motors and Tata Steel, bringing them under the Tata logo and giving them names that retained their individuality yet identified with the parent group.
Companies seek to add their own ‘uniqueness’ to the products they manufacture and there is an art to designing brand names and logos. It is for this reason that, Mercedes cares as much about precise design of its three-pointed star as it does about the quality of the cars it makes. Ratan Tata bought this desire to the group level. He realised the commercial value of the Tata brand, and capitalized on it. After all, as they say, it’s all in the name.
For some people the realization that they are really meant to do a PhD comes only after having got some research-related work experience. In fact Dr. Harchol-Balter recommends it before jumping into a doctoral program. Here’s how her career path led her to the realization that she should be doing a PhD:
“After I finished my B.A. in CS and Math, I went to work at the Advanced Machine Intelligence Lab at GTE in Massachusetts. At first I was very excited by my paycheck and the great feeling of being independent. I also really enjoyed my area of research at the time: pattern recognition and classification. I was working with frame-of-reference transformations involving eigenvectors of autocorrelation matrices. It was exciting! However I quickly realized that I wanted to know more. I wanted to know why some algorithms produced good results and others didn’t. I wanted to come up with my own algorithms. I worried that I didn’t have enough of a mathematics background to answer my own questions. In summary, I wanted to delve deeper. Everyone around me thought I was odd for wanting these things. I left after 2 years and went to graduate school. That first month of graduate school I looked around and realized that everyone there was just as weird and obsessed as I was, and I knew I had made the right decision.”
Read Dr. Harchol-Balter’s own article on Applying to Ph.D. Programs in Computer Science from which this has been excerpted.
Read a review of Dr. Harchol-Balter’s article here.
Read excerpts from her article on recommendation letters and statements of purpose,
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This is the first of a three-part series on Ratan Tata, who on 28th 
December 2012, stepped down from his position as fifth Chief Managing Director (CMD) of the 144-year old Tata Group. This article focuses on the surprising humility of Ratan Tata, one of India’s most eminent business personalities, a man who in his tenure of over 20 years as CMD (from 1991-2012) led the Tata Group to international prominence.
Based on a translation of an article by Girish Kuber in the Sunday edition of Loksatta dated 23 Dec 2012
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The employees at Bombay House, Tata Group’s corporate headquarters at Mumbai, will tell you that when Ratan Tata, head of India’s largest industrial conglomerate, enters the building to begin the day’s work… nothing extraordinary occurs!
There is no flurry of activity, no hushed tones. There is nothing to indicate that “the boss is on the way.” The only excitement is among a band of happy dogs who crowd around Ratan Tata’s car as soon as it enters the gate. This is not surprising because, when he steps down from the car, Ratan Tata habitually pets a few of the dogs, and indulges them a bit. The Tata’s have a long history of being dog lovers, so he gives no thought to ‘what will people say’ about this nor, will you ever find him making statements about “These Indian dogs…” etc.. And then, just like an ordinary employee, he joins the queue to enter the lift. There is no separate ‘reserved’ entrance for Ratan Tata.
This man doesn’t carry even a hint of pretension to indicate his position. He’s never seen revelling at the kind of parties published on page three and he also keeps himself aloof from the usual ‘snakepit’ that surrounds an industrialist of his stature. It would have been very easy for the Tata’s to build for themselves a palatial skyscraper, but he is aware that in a city where 65% of the population is homeless, it’s not befitting to live in a 25-storey tower all by yourself. That’s why he lives in a flat – like any other employee. His one small indulgence is that on Saturdays, he takes his two German Shepherd dogs, to Alibaug by (a small) motorboat.
The 26/11 Mumbai terror attack targeted the Taj Mahal Hotel, diadem of the Tata Group, which is situated near the Gateway of India, Mumbai. In this attack, entire families of hotel management staff were wiped out. Not only did Tata extend a helping hand to the family members of the deceased staff, but he also personally visited each and every staff family affected by the terror attack and helped them come to terms with the ordeal. There was no need for him to do this, and had he not done it, no one would have held it against him. But he did it.
His consideration for every member of the Tata family is a quintessential Tata trait. His predecessor JRD, upon spotting anybody from his office standing in line for a B.E.S.T bus, would often stop and give them a lift to work. If someone expressed hesitation about riding alongside him in his car, he would exclaim “Well, it’s not really my car; it’s the company’s, so why shouldn’t I give a ride to a fellow worker?”
From JRD’s point of view, or Ratan Tata’s for that matter, there is nothing extraordinary about such things. If anything is wrong, it’s with our psyche. In our country, simple living is considered abnormal for the elite and breaking the law or a traffic rule is deemed to be one’s right, especially for the rich and famous. In such a country industrialists like Tata are in a minority. Outstanding among them, Ratan Tata sets a refreshing and praiseworthy example.