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Archive for December, 2012

14As Mr. Ratan Tata demits office as a Chairman of Tata Sons and as a head of the $84 billion conglomerate of over 100 companies in the world-famous Tata group on the 28th of December, 2012, permit me to salute the group as well as its illustrious leaders who have led it to great heights in the field of business, as also in philanthropy and in socially relevant initiatives.

I am just one amongst millions of the group’s ex-employees who have had a stint with the Tata group.  The connection of my family with the group spans three generations. Way back in 1945, my father was associated with Tata Airlines. In 1976, I started my career with the Leather Complex of Tata Exports (now known as Tata International). Due to compelling personal reasons, I had to finally leave the group in 1993. In 2003, my son started his career innings with Tata Motors.

What is it that goes on to make the Tata group different from its competitors and contemporaries in the business world? With all humility that I can muster, here is my take.

Succession Planning

Mr. Jamsetji N. Tata was the founder of the group. In 1904, he handed over the baton to Sir Dorab Tata, who was at the helm of affairs till 1932, followed by Sir Nowroji Saklatvala who was there till 1938.

The group was then steered by Mr. J. R. D. Tata till 1991, when the charge passed on to Mr. Ratan Tata. It was on March 23, 1991, that Mr. Ratan Tata was told by his uncle that he intended to handover the baton of the group to him. Coinciding with the economic reforms unleashed by Dr. Manmohan Singh, the group has had a remarkable journey since then!

Mr. Ratan Tata took over the reins of the group at a time when it was an empire made up of several independent fiefdoms, run by stalwarts like Mr. Darbari Seth, Mr. Russi Mody, Mr. Ajit Kerkar and Mr. Nani Palkhivala.

Much like the King Bharata in Mahabharata who chose a successor based on merit alone, the group has invariably followed the principle of meritocracy when choosing a successor. What Cyrus Mistry takes over from him today is a much more well-knit and cohesive group, united by a shared philosophy, vision and identity.

A Conservative Outlook on Diversification

Tatas have often been criticised for not being enterprising enough to diversify into new fields. Mr. J. R. D. Tata himself attributed this in 1991 to two factors – an unwillingness to compromise on certain principles in the licence and permit raj prevalent then, and a long-held belief that the group’s principal role was to develop basic industries.

From textiles, hotels and a premier institute of learning, the group took a leap of faith to set up the first steel plant in India at the beginning of the last century. Then it ventured into hydro-electric power, soaps and detergents, cement, tin, soda ash, housing and commercial vehicles. Post 1947, when India gained independence, the group went in for cosmetics, steel tubes, refrigeration, fisheries, refractories and pharmaceuticals. Tea, watches, bearings and several others followed.

During Mr. Ratan Tata’s tenure, the group improved its focus on the business horizon. In tune with the changing times, TOMCO, Lakme, Merind, ACC, Nerolac Paints and others got hived off. Businesses like IT, telecom and financial services got added to the group’s portfolio. TCS became a flagship company, leading India’s march into the knowledge economy.

In 2000, Tata Tea took over UK brand Tetley. During 2007, Tata Steel acquired Anglo-Dutch rival Corus. The buyout of JLR in 2008 supplemented the core competency of the group company now referred to as Tata Motors. This move further established the global aspirations of the group – a segment which today contributes 60% of its revenues. Leveraging its strengths in the automobile sector, the group entered the territory of passenger cars, overcoming such hurdles as the Singur controversy. Nano is an innovation which has been taken note of globally.

Mr. Ratan Tata did not have it easy. Due to a negative business environment, the entry of Tatas in the field of airlines got aborted. It moved in time to save Tata Financial Services when the top management there committed fraud. In the telecom field, it had to grapple with a nascent industry which is still plagued by policy uncertainty. The controversy surrounding the infamous Radia tapes went on to show that what would have been considered a minor transgression by any other business house proved to be a demoralizing factor, somewhat sullying the group’s pristine white image.

Referring to the airline fiasco, he claimed in a press interview that he was rather proud of the fact that he could not handle political manipulations.

Concern for Environment and CSR

Industrialists complaining about environmental regulations and land acquisition issues today could surely learn a few lessons from Mr. J. N. Tata when he went about setting up India’s first steel plant during the early 1900s in what was then a predominantly forest area, inhabited by tribals.

In a letter written to his son in 1902, five years before the site of the steel plant was finally located, Mr. J. N. Tata laid down broad guidelines covering the design of the industrial complex which was to come up at Jamshedpur: “Be sure to lay wide streets planted with shady trees, every other of a quick-growing variety. Be sure that there is plenty of space for lawns and gardens. Reserve large areas for football, hockey and parks. Earmark areas for Hindu temples, Mohammedan mosques and Christian churches”.

When TELCO Pune was planned, thousands of trees got planted first. Since trees needed water, an artificial lake was created with a circumference of four kilometres. The factory buildings came up much later.

At the Leather Complex at Dewas (MP) that I was associated with, other than a massive plantation of trees of all kinds, a deer park was also set up. Our Accounts Department was often twiddling its thumbs to figure out if the cost incurred on the animals’ upkeep was reasonable!

Focus on People

The average Tata manager is sober, knowledgeable, mature, restrained, dignified, humane and downright ethical.  It does not boast of, but is quietly aware of, being part of a group which has always conducted its affairs in a transparent and ethical manner. There is an in-born self-belief that the values Tatas follow are not a mere statement of pious intentions; rather, these form a blueprint which guides and permeates all the activities the group.

Tata Steel has several firsts to its credit in the realm of labour welfare. An eight-hour working day was introduced in 1912 itself, whereas the law mandated it only in 1948. Likewise, free medical aid, establishment of a Welfare Department, formation of a Works Committee for handling employee grievances and leave with pay, provident fund, etc. were introduced much before the relevant laws came into being.

The social welfare measures across various Tata companies may vary, but the standards set by them somewhat exceed the legal requirements. Tax planning, yes; tax evasion, never. The group’s foray into education, fine arts and other socially relevant projects was planned and executed at a time when CSR norms were not even heard of.

How closely the value of compassion is cherished became very clear in the aftermath of the 26/11 terrorist attack on The Taj Mahal Hotel. The conduct of the employees during the attack and the subsequent support they received from the management is a case study in organizational behaviour and employee motivation.

I had a first-hand experience of this value of compassion in 1991 when I and a colleague of mine were mercilessly beaten up by a gang of misinformed workers of one of the small ancillary units of the Tata Exports. Prompt medical attention, legal support, counselling for the self and the family and a compulsory vacation followed automatically. A month later, Mr. Syamal Gupta, the then MD, nine rungs above us in the rigid Tata hierarchy, called for a personal meeting and instilled in us a sense of pride and fulfilment for having stood up to the rowdy elements in the work force.

The fact that I write this piece almost twenty years after I parted company with the group goes on to show the sense of belongingness I still – and shall continue to – carry with me!

Ethics and Values – A High Moral Quotient

When I look back at my association with the group, which lasted over ten years split over two phases, I am amazed at the rich learning I had. Job rotation, technical training and job knowledge apart, the exposure to the nuts and bolts of business ethics left an everlasting impression on my psyche.

A bribe was a simply not payable, whatever the commercial cost of keeping an entire manufacturing facility idle for three weeks. A senior manager who made the error of judgement of offering a bribe to a government servant for securing a permission was publically rebuked and persuaded to leave the company. Instead, I, a junior office then, was sent to accomplish the task without any speed money being paid. Luckily, I could manage this feat, though the company ended up incurring a cost of five times the bribe amount on my trip alone!

Aiming for Perfection

As per Mr. J. R. D. Tata, “One of the weaknesses of our country is that we are satisfied with the second or third best in everything. The basic attitude of chalega, ayega, dekhega. Therefore almost everything we do, we do it poorly”. He always maintained that “You can’t achieve high standards by aiming at those standards. You can only achieve a standard by aiming at something more. If you want excellence, you must aim at perfection”.

This implies painstaking attention to detail, a trait which permeates all spheres of the group’s activities. When a new factory block came up in the company, I asked my boss as to why a black stone slab was made a part of the flooring at the entrance to the shop floor. He was quick to point out: “That is the only way to ensure that we have minimum dirt and dust entering the floor; black colour will show any deviations without fail!”

“Humata”, “Hukhta”, “Hvarshta”

These words form a part of the Tata crest, designed by the founder Mr. Jamsetji Tata. In the ancient Avesta language, these mean “Good Thoughts”, “Good Words” and “Good Deeds”. The premium that the Tata brand enjoys in the market is the culmination of more than a century of efforts of the group, based on these principles and values preached as well as practised by the group.

As Mr. Ratan Tata henceforth channelizes his dynamism towards philanthropic activities and development projects, I have no doubt that he would come up with more innovations in the field of social entrepreneurship, so as to transform and upgrade the lives of millions in India at the bottom of the pyramid.

I once had the privilege of meeting him fleetingly at a Pragati Maidan Expo held in New Delhi in 1993. From what little I know of him, he is not the retiring kind. To him one cannot express the usual wishes of a peaceful and quiet retirement, howsoever well deserved it is. One may instead wish him long life, health, contentment and all the fun and excitement he can find in any activity he may choose to indulge in hereafter.

Likewise, one wishes Mr. Cyrus Mistry a great cruise ahead in these times of exciting business possibilities for the group! To quote a song from “The Sound of Music” – one of the greatest musical movies ever produced:

“Climb every mountain, ford every stream; Follow every rainbow, till you find your dream….!”

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If you are reading this on the 23rdof December, 2012, it is proof enough that the world has not come to an end on the 21st of this month!

Quite a few doomsday believers had interpreted an ancient Mayan calendar to indicate that on the fateful day of 21st of December, 2012, a 5,125-year cycle known as the Long Count would come to an end. So, they had predicted an end of the world on that day.

You may be aware that this prediction had come in handy for many glum faced entrepreneurs and marketing professionals in these hard-hit recessionary times. As a result, employment prospects had improved for many in several countries. In USA, sales of survival shelters had sky-rocketed. In France, China and Russia demand for candles and essential items had shot up sharply. Film producers had a field day cashing in on the fear psychosis.

Had the world really ended that day, you would have never known what eventually happened to President Obama’s difficulties. The manner in which the Euro-zone crisis had got resolved would have remained a mystery. The fate of Afghanistan would have remained unclear. The manner in which ties between Japan and China had shaped up after the elections in Japan would have never been known to you.

Closer home,Chief Minister of a big state which had just gone to the polls would have possibly lost a chance of fulfilling his prime ministerial ambitions in the 2014 general elections. Our legislative bodies would have been denied further luxury of delaying vital pieces of legislation through shadow-boxing. MNCs wanting to invest in India would no longer have been around twiddling their thumbs to figure out how to kick-start their businesses in India, weaving their way through the corruption-infested systems we have in place.

If you happen to be a public-spirited soul, you would have never known which VIPs are being targeted next by our self-anointed anti-corruption crusaders. The eventual fate of the Aam Aadmi Party would have been lost to posterity, thereby denying you some chance of cleaning up our political arena. For the poorest amongst you, there would have been no way of knowing if the ruling party’s plans of direct transfer of benefits to your bank account had indeed fructified. Benefits of economic growth trickling down to you would no longer have been possible.

Had the end come, your dreams of making a trip either to Moon or to Mars, or even settling down there, would have come to a naught. For the well-heeled amongst you who had planned to have an exciting vacation covering the Grand Canyon, the Niagara Falls, the fjords in Norway, Mount Titlis, or an overnight boat ride in the famous backwaters of Kerala, grave disappointment would have been in store.

Plans for lavish New Year parties or grand resolutions would have been mercilessly cut short. Just-married couples would have been denied the opportunity of raising bright-eyed kids who would have delighted their grandparents no end. Those with young children would have never known how their progeny fared in the competitive exams for acquiring professional degrees which would have improved their lot in life.

For the tech-savvy amongst you, the roll-out of 4G would have remained a pipe dream. You would have also lost the chance of fiddling with the latest i-Pads, tablets and smart phones due to hit the market pretty soon. The debate of freedom of speech over the internet would have been left inconclusive.

As to the artistically inclined, the remainder of the December music season in Chennai would have been sorely missed. Fans of Salman Khan and Kamal Hasan would have been severely disappointed if they had missed the first day shows of Dabangg-2 and Viswaroopam.

So while you enjoy your steaming cup of filter coffee while devouring the contents of today’s edition of your favourite newspaper, be grateful for the fact that the countdown is over for now, and the end is still far away. Catch up with a good night’s sleep, because today is winter solstice – the longest night in the year!

Celebrate the fact that the inexorable march of humanity towards the next step of its evolution continues uninterrupted!

 

 

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I recently had the uplifting experience of being confined to a public hospital of repute. I call the experience “uplifting” because of the simple reason that if I were to forget the medical problem and just concentrate on the overall experience, both the body and the soul were truly enriched by the time my confinement had ended.

I have stayed in private as well as in public hospitals. We often speak of the latter in deprecatory terms. The term “government hospital” invariably leads us to imagine dingy corridors, dust-covered wards, negligent and indifferent doctors and nurses, and equipment which is seldom found in working order. Well, a recent experience of mine has been rather different. The doctors have a richer exposure, and commercial considerations do not overtake health issues.

I found that staying in a public hospital eventually disperses the pall of gloom which envelopes one on knowing of a medical problem. Moreover, the experience has its funnier aspects which leave one convinced that a brief stay of ten days not only changes one’s outlook on life but also reveals its sunnier side!

In Safe Hands!

The pre-admission check-ups led me to various “speciality” departments of the hospital. Even though my problem pertained to the abdomen, my eyes, teeth, heart, lungs, kidney, liver as well as my feet were all subjected to a complex battery of tests. Surprisingly, the doctors did not think there was anything wrong with my grey matter, so the brain was – thankfully – let off the hook. All the brisk walking that I had to do within the hospital campus left me in a much fitter shape than I ever was.

Interspersed with social distractions, it took as many as ten visits spread over six weeks before I could secure the coveted admission slip. I confess this feat would not have been possible without a strong will-power. Of particular help were the juices of patience and perseverance sloshing about within us. The underlying spirit of perfection which permeated the whole pre-admission process left me in awe of the robust systems which are in place. The fact that an allopathic view of the body is highly segmented and organ-centric did lead to inconvenience. However, at the end of it all, I felt that I was in safe hands!

An Unjustified Feeling of Being Lucky

Once diagnosed and advised to get admitted, I needed the support of two able-bodied relatives for a week to get a room allotted. The endless running from pillar to post made me learn the value of team work. When entering the hospital with our bag and baggage, we had to negotiate our way through the over-crowded corridors. Our experience and skills in weaving our car through the arterial roads of the metropolis we live in came in handy. It took us some time for our nasal faculties to get adjusted to the all-pervading smell of disinfectants.

On the way to the room allotted to me, human suffering in various forms was clearly visible. As a result, my own ailment paled into insignificance. Suddenly, a realization dawned that I was luckier to have a sickness which was much more manageable. Looking at people of all shapes and sizes with hopelessness oozing out of their sullen eyes, I thanked the Almighty for having been kinder to me than to quite a few others.

Being in a Medical Zoo

Once I and my wife had settled down in the room, we had a feeling as if we were either in a fish bowl or in a zoo. Just like the hapless animals confined to their cages, much away from their natural habitat, we were in a room, temporarily uprooted by fate from our home and hearth. In a zoo, the poor animals get ogled at, teased and harassed by the visiting public. Likewise, it was pretty normal for us to be visited by a group of enthusiastic as well as not-so-enthusiastic doctors, nurses, paramedics and other staff.

I dare say that the animals in a zoo are much better off; they at least have fixed visiting hours. We had no such luck. Late in the night, when we had switched off the lights and believed ourselves to have earned a night’s reprieve, a group of interns walked in, asking all kinds of questions regarding my medical history and current predicaments.

Animals get fed at random by some naughty kids, egged on by their cheering parents. In the hospital, I was fed medicines from time to time by the visiting nurses. I dare not call them naughty, because some of them wore a stern look which would have put a Hitler to shame.

Suprabhatam

Early morning, we would get rudely woken up by the cleaning lady at some ungodly hour. Her concept of playing “Suprabhatam” was a loud and unending banging on the door. The rude banging, reminding me of the percussion beats of a broken tabla would continue till the time my wife gingerly got up and switched on the lights.

Throughout the day, at frequent intervals, nurses would waltz in, either drawing a blood sample, or taking body temperatures, or simply reminding us to arrange our things tidily since the doctors would be on their routine rounds soon. A single doctor would pop up, aiming to check my blood pressure and pulse rate. A gang of doctors would then troop in, shoot a couple of perfunctory questions, and leave us wondering what would happen next. Specialists from various disciplines like cardiology, orthopaedic and ophthalmology would keep turning up in an endless stream throughout the day.

A Delighted Better Half!

Cleaning ladies, maids serving three meals and milk, coffee etc. in the day, would make a beeline for our room, ensuring that we both were well fed. This kind of dietary pampering left my wife in high spirits after a very long time. She no longer had to worry about the cooking and household management issues that plague her at home.

Experiencing Medical Tourism

We had several Good Samaritans supporting our unique venture in medical tourism. Delicious home cooked meals were just a call away. Internet connectivity was never an issue, though we never got leisurely time to enjoy the same. Supplies like newspapers, fruits, snacks and biscuits kept pouring in automatically.

One afternoon, a charming friend walked in and we had a leisurely chat on spiritual matters. Another evening, a friend walked in with piping hot samosas. Wife volunteered to use her electric kettle to produce a few cups of tea. A senior acquaintance walked in, only to find a rather boisterous tea party in progress. Overcoming his surprise and amazement, he lost no time in joining in!

Absolute Surrender

On the day of the surgery, it was as if my physical body had been forced to surrender, albeit not to a higher force but to an angel doctor who played God at that point in time. Post-operative care was compassionate and even small complaints were promptly attended to. On our request, the nurse on duty ensured that we were not woken up very early, but only at a more decent hour when it was absolutely necessary. This speeded up my recovery.

Why Public Hospitals Score Over Private Ones

By the time my treatment got over, I was not only healthier but also wiser. Having dutifully paid my taxes all through my working life, I realized the good silent work the government was doing in running these institutions of excellence, where the best possible medical care was being made available to the public at a minimal cost. Due to a much better exposure to various kinds of ailments, the technical knowledge of the doctors was much better than in privately managed hospitals. Above all, the patient is only expected to fall in line with the system and be “patient”, rather than being viewed as yet another money-making apparatus for the hospital.

Home, Sweet Home!

At the end of the ordeal, I look outside the window of my bedroom and notice that the birds are chirping merrily, the sun is shining brightly on a lazy winter morning, flowers are in full bloom, colourful butterflies are flitting about seeking their daily dose of nectar and the bees and the ants are going about their daily chores with much zest and vigour. Sipping a cup of tea, I fondly remember the efficient doctors, caring nurses and empathic staff I had come across during this unique medical sojourn!

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It is heartening to note that as many as six large Indian corporate groups have joined World Economic Forum’s Partnership Against Corruption Initiative at a recently concluded WEF India Summit in New Delhi. Infosys, Wipro, Godrej, Bajaj and Genpact have thus joined ranks with MNCs like Siemens, ABB and Rio Tinto in pledging to stamp out corruption across all their business verticals. Thirty more companies have apparently discussed concrete action that they can take to curb graft in their business dealings. A small beginning, but a crucial step appears to have been taken in the right direction. 

Corporates – Victims as well as Participants

To lay the entire blame for corruption in high places at the doorstep of either the politicians or the bureaucrats is like looking at only one side of the coin. The corporate world is not only a victim but also a participant in the vicious cycle of corruption that corrodes our economy and saps the vitality of our constitutional institutions. The fact that business has finally articulated its voice against unfair practices goes on to confirm that anti-graft measures make eminent sense as a business strategy.

India Inc willy-nilly becomes a partner in institutionalized corruption not only because of its need to line the pockets of those who make and implement laws and regulations which touch upon their businesses. The need to milk the exchequer to generate vast sums of cash to fund political activity also contributes towards the malaise.

Setting the Moral Compass Right

Siemens’ is a case in point. Based on investigations between 2001 and 2007, the German engineering major admitted to several bribery charges and paid fines of USD 1.6 billion to US and German authorities. The cases involved its operations in such far-flung countries as China, Venezuela, Argentina, Iraq, Bangladesh and Vietnam.

A massive clean-up started, starting right from the Board of Directors. A Compliance Director was brought in. Besides organizational changes, compliance teams were set up across all the business verticals. All such teams formed an integral part of the respective business processes but functionally reported to the Compliance Director. As a policy, internal whistle-blowing platforms were created. A conscious decision was taken to withdraw from projects and territories where it was not possible for the company to engage in clean business.  In other words, rather than confining itself to paper affirmations and lip service, anti-graft measures were made an integral part of the business processes of the company.

It is not surprising that Tatas, a group renowned for its ethical standards in business, decided to study the Siemens model. It is well-known that for more than a century, Tatas have maintained a steady rate of growth without succumbing to the charms of shady deals as a means to the end of making profits. The result has been a steady build up of the trust placed by the public in the Tata brand.

There are many instances of small businesses the owners of which suffer sleepless nights when asked to shell out taxes of any kind. Some reckless souls end up crossing the thin line dividing tax evasion and tax avoidance. There is no dearth of professionals who specialize in supporting such efforts, either due to pecuniary considerations or owing to the need to be in the good books of their bosses.

Quality and Types of Corruption

The World Economic Forum deserves to be lauded for its efforts to facilitate the anti-graft renaissance amongst India Inc. However, what needs to be realized is that the quality of corruption has undergone a major change over the past several decades. Way back in the late 1970s, it used to be either about bending the rules or for terming a “wrong” as a “right”. Now, it is mostly about framing the rules in such a way as to favor a privileged few, and terming a “right” as a “right”!

Corruption, as we face it today, has become more refined, operating within the legal paradigm, at subterranean levels. Corrupt practices brook no standardization; there are different kinds which have evolved depending upon the situation at hand.

The customary kind is designed to prevent harassment and delays. “Speed money” helps smoother implementation of a business venture, within the ambit of rules and regulations in force. This kind also covers a bidding process where all players do not get a level playing field.

The predatory type of corruption is one where those connected to power centers exploit business opportunities armed with prior knowledge of the development projects being planned. Again, all activities would be within the ambit of law, though there would be an in-built advantage in favor of the well-heeled.

The patronage kind of corruption is based on cliques. A team gets formed, and the proceeds typically flow towards the higher echelons. Private businesses as well public sector entities fall prey to this type of corruption.

Companies typically face internal corruption in such areas as procurement, logistics, outsourcing and the like. Internal audits are useful to curb these to some extent, but the real game changer is a clear message from the top, as also an exemplary reward and reprimand system for those who work in sensitive areas.

Then there is petty corruption which all companies and individuals face in their day-to-day operations! Eradicating this type could perhaps be the toughest challenge.

The Road Ahead

The RTI Act in India has surely been a very progressive step in the right direction. It has brought the corruption issue centre-stage and continues to remind us of the fragility of our systems and procedures at regular intervals.

The response of our business leaders to the initiative of WEF is praiseworthy. One would watch their future actions with a keen sense of anticipation and hope. If the business in India comes together and forms a self-regulatory Corruption Watchdog, it could bring in a major change in the way the masses perceive its conduct. Corporates can also resolve to make all political donations transparent, thereby dismantling one of the main pillars of our parallel economy.

The fact that India is ranked 94th out of 176 countries in corruption by the 2012 scores released by Transparency International is a wake-up call to all stakeholders to address this issue with all the seriousness it deserves.

Leaders with a High Moral Quotient

I may sound like a pessimist, but I do believe that just like the oldest profession in the world, viz. prostitution, the oldest practice in the world, viz. corruption, cannot be altogether eliminated. But all self-respecting citizens – corporate or otherwise – would perhaps agree with me that it can at least be reined in, if not eliminated.

For this to be achieved, both the Government and India Inc can work in tandem. The Government can pitch in by playing the role of a transparent facilitator of business and by renewing its efforts towards creating a more equitable and inclusive society. Corporates can effectively contribute towards this goal by depending upon those who have the wisdom to differentiate between right and wrong. In other words, by having leaders and managers who have a high Moral Quotient!

In the long run, a sound business strategy means steering a business by using a moral compass as well!

 

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