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Respected Ladies and Gentlemen,

Some of you might be twiddling your fingers these days, trying to figure out exactly what is happening, why things have come to such a pass, and if there is some way you could pitch in to resolve the Tata-Mistry issue.

I do believe there is a way you can make a difference. You can do so by taking a stand which would make you look back at your decision in the future with a feeling of glowing satisfaction and contentment.

Allow me to share some of my own thoughts on the subject. I write with all humility at my command. I write this as a lesser mortal who is not privy to the power conflicts at the top levels of the Tata group. I write this as a common man, and also as an ex-employee of one of the companies of the group, namely Tata International.

Ratan Tata

Forced separation only under grave provocation

The rather uncharacteristic manner in which Cyrus Mistry has been shown the door by Tatas some time back only goes on to establish a truth – that you all support an elephant which has not only learnt to dance but also knows how to be nimble-footed when the situation so demands. Step on the wrong toes and the message is loud and clear. Core values are not negotiable. Cross that invisible line at your own risk and peril. Provoke the elephant in a wrong way and face the music.

Way back in 1993, Russi Mody also underwent the experience of a forced separation.

There are many other instances which one can go on quoting, but the moot point remains that those entertain individual ambitions and start nudging the group against its core values invariably get ejected from the pilot’s cockpit.

Even at lower levels, the old perception that Tatas work like a massive bureaucracy and a job with them is for one’s life time is altogether wrong. I have myself been a witness to some such cases, where managers who had either performed very poorly, or offered speed money, or otherwise acted in bad faith, were clearly told to look for greener pastures elsewhere.

In Tata we trust

You are well aware that the brand equity that the group enjoys is as much about product quality as it is about trust and faith which stakeholders of all hues, sizes and shapes repose in its operations.

Tatas happen to support trusts which are some of the oldest charitable institutions in India. The group has pioneered modern ideas of secular, social services-oriented philanthropy.

It is not easy to name another business empire which has invested in the social sectors even when no law ever mandated it. Or, one which has invested in areas totally unrelated to the core business activities of the group. Iconic institutions like the Indian Institute of Science, the Tata Institute of Fundamental Research, the Tata Institute of Social Sciences, the National Center for Performing Arts are but some of the examples which spring to one’s mind.

A habit of going beyond the mandate

tata-crest

It may also not be possible for us to locate another business house which has gone out of its way to incur a liability out of a sheer sense of decency even when not having a formal agreement to that effect.
In one of his scintillating articles, Arun Maira, ex-member of the Indian Planning Commission and an ex-Tata senior, recounts a 1946 meeting between the KraussMaffei board and J R D Tata and Sumant Moolgaokar on the platform of the bombed out Munich station. In those times, Indian companies had no way of entering into any agreement with German companies. The Germans requested Tatas to take their best technicians and their families to India, who were starving without work in Germany. So, Tatas learnt metal-working from the best of the best.

He says that many years later, when India had become independent, the German company’s headquarters received a letter from Tatas, asking how much to pay for the technology they had provided to Tatas. That letter showed the true spirit of the group – one honours one’s debt, even when it is not legally binding, and even when it is not demanded of one.

You may also recall the Tata Finance fiasco in 2001, when a letter alleging some wrongdoings at the company reached the desks of several Tata seniors. Tata Sons could have well adhered to admitting its limited legal liabilities, but Ratan Tata took a courageous and humane view to publicly declare that interests of every small investor shall be protected.

In his brilliant book, Six Lenses, R Gopalakrishnan, cites several examples from the Tata history to sketch out the kind of culture the group has.

You are well aware that much of the goodwill enjoyed by the group is because of the perception that, as a business house, it has always tried to put into practice the Zoroastrianism principles of Humata (Good Thoughts), Hukhta (Good Words) and Hvarshta (Good Deeds).

A unique vision and the spirit of enterprise

jamsetji-tata

Elsewhere, R M Lala speaks of the spirit of enterprise by quoting the instance when Sir Jamsetji N. Tata traveled all the way to Pittsburgh in USA to realize his dream of building a steel plant in India. In 1901, he met Julian Kennedy, the foremost steel expert, who warned him that even the preliminary investigation could cost a fortune and there was no guarantee of any returns. He suggested that survey of the raw materials be made by Charles Page Perin, the best geologist in America.

In New York, Jamsetji went to Perin’s office who was impressed by the passion and the sincerity of the aging entrepreneur. In April 1903, his partner, C. W. Weld, came over to India to kick-start the process of setting up a steel foundry. Even though Jamsetji passed away in 1904, his vision was brought to fruition and the first ingot of steel rolled out of the Sakchi plant during 1912. World War I broke out soon after and Britain found that the only source of steel for the war effort East of Suez was in India.

Within two months of the War ending, the Viceroy came to the Steel Works at Sakchi, and rechristened it Jamshedpur.

Many of you may believe that the Tatas can grow faster by being more aggressive in existing as well as in green field verticals. But you can not miss the point that tremendous progress has been made already, and never by compromising on the core ethics and values the group companies adhere to. Running the same businesses without this core would be like having living organisms sans their souls.

Succession and moments of mental aberration

Succession in a complex organization which is 148 years old is often a delicate issue.

jrd-tata

JRD is reported to have often joked that the Tata Sons board made him chairman in a moment of mental aberration. While he was anointed thus in 1938, his ascendance was never a cake walk. He took over the baton of the group from his second cousin Nowroji Saklatwala.

To quote Jehangir Pocha:

Inwardly, he was none too pleased with Shapoorji’s “intrusion” into Tatas. He is said to have got even more infuriated when Shapoorji proceeded to buy further stakes in Tata Sons from his siblings, Sylla and Darab Tata. This event has now come back to haunt the group.

JRD himself never spoke publicly about Shapoorji, Darab or Sylla, as was the norm in the days when grace mattered and linen was never washed in public. But he did say in his later years that Shapoorji took advantage of people who were “weak-willed and credulous”.

He surrounded himself with exceptional managers and threw the somnolent group into expansion mode. Tata Chemicals was incorporated in 1939 and became India’s first soda-ash supplier under Darbari Seth. Tata Motors was established in 1945 and nurtured by Sumant Moolgaokar. Tata Steel grew under Homi, and then, Russi Mody. JRD himself was the steward of Air India’s growth, even after its nationalisation in 1953. Naval Tata led the Tata electric companies, and the group’s textile and oil mills.

Fast-forward to 1991, when Ratan Tata took over the reins of the house of Tatas. He then faced the challenge of managing the then existing power structure within the group to be able to assert himself.ratan_tata

Of de-globalization and corporate governance

On the global stage, these are challenging times for many of the group’s business verticals. Brexit and the recent US elections are events which need great attention. Post-2008, the world appears to have entered into a phase of de-globalization. Protectionist barriers are likely to get higher. Right-wing enthusiasts world over are basking in the perceived glory of their resurgence on the global stage. The Mistry fiasco is a distraction the group can surely do without.

The current feud does throw up several serious challenges. One is that of achieving managerial excellence within the framework of ownership by a particular family – something that Tatas have always managed to do so very well. Another is that of articulating the invisible authority lines between owners and professionals. Both these factors need strategic thought from persons of such eminence as your goodselves.

Yet another issue pertains to managing the employees and the business ecosystems as long as the turbulence persists.

Support a business with its soul intact

Tata logo

Allow yours truly to urge upon all of you to think deeply on the issues that the group faces at this time. Go back to your conscience and check if you view your relationship with any of the Tata companies purely through a materialistic lens, or through a lens which also incorporates the kind of values the group stands for.

You are well aware that in many areas of management, Tatas have set the bar very high. Giving back to society. Business strategy. Employee welfare. Women empowerment. Avoiding the bribe traps. Avoiding, but never evading, taxes. Going beyond the mandate.

One would hope that persons of your eminence would choose not to wash dirty linen in public and resolve your differences in a spirit of mutual accommodation. That you shall respect your custodianship role and live it. That you shall conduct yourself in a manner which would justify the trust and faith reposed in you not only by the group but also by the shareholders of the company you happen to be associated with.

That you shall subdue your ego and care for the long term bigger picture. That if your value systems happen to be out of sync with those of the Tata group, you shall quietly withdraw from the eminent position you enjoy on the board of any of the group companies. That, hopefully, you shall support Ratan Tata and his team to protect their turf.

If the differences between you continue to fester, the brand equity of the group might take a short-term hit. However, one has no doubt that, given your support, it shall scale greater heights in the years to come.

One wishes Ratan Tata the best of deliberations to find a perfect professional to steer the group in the coming decades.

(Further reading:
Article by Mr Arun Maira
http://www.livemint.com/Opinion/GOx9Ym0MSLSGwbHb6WSvsO/The-Tatas-and-a-matter-of-trust.html
Article by Mr R M Lala
http://www.thehindubusinessline.com/todays-paper/tp-opinion/in-the-company-of-men-of-steel/article1649373.ece
Book by Mr R Gopalakrishnan (www.themindworks.me)
Six Lenses, ISBN 978-81-291-3587-2)

(Related Posts:

https://ashokbhatia.wordpress.com/2012/12/27/bidding-an-adieu-to-mr-ratan-tata

https://ashokbhatia.wordpress.com/2016/04/04/super-leaders-the-near-perfect-ceos

https://ashokbhatia.wordpress.com/2012/12/09/getting-a-moral-compass-would-be-a-sound-business-strategy-for-india-inc)

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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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