The month of June in New York is warm and a great time to visit the Big Apple. But the five brain trusts of the Tata Group had no time to enjoy a summer vacation. The clock was ticking. They had to finalise Ratan Tata’s successor by the year end and they had already cast their net wide.
Sources aware of the selection process said, by then potential candidates from within the $83 billion conglomerate were already shortlisted along with global leaders many of whom incidentally also had a strong “India connect.” Among them were Anshu Jain, the poster boy of investment banking from Deutche Bank, Vodafone’s former boss-turned- PE investor Arun Sarin and American John Thaine, the last chairman and chief executive officer of Merill Lynch.
“Indra Nooyi’s name was never there,” quipped a source.
Internal candidates like Ishaat Hussain — the Group’s CFO and B.Muthuraman, Tata Steel’s former boss — were also seriously considered and their interviews taken. But by then, it was becoming increasingly clear that two factors would be critical for the final selection for the top job at Bombay House.
More than succession, it had to be “legacy planning”. It was as much about competence as it was about continuity. And that’s when the panel realised that the suitable boy could well be a 43-year old man who has been with them for the last 10 months.
“Around that New York meeting, Cyrus was sounded out and he dropped out of the selection committee and became a candidate himself,” said a source. He thought about it, consulted his family and father -- who is the largest shareholder of Tata Sons – and came back to face the same rigorous exercise that the other candidates had to go through.
What perhaps worked for Cyrus as opposed to some of the others were a handful of very important factors. He was already in the Tata Sons board for over five years. As a young blood, he has always been vocal about the strategic path the group should undertake in the coming years.
Even during the interview process, he repeatedly articulated that big picture, what the group should do or strive for in the next few years. His past and present colleagues from the Tata Sons board say, he has always been a supporter of young managers getting nurtured and a senior management pool to infuse fresh thinking. So in him there was continuity of a thought process, one that gelled well with Ratan Tata himself. “There has always been a strong chemistry between the two,” quips JJ Irani, former Tata Sons director. “In board meetings, Mr Tata would often seek out his advice.”
Moreover, at 43, he has age on his side and close to at least 25 years ahead of him to chart out his own leadership course.
Cyrus’s passion for finance and engineering background also helped. Even though during big ticket acquisitions like Corus or JLR, the lead role was always played by the operating companies, Cyrus is believed to have given strategic inputs as the youngest member of the board of Tata Sons – the group’s apex decision making body.
Many Tata Group watchers say it is believed that Ratan Tata has always kept a close eye on Cyrus ever since the various holding structures in Shapoorji Pallonji companies like ACC were resolved post the Tata branding days. “It was a smooth and seamless transition, and no acrimony involved,” said a person in the know.
So when Ratan Tata actually mentioned Noel Tata lacked experience, the rumblings had already begun. It would have been tough for Noel who was not even inducted in the Tata Sons board. Eighteen meetings later, the selection committee chose one of its own.
Cyrus Mistry’s selection as the deputy chairman and heir-apparent took a little over a year. In August 2010, when a five-member committee was set up to select Ratan Tata’s successor, he was part of the team.
The other four members included three seniors of the group -- NA Soonawala, R K Krishna Kumar and Shirin Barucha. The only outsider, Sushanta Kumar Bhattacharya, whose surname is usually prefixed by his title of ‘Lord’, is the founder of Warwick Manufacturing Group in Britain.
R K Krishna Kumar is a director on the Tata Sons Board. He is also chairman in several other firms, including Tata Coffee, Infiniti Retail (Croma), Tata Realty and Infrastructure, Tata Housing and Development Company and vice-chairman of Tata Tea and of Indian Hotels. He is a trustee of the Sir Dorabji Tata Trust, the Sir Ratan Tata Trust and some allied Tata trusts
N A Soonawala, number two on the Tata Sons board till his retirement, is one of the most trusted lieutenants of Ratan Tata. He is a member and trustee of several trusts.
Lord Sushanta Kumar Bhattacharya is founder of the Warwick Manufacturing Group, an industrial consultancy and part of Warwick University. A close friend of Ratan Tata’s for years, he has been instrumental in the group’s expansion in the UK.
Shirin Bharucha’s association with the group dates back to the 1960s. She has advised about 80 companies of the group. She is also involved with a number of trusts.