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Tata Sons Chairman Cyrus Mistry has called for a culture of openness and pooling of resources across companies in an environment that is “volatile and uncertain”. In his year-end letter to employees, Mistry (45), who has just completed a year in office as chairman, said the group needed to reconsider some of its strategies, recalibrate business models and fine-tune execution — when stagnant or sluggish economic growth in some of the group’s key markets, such as India and Europe, was affecting the performance of several Tata companies.
Calling for more synergy among the 100-odd companies of the group, Mistry said: “There is so much that collaboration between our companies can offer — be it in areas like innovation and management of technology or identifying emerging needs of consumers.”
Spelling out other key factors to remain relevant, he said the group needed to focus on innovation and evaluate alternative scenarios, powered by teams with aptitude and capability for continual learning.
Highlighting factors to define the group’s success in achieving its goals, he said: “Principal among these will be our ability to foster a culture of openness across the Tata group, and develop a performance-oriented framework that values each colleague’s contribution, as well as cultural fit with the group. This requires significant investment in people development and in encouraging diversity at workplace.”
Mistry said: “With over half a million employees, the Tata group today constitutes a global force not only for doing good business, but being in the business of doing good for society; I am absolutely confident we will deliver on our core purpose of long-term stakeholder value creation.”
He said the past year had been full of new experiences, including interacting with colleagues across the globe and acquiring a fuller understanding of the multiple businesses under the Tata group umbrella. “I have come to realise the distinctiveness of every Tata enterprise and that each needs to be viewed in a manner appreciative of its uniqueness,” he added.
The Tata group companies, with operations in more than 100 countries across six continents, employ over 540,000 people globally. The leading ones, such as Tata Steel, Tata Power, Indian Hotels and the domestic operations of Tata Motors, however, are under pressure — partly due to an economic slowdown in India and Europe compressing demand for goods and services. Nearly half the group’s revenue is currently accounted for by companies and businesses that earn below-par shareholder returns.
A collaboration among the group’s firms to leverage one another’s learnings has gained momentum lately. For example, Tata Power and Tata Motors are developing an engine to convert waste into power and provide a cheaper substitute to diesel and kerosene in predominantly rural areas. Tata Elxsi is increasingly getting involved in giving makeovers to Taj properties across the world. As part of inter-group cross-selling, TCS is winning more lucrative business from group companies — these earlier went to rivals like IBM — purely on merit.
