It would be interesting to see how Maslow with his theory of hierarchy of needs would have deciphered the motivations driving Ratan Tata. By all accounts of his early life available to us, he would surely qualify as making an entry close to the top of the pyramid as being the scion of India’s first business family; other needs would stand serviced by default as a corollary of lineage and the privilege associated with it. I suspect Maslow would have placed him in the top two echelons of self–esteem, recognition and self actualisation.
Not much is known in the public space on how he fared as a rookie shop floor worker way back in 1962 at TATA steel mills. We do know however of his so called ‘failures’ at Nelco and Empress Mills a decade later, both basket cases when he was parachuted into the thick of strife with the mandate of reviving them. That his detractors and corporate history judged these two assignments as failures appears to have rankled his mind no end and indicates that even in the formative years of his career, his motivation to perform stemmed from self – esteem and recognition. Subsequently, we know of his work at various positions within the TATA group that could be best described a chequered career that saw some failure but mostly success, driven by his allegiance to the apex of Maslow’s pyramid.
My way of paying tribute to a living legend of the Indian Corporate pantheon is by drawing a few lessons from his illustrious career for posterity. I may not be entirely successful, but this does not prevent me from at least attempting. So here goes ......
Prepare a plan and then stick to it: It could be on account of his initial training as an architect, but the method in the madness that he always pursued was to formulate a plan, even re-plan if the business context changes and then stay the course. I believe that as early as 1983, he had envisioned expansion of India’s capital markets and concomitant access to capital and helped formulate a plan that would benefit from this development. Tata Telecom, Tata Finance, Tata Keltron, Hitech Drilling Services, Tata Honeywell, Tata Elxsi and Plantek, all high technology operations, emerged from this plan and also helped create greater business focus within the ‘Salt to Steel’ diversified group. This plan was revisited in 1991 when he assumed charge of TATA Group and updated to incorporate globalisation efforts of the Indian economy. To date, this remains work – in – progress
In pursuit of inorganic diversification, rationalise your portfolio: When expansion into multiple businesses and a multitude of companies is envisaged, ensure that they conform to an overall strategic plan and then design a portfolio around it. When Ratan Tata took over, there were three group companies manufacturing cement; five were involved in pharmaceuticals, while nine companies operated in the IT space. One of his first acts was to sell TATA oil mills and this was followed by swift exits from pharma, textiles and the cement verticals as they did not fit into the TATA group corporate plan
Think the Small with the Big: Architects are paid for precisely this, conceive the overall building and then plan to the detail of the last screw in the cupboard. Ratan Tata’s training as an architect would have surely come in handy when planning mega projects to the smallest detail. He also has the gift of being able to sequester a project within a vertical and then analyse it threadbare on various dimensions – strategic, financial, technological, innovation and branding. Consider the vast portfolio of the TATA Group and even the diversity within its own industry vertical. In the motor vehicle space for instance, the group straddles the spectrum from Jaguar and Land Rover on the luxury end to Nano, in most affordable category
Envision and leap; before others do: Not many can do both, yet Ratan Tata managed this quite well. When Indian business policy was yet tethered to socialist moorings, allegiance to the permit raj and comfort with the now infamous ‘Hindu’ rate of growth, he created a strategic business plan that anticipated opening – up of the Indian economy and the spectacular growth of capital markets. World – class companies such as TCS emerged and have since retained their leadership
It is Brands with a humane touch that endure: I trust the TATA brand implicitly; it stands for honesty, integrity, quality, a promise made and a promise kept. This takes years of sustained effort and consistency in messaging to customers through product design, service delivery and adherence to quality. It is an extension of the personal value system of the people at the helms; how they treat their own employees as well as their customers. With Ratan Tata, this is a direct fit. His personal value system influence HR policies and practices of the TATA group that then gets communicated to the customer in myriad ways. I remember his speech at the launch of the Nano when he famously said – “I would like to announce today that the standard car will in fact have a dealer price of One Lakh Only, VAT and transport being extra. Now having said that, I just want to say that that is because a promise is a promise and that's what we would like to leave you with”
It is difficult to do justice to a living legend when print space is a constraint and just when I was beginning to feel the rush of creativity, I must end this piece, though rather reluctantly.
Today, Ratan Tata helms India’s largest multinational conglomerate of 98 operating companies spread across 56 countries in six continents. The past decade could be termed the glorious years of Ratan Tata when he is at the pinnacle of Maslow’s pyramid. With nearly $18 billion investment to acquire 22 companies worldwide, including Tetley Tea and Corus Steel in the UK, New York’s Pierre Hotel and Jaguar Land Rover, he stands in the rarified atmosphere of global corporate greats.
With one sunset, there is also a sunrise; as he passes on the baton to Cyrus Mistry, he also vacates rather large shoes that this young scion is expected to fill. I wish him the best in his endeavours.
May the force be with him!
