With the passing away of Ratan Naval Tata, just short of his 87th birthday on Wednesday, India Inc as well as a host of startups has lost their mentor and global ambassador. Not to forget all the stray dogs that had found their home at the group’s headquarters Bombay House and the Taj Mahal Hotel.
However, he will always be remembered for making the Tata Group a global powerhouse by bringing marquee names like Jaguar, Land Rover, Corus, and Tetley to its fold.
At the same time, he continued to pursue excellence within his companies in India to meet global standards. The Indica—India’s first locally developed passenger car—was launched in 1998. And a decade later, the Rs 1 lakh car Nano was born—a car that could be bought with the swipe of a credit card. And in the two decades of his leadership, the group grew from $4 billion in revenues to $100 billion in 2012 (currently $165 billion).
His compassion was legendary as well. After the Mumbai attacks, he vowed to take care of the families of the hotel employees who were killed or injured. He also pledged to pay the relatives of the dead staff members the “salaries they would have earned for the rest of their lives.” A month after the attacks, the Tata Group established the Taj Public Service Welfare Trust (TPSWT) to provide immediate support to those impacted.
Naval Tata’s son, Ratan Tata’s school education happened in Mumbai and Shimla, after which he completed his graduation at Cornell University in architecture and joined the group in 1961.
The going wasn’t easy for the young Tata. Just a fortnight after he became chairman of Telco (Tata Motors), there was a strike at the plant at the behest of one of the union leaders. However, Tata squashed it with an iron hand.
His ascension as chairman could not have come at a worse time. In March 1991, when JRD Tata announced his name as the chairman, there was political turmoil in India, our economy was floundering, and to top it all, the Gulf War was raging.
The worst part: He didn’t have too many friends within the top management either. JRD’s satraps, Russi Mody (Tisco, now Tata Steel), Darbari Seth (Tata Tea and Tata Chemicals), and Nani Palkhivala (ACC and the group’s legal advisor), were all brilliant and powerful within the group. Then, there was Nusli Wadia, JRD’s godson, who was also considered a contender.
Consequently, Tata found himself in a situation in which, even after becoming the chairman, the satraps refused to toe the line of a group vision.
He proved his mettle with two masterstrokes. One, by enforcing the 75-year rule as the retirement age for all Tata directors. This hastened the exits of Seth and Palkhivala. Ajit Kerkar, who was the executive chairman of Indian Hotels, also exited after he turned 65 for different reasons. While Mody continued to defy Tata, he too retired three months after his due retirement date.
His next move was to remove individual fiefdoms. To achieve this, he used the brand Tata—a group logo that belonged to Tata Sons. All group companies were asked to sign brand and business promotion agreements with Tata Sons and pay a royalty for the same. In addition, increasing Tata Sons’ holdings in various group companies ensured that all group companies answer to one person—the Tata Sons chairman.
However, despite his grand success as a business leader and statesman, Tata would also be remembered for the ugly spat with his successor, the late Cyrus Mistry, son of the Tata Sons’ other shareholder, Shapoorji Pallonji Mistry, who had, incidentally, proposed Tata’s name as chairman in March 1991.
Tata had made the appointment personally, but in a boardroom coup, Mistry was abruptly dismissed in October 2016. While he challenged his removal, accusing the board of mismanagement and oppressing minority shareholders, the group later alleged mismanagement and poor performance on his part. While both the Tata Group and Mistry went to the National Company Law Tribunal and later the Supreme Court, and the former won all the cases, the string of allegations and counter allegations was one of the worst in India Inc’s history—something that is not associated with the over 150-year-old group.
While reams can be written about Tata’s legacy, he will always be remembered as the only global Indian business leader with a heart of gold.
From: financialexpress
Financial News