One of Ratan’s biggest achievements is the way he has unified the Tata Group

JRD Tata announced the appointment of Ratan Tata as the Chairman of Tata Sons on 25 March 1991. Two weeks later, on 5 April, I met JRD just as he was going to Europe for his angioplasty procedure and I asked him why he had come to choose Ratan as his successor. Was it was because of his integrity?

Russi M Lala in conversation with DIBEYENDU GANGULY ET BUREAU

imageHe replied: "Oh, no, you can’t say that! It would imply that the other contenders did not have integrity". He later added: "I think he will be more like me."

If JRD was alive he would have been proud of what Ratan has achieved. The two are alike in many ways and in other ways, very different. One trait that Ratan has in common with JRD is his integrity. They are different in that JRD was an outgoing person with a great love of people. Ratan was reserved by nature but has now come out of it.

I remember Ratan was posted in Jamshedpur for a while. JRD and Ratan both had a common passion for flying. JRD and Ratan came close to each other when Ratan went up to JRD and said: "I would like to start a Flying Club in Jamshedpur".

I met Ratan in 1979 when I was working on my book, The Creation of Wealth: The Tata Story. He was then handling Empress Mills and I dropped into his office just to get to know him. A little later, I invited him out to lunch at the Taj with Frederik "Frits" Philips, who was a personal friend of mine. Ratan was young then, and I remember he was really glad to meet the legendary head of the family that owned Philips in Holland.

I met Ratan on and off through the 1980s. He was appointed head of Tata Industries , which had become an under-capitalised ‘shell company’ of the Group but was nonetheless considered important. Ratan’s father, Naval, was particularly happy when the appointment was announced because it indicated that Ratan had a chance at later becoming the Chairman of Tata Sons. In those days powerful figures like Russi Modi and Nani Palkhiwala were also contenders for the post.

Three months after he was appointed head of Tata Industries, Ratan’s mother Soonoo was diagnosed with cancer. He was faced with a hard choice at that point. On one hand there was this big career opportunity and on the other there was his mother in hospital in the United States. It is a measure of the man that he had his priorities right. He chose to be with his mother and left for the USA and stayed there with her for three months. Recalling this he said: "After all you have only one mother!"

In that period of waiting by his mother’s hospital bed, Ratan sketched out a long term strategic plan for the Tatas and the industries he thought the group should be in. He included petroleum in the list as well. That never happened, but many of the other plans he made then have become a reality. For example, he thought the companies of the group should pay a royalty to Tata Sons for the use of the Tata name which seemed like a difficult proposal then but which he has since implemented very well when he became the Chairman.

Ratan became Chairman of Tata Sons four months before Manmohan Singh announced his liberalisation policy. JRD had felt it was coming but he knew it would be too late for him to play a meaningful part at the age of 87.

Liberalisation opened up new opportunities and Ratan was able to take advantage of it. The Tatas have always had a great cadre of talented people. It is one of Ratan’s greatest resources. In 1979 when I first got to know JRD Tata I asked him why the Tata Group (under the License Raj) has not grown as fast as some other Groups and JRD had replied: "I have often thought about it. If we had adopted the means some others have we would have grown twice as big as we are today." Then he forcefully added, "but we would not want it any other way."

One of Ratan’s biggest achievements is the way he has unified the Tata Group. Towards the end of his career, when he was in his 80s, JRD did not have the energy to do what had to be done. Some Managing Directors took advantage of him. Once Ratan took over as Chairman of Tata Sons he introduced a retirement age for the company CEOs, that required even top people to step down. He did it with great finesse. Russi Modi, Darbari Seth, the former left with protest, the latter quietly when his time came.

After that, freed of the shackles of the License Raj, Ratan was free to use his creative powers for the growth of the Group. But he was careful before that to work out with McKinsey & Co, a plan for thinning a number of companies (then about 95), holding on to the companies that were in steel, advanced plastics, power, inorganic fertilizers, air-conditioning, software, telecommunications, tea, coffee, watches, hotels, retailing, financial services, insurance and international trade.

The creative efforts which followed included the introduction of the Nano. Of all his companies Ratan’s first love is for Tata Motors . In the late 1980s Sumant Moolgaokar chose him as a successor for the Managing Directorship. His second great love is for planes, but, alas, three successive governments frustrated his proposal for collaboration with Singapore Airlines, each giving a different reason.

Nearing the end of his career Ratan can have the satisfaction that he has lived up to JRD’s expectations. Russi M Lala, 82, is biographer to both Jamsetji Tata and JRD Tata. He has been the director of the Sir Dorabji Tata Trust for 18 years and the co-founder of the Centre For advancement in Philanthropy and its chairman from 1993 to 2008.

(As told to Dibeyendu Ganguly)