Tata for Now. But What About Later?


August 6, 2010

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Ratan-Tata Can the Tata Group be led by a non-Tata?

That is the question the group’s chairman, Ratan Tata, has refused to answer for the public even though the leader of India’s second largest conglomerate is nearing retirement with no obvious successor.

By Eric Bellman / Wall Street Journal

This week the group announced that the 72-year-old will share the burden of choosing a new leader for the tea-to-telecom giant with a special five-person committee. The committee is expected to come up with an answer in a year or so to give the new top Tata time to get used to the crown before Mr. Tata retires on his 75th birthday on Dec. 28, 2012.

The Tata Group has a long, proud history under the leadership of people with the last name Tata.

Jamsetji Tata, the man who founded the group back in 1868, is Ratan Tata’s great grandfather. After Jamsetji and before Ratan, the growing group was led by Dorab Tata, J.R.D. Tata and Nowroji Saklatwala who wasn’t a Tata but was a Parsi, a member of the same tiny Mumbai religious community as the Tata family.

Ratan Tata’s half-brother, Noel Tata, is constantly mentioned in the local media and among analysts and investors as a likely successor. But Noel Tata has kept such a low profile and been given such little responsibility in the group that everyone is far from certain he is being groomed for the position.

Ratan Tata may have another surprise up his sleeve before he leaves. Though he often comes off as shy and soft spoken, since taking over the company in 1991 he has shown he is not afraid of bold moves. He has said in the past he is ready to break from tradition and consider handing over the reins to a non-family member, non-group member and even a non-Indian.

Heading a diverse group with interests in many of the fastest growing industries in one of the world’s fastest expanding economies could be lucrative and exciting enough for any executive to jump at. However it will also include the heavy yoke of spreading the good news about the Tata way of doing business, which often puts communities and employees before profit and requires its people to stick to a strict code of conduct in a country which often runs on rule bending.

These Tata values are the heart and soul of the Tata Brand and the head of the group is like the Pope, the protector and promoter of the way.

That’s no exaggeration. The cult-like following of past leaders is obvious at Jamshedpur, the town that Tata built (and still controls) in eastern India. In the steel-making city, offices and museums are plastered with the posters of past chairmen and executives and parks hold statues and fountains dedicated to the founder. The sprawling J.R.D. Tata Sports complex has a giant billboard of the smiling face of J.R.D. that would make North Korea’s Dear Leader Kim Jong Il jealous.

Who but a Tata, or at least a long-time veteran of the group, is pure of heart and brave enough to bear this burden? Applications for the crown are now being accepted.