‘The biggest test for Cyrus is to stay true to the Tata code of ethics’


December 9, 2012

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Having steered over hundred companies of the Tata group for more than two decades,Ratan Tata, who retires on December 28 as the group’s chairman, says he has always tried to do the “right thing” but rues that Indians have a tendency to harp too much on the dark side of things and pull down those with the ability to progress.

“In my interactions with business leaders in India, as against elsewhere, there is this feeling that they are looking for cracks in your armour in order to pull you down; this happens not just to me but to everybody,” Tata said in an in-house interview to Christabelle Noronha, chief of group corporate affairs at Tata Sons.

“There is a tendency to look at the dark side of everybody and everything, every situation and every government move.”

You have been at the helm of the Tata organisation for more than two decades. If you were to reflect on this period of your life, what would be your most satisfying memories?

This period has probably been one of the most important in my life. At the same time, it has also been the most demanding that I have experienced. There have been several satisfying memories and some disturbing ones, too.

Perhaps the most satisfying is that during this period one was able to weld the organisation together in a more cohesive way than it had been in its past, that it was able to identify itself more as a group, and that we took bold and, in some cases, rewarding decisions in terms of growth, including the making of acquisitions overseas. It would have been tremendously satisfying if economic conditions globally had continued to be buoyant.

This, unfortunately, has not happened and that reality has affected the satisfaction index.

Ratan Tata has always seemed to be a contemplative kind of person, an introvert who appears to be most comfortable away from the glare. How have you been able to manage the attention and the limelight that came with the chairmanship responsibility? What kind of defence mechanisms have you had to employ to deal with the expectations and the unrelenting scrutiny?

When I took up the position of chairman, I had an underlying dilemma in my mind on how to fill the shoes of a very great person. The decision I made was to just be myself. That, I think, carried on to the interactions with media and in public life. I decided to be myself.

I am an introvert, kind of a private person, and I tried to remain that way. Some of the media glare I could not escape, so I faced up to it as part of the job. But in every other way, maybe to some extent to the detriment of the group and myself, I stayed away from the media unless I had to. I avoided being an easily accessible person and, as a consequence, the group has probably not had the visibility and the public relations positives that it should have garnered.

Would you have liked to do things differently?

No, I would not. As I said, I wanted to be myself and I did not make the sacrifice that is demanded if you are to be seen as a public figure.

When you were appointed chairman of Tata Sons, did you doubt your ability to provide the group with the kind of leadership it required? What were your main concerns?

That’s a difficult question to answer. JRD Tata (the late chairman of Tata Sons) had around him a team of senior managers, all of them people of substantial standing in their respective spheres. They had high public acceptance and were people with proven track records. While they may have acceded to his wish that I take over the chairmanship – and this happened suddenly – I must confess that I did not feel any sense of joyousness on their part, because some of them had aspirations to have that job themselves.

It was a period of tightrope walking: on the one hand, trying to continue the cordial relationships I had with them, not as chairman of the group but as one of their colleagues, and at the same time trying not to avoid taking the decisions on change that I felt were needed to be taken. The first five years of my being chairman were spent in negotiating and in trying, as diplomatically as I could, to achieve what I was convinced had to be achieved, in some instances to the annoyance and even anger of some of these stalwarts.

How has the responsibility of being chairman over such a long period of time changed you as a person? How different is the Ratan Tata of today from the Ratan Tata who studied to be an architect and then reluctantly plunged into the world of business?

Over the years leading up to becoming chairman, I think I formed views on what the group could do and accomplish. I exchanged notes with JRD on how, from a strategic standpoint, the Tatas should operate (JRD did not, in fact, endorse many of my views). When I did take over the chairmanship, I had a strong desire to implement those changes. As time went on I became more realistic that everything cannot be changed overnight, that change cannot happen by force or diktat, and that you have to carry people with you. I believe I am a softer person today, maybe less decisive than I was when I took over, less idealistic, more pragmatic about what can be done and what cannot, and much more aware of the need to communicate.

For instance, on the communication front, I have changed. I have realised that you cannot carry people with you through public proclamations of what you want to do; there is a lot of behind-the-scenes convincing and cajoling that’s needed. I still don’t do enough of that, but I have come to recognise the necessity of such an approach and I have improved my communications with others prior to effecting any change that I would like to effect.

But do you really dictate to or mandate people to follow you?

I think it may have been viewed that way at times; at other times it may not have been viewed that way. There have been instructions, guidelines and expectations expressed by me. These have, in some cases, been viewed as a command, in other cases as direction. Within the Tata group there has always been, in my view, this situation where if something that has been put out from my office upsets people, then it’s a diktat; if it suits them, it’s a guideline. So the same instruction can mean different things to different people.

You appear to be a person who is at home in the world, more comfortable in a global business environment than in your ‘Indian business leader’ skin. Is that a correct impression?

I am, to an extent, very comfortable in the United States, where I spent 10 years of my life. In my interactions with business leaders in India, as against elsewhere, there is this feeling that they are looking for cracks in your armour in order to pull you down; this happens not just to me but to everybody. There is a tendency to look at the dark side of everybody and everything, every situation and every government move. Outside of India, in the business environment, there is genuine and much greater appreciation of the good that a person does and the success that he or she has achieved.

Some element of this thinking has led me to foster closer relations with business leaders from abroad that I like.

It is said that just as JRD had a soft corner for Tata Steel, you have one for Tata Motors…

I wouldn’t say that. Automobiles are a passion with me and so it was with JRD, except that he handed over operations at Tata Motors (Telco at the time) to Sumant Moolgaonkar and thereby reduced his involvement with the company. He retained his interest in Tata Steel and I think the two of us, if you take away the frills, had an equivalent interest in Tata Steel and Tata Motors, respectively. Tata Steel has been the flagship company of the group and JRD had a far greater involvement in its growth and development than have I.
Similarly, I have had a closer association with Tata Motors, both in commercial vehicles and passenger cars.

It’s inevitable that people say you have a soft corner for a business concern when you are more deeply involved with it than with others. Coming back to Tata Steel, a great deal of the company’s progress happened during JRD’s time, but more recently there has been a significant involvement on my part in its growth and evolution. So I don’t think it’s fair to infer that I have a soft corner for Tata Motors. That said, the automotive business is more lively and intriguing – it’s not a commodity business – and I have to confess that my personal interest in automobiles is high and I enjoy being in that business.

You have often over the past few years made clear your intention to step down as chairman when the time comes. What are the thoughts that gather in your mind as that time approaches? Could you share some of the details of your post-retirement years as you have it mapped out? How much space will there be for Tata in this scheme of things?

You will recall that I reintroduced the retirement age criterion in the group and this was done as a set of guidelines. It was considered an edict by some and welcomed by others. While some people have suggested that the retirement policy should not apply to the chairman, I have always believed that you don’t make exceptions for yourself. So I took the view that the rule should apply to me too, that I should not be treated differently from everyone else in the organisation in terms of the application of that policy and the content of that policy.

The retirement age was implemented after I took over as chairman. The retirement age I had suggested was 70 years for all directors and 65 years for senior executives. It was then revised to 75 years for directors. More recently, it has been revised back to where I had initially put it. I welcomed the extra five years because it gave me the opportunity to do many of the things I wanted to. If I had stepped down at 70 I would have had fewer years as chairman and that would have meant an unfinished agenda. But I was certainly not keen to see any new modifications to the rule. I realise that I have to live by the rules I have set and step down when the time comes. And that time has come.

Do you have an unfinished agenda still?

Oh yes. I would be a hypocrite if I said I did not.

So what is it that remains to be accomplished?

I think it would not be correct at this point in time to talk about what one would have liked to do; it would not be fair to my successor for me to say. I think he has to have his arena to perform in.

Coming back to business, it has been reported that you are keen on guiding the future development of the Nano in your post-retirement years. How would that association pan out?

I have a view that the Nano can be marketed differently from how it is today. It can, with some evolution, be relaunched and made to serve the purpose for which it was intended. The Nano was meant to be an affordable car for the family, a vehicle that delivers outstanding value for money.

Unfortunately, it has come to be perceived as a low-priced car and various stigmas have been attached to it. It has been marketed like other cars, but as a minimal automobile at a low price. I think that is the wrong way to go and I would love to have a chance to implement a new marketing plan for the product, if that were possible. This is not a stated wish, just something that – if I were asked or got involved with – I would gladly devote my time to.

There has been speculation that you plan to enhance the spread and profile of the charity work that the Tata trusts do, that much of your time will be directed towards this objective.

I think there is potential for a fresh look at the manner and scope of philanthropic grants we make in the areas in which we operate – in rural development, in water conservation, in enhancing the quality of life in rural areas, in health and education. I believe we can bring more technology to bear on our initiatives and that we can be a more effective grant giver than we have been thus far. I believe we can make a great difference to the communities we serve.

We can always continue to donate to non-governmental organisations (NGOs) working in their areas of expertise and base such giving on their track record. The question I ask is: is that all we are, a supplier of funds, or an identifier of good NGOs? Or should we be more creative in terms of considering solutions for a given social or demographic problem, in terms of finding solutions that are innovative and more effective than those that have been tried in the past?

Let me elaborate. The creation of hybrid rice by the International Rice Research Institute in the Philippines, a programme in which Dr M S Swaminathan was involved, changed the face of rice growing in Asia. It was the application of modern technology to a traditional form of agriculture and it has changed the lives of millions of people. That’s just an example; it’s not that I want to pursue DNA or gene manipulation in the product. What I’m saying is that application of technology and the creation of something new can transform lives. What I would like to do is give more of my time to those kinds of possibilities and move some of our grants towards those kinds of discoveries, in the hope that we can change or enhance the quality of life of people who need such help.

What, in your opinion, are the most significant challenges that Cyrus Mistry and his generation of Tata leaders will be confronted with as the group looks to expand and consolidate in the decades to come? What do they have to watch out for?

I have said this before and I continue to say it today: the most valuable asset we have in our group is our ethical standards and our values.

Unfortunately, as a nation, we seem to be following, more and more, a divergence towards a breakdown in the fabric of values and principles and ethics. We have, in the years that I have been involved and, of course, when JRD was at the helm, stayed true to our principles. We have managed to grow and we have managed to abide by our values without compromising. We have been respected for that and, in some cases, we may have lost opportunities due to that. But, as I have frequently said, I can go to bed at night knowing that I did not succumb.

I reckon this is going to be the greatest challenge – the challenge of staying faithful to the Tata code of ethics – that Cyrus and the group will have to confront in the coming years. They will have to make decisions and, when they do this, they will be constantly faced with the question: do you compromise, do you give in? You can call it by another name, but in playing this game of appeasing or surrendering to a venal system, the soft option, the easy way out is a compromise. And compromise can set in gradually, in a very small way, but there’s no turning back once you are in. That is going to be the greatest challenge, more so even than the ability to run the business prudently.

On the other hand – and I am quite certain of this now that I have worked with him for a year – Cyrus’s values and principles are not different from ours, and he does have the strength of character to manage this critical aspect. In addition, and I have watched him at close quarters, he possesses the ability to analyse businesses. I consider myself to be more of a numbers person than JRD was. I believe Cyrus is more of a numbers man than I am.

The group will therefore be in the hands of somebody who will understand the business environment better than me. I tend to rely a lot on intuition. I believe Cyrus will bring a new dimension to the group and I also believe he will uphold its values.
You were quoted in a recent interview as saying that you have “not been able to create the truly open, flat, transparent organisation that I had hoped we could do.” What exactly did you mean?

What I am trying to say is that in India, regrettably, hierarchy and designations are more important to people than job content or even pay packets. When you are overseas you don’t have someone talking about a batchmate and seniority based on year of graduation. But that’s what tends to happen in India and it’s sad because there’s an assumption here that age and seniority go hand in hand with merit.
I had hopes that we could create a flat organisation where hierarchy was downplayed and that we could create a culture where performance was rewarded with recognition, monetarily and through the placing of the meritorious in positions of importance.

Designations would have been flat in such a system.

I have found the reactions to such an idea absolutely contrary to what people want: when it suitthem they say it is great, but when it comes to how it affects them, they do not want to see it happen. To that extent, I think we have failed – I have failed – in creating a flat organisation.

I have seen some enterprises overseas where everybody from a worker upwards is an associate. Then you have the senior associate, the general manager and so on; four or five levels and that’s it. That would be a great way for us to go even in a single Tata company. We, instead, have vice presidents, senior vice presidents, senior executive vice presidents and the like, all these designations crafted to reinforce differences in stature. This, I am convinced, is not how it should be.

If business and the Tata group had not come to dominate your existence, how would your life have played out?

I don’t know; it depends on how things happen over a long time. If I had not come back to India, if I had continued practising as an architect, I would have had a completely different life. From 1962 onwards, my life has been about living in different Tata organisations in different positions.

Each of these experiences has had its attributes, its pulls and pressures. It’s an impossible question to answer.
In some of our earlier discussions, you mentioned designing the odd house or two. What were those experiences like and what did it feel like to use the skill you were trained for?

In both cases, in Jamshedpur and with my mother’s house, I never had a proper place to work, so it was a drawing board on my lap, sitting by the side of my bed. Both of them went the same way: enjoyable to design, frustrating to build.

I seek perfection and this has been a source of motivation for me and also frustration. Architecture – if you do it well, if it results in achieving what you want – can be a fount of extraordinary motivation, and unending frustration if you are not able to accomplish what you have set your mind on. In my life, in business, motivation and frustration have gone together. And frustration is the worst of it, not having things come out as you had perceived or conceived them, and having to sometimes live with what is less than best.
Dogs and cars, flying and doodling, that much the world knows of what Ratan Tata likes when the world of business does not crowd him. What about your other interests?

I used to really enjoy scuba diving. I have done it since 1962 in various waters, in the Pacific and in North America. I perforated my eardrum too many times and it has become difficult for me to dive without suffering pain in the ears,which is why I gave it up about five years back. Flying I continue to be involved with. I love flying and I hope to keep doing it so long as I can
pass my medicals and stay proficient. It would be the same with cars, I think. Maybe the desire for fast cars has mellowed in the course of time as one’s reactions got slower, but I will always remain fond of cars and the technology that goes into crafting them.
My love for dogs as pets is ever strong and will continue for as long as I live. There is an indescribable sadness every time a pet passes away and I resolve I cannot go through another parting of that nature. And yet, two-three years down the road, my home becomes too empty and too quiet for me to live without them, so there is another dog that gets my affection and attention, just like the last one. Dogs will forever be a part of my future.

I have not given my pets the time I would have liked to; it has always been little snatches. I look forward to having in my hands the luxury of time for my dogs.

What about art, music, books and movies?

All of those I enjoy and would love to have time to pursue. Some are within me, things that I would like to express. I would like to formally relearn music so I can enjoy it by myself. It would be wonderful if I could learn to play a musical instrument; it would absorb me to learn to play the piano, for instance.

What kind of music do you listen to?

All kinds of western music; classical, rock, jazz, I’m equally fond of all of them.

What do you reckon is the greatest legacy of Ratan Tata as chairman of the Tata group?

I have been asked that question before and I have always dodged it. That’s because it is for others to decide, not for me. The legacy I leave behind – that which I am aware of, that which I can express – is that I myself have lived by the principles that I have desired for the group. I have led by example in that sense and I have devoted my life, as best I could, to the welfare of the
group. I have endeavoured to do the best I could with the responsibilities I have had. I have always tried to do the “right thing”.

Courtesy: Tata Sons website/NewsWire18