Global leadership, the Ratan Tata way
Chairman, Tata Group |
" It
is a statement I feel quite awkward in acknowledging." That is Ratan
Naval Tata’s immediate reaction when he is told that he has been voted
India Inc’s Best Brand Icon in the Outlook Business-CNBC Universe Poll—the
result marks him out as the flag bearer of India’s global aspirations.
The response is not at all uncharacteristic of Tata. He is an extremely
private person, and yet one who has managed to transform the Tatas from a
Rs 13,000-crore asynchronous group into a Rs 129,994-crore cohesive
global organisation in 16 years at the helm. "All that I have been
doing, in my own little way, is to make the group more competitive and
bold," he says.
Quite
true to his nature, that also is an understatement. In the last few
years, the group has wrapped up 35 cross-border acquisitions, including
some mind-blowing large deals that are now much too famous to require a
mention here. International revenues now account for over 50% of group
revenues. (That figure was in single digits when he had taken charge.)
And if there is one big reason why corporate decision makers judged him
to be India’s Best Brand Icon, it has got to be his success in taking
the group global. "Both Indian and global stakeholders are increasingly
seeing us as a group that is making big plays, taking more risks than it
was known to do in the past and managing large global takeovers with
reasonable grace and finesse and, hopefully, success," Tata says.
The Mind Of A Leader
There
are many facets to Ratan Tata’s global gameplan—his thought leadership
in identifying the need to go global very early on; his wisdom in
waiting to make the group more competitive before going in for the
international push; his skill as a leader in making this theme resonate
all over the group; the aggression with which he has won some of these
cross-border deals; and his unshakable resolve never to compromise on
the ethics and values that the group has cherished for over 100 years
now.
The
earliest evidence of Tata’s thought leadership could be found in a
document unofficially called the Tata Plan that he authored way back in
1983. Under the leadership of JRD Tata, the group got Ratan Tata (then
Tata Industries’ Chairman) to draw up a blueprint for the future. In it
Tata recommended that the group `seek substantial growth in
international operations.’ He also suggested restructuring the group to
address the global opportunity better.
"Tata identified the theme of going global very early on, but his initial judgment was
Tata has been trying to increase the "dare quotient" of his group.He has been nudging his managers to be bold in their planning
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A Man Of Ideas
Managers
who have worked with Tata closely say that he has identified many such
themes. Internationalisation was one. The push to hire young mangers at
significant, decision-making levels across the group is another. The
entire focus on the bottom of the pyramid—be it the one-lakh car, budget
hotels or low-end watches—is his idea. So is the focus on research and
development. "No doubt, he has been a big influence on the group in the
last three-four years," says R Gopalakrishnan, Executive Director of
Tata Sons. Rosling says, "he is a deep thinker, extremely strategic and
long term. He is always two-three moves ahead."
In driver's seat: Indica, INdia's first indigenous car, was launched in 1998 |
Be Bold
Admittedly,
Tata has also been trying to increase the "dare quotient" of the group.
He has been nudging his managers to be bold in their planning. This
relatively new facet is perhaps best summed by the mindset with which
Tata walked into the Corus auction. "Tata went into the auction with the
intention to win," says Gopalakrishnan. "You are now beginning to see
that attitude being reflected in group companies," he adds.
Tata
encourages aggression among group mangers in many ways. To begin with,
he is always encouraging companies to think big and be bold enough to
attempt the impossible. When such thinking leads a company to a
cross-border deal, he makes himself available 24x7 to the CEO doing the
acquisition. "When you come to him for a critical decision—which will
always be in some negotiations—he will give you a very quick answer,"
says Rosling. His responses would be crisp, leaving no room for doubt.
The answers would be something along these lines: "Yes, I agree that we
should offer this price" or "yes I agree we should withdraw" (the group
has done that on occasions.) "His involvement in cross-border deals
could be quite significant," says Rosling. And that’s precisely what
gives the CEOs the confidence to move ahead
without doubts.
without doubts.
Hands Off
Yet,
in all this Tata never comes in the way of a manager functioning. Yes,
he might step in to make a broad strategic adjustment, but he does not
interfere in operational issues. Only if his help or input is sought in
something specific does he come into the picture.
That can be said of his involvement in the global acquisitions as well. He is present
"He has a very positive global stature. That does help the group companies"- R GopalakrishnanED, Tata Sons
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Tata
extends a similar philosophy into the way global acquisitions are
managed and integrated into the group. Cultural compatibility is one big
area in which due diligence is done before starting work on any
cross-border deal. "This ensures that they are, in a manner of speaking,
inclined to be in the Tata groove more readily," says Tata. He prefers a
non-prescriptive approach. "We do not take a William the conqueror
approach to cross-border acquisitions," says Gopalakrishnan. "I have
signed the cheque. So I am here to tell you how to handle things in the
future—that’s not what Tata believes in," he adds.
Man Of Integrity
A
key issue that ensures cultural competency is ethics. This is where Tata
has never diluted his value system. "I saw him stand by his principles,
even though it cost him entry into the lucrative airline business,"
recalls a senior official of the group, referring to the jinxed Tata
Airlines-Singapore Airlines proposal of the late ’90s.
"Tata
has shown that there is no other way he will do business other than do
it ethically," says Gopalakrishnan. He points to the Tata Finance
episode (financial irregularities by senior company officials had led to
the loss of few hundreds of crore) as an example. At that time, when
the loss was yet to be ascertained (estimates ranged from Rs 500 crore
to Rs 1,000 crore), Tata announced that the holding company would pump
in the required money to prevent Tata Finance deposit holders or
shareholders from suffering any loss. "By that one action, he gave a
message that is far beyond all the speeches he could give in the next 10
years," he adds.
"He is a deep thinker and extremely strategic. He is always 2-3 steps ahead"- Alan Rosling
ED, Tata sons |
Amit Ahlawat
IM 18 Sec A
Roll No 19
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