On March 23, 1991 at 12.30 pm, an ailing JRD Tata told Ratan Tata that he had chosen his successor. Ratan Naval Tata was to be the next chairman of Tata Sons.
Ratan recalls the news left him “a bit speech-less”, and truth be told, it had a similar effect on much of corporate India. Untested and unknown, how would this new person fill the shoes of the legendary JRD? What would he do to grow the House of Tata, India largest, best-known conglomerate? As it turned out, plenty.
Over two decades, Ratan Tata has transformed what was once a loose confederation of companies into a unified powerhouse. With marquee acquisitions, the game changing Nano, and a global growth agenda, the 72 year old has primed India’s premier business house for another long innings. Which is why he has been voted not only India Inc’s Most Powerful CEO for 2009, but also the CEO of the Decade.
Tata Group FOUNDER Jamsetji Nusserwanji Tata designed his coat of arms in 1869, it was the highest Zoroastrian principles of humata (good thoughts), hukhta (good works) and hvarshta (good deeds) that he inscribed on the blue insignia. The inspiring motto was just right for the businessman who was a descendant of the Parsi priests of Navsari in Gujarat.
Many decades and many generations later, the house of Tata's still lives by that credo. In the big bad world of business, Tata's are a unique example . The various philanthropic Tata Trusts own about 65.8 per cent of the holding company Tata Sons. Each of the Tata Sons' chairmen has adhered to the lofty values set by the founder and over generations won over the Indian populace .
Ultimately, it's not the size of his businesses , or the sheer scale of his ambition but this position as the guardian of that collective trust that the people of India place in the Tatas which makes Ratan Tata India's most powerful CEO of the decade. Run through the annals of history, and you will find that there are few industrial houses across the globe that have played a more important role in nation building than the Tata's have in India.
Whether it was the group's foray into textiles, power, chemicals or steel in the early 1900s or transport in 1945 or software in late 1968; each new business venture created an industry and in turn made India more self reliant.
Tatas have practiced patriotic entrepreneurship from the outset. When Tata Steel raised money from domestic investors in 1906, Jamshetji's son Sir Dorabji Tata wrote, "It was the first time that the raw material of India did not go out and return as finished articles to be sold in the country. Above all, it was purely swadeshi enterprise financed by swadeshi money and managed by swadeshi brains."
Most of these projects in the early 1900s were downright risky and ahead of their time. That never deterred the Tatas. When Sir Frederick Upcott, chief commissioner of Railways heard about Dorabji Tata's plan to make steel in India, he replied sarcastically, "Do you mean to say that Tata proposes to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making." The rest, as they say, is history.
So when critics scoffed at Ratan Tata's proposal to make a Rs one lakh car in the early 2000s, they erred; history was merely repeating itself. Ratan Tata was not going to break a promise, just like none of his ancestors ever had. When the Nano was eventually launched in 2009 a nation was united in pride.
It's difficult to find a similar match of profits and purpose across the globe. For a young nation to stand tall, an ecosystem of world class institutions is imperative and the Tatas have always stepped up to give India the best. Prestigious institutes like Indian Institute of Science, Tata Institute of Social Science, Tata Institute of Fundamental Research , Tata Environmental and Research Institute, Tata Memorial Hospital and NCPA owe their existence to the foresight and monetary contributions from the group.
The lives of lakhs of Indians continue to be touched by the group every single day by the various Tata Trusts. The Tatas and philanthropy go hand in hand today because it was a tradition that Jamsetji set right at the very start. In September 1898, he pledged half his personal wealth to make his dream of the ‘University of Research’ attain fruition, and in 1892, he set up an endowment to enable Indian scholars to pursue post-graduate studies.
Even today the three big Tata Trusts - JN Tata Trust, Sir Dorabji Trust, and Sir Ratan Trust - cover the entire gamut of philanthropic activities in field as diverse as education, art and innovation. For Ratan Tata to announce a Taj Public Service Welfare Trust to help the 26/11 massacre victims was a natural step given a family legacy where one of the ancestors of Ratan Tata even bequeathed his cufflinks and tie pins to charity.
Social philanthropy aside, the Tata leaders have the added responsibility of propriety. In an industrial milieu where business family fights were and are the order of the day, Tatas have been true role models. Apart from Jamsetji and his son Dorabji, no Tata Sons chairman has been a direct descendant.
Dorabji Tata and his successor Nowroji Saklatwala were first cousins, Saklatwala and JRD Tata were second cousins, and JRD and current chairman Ratan Tata were second cousins twice removed. The other Tata family members like Ratan Tata in the early 1900s, Naval Tata in the 60s and 70s and now, Noel Tata quietly served the group; palace intrigues remain a non-issue in Tata Land.
Though there have been isolated instances like Nandigram , the Tatas have believed in social responsibility and inclusive growth throughout their journey. As far back as 1902, when the founder Jamsetji wrote to his son Dorabji about planning an industrial city in Gurumahisani Hills where iron ore was found, he said, "Be sure to lay wide streets planted with shady trees, every other of a quick growing variety. Be sure that there is plenty of space for lawns and gardens" ; Jamsetji didn't want to replicate the dingy British industrial towns. It was not a Tata thing to do.
It's long been our trick question for any CEO: Can you read your company's mission and value statement with a straight face? Most fail. We have never had a chance to pose that query to Ratan Tata but are sure he would pass the test with flying colours. Just like Jamsetji Nusserwanji Tata, Dorabji Tata, Nowroji Saklatwala, and JRD Tata would have.
(This article has borrowed heavily from Aman Nath and Jay Vithalani's Horizons - The Tata India Century 1904 - 2004 and RM Lala's The Creation of Wealth: The Tatas from 19th to the 21st century)
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