Nicely written, about a man who in his own non-flamboyant manner is an icon in himself. He is a role model. What a man!!!
Ratan Tata, a man ahead of his time
T Surendar/ Forbes India
'To underwrite your loans, we want a say in your company.' That was the gist of what the British government told Ratan Tata when he knocked on their doors early this year in a desperate bid to bail his companies out. Tata had bought two ailing British firms, steel-maker Corus and automobile company Jaguar Land Rover, borrowing a lot of money and was caught in the financial blizzard that hit the world economy late last year.
Not a stranger to tough situations, when 2009 dawned, it was like the morning after a disaster for Tata, 71, who heads the philanthropic trust that controls India's biggest business empire, the Tata Group.
In November 2008, terrorists had ravaged the Tata group's iconic Taj Mahal Hotel across the Gateway of India killing people and damaging the century old building severely. Tata, who studied structural engineering and had immersed himself in renovating the hotel a few years earlier, was distraught.
Around the same time, the global crisis caused financial markets to rapidly tumble. Tata, who was until then hailed as hero for putting India on the global map, seemed to have committed big blunders.
"Ratan was so busy those days that there wasn't even time to ask if he was stressed," says a close business associate who did not wish to be named for this article. "He had taken it upon himself to prove that he had made the right move."
For people working in his office, he was simply not reachable. For weeks on end, Tata would fly to the UK and US to personally negotiate financial matters.
After months of sparring with the British government and its business secretary Peter Mandelson, Tata managed the impossible. He quietly paid off the $3 billion expensive loan Tata Motors had raised for the Jaguar acquisition and replaced them with cheaper loans from banks, some guaranteed by the British government. This, without giving away anything the British government wanted.
"He pulled off the Indica. He pulled off the Nano. Yet we were surprised when he raised $3 billion in such a bad market," says a Mumbai-based merchant banking executive who has worked closely with the Tata group companies. "He has shown that he won't be pushed over if his deal is fair."
But Tata is making it to the Forbes People of the Year list not for solving a $3 billion problem. He is here because, in a very difficult year, he has had the courage and conviction to lead from the front to not just put the house in order but also push the pedal on newer areas of growth for the group.
Tata launched the Nano this year, jointly launched new telecom services with Japanese firm DoCoMO and even launched a low-priced water filter to address the drinking water problem of the under privileged.
"We were surprised when he accepted to cut the ribbon to launch a water purifier," says the close associate. Tata is shy about public functions and prefers to stay away from them.
A couple of things about the water filter attracted Tata. Here was a product that came close to his definition of an innovation for the bottom-of-the-pyramid audience. In recent years, Tata has been looking for ways to make low cost cars to air conditioners to make his products more affordable. He is said to have told his ebullient managers: "Even this price (Rs. 999) must be bought down. It's too much for most Indians."
What are the lessons that stand out for business from the way Tata handled what seemed a crisis for the group? "Since he has already fixed his destination and doesn't waver, Tata never considers anything a crisis. Instead, he chooses to think of them of a situation and starts solving it," the associate says.
To people who know Tata, it is no surprise. When he took over the group in the early 1990s, the Tatas were still one of the most respected business groups in the country. But they used to think local. Now the group has become synonymous with global large scale operations.
One of the documents that still plays heavily on the way Tata thinks is a strategy document he wrote in 1983. Sitting by the side of his ailing mother in the hospital, Tata is said to have penned his first document detailing the areas in which the group should venture. Apart from passenger cars and information technology, Tata, even at that time had envisioned that companies that harness the power of the youth of the country will be the ones that will eventually make the cut.
Even as Tata was strategising with managers of Tata Steel that bought UK-based Corus to cut costs without paring jobs, he was pushing his trusts to invest more in training youth. He was ensuring the group's future leaders were younger than his generation, to allow them room to grow big. Now, several of his companies sport CEOs in their early 40s. He is doing this as he is vetting candidates from across the world to succeed him in the next couple of years.
Tata has shown that if taking risky decisions need spunk, carrying them through requires more. More often than not, being a visionary, his ideas and decisions see far ahead in time and there are few who understand them when they are first thought of. R Gopalakrishnan, executive director, Tata Sons, says "We have thinking about water for several years but when you fit in the bottom-of-the-pyramid matrix, we had an innovation."
The effects of Tata's labour will not be visible soon. It took nearly a decade to prove that the country's truck maker can also make cars. It took more than five years before his company could produce the $2000 car. When the current storm blows over and time passes by, this year's effort by Tata is sure to leave an indelible mark on the group and its fortunes. A positive one at that.
