Interview/ Mukund Rajan, former brand custodian, Tata Group
THE FIRST BRAND custodian of Tata Group, Mukund Rajan served on the board of various Tata companies. He joined the group in 1995 and closely worked with successive group chairmen before leaving in 2018 to become an entrepreneur. Excerpts from an interaction:
Q/ When Ratan Tata took charge, there were a lot of concerns about how he could fit into the shoes of J.R.D. Tata. But he succeeded in many ways. How did he do it?
A/ Establishing himself as a rightful successor to J.R.D. Tata, probably, was achieved by the end of the 1990s. And that’s the time also when his board, which he inherited from J.R.D. and which had many octogenarians on it, agreed to accept a new retirement policy. And one by one, they all stepped down. Famous names like Nani Palkhivala, F.C. Kohli, Shahrukh Sabhawala, A.H. Tobaccowala, all of those people started stepping down from the board of Tata Sons. It was a kind of reflection of the fact that they felt that their time was up, their duty to J.R.D. and Tata was over, and that Ratan Tata had proven to be an effective leader.
There were several major interventions that ensured Tata came out into the 2000s looking like a strong group. One was this whole idea of unification. Ratan Tata felt that individual companies had gone too far out in their own independent direction. There was a sense that some of these companies were doing their own thing without reference to the group centre. There wasn’t a sense of united purpose or a joint commitment that everyone bought into with a common vision of the future.
Tata Sons created a group centre which had the capability to help the group companies chart their direction. In the process of centralisation, the unification of the group which took place was catalysed by things like a common logo which every Tata company had to use, a common brand architecture identifying which companies could call themselves ‘a Tata company’ and the basis on which they could do that, the requirement that every company had to sign a Brand Equity and Business Promotion Agreement with Tata Sons which was the owner of the Tata brand, and so on. A Tata Code of Conduct created for the first time in 1998 ensured that companies didn’t go haywire in terms of poor governance or poor ethics.
Linked to all of that was this big focus on quality improvement. Ratan Tata was clear that quality improvement had to be a major thrust, and where required investments in technology had to be made towards that end. The Tata Business Excellence Model was very important in pushing group companies to measure themselves against the competition, not just in India but also overseas, and then figure out ways in which they could achieve those benchmarks.
On the strength of all of these interventions in the 1990s followed the push for global growth. One of the big motivations for this came from the successful acquisition of Tetley by Tata Tea in 2000. This was a leveraged buyout, the biggest one in Indian corporate history till then.
And Tatas were able to not only finance it, but successfully run it in partnership with much of the old team that used to run Tetley. That gave a fair amount of confidence that if one Tata company can do this, many others can take their lessons and do the same.
Q/ How is this legacy that Ratan Tata has left behind going to drive Tata Group in the future?
A/ It is up to each generation of leadership to build on the best that the previous generation left them. And either investigate new opportunities or find even better ways of doing things going forward. So I would expect that some of the basics that were put in place, unification of the group, the investment in the brand all over the world, the focus on ethics so that stakeholders maintain their trust in the brand, all of those are sustained. The group should never go easy on any of those issues or become complacent.
In terms of how you think about the future, with each few years something new becomes a disruption. In the last decade and a bit, digitalisation has been a major disruption. When Ratan Tata was in the chair, globalisation was another disruptor, which was part of the reason he said all our companies needed to have an international strand to their strategy.
These days, a lot of people talk about AI and automation and what that can do to disrupt industries, including Tata’s largest breadwinner at the moment, TCS, where you have a large number of people doing things like coding. What happens if coding becomes something that can be automated and AI can do it for you? Will that shift the power balance to other parts of the world that are very strong in AI? How strong is your innovation engine and your ability across industries to keep up with the rest of the world while using these new tools that are becoming available? Those would be the things that would be giving sleepless nights to Chandrasekaran and his team.
Q/ What are your thoughts on the appointment of Noel Tata as the chairman of Tata Trusts?
A/ I haven’t worked closely with him and it wouldn’t be fair for me to comment. Noel has the surname, therefore there will be the pressure of expectation. He has to think about a group in which the Tata Trusts are the largest shareholder.
But the trusts also have a public welfare mandate. And therefore he has to think about the people of India. But the group is also international, therefore he has to think about communities in other parts of the world.
Q/ Could you talk a bit on the lighter side of Ratan Tata?
A/ He had a good sense of humour and a loud laugh. He was happy to laugh at jokes, at himself, at the sillier side of things. Even during important meetings, he could break the tension with something like that. His doodles and caricatures during board meetings were ways to deal with tedious board meetings. Some of them were presented to colleagues. In high-pressure jobs, you need to be able to pierce the tension in a room with humour. He had that.