Outgoing Tata Sons chairman Ratan Tata believes the biggest challenge his successor, Cyrus Mistry, may face would be to stay faithful to the Tata code of ethics. "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," he said.
"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."
Following is the second and concluding part of the full text of Tata's interview with Christabelle Noronha, chief of group corporate affairs at Tata Sons Ltd:
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.
You will remain chairman of the Tata trusts even after you relinquish the helmsman role at the group. There has been speculation that you plan to enhance the spread and profile of the charity work that the 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 MS 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.
What kind of leaders does today's Tata Group require? How difficult is it to find the right person for a leadership position?
With today's business leaders, I see a much greater consciousness about the creation of personal assets. I don't mean they do this clandestinely; they do it openly. Consequently, businesses are often driven by people who have greater personal ambitions, who believe they can rise faster with the opportunities a large group is able to provide.
The leaders are there; the question is whether you can meet their ambitions (their internal mental demands are another issue). The group needs to be — and this has been a challenge in my time, too — fast and nimble-footed in the marketplace so as to make the most of opportunities and situations.
Are we willing to break the traditions of the group and move some people faster than others? There can be repercussions of this in a group of our size, which is why we have tried to do it cautiously. Cyrus could well consider this question differently. He could decide that people should move based on merit, faster and in less of a traditional fashion than has been the case thus far.
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 suits them 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.
In the years ahead, do you see yourself remaining a mentor to Cyrus Mistry and other leaders of the Tata Group, or will you be consciously keeping your counsel to yourself?
I want to make one thing clear: I have given most of my life to the Tata Group and if there is anything anyone wants of me in terms of advice, counsel, etc, I am happy to give it. At the same time, I am very conscious that I don't want to have my shadow hanging over the group, a ghost walking the corridors, someone giving unsolicited suggestions or expressing an unsolicited viewpoint.
In the circumstances, I don't consider myself in the coming years to be playing the role of mentor to Cyrus, nor do I yearn for a post-retirement designation of mentor. I would like to make a clean break. I will be available if called upon in any way to help. At the same time, to be called upon in isolation leads to funny situations where you are not fully informed, you are not fully involved, and your opinion is, to that extent, not as good as it would have been if you were fully involved and committed. Despite all this, if I were called upon, the involvement from my side would be on the basis that this is personal. It would not be a functional duty and it would be on issues that I would decide whether I wanted to get involved with.
I could never do anything to hurt the group. This is where my life has been and I want to see it succeed further. I want to see Cyrus and his team succeed.
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".