The largely ‘conservative’ House of Tata saw drama unfold this week at Bombay House, the headquarters of Tata Sons. The holding company which has numerous businesses under its fold including Tata Motors, Tata Steel, Tata Consultancy Services has decided to oust the Chairman of its Board, Mr Cyrus Mistry. The same Chairman who four years ago was chosen by the same board to replace Mr Ratan Tata as Chairman on the latter’s retirement.
Mr Cyrus Mistry had been part of the board as a member. He has also been involved in the global search for Mr Ratan Tata’s replacement. Some of the names considered before formalizing Mr Mistry included Indira Nooyi and Arun Sarin, Indians with global experience and standing. With unseating of this Chairman, the clock winds back to the past. Old is gold it seems, especially when our man is aurum (gold) Ratan. He returns as interim Chairman of the Board of Tata Sons. He and a selection panel have been mandated by the Board to find Mistry’s successor in four months.
(As this write-up gets posted, there are reports of Cyrus’ letter to the board surfacing. We are also attaching below what looks like an authentic version. Reader discretion needed.)
Cool Chilli’s Comments
The one thing that strikes a neutral observer is the alacrity with which Chairman Cyrus becomes history. There is more to Mistry missing his mojo with the Board than is available for public consumption. The mystery of the Pallonji scion getting out of favour with Tata Sons’ Board may have more angles or dimensions than we imagined. Without the benefit of ‘insider information’ we believe as read in the media that the old guard at Tata Sons did not take too kindly to Cyrus’s stance on a few things. Like not persisting with some of the troubled businesses like Corus Steel, also pushing partner Docomo to take Tata to Court.
Pupil in the Master’s Shadow
Cool Chilli believes that Cyrus may be more sinned against than sinning. Imagine his position and maybe dilemma after being appointed to shepherd the group. On the one hand he has had a very successful predecessor, Ratan Tata. One wishes to take nothing away from Ratan but he also had taken some huge calls. The good thing for Ratan Tata was that the dice fell more often in his favour. Hence a few calls which could otherwise have been ridiculed were offset by other good ones.The advantage of being a conglomerate. Mr Ratan Tata had a fairly longish stint too, to grow into the tough top job. The Indian economy then was growing a few percentage points more than it currently is.
The Master needs to Let Go for the Pupil to flower
Also the two role models for Cyrus could be Jack Welch and Jeffrey Immelt. The former took over from Reginald Jones as CEO of General Electric. The latter replaced the former. Both Welch and Jones before him left GE as a good performing business. But that did not ‘shackle’ their successors.
The successors on their own, took initiatives with fresh thinking, sometimes questioning the continuity of the businesses that their predecessors had found worthwhile. This has only made GE stronger and in a position to leverage the changing marketplace. Quality as in Six Sigma for Jack Welch has moved on. The Internet that Jack Welch realized was a big game changer is now the game itself for the most part in many domains. The GE that Jeff would exit in due course will not be the GE he became CEO of. But the important point to note is that both Jack Welch and Jeffrey Immelt did or are doing because of the free hand their Boards lend them with constructive feedback as needed.
We are not sure how much freedom Mr Cyrus Mistry had been enjoying.
The DNA remains. The Domains of endeavour may change.
As with Nations and Economies, so with Companies. They would change with time. But the DNA ideally should not, unless for the better, through valid mutative process. For a Nation, the DNA would their idea of existence, their global outlook. For eg. America is a Nation of Immigrants, Its Business is Business etc. India’s DNA could be its assimilative nature and its Spiritual and Moral thought leadership (which as the coming years will prove is no small thing). Similarly a Company’s Vision and Mission and the values they engender become their DNA over a period.
The Idea of Tata
Tata amongst all Indian brands was one that was easily trust worthy. Not that it has not taken a beating. Until there was public outcry (led by environmental activists) about the Dhamra Deepwater Port it was creating on the eastern coast of India, the Ratan Tata led Tata Group was completely all right with the fact that it was further injuring the already vulnerable Olive Ridley turtles. For a far warmer Chilli, the aura of the Tata values started cooling off. While we cannot expect every CEO to be a Jamshetji Tata, some things are really jarring.
The Wisdom of Ancient India
Ancient India had a beautiful concept which is very relevant in this context. The four stages of life. The beauty of this concept and its practical utility was/is that it is occupation and class agnostic. Anyone could follow it, whether a Teacher, a Trader, a Minister or a King. In fact, very relevant to this discussion, Kings and Emperors used to follow it. After handing over the reins of the Kingdom, the father would enter the Vanaprastha (retirement/advisory/Counselling) period, far away from his son’s life unless the heir needed assistance. This ensured that the son had the independence and free hand. Also the father’s experience and ability could still of use to society in some other place, some other domain, etc. How insightful the concept is.
The NewsTikka team believes more transparency is needed to understand and comment with complete conviction. Even assuming Cyrus has not performed adequately ( and NT doesn’t believe so), he deserved as does any stakeholder an opportunity to be heard and clarify points of disconnect. The Tata Sons board has not done much service to the ‘Idea of Tata’ by this move. This indiscreet act may also discourage potential candidates from considering the search team’s feelers.
Theorists and experienced savants differenciate between Leaders and Managers. Both fulfill a need. There are situations and domains where we need an overlap of these roles as well. But both of these also need the necessary support structure to learn to fly and come alive on their own. Unless the eagle soars, the purpose of its existence isn’t realized. The same is true of Leaders, CEO and Chairmen. May our CEOs and Chairmen (in all domains grow). May they be responsible Corporate/Political/Social Citizens and help the company, country and global economy grow without sacrificing Human (Sanskriti) or Nature’s (Prakriti) values. Aam, Amen, Ameen!