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Ryan Martis
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« Reply #12 on: December 07, 2010, 12:24:41 AM » |
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 Former Tata Steel CMD Russi Mody doesn't consider the lack of the right surname a handicap -- "I was a chairman although I wasn't a Tata," he says -- but is quite sure that only a company man will do for the job.
"This is an Indian company and an Indian should be appointed chairman. A company man will have loyalty to the group," he declares.
Preety Kumar, managing partner at global executive search firm Amrop, gives the neutral observer's viewpoint. "Internal succession always has smoother transition than an external one. In some of our work, successor appointments have been made two or three years before the succession, which helps change perceptions," she says.
Sanjay Teli, MD of executive search firm ESP Consultants, adds that group acceptance of and support to the heir apparent is critical. "Ratan Tata's personality and the changes he brought about helped attract the best talent to the group. Retaining some of those people may become an issue in the future," he warns.
Those and other important issues must be top of mind for the selection committee as it searches for the ideal candidate. The five-member panel -- comprising Tata Sons vice chairman NA Soonawala, group advisor Shirin Bharucha, British businessman Lord Bhattacharya, Tata Sons director Cyrus Mistry and Indian Hotels vice chairman R K Krishnakumar -- is expected to announce its choice by March 2011, which leaves room for a reasonably long handover period.
The actual selection process isn't public, but it is known that Tata and other senior executives have given their inputs on what to look for. "It's a scientific process," says a person familiar with the broad workings of the panel.
"The candidates will be evaluated on leadership qualities, management skills, operational performance and other criteria. There will be a matrix and the top scorer will get the top job."
As it happens, those are precisely the qualities that catapulted B Muthuraman to the top job at Tata Steel in 2001. When J J Irani's retirement was imminent, three people were considered likely successors -- Muthuraman and T Mukherjee, both executive directors, and Firdose A Vandrewala, who was responsible for sales and marketing, as well as new business initiatives at the company.
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Ryan Martis
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« Reply #13 on: December 07, 2010, 12:24:50 AM » |
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 "Tata asked all three to prepare a presentation on the future of Tata Steel. Muthuraman's vision and roadmap was crisp, clear and the most appropriate," says a 30-year veteran of the company.
Background and prior domain expertise aren't make-or-break criteria for Ratan Tata, perhaps because he's living proof that track records can be deceptive or misinterpreted.
Anil Sardana was CEO of North Delhi Power when he was picked to lead Tata Teleservices (TTSL), a different industry altogether. He's already proved that the group's confidence in him was justified: from a user base of 15 million in August 2007 when he took over, TTSL now has 75 million.
The old order changeth
In many ways, the successor's task will be easier than Ratan's. It begins with the selection process itself. When Ratan took over from JRD, it was a succession fraught with intrigue, suspense and bad blood.
Resentment from established camps within the group at what was seen as an arbitrary decision was only compounded by Ratan's own admission of surprise at the announcement. The ongoing selection process may be equally opaque -- at least, at present -- but there is some logic and purpose behind it, which should make the panel's decision easier to accept.
The new chairman is also not likely to be battling cliques and fiefdoms within the group -- his predecessor has already taken care of that. Instead of the "corporate commonwealth" that Ratan inherited, the Tata Group now operates more or less as a cohesive unit, which will work to the successor's advantage.
Besides, there is now frequent churn at the board-level as senior members attain retirement age -- most Tata Sons board members are nearing 75, when non-executive directors have to retire. The heads of the three biggest companies in the group also retired last year: there's fresh blood at the top at Tata Motors, Tata Steel and Tata Consultancy Services.
Also, when Ratan took over, the Tata family had neither financial nor managerial control over many group companies. Indeed, at one point in the 1980s, the Birlas owned more stock in Tisco than the Tatas (through Tata Sons) did. That vulnerability to outside interference is now greatly reduced: Tata Sons' holding in most group companies is now around 26%, sometimes more.
Clearly, the old order has changed. But some things will remain constant -- Tata stepped into the shoes of a giant in 1991. His successor will do likewise. |
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Ryan Martis
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« Reply #14 on: December 07, 2010, 12:25:06 AM » |
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 Ratan Tata, the person
1937 Born in Mumbai on Dec 28.
1962 Completes BSc in architecture from Cornell University.
1962 Joins Tata Group.
1971 Appointed Director of The National Radio & Electronics (Nelco).
1974 Becomes a Director in Tata Sons.
1975 Completes management programme from Harvard Business School.
1977 Given charge of Empress Mills.
1981 Named Chairman of Tata Industries.
1984 Sale of Tomco
1991 Takes over as group chairman from JRD Tata.
From driving cars to flying choppers, from charity to business strategy, Ratan Tata does it all, and he does it passionately. But, despite being the cynosure of all eyes, very little is known about the Tata Sons chairman's personal life.
"He is a very private man. Even his closest business aides know little about what he does in his free time," says a veteran at the group.
It's anybody's guess what Tata will do after he steps down from the country's top private sector job. Those who know him well believe he will indulge in all his pet interests, things he didn't have enough time for while helming the Tata Group.
A bachelor, Tata continues to live in a flat in Colaba, filled with books and dogs. Cars and planes are his biggest -- and perhaps, only -- indulgences. He has eight or nine cars in his stable, including a Chrysler Sebring, Land Rover Freelander and Indigo Marina. (There are rumours of a metallic blue Ferrari California and a Maserati also finding their way into his collection.)
"Unfortunately, I do not get enough time to drive. Sunday is when I take my cars out. The cars that I really like, I tend not to let my chauffeur drive," he said to an auto magazine almost a decade ago.
Now he'll have time to spend with his cars, as well as his other mechanical passion, planes. Like his predecessor and uncle JRD Tata, Ratan is an accomplished pilot and flies both planes and helicopters.
He made his first solo flight at 17 and enjoys piloting his Falcon 2000. He has also flown the F-16 and F/A-18 fighters, getting into their cockpits at the Aero India 2007 show. |
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Ryan Martis
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« Reply #15 on: December 07, 2010, 12:25:15 AM » |
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 "I've got a type rating [a licence that allows the holder to fly specific aircraft] for the Falcon business jet, but lately I've been getting more into flying helicopters. I love the engineering in them and they're challenging to fly well," he says.
There's also likely to be more time for swimming and golf, post 2012. Tata used to scuba dive regularly, but punctured his eardrums "too many times". He's had to give that up, but still swims "a lot".
Growing Up
Ratan Tata grew up in the lap of luxury -- in the south Mumbai mansion that now houses Deutsche Bank, driven to school in a Rolls Royce.
All that was forgotten in the decade he spent in the US studying architecture at Cornell, taking on odd jobs -- including washing dishes -- to supplement the pittance that the Reserve Bank of India allowed as foreign exchange allowance.
Returning to India and joining the Tata Group didn't mean any substantial improvement in his standard of living. Ratan's first jobs were on the Tata Steel shop floor in Jamshedpur, where he is believed to have done all manner of tasks, including shovelling coal into the furnace. Which is perhaps why he retains the common touch, and focusses on innovations that will make the lives of ordinary people easier.
Although Ratan Tata will retire in 2012, he will continue to be associated closely with the Tata Group -- nearly 60% of the group holding company is controlled by two charitable trusts, the Sir Dorabji Trust and the Sir Ratan Tata Trust. Tata heads both.
That will mean that not only will he get the chance to sit in the audience during group company AGMs and ask questions (as he said he'd like to do), he will also be able to carry on the Tata family tradition of philanthropy.
"The Tata Group is associated with many charitable activities. It is logical that Tata will increase his involvement in that work," says an insider.
Tata may also spend a lot of time working with educational and business organisations with which he is associated. Clearly, Ratan Tata will be a busy man even after moving out of the hot seat. |
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COOL STOP
