Triumph of entrepreneurship

Updated: Dec 28 2012, 07:44am hrs
Ratan TataRatan Tata
Kavil Ramachandran

Ratan Tata is leaving a legacy which is comparable to that left behind by some of his predecessors. That is precisely what is expected of him, and he can hang up his boots, satisfied with his performance. It is not always that we find corporate leaders like Tata who have weathered storms while continuing to contribute immensely to the challenges of institution-building over two decades. They become legends. Tata has transformed a relatively smaller group that he had inherited, quietly but with determination into a much larger and respectable empire in the world.

He took charge of a family-controlled but professionally-managed group under difficult circumstances. In fact, he was not groomed to step into the larger-than-life size shoes of his predecessor JRD Tata. The process of building a legacy began then. He had the challenge of evolving a new growth vision while fighting disruptive forces. In fact, his success at consolidating his position organisationally must be viewed as the cradle where he learnt the art of building an empire.

The circumstances under which Tata took charge of the reins of the group were hostile. While he inherited the empire, the kingdoms were under the control of rebellious kings who not did not approve of him but, in fact, went to the extent of trying to dethrone him. This is where his faith in trusteeship and determination to win the cause comes out clearly. As a trustee of the wealth of the Tatas, he had to take charge and lead from the front. He did that successfully, and made the institution stronger.

A leaders ability to inspire comes not only from the techno-managerial capabilities that he exhibits, but also the sincerity with which he undertakes the challenges and leads. Tata has proven time and again that he believes in the fundamental strengths of the Tata Group. The group has always believed in values such as compassion for all stakeholders. He continued to practice the values of the organisation that he was destined to lead. Even at the time of finding a successor, he did not go ahead and announce a hand-picked successor. He wanted to ensure that the person who was stepping into the chair that he was going to vacate had the capabilities to take the organisation to newer heights. The future had to be in safe hands.

He continued to adhere to the human values such as caring and collaboration across the group. Employees were often paid salary increments even when the concerned group company made financial losses. The logic being: The factory workers did not do anything wrong for the less than adequate performance of the organisation. This was especially so at the worker level. The group did not start cutting staff even in the newly-acquired Corus in UK.

The beginning of economic liberalisation in 1991 coincided with the arrival of Tata as the future leader of the group. That was the water shed, make or break moment for India. The country badly needed entrepreneurial organisations to emerge out of existing groups to steer the growth graph. Given that a substantial majority of Indian businesses are family controlled and managed, the onus was on leaders like Tata to become entrepreneurial in terms of thinking and action. His passion for technology, innovation and enthusiasm to prove to the world the inherent potential of the country to be a manufacturing destination was proven with the design, development and manufacture of the cheapest but technologically-advanced car of the century, the Nano. While there may be a number of reasons for the less than expected market performance of Nano, it gave thumbs-up to Indias capabilities beyond IT.

Even in IT, the growth of TCS is a demonstration of his ability to trust and delegate operations and strategy to capable executives. He allowed his team to be entrepreneurial. The groups growth beyond its traditional boundaries is an evidence of the capabilities of the team that Tata built over a period. The group believed in what is now called portfolio entrepreneurship and grew exponentially.

The group has grown multifold over the past two decades, and has become force to reckon with globally. This is precisely what all long-lasting family-controlled businesses have done across the world in their pursuit to build and perpetuate successfully.

Tata will only be retiring from his responsibilities as the executive head of the group. He will continue to be active in several other capacities, including that of leading some of the large Tata trusts. As chairman of some of them, he will continue to influence the vision and strategies of the group. He is only redefining his role and is passing over the baton of leadership to a younger person in whom he and the group have faith. It is obvious that a person of his commitment and capability will only be delighted to see the institution that he has nurtured for two decades continues to grow. That alone will make eternal his legacy.

Kavil Ramachandran is a management expert