Interrogate the internet on what attributes Tatas look for in a leader and there is a broad contour set by JRD Tata, the group’s visionary leader. He defines it as one where a leader is worthy enough for his leadership to be respected by the team and is about leading on the basis of consensus. To what extent these and other new age attributes count when scouting for the successor to Natarajan Chandrasekaran at Tata Sons, is yet unclear as has been the lack of clarity on the future course of action or even on the yet to be announced search committee.
The 158 year old venerable institution of the Tatas is too huge by most accounts. It has a combined market capitalization of publicly listed stocks of approximately ₹26.32 lakh crore (around $277 billion to $320 billion USD), reflecting recent market adjustments and trading sessions. It spans over more than 20 publicly traded companies across diverse sectors like IT, automotive, steel, and consumer goods. The salt to software behemoth is in almost every business except perhaps medicine-making.
Most of the group companies are widely held by retail and institutional investors. A senior member on the board of one of the Tata companies speaking on the condition that he not be named, felt the group’s public shareholder interest would be best served by clarity on what is to unfold. Without it, questions abound such as why has no search committee been set up? If the future lies not in finding a successor immediately then why not clarify on the future course for the businesses?
Questions abound
Can the group, with all its diversity, really look for one individual who is a specialist in consumer-facing businesses, in manufacturing, in all the new-age businesses, in technology, in minerals? And, yet be strategic, across the board? What shape and form should the conglomerate take in the months and years ahead?
Are the current divisions-based on businesses the best approach or should sectors of operations decide the businesses and/or should each sectoral operations within the group, based on synergies, be headed by a chairman, and from these the overall head be chosen.
Purpose & the project
After all, there has always been a purpose propelling the setting up of any business within the group. Tata group progenitor Jamsetji Tata built the imposing Taj Mahal hotel in Mumbai in response to discrimination against Indians by the British much like the founding of Tata Power and Tata Steel to overcome the shortage of electricity in Mumbai and to give a much needed fillip to heavy industries. The story behind the making of Titan watches is now a popular drama series on the OTT platform. This continues right up to the making of the Tata Nano car and now all their long-gestation investment projects which will take time to yield the financial returns.
New format
Many see the Tatas beyond the lattice of business encompassing its business diversity and do-goodery. The successor to Chandrasekaran, it is often argued, will need to be extremely competent person who would be able to understand the group businesses, especially the long-term investments. Unless offcourse the new thinking within the group is now to separate the roles of Chairman and MD, and a “trusted” person from within the group is chosen chairman.
The attribute of internal candidate emphasised to stay aligned to the group’s culture, ethos and the ability to manage internal dynamics. But this again needs clarity and timely communication for silence is not always golden, especially if the implications could mean risking its brand image externally or triggering a fresh round of second guessing and speculation on talent realignment internally. Rumours in the industry circles about differences at the top leading to the current turmoil have already started doing the rounds. Tatas have withstood a clash at the top earlier and if such is the case this time too then clarity on the future course will arguably only help stem the speculation tide in time.