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TATA Bye Bye…

TATA Bye Bye…

There was a very stimulating Editorial in the Financial Express of 25th May 2011.Here it is :
 
How does one read Tata Group chief Ratan Tata’s recent remarks to The Times, London, that his half-brother Noel is not ready to step into his shoes come December 2012? “I think if he is to run this he should have greater exposure than he has had. Partly his not having it has been his own choice,” Tata is reported to have told the UK newspaper. At one level, the chairman of India’s largest business group, the $67 billion salt-to-software conglomerate, going public on such a sensitive issue at a time when the search committee is in the midst of its search, is unfortunate, more so since he consciously ensured he was not a member of the committee. Tata’s speaking publicly may be construed as a signal to the search committee that Noel is not up to the job. But that would be missing the woods for the trees as Tata could have said the same in the confines of Bombay House and no one would have been any the wiser. 

Tata speaking aloud on it, and more importantly standing by what he said in the Times interview even when he disputes the context of lot of other brave things he was supposed to have said in the same interview, tells us that something has fundamentally changed in the India of 2011, and for the better. What Ratan Tata is saying is that in the globalised India of the 21st century, the family name and/or being an insider is neither a necessary, nor sufficient condition for succession. Experience and a proven track-record matter far more, never mind the critics who point out that Tata also stepped into the legendary JRD’s shoes in 1991 thanks largely to his surname—like Noel, Tata didn’t have significant experience to back his claims, more so compared to others at the helm of important group companies. But the business environment was benign back then, with little global competition, and very small proportion of group revenues coming from overseas. With global operations accounting for around 60% of the group’s sales, Noel’s experience of a little over a year with group trading firm Tata International, and a lot more with group retailing firm Trent, seems far from sufficient to lay claim to the top honcho’s position at the group that stretches 90 operating companies across 85 countries. Hopefully, Ratan Tata’s candid remarks should herald a new succession chapter in family-run businesses in the country.

This is what I wrote in response to above by way of a Letter to the Editor:
 
Dear Sir,
This refers to your Editorial “Tata to Tata” in FE of 25.05.2011. 
It is an established fact that clear objectives are critical to an effective succession planning process.Some of the following objectives have been generally crucial in deciding a worthy successor: 1.Identifying persons with potential to assume greater responsibility in the organization.2.Providing critical development experiences to those who can occupy key positions.3.Engaging leadership in supporting the development of high-potential leaders.4.Building a data base that can be used to make better staffing decisions for key jobs upon change of guard.5.Improving employee commitment and retention.6.Meeting the career development expectations of existing employees.7.Countering the increasing difficulty and cost of recruiting employees from outside.
 
 
Corporate history is full of note worthy examples of approach to right succession planning and implementation.The  GE example is well known.In the 1980s,Reginald Jones,the then chairman,together with his  board, had undertaken a task to short list his successors and how he finally zeroed in on Jack Welch,is the subject of an interesting Harvard case study now.May be,Tatas will add new dimensions to such case studies for Indian B Schools.
 

If the past corporate history of succession issues in some other Tata Group concerns (example:Voltas,Indian Hotels,Titan etc.) is an indication, the group mostly got the right person to fit the shoe and the new incumbent proved to be as effective and an excellent performer as the earlier chairman.Let us hope that Ratan Tata finds a worthy successor-from inside or from outside,this time too.

A parallel example from our epic Mahabharata also highlights the problems faced during such instances.Dronacharya,a master of advanced military arts, was the royal guru to Kauravas and Pandavas.Arjuna was his favourite student. Drona’s love for Arjuna was second only to his love for his son Ashwathama.Drona was greatly impressed by Arjuna’s concentration, determination and drive, and promised him that he would become the most powerful warrior on earth. Drona gave Arjuna special knowledge that no other prince possessed.

The strongest criticism of Drona was his behaviour towards Eklavya,a young prince of some other tribe, who came to Drona for instruction but Drona refused to train him along with the Kshatriya Princes, because Eklavya did not belong to the Kshatriya caste.So,Eklavya began studying and practising by himself,after making a clay image of Drona and worshiping him.Solely by his determination,Eklavya achieved exceptional prowess, even excelling Arjuna.
 
The story goes to say that one day, a dog barked while he was focused upon practice, and without looking,Eklavya fired arrows that sealed the dog’s mouth without causing it any harm.The Pandva princes saw this dog running, and wondered who could have done such a feat. They saw Eklavya, who announced himself as a pupil of Drona.Arjuna got worried that his position as the best warrior in the world might be usurped.Drona saw his worry, and visited Eklavya and asked him for a dakshina, or a deed of thanks a student must give to his teacher upon the completion of his training.Drona asked for Eklavya’s right thumb, which he unhesitatingly cut off and handed to Drona, despite knowing that this would irreparably hamper his archery skills.
 
 

One can draw one’s own conclusions about the similarities in the above epic story and the present “mother-of-all” succession stories of modern  times.And who knows,somebody from outside,like Eklavya,may be ready to give his right foot to enter into the shoes of Ratan Tata when,he says bye bye in December.

Let us see if this magnum opus,like our Bollywood films,ends with the syrupy “they lived happily ever after” note or sourly with a wet handkerchief, as in a tear-jerker.Bet on your last 500 Rupee note.
 
J S BROCA
New Delhi.
 
 
I shall wait to see if my letter gets some space in FE over the next few days.Anyway,I loved exercising my grey cells over this issue.
 
Your views/comments,dear Readers,will be appreciated.