What I learnt from Ratan Tata

 

Ratan Tata - Ex Chairman, Tata Group

Ratan Tata – Ex Chairman, Tata Group

Ratan Tata retired a few days ago. He has been one of the most iconic Indian businessmen in last two decades. Under his leadership, Tata Group notched several honors. I’ve had several encounters with him in my almost decade long service at the Tata Group before I started out on my own with SwitchMe. He has been inspirational in several aspects to me and I thought I would pen down a few.

My first interaction with him was when we wanted to set up a supercomputing company in India. The other two in the team were Narendra Karmarkar and Sunil Sherlekar – both stalwarts with huge reputations behind them. They wanted someone with a business background to understand the opportunity and to shape up the business proposition and asked me. I was excited but didn’t realise then that this would lead to a series of lessons from one of the finest business leaders.

One of the few things that we realised at the very outset was that this was a capex intensive business where technology risk was also very high. Even a basic prototype to prove the technology would need more than Rs 100 Cr! No VC in the world would take such a risk. So, Indian Govt was our first option but clearly no one was interested. We were quite disheartened but by Mr Ramadorai (then CEO of TCS) advised us to approach Mr Tata. We were not sure if this would work. Mr Tata had bet early in his career on another company in High Performance Computing (Industry parlance for supercomputing) and that bet had turned sour. That company still exists as Tata Elxi and has little to do with supercomputing now. Given this background, we expected a rejection. But Karmarkar and Sherlekar met Mr Tata and came away excited. The clear message was that he was interested as long as the project was unique and could make a big impact. Clearly, here was an entrepreneur and not an investor. Past failure wouldn’t deter him from taking new risks. In fact he wanted big bets!

We were then told to make a business plan. We got help from TSMG (Tata Strategic Management Group) to do this and we thought that this was a Bombay House process and it is best that people used to the process drive the plan. So, we provided information as needed and a presentation was made. Mr Tata looked at it and said that the plan was good for any of the group companies but not a start up. He asked for a business plan to be made as it would be done for VCs in Silicon Valley. He was clear that process should follow the opportunity and not the other way round.

This responsibility fell to me as I used to handle TCS’ relationship with VCs and knew several VCs in valley. So, I prepared a deck as best as I could.  A meeting was scheduled around Christmas. This took us by surprise as Mr Tata was on a vacation then. We asked him when we met him and he said “This is not work, this is fun” with an excited smile. He was more interested in the progress made in tech and was very excited about what Karmarkar told him. Lastly, it came to the presentation and he was clearly disappointed. He said this wasn’t what he asked for. I told him that this was in line with what Silicon valley VCs were doing then and quoted a few names. He paused and said “My dear friend, you’re mistaken”. I replied point-blank without hesitation “No sir, you are mistaken”. He stared at me and said slowly “you are mistaken”. And I again replied “No sir, you are mistaken”. There was silence in the room and I realised that I had overstepped an invisible line in my enthusiasm. After all, this was Ratan Tata and I was arguing with him! He broke the silence by asking us to move to other points. I felt quite stupid and nervous. After some time, the meeting was over and Mr Tata prepared to leave. I could sense a bit of hostility in the room from several other seniors and prepared myself to be suitably chastised. But Mr Tata came around to shake hands and complimented me on my “spirited arguement” and with a mischivious smile added “But I still think you’re mistaken”. That took a weight off my shoulder and everyone in the room laughed. He made sure that disagreements were only professional and protected dissenting voices.

The next step was to present to GCC (Group Corporate Centre). This was a surprise – Mr Tata was the Chairman and we thought he could decide. We were told that there is a governance mechanism laid down for the entire group and everyone including Mr Tata needs to abide by this. This is very unusual in Indian business where the leader of the group decides on his own and many times even their wives (Bhabhijee) are part of decision-making process. Even in large US companies, a CEO with a standing like Mr Tata pretty much carries the proposal through the board. But in this case, Mr Tata did not even voice his opinion until others had voiced their theirs! In the end, the meeting went quite smoothly and we got funded.

The last incident underlined a key aspect of his leadership – Companies are run on principles and not personalities. Principles are inviolable – even by the person who creates them. You will see every Tata company follow this and I saw my boss Mr Ramadorai live them many a times. Even in his last act, Mr Tata followed the same principal. He could have extended his tenure easily but he followed the laid down rule of retirement at 75 and stepped down.

Farewell Sir and thank you for your lessons. I try to follow them. By the way, I know now that indeed I was mistaken that day.

2 Thoughts on “What I learnt from Ratan Tata

  1. Superb article! The preaching of Mr. Tata is not only useful for you but for every Indians who have started to idolize him. He is a great person with skills and entrepreneurial qualities that one can learn to run his show with optimum skills.

    Good job :)

  2. VIjaya on January 20, 2013 at 5:08 pm said:

    Humility even in greatness

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