April 15, 2011 | The Financial Express

Wealth of talent best part of legacy Ratan’s successor will inherit

Excerpts:
 
Mumbai: With a turnaround at Tata Steel and tremendous performance at Tata Motors, 2010-11 has been a good year for the Tata Group.
 
The credit for this goes entirely to the managements of the various companies and the teams that the group has nurtured over the years. As group chairman Ratan N Tata, 73, prepares to step down in December 2012, this talent is probably the best part of the legacy that he will leave his successor. In fact, one of the many challenges that Tata’s successor — to be decided soon by a five-member search panel — will face is to keep the team motivated and ensure the quality of the gene pool as good as it is today. In an interview to CNN, earlier this week, Tata did not rule out the possibility of the top job at the salt-to-software conglomerate going to Noel Tata.
 
Noel Tata has been playing a bigger role in the group since he was appointed managing director of Tata International in August last year. Corporate commentators say he would be a good candidate for the job; for one, he’s familiar with the Tata culture, and would, therefore, like Ratan Tata uphold its ‘values and ethics’.
 
Moreover, at 53, he has plenty of time ahead and is experienced enough to lead the Tata team which, going by recent appointments, clearly wants to give itself a younger look. In the past couple of years the group has motivated several of its younger executives giving them a chance to lead. When R Mukundan became MD of Tata Chemicals in late 2008, he was 42 years old. N Chandrasekharan, MD of TCS, is 47, while N Srinath, currently heading Tata Teleservices, is 48 and Mukund Rajan, MD of Tata Teleservices, Maharashtra, just 43.
 
Many like Mukundan have risen from the ranks having joined the Tata Administrative Service (TAS). Recently, Tata Sons, the holding company for the group, decided to lower the retirement age of all non-executive directors from 75 to 70 years.
 
While Ratan Tata was fortunate to have inherited experienced people like RK Krishna Kumar, now on the Tata Sons board, S Ramadorai of TCS and B Muthuraman of Tata Steel as part of the executive cadre when he became the group chairman in 1991, he was also able to spot talent in the form of Ravi Kant who joined Tata Motors in 2000. Ratan Tata acknowledges his team’s efforts and knows that it’s important to give them their space. In the interview to CNN’s Talk Asia programme, he said, “I would say that I am blessed with a very very good executive team that operates reasonably autonomously each of the companies.” The ‘review system’ seems to have worked well and Tata’s successor, say observers, will need to continue with this tradition of empowering the CEOs of the group’s many companies, because people are clearly among the biggest strengths of the Tata group. The search committee set up to scout for a successor to Ratan Tata, has also recommended a restructuring of the board of Tata Sons by inducting younger executives from the Tata fold and independent directors.

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