Both the Group's initiatives-the TBEM an the TBE-BP-have ambitious objectives as they attempt to take the Group's 100-odd companies through one of the world's toughest certifications of excellence.

It's only for the fourth time in 8 years that the (clean) four-letter word is on our cover. (There hangs a tale and a twist that I dare not tell.) For deadly reason too-and that doesn't spell Tetley either. Right from December, 1998, when Chairman Ratan N. Tata first spoke about the Tata Business Excellence Model, I have been curious about what it would do to a Rs. 33,000-crore, 107-company, 37-business group that was fighting to come to terms with itself 132 years after it was born. I'm still not sure-tellingly, the group's score on the BT Business Group Evaluation Matrix has gone up from 650/1,000 in 1996 to 655/1,000 in 1999-but the creation in recent years of the Group Executive Office, the Business Review Committees, the Tata Brand Equity Business Promotion Scheme, and above all, the Tata Business Excellence Model suggest that Tata could, finally be on the right track. Although the number of its companies greatly exceeds 30 and the number of its businesses is nowhere near 12 (remember the Tata Plan?), fact is, the attitudes in the Group about process quality are changing. And more than any other restructuring that it has planned in the last 20 years, that could allow India's biggest business group to survive the future, creating a global template for managing quality (turn to page 84 of this issue) in conglomerates. In fact, that's the only way monoliths like this will learn to do the mambo, right?

The House of Tata restructuring for excellence
They had congregated to be told that they were jolly good follows running jolly companies that would have to do better in future. After all, it was July 29, 1999, the birth anniversary of the Late J.R.D. Tata, when it is customary for the Chairman of the Tata Group to address senior managers of group companies, review the financial year gone by, and set new targets-all of it in a non-threatening, unassertive manner. So, when Ratan N. Tata, 63, strode to the podium, the assembly was not prepared for what followed.

The normally mild-spoken Tata heaped no encomiums on anyone. There were no self-congratulatory platitudes, no gentle reminders of the need to do better. Instead, he launched into one of the most passionate indictments of the present at the Rs. 33,000 crore, 107 company, 37-business Tata Group, warning ever one that the transformation the competitive environment was undergoing could leave the Group in smithereens unless each and every company began grappling with the challenges of change-now.

All these years, said Tata, the Group had amassed physical assets under the impression that these would insure it from competition in the marketplace and from dawn raids by hostile predators. The result was that most of the Group's companies had acquired huge dimensions. But this very size, Tata elaborated to a by-now-stunned-into-silence audience, could prove to be an albatross. It would prevent companies that had become used to operating in sellers' markets from being fleet of foot and responsive to customer requirements. The Group, declared Tata, would have to transform itself fast. Or else, its business leadership quotient, already at a low for all its main business, would worsen.

The Declaration of 99-some day, the Tata Group could well refer to this watershed speech with the title-was no empty statement of intent. For a year, Tata had been insinuating into the Group's operations its largest-ever change initiative: the Tata Business Excellence Model (TBEM). Between December, 1998, and January, 2000, 30 companies have signed up to implement the compliance plan laid out by this model. And, beginning July, 2000, these companies will be annually evaluated on the 7 criteria that constitute the TBEM: Leadership, Strategic Planning, Customer and Market Focus, Information and Analysis, Process Management, Human Resource Focus, and Business Results. Each of these criteria has a number of points attached to it, with all of them totalling 1,000. The goal for each participating company is to reach a score of 600 over the next 5 years. The more ambitious companies like Indian Hotels and Tata International have set a target of achieving that magic number in just 3 years. Says Xerxes Desai, 57, CEO, Titan Industries: "What the model evaluates firms on is the least that any company with even a pretense towards excellence should be doing."

The Origins
The genesis of the TBEM lies in the JRD QV Award. Launched in 1994, the QV Award is based on the Malcolm Baldridge National Quality Award that jump-started a small but growing quality movement in the US in 1998. By introducing the award internally. the Tata Group hoped to replicate that passion for excellence, demonstrated by the 12 companies that initially signed up to complete for the award.

The JRD QV Award had already put in place the required minutes for the companies that would compete and the focus on process and customer satisfaction. In addition, it had effected the structural changes required to monitor and facilitate the award. For instance, a network of 80 quality champions was developed across the Tata Group, with each champion representing one company. A team of JRD QV examiners was inducted and trained for evaluating the applications and certifying them through an examination. The number of such examiners soared from 14 in 1995 to more than 200 in 1999. Then, in a related move, the Tata Brand Equity Business Promotion (TBE-BP) scheme was launched in December, 1999. TBE-BP laid down a set of conditions for the usage of the Tata brand name. For the first time in the Group's history, there was a code of conduct and ethics for group companies. In addition, the Tata logo was revamped, and its specifications laid down.

Both the Group's initiatives-the TBEM an the TBE-BP-have ambitious objectives as they attempt to take the Group's 100-odd companies, organised as they are in a loose federation, through one of the world's toughest certifications of excellence. One indication of the magnitude of the task is the fact that despite competing for it since 1999, no company in the Group has as yet won the beautiful Baccarat crystal JRD QV trophy, designed by Titan. Although a handful of firms, like Tata Steel, Titan, Tata Honeywell, and Tata Infotech, are hovering around the 500-mark, none has touched 600. While Tata Steel is the only company that has crossed the 500 mark, Titan is a close second at 450 points. There is an entire clutch of third-tier companies, like Tata infotech and Tata Honeywell, that are closing in.

The size of the Group is a concern, but not as much as attitudes. Sudhir Deoras, Managing Director, Tata International, has a pretty typical challenge ahead of him: convincing his employees at the leather exports division that customer management is critical although they might never see these customers. With 59,000 workers in one coffee estate and 55 tea gardens across 25 states in India, Tata Tea has the unenviable task of communicating the message of the TBEM across its divisions.

For years now, the Tatas have been associated with a lethargy and stodginess that hardly befits the image of India's premier family group. One would grant the Tatas impeccable values, ethics, and the ability to function at a high level of social responsiveness. But, pro chess-orientation as well as quality-consciousness have been the prerogative of a few of the Group's companies like Tata Steel, Tata Engineering and Titan Watches. In fact, the reason that Tata Steel is way ahead of the others is that its cycle of improvement started as far back as 1991.

Says J.J. Irani, 64, Managing Director, Tata Steel: "In the post-1991 scenario, a completely different set of parameters have guided the corporate and business objective of the Company. The strategy, the vision, and the objectives had to undergo a sea change if we had to be successful. There was no alternative." Asked whether the atmosphere in the Group was one of the atmosphere in the Group was one of recognition that things must change, M.N. Bhagwat, 52, Advisor, Tata Sons, and Head (Corporate Assurance Group), Tata Group, says: "Truthfully, about a year ago, I was worried. Today, I'm not." Elaborates Jamshed Daboo, 48, CEO, Tata Quality Management Services (TQMS): "People are excited now, and the momentum is just beginning."

The Structure
Daboo personifies the change. As as Tata Administrative Service graduate, he joined Titan in 1986, and was moved to the Group's Mumbai headquarters in October, 1998. There, he and a team of 5-4 pulled in from other companies and 1 hired externally-set up TQMS as a division of Tata Sons. This is the body that will drive the TBEM, monitor the application process, and train and certify the examiners. The TQMS will also function as a conduit for sharing the knowledge and best practices across the Group. For instance, it is putting together a series of Pretty Good Practices, culled from group companies. The first one focuses on how certain measures are used to drive performance. One example is the New Product Introduction Process: how it is measured, and how it can be improved. The second in the series will focus on customer complaint management.

The TQMS is given focus by a Group Executive Office (GEO), formed in October, 1998, that Daboo reports to. The GEO was the culmination of structural changes at the helm of the Group, suggested in part by the famous McKinsey report. The report, sumitted in early 1998, warned that the Tata Group did not have an efficacious structure or process in place for macro-management and group-wide strategic planning. Says R.K. Krishna Kumar, 61, Managing Director, Indian Hotels: "The realisation is clear now that the Group needs a strong focus. Everything else is incidental to the central task of performance."

Indeed, there is good reason for concern. Aggregate net sales of 38 Tata companies declined by 2.5. per cent in 1998-99. The aggregate net profits have declined by as much as 16.40 per cent in 1998-99, over and above a 20.80 per cent decline in the previous year. Gross profits have declined by 5.2 per cent. The McKinsey report recommended that the Group focus on its core competencies and improve operational efficiencies. One of the responses to this was the GEO, and a closely-guarded list of businesses and companies that are to be divested. The rest are grouped into 7-business sectors: materials, energy, chemicals, engineering, communications and information systems, services, and consumer goods. Says R. Gopalakrishnan, 56, Executive Director, Tata sons: "The process of devising a system to allocate the companies in each category is, at present, underway." While the board of Tata Sons continues to be the Holy Grail, the executive responsibility for these 7 businesses lies with the GEO that serves as a strategic think-tank for the Group. It consists of Ratan Tata and 3 executive directors: R. Gopalakrishnan, Ishat Hussain (Senior Vice-President and Executive Director, Tata Steel) and A. Soonawala (Group Finance Head). The Group is on the look-out for a fourth executive director. Manab Bose, the former human resources head of General Electric, is now the HR Director for the Group and a member of the GEO, but not an executive director. K.A. Chaukkar, the former head of I-SEC, heads Tata Industries, which performs the Group's venture capitalist role. The model's implementation is being monitored at this level.

Company-level structures are similar. An apex group at the top, a core group at the second level, and task-specific functional terms and a corporate quality head that has overall responsibility for driving the model. At Indian Hotels, the Apex Quality Council drives the initiative from the helm, but the ground implementation is done through 150 cross-functional terms. For instance, at the Taj Palace, Delhi, one of the teams consists of the Executive Chef, Credit manager, and the Materials Manager. Tata International has a similar format with the 6 business councils reporting to an apex body.

In larger organisations, such as Tata Steel, the range of the structure is wider. Tata Steel set up an Apex Quality Council, chaired by the Managing Director, and staffed by vice-presidents and senior general Managers. The council decides broad policy, and meets quarterly to review progress, but the deployments is done by 9 quality councils, chaired by the vice-presidents, and the 36 quality sub-councils, chaired by divisional heads.

The Model
Beyond broad guidelines, the model has no prescriptions, and is extensively adaptable. The choice of the tools of implementation lie entirely with the Company, as does the method of deployment. The model also shies away from making any suggestions about how the organisation should structured, whether they should have quality-planning departments or not, and any suggestions about starting-points, systems, tools, and techniques. Here's how the TBEM drives excellence across functions.

• The Leadership criterion checks how senior leaders create a leader system based on Group values.
• The Customer and Market Focus checks how the Company determines customer groups, key customer needs, and complaint-management issues.
• The Strategic Planning criterion examines how the Company develops strategic objectives, action plans, and resource-allocation.
• The Information and Analysis criteria check whether the organisation has key metrics in place to measure and analyse performance.
• The Human Resources Focus checks the appraisal system, the work environment, and the training and development of employees.
• Process Management examines the product design, production and delivery process, and supply-chain management.
• The Business Results criterion measures the organisation's performance in business areas like customer satisfaction and product-and service-performance.
  

Indeed, finding a common platform of implementation between companies where the initiative has seeped well into the organisation and the ones where it is just about starting will be difficult. B.G. Dwarkanath, Vice-President (Horology and Manufacturing Technologies) at Titan prefers to judge the level of implementation by clubbing employees into 4 groups: Category 1, who claim that they do not know anything; Category 2, who feel that they understand, but cannot possibly help in doing anything; Category 3, who say they understand and can take action, but cannot teach; and Category 4, who say that they understand, can take action, and teach. Agrees Gopalakrishnan: "It is going to take time before it percolates to the 'Pandu' on the factory floor, "Working with this parameter of percolation in the organisation, companies like Tata Steel, Titan, Taj Residency, Bangalore, and Tata Infotech would fall into category 4. Most of the other companies are starting from scratch this year, and will find their own modus operandi to implement the TBEM.

Indian Hotels first made a pitch for the awarding 1995-96 with its Bangalore-based luxury hotel, Taj Residency. As an extension of this, the Company has chosen its luxury hotels division to kick off the implementation of the model. The choice was based on the reasoning that 60 per cent of the Company's revenues and 70 per cent of its profits came from this division.

On the other hand, Tata International prefers to immerse its 6 businesses all at once. Says Sudhir Deoras, 52, Managing Director, Tata International: "I feel it is necessary to take the organisation through the TBEM together instead of a piecemeal effort. "His decision stems from his experience as head of Tata Bearings, where he implemented the ISO-9000 programme. He feels that isolating just that 1 subsidiary of Tata Steel for the implementation of the programme made the spread of the initiative sluggish.

Whatever the approach, the communication is a critical element in all of them. Titan has conducted over 30 awareness programmes to spread the TBEM message. Tata Steel now conducts a Senior Dialogue, Junior Dialogue, Spouses Dialogue, and a Workers Union-Management Dialogue to assure all-around support.

It was this non-prescriptive aspect of the model that attracted the Group towards it in the first place. It felt that, in a multi-company, multi-business group such as the Tatas, excessive focus on procedures and tools, instead of results, would be self-defeating. Says Daboo: "Selection of tools and techniques, usually, depends on factors such as business types, the employee's capabilities and responsibilities, and the market environment."

The focus in the TBEM is on process-orientation throughout. The belief is that with the installation, modification, or improvement of critical processes, companies would eliminate any wastage's in the system that does not add value, thereby improving profits, marketshare, and shareholder value. Gopalakrishnan, however, clarifies: "The TBEM, by itself, is not the magic wand by which all our problems will be solved. But the model will, certainly, put our house in order.

How the Company wishes to do so is left entirely to the organisation. Indian Hotels chose Gemba Kaizen-improvement at the workpalce-and the Company is mapping out the key processes in each of its luxury hotels, like the check-in and check-out process, meal experience, to message-handling. It has realised that there were at least 5 steps in each of these processes which were redundant. Says H.N. Srinivas, 45, Vice-President (Total Quality Management), Indian Hotels, about the importance of process-orientation: "Today, if 2 of my employees at the front-desk change, the guest is able to spot something is amiss instantly."

Post this exercise, big and small results are already flowing in. At the President in Mumbai, setting the tea-tray earlier took 10 minutes with 79 steps. This was brought down to 5 minutes with 9 steps. At the Taj Coramandel, Chennai, the re-organisation of the stores has released 1,000 sq. ft. of prime real estate. Besides, inventory was reduced by 30 per cent, which is saving the hotel Rs. 15 lakh every year. The hotel is also investing in front-end infotech systems to ensure that the information about a customer that is entered in one place is seamlessly replicated throughout the organisation.

Krishna Kumar is not sparing himself either. To fulfill the first criterion if leadership, he put his performance under the microscope. For the first time ever, last year, he put himself up for a 360-degree appraisal. He was evaluated not only by his colleagues, but also by competitors and government officials. Says Krishna Kumar thoughtfully. "In Tata Tea, I had the luxury of time, and so was more tolerant of people. I'll have to work on that here."

Titan Industries decided to move towards World Class manufacturing from Day One-in 1986-before the TBEM became a change mantra for the Tatas. The major thrust areas under that were not 1, but 5: Just-in-Time Manufacturing, Total Productive Maintenance, Total Quality Control, Total Employee Involvement, and Housekeeping. Titan identified departmental and Individual Key Result Areas (KRAs), trained 50 internal change agents, and had a 3-day intensive workshop on the Change Management Process. When it applied for the JRD QV Award for the first time in 1996-97, it came second, apposition it holds till date.

Therefore, for Titan, the results are already a reality. The lead time in its watch-assembly plant has dropped from 17 to 10 days. Its throughput time for the step motor function has dropped from 25 days to 23 minutes. There have also been improvements in watch repair times: 95 per cent in 7 days to 95 per cent in 4 days. And a voice recording system to log in customer complaints has been introduced. On the leadership front, a formal evaluation of the leadership system are being put in place like peer reviews and 360 degree appraisals.

Nothing is taken for granted till it is penned and checked by an external examiner. The examiners, accredited by TQMS, perform systematic and adhoc examinations. The examiners are certified through a workshop and an exam, and perform usual functions in group companies. For instance, Manab Bose, Director (Human Resources), is a certified examiner. And a company the size of Titan has 15.

An examiner could arbitrarily pick up anyone in a company and question the person about his function. The scoring systems is based on approach, deployment, and results. Approach refers to how the organisation addresses the requirement, how consistently it is applied, and whether it shows any evidence of innovation. Deployment examines whether the approach is adequately used in all the work units. And business results whether the benchmarks and goals set were met.
Internal assessment is equally important. "It is no use putting in an application every year and recording, perhaps, an improvement of 20-40 odd points. What we are aiming at is a quantum improvement in our systems and processes towards performance excellence, which will automatically be reflected in the score. Self-assessment is, therefore, of utmost importance to us," says Kidwai.

The actual assessment work starts only in April, 2000, with external assessments, and winds up in July, 2000-well in time for JRD's birth anniversary. Once the weaknesses are identified, the examiners help the organisation set an action plan with time-tables to fix it. For instance, tata Tea scored initially on a scale of 1,000. One of the Opportunities For Improvement (OFIs) that needed to be addressed was evaluating Quality Complaints on a quarterly basis.

There is a Complaint Management System in which each complaint is recorded against a docket number. Within 24 hours, the marketing department has to let the quality group know the nature of the complaint and within 48 hours, the quality group has to get back to the marketing department. The complaint has to be closed within 10 days, with details of the steps to be taken, and after attending to all the issues pertaining to it.

As an extension of the same initiative, Tata Tea has come up with an innovative way of inviting complaints by printing a special message in all the packs of its mainline brands. Consumers are encouraged to write to the Head (Corporate Quality) in case they are not satisfied with any aspect of the product, be it taste, flavour, or even packaging. This year, so far, the marketing department has addressed 250 complaints.

The challenge of the model lies not only in its implementation, but also in achieving a balance. Organisations like Titan thrive on creativity, and Desai hopes that the model will allow his organisation to achieve a blend of liquid and rigid processes. Says Desai: "Creativeity is not a command performance. You can't have an organised, systematic process roll-out of creativity. The model, sometimes, tends to underplay the great induction leaps that organisations might's take to achieve excellence."

It is equally important to keep the momentum going in organisations where the model is well-entrenched. Explains Dwarkanath of Titan: " It's the incremental and continuous improvements which get tougher and tougher." There is also some way that the model will have to allow for measuring delta improvements. In its original form, the model calls for an annual evaluation. But the entire process of writing out the application and putting up with the external assessment process is a huge strain on the organisation, particularly since it comes at the end of the financial year. Says Daboo: "We are making changes to measure incremental improvements." How well the Group deals with these issues is what will determine its fate in this bid for excellence.

Make no mistake: what Tata has unleashed in the convention-ridden, leathargyprone Group is nothing short of cataclysmic change. The real objective of the TBEM, therefore, is not to stage a beauty-contest for signs of quality awareness, but to force each of the companies to take a good look at themselves-products, processes, and people-and embark on a voyage of transformation. Ultimately, the actual scores that are obtained by the companies will not be important, but the changes that the pursuit of those scores has brought about will leave a lasting impression on the way the Tata Group's companies manage their businesses.

Sure, following the TBEM is no guarantor of a successful business strategy. Nor will a company generate record sales and profits simply by scoring highly on each of the parameters. Those are goals that must be met through other means. But, crucially, Tata wants the sense of competition created by the TBEM tournament to catalyse a chain-reaction ending in a managerial minset for competing. His objective, in fact, is to get his companies to understand that change must be directed towards the goal of beating others.

If even half the companies-and their CEOs-in the Tata Group can, indeed, use the TBEM as a launch-pad to set themselves off on a trajectory of continuous improvement in a competitive business environment, Tata will have a achieved excellent results from his model for excellence.
It also shines away from making any suggestions about how the organisation should be structured and whether they should have quality-planning departments or not.

"There was a need to re-focus, and look at how your customer sees you"
Ratan N. Tata, the Chairman of the Tata Group, spoke to BT's Radhika Dhawan about the need for the Group's companies to focus on quality in a holistic and comprehensive manner, and how the Tata Business Excellence Model emerged out of this need. Excerpts from an exclusive interview :

Mr. Tata, thank you for meeting us. There are plenty of tools and models of change that could be implemented in large groups. Why did you choose the Tata Business Excellence Model?
It all started with the need to focus on quality, and an awareness of quality. And we found in the group that different companies' perception of quality veried grossly. After the death of J.R.D. Tata, we thought nothing would be more fitting them a process which would create a recognition of quality. Then, we tried to put some bones and flesh on the idea, and decided to install the Malcolm Baldridge Award as a model because, internationally, it is a coveted quality award.

Quality has many faces: the quality of the Company and the way it is run, and not just the quality of the product. The Malcolm Baldridge Award is holistic in its approach. There are many other awards that exist of quality, like the Six Sigma, which, in a manner of speaking, are a means to an end. What we liked about the Award is that it's holistic and comprehensive.

We then went about establishing this as an annual award in the Group on JRD's birth anniversary, and tried to adapt it to meet our needs. What emerged from the first cut is the fabric of really transforming some of the companies if they tried to comply with some of the issues that were spelt out in terms of rating. And that was something not foreseen. It was something we saw after we put everything together. Then, our reaction was: "If companies would really try and aspire to climb the ladder on this, then we would have companies which would be setting higher goals of excellence goals in a variety of areas."

As this emerged, companies looked at this as an award process and with a let's win-the-prize attitude. In our first year, this was a dilemma we faced. Do we give a prize every year or Do we uphold the standards that we had set, and since no company had reached that, we say no? we debated this no end because when you have an award, you give it every year. You may give it to the best company, but it was still short of what we had previously said was the threshold for the award. So, we finally decided that we would not give an award till the Company met the standard because we would be diffusing and diluting the value of what we created. So, we didn't give the award; we gave some recognition and citation. To date, there has been no award.

By the second year, we really wanted the companies to move away from this award to improving the fabric of the enterprise. We are looking at companies being creators of excellence-in the manner in which you conduct your business, the way you conduct business, and the way you treat your stakeholders. And if you do all of that, you will get the award any way.

We did this because there were companies that said: "Oh! I'm just a small company, and the award will go to a big company because they have the resources to make this happen. "We didn't want any company to walk away from this process. We wanted this to have some sort of operating creed. And we have tried to focus on this creed and said that we will work with you in focusing what your gaps are and what your weaknesses are, and help you walk this path. That's where we are today.

This is the first initiative of such magnitude being taken up in a group which is not really used to functioning in a cohesive manner. What are the hindrances — cultural or structural-to implementing it?
We like to be considered as a group . But what we have been for the last 30 to 40 years is an aggregation of different companies, some bearing the same name, each one operating differently -- each one in the foot-prints of its leader, different and individualistic. While, on the one hand, this has some advantages, on the other, it has been difficult to rein them into some sort of framework. The battles to make that happen are public knowledge, and ate up many pages of the media.

The more traditional and bigger Tata companies were the ones that operated in the seller's market. They operated in a manner where they did not undertake any action to wilfully deceive the customer or provide him bad value for money. By and large, our intention has always been to deal with our stakeholders in the most fair manner as we could. But there were varying degrees of this, depending on the CEO's view of what was right or wrong or fair or unfair.

A couple of things were quite significant. Over the years, much of our attention in our more traditional companies was on establishing manufacturing facilities because that gave us a good product. The product gave our customer good value, but we didn't benchmark ourselves against the best of the beard, either in India or globally. Some companies never looked at marketshare, and we always compared ourselves traditionally to our past, Better than last year was good enough, I'm not trying to talk against our companies: they did a great job in contributing to our country. But many of them got into the phase of reacting to the market instead of being proactive.

While in the 1930s and 1940s, the Tatas had led the nation in initiatives, now we were following someone to catch up, and, in many cases, losing marketshare. There was a need to re-focus and look at how your customer sees you, and to pay more attention to what the customer wants rather than what you think she wants. Are you really the most cost effective producer? Are you aggressive enough to grab marketshare? Will you endeavour to dip your toe in the water and do something that you haven't done before? All those things needed to change.

And then you have to focus on the fact that you are not just going to be judged on your turnover growth or profit growth, but on a much wider set of parameters. These are some of the changes that must be made. But a couple of nuances have come in. One is that we are saying we will define our core businesses and focus on some of the business areas. And we will gauge you on how you comply with this more holistic parameter of how you conduct your business. If you don't we might not decide to carry you.

All 3 things might happen. So, I think, in answer to your question, there will be some instances in the present, or maybe future, where this kind of thing will be the manner in which some of the companies will take it up and say, " Oh! ! need to do something."

You mentioned certain core businesses. What sort of Tata Group are we likely to see in the near future?
I'm not willing to answer that specifically now since we are in the process of doing this. But I will say this to dispel any misunderstanding. No company should steadfastly say, over several decades, that this is our core business. You might add a business which is core, and you might take out a business you thought was core at that point in time. I would not like to be party to necessarily running up a flag, that this is our core business and now its is gone. All I can tell you is that it will be a deliberate exercise. Someone will not come to us and ask: "Will you make toothpaste?" and we will not say, "Let's set up a company to do so," which is what happened in the past. Does that mean that we will get out of some of the businesses that we have gone into the past? Yes, we may.

The Imperatives of restructuring an industrial empire
The Tata Group has traditionally been run without much interference from Tata Sons ot its chairman. But if Chairman Ratan Tata is to see his dream of changing the Group by 2002 come true, things will have to change-and fast at Bombay House.
At 63, when most CEOs contemplate retirement, Ratan Naval Tata routinely logs 10-12 hour days. Most of his workday is spent in meetings of the Group Executive Office (GEO)-the new power centre in the Bombay House head quarters. Apart from old Tata hands like N.A. Soonawala and Ishaat Hussain, the GEO includes new inductees like former Leverite R. Gopalakrishnan, ex-GE executive Manab Bose, and former I-Sec CEO Kishore Chaukhar. Headed by Tata, the GEO was formed last year to review the sprawling Group's loose federation-like structure and its vastly diversified portfolio of products and services. Tata also spends a great deal of his time at meetings of the Group's Business Review Committees (BRCs)-top-level panels which help act as a bridge between each group company and the apex of the Tata empire, Tata Sons. As of now, there are 12 BRCs, but, soon, as every major group company embraces the concept, there could be more.

But then, things move slowly in Bombay House. And the reason for that is historical. Traditionally, at the 132-year-old Tata Group, companies have been run without much interference either from Tata Sons or its Chairman, Unlike a cohesive South Korean chaebol, the Group is loosely structured, with companies enjoying a far greater degree of autonomy than in other business groups. Neither does a single business family or owner enjoy large stakes in each company. Worse, the group has 107 companies, engaged in 25 different businesses. Till 5 years ago, many of these companies, particularly the big ones like TISCO, TELCO, Tata Tea, Indian Hotels, and Tata Chemicals, were run ECOs by who enjoyed almost unlimited powers.
Although Tata took over as Chairman of Tata Sons in 1991, he could really address his major challenge of restructuring the sprawling industrial empire only in 1996. Till then, much of his time and effort were channelled into an often frustrating task of changing the way the group was managed. Frustrating, because it meant getting embroiled in intra group politics and skirmishes with the old guard at Bombay House. It was not till 1995-4 years after Tata took charge from the late JRD Tata-that he could begin work on the main challenge. That year, Tata Sons floated a rights issue, the proceeds of which were, subsequently, used by the apex company to shore up its dwindling shareholdings in major group companies-a move that is clearly designed to increase control over the group's businesses.

The broad task that Ratan Tata has set out for himself back in 1992, when corporate India was feeling the first effects of liberalisation, was 2-pronged: first, he needed to shrink the number of companies in the group from 107 to less than 30, and the number of business in I the group from 25 to just 12. But, although Tata hived off some companies quickly enough, like FMCG major TOMCO, which was merged with Hindustan Lever, it was only in 1996 that the appointed McKinsey and Co. to suggest an overhauling plan for the group.

To be sure, since 1996, the group's metamorphosis has gathered momentum. It should have happened earlier. In the 1980s, and for much of the 1990s, the Tata Group missed several apportunities. In the 1980s, it failed to maximise opportunities to grow in many of the then-sunrise sectors, like petrochemicals, synthetic textiles, and financial services. True, the Tata Group did make efforts-like copromoting the Haldia Petrochemicals complex and setting up Tata Finance-but, unlike players like Reliance, Kotak Mahindra, or even older conglomerates like the A.V. Birla Group, it did not always end up making a success out of them. The 1990s was different, with most of the decade getting dissipated by unseemly controversies-like the acrimonious ouster of former TISCO CEO, Russi Mody, Tata Chemicals Chairman, Darbari seth, Voltas Chairman, A.H. Tobaccowala, ACC Chairman, Nani Palkhivala, and Indian Hotels supermo, Ajit Kerkar.

Tata's pre-occupation-often unavoidable-with dealing with Bombay House's old guard, meant the group's efforts to grab the new business opportunities of the 1990s suffered. Of course, Tata achieved some success, like building a truly Indian small car. True, he also did try to capitalise on emerging opportunities, like power, telecommunications, civil aviation, and infotech, but these attempts lacked the aggression of newer players like Bharti Telcom, Infosys Technologies, or Satyam Computers.

Now, with the dawn of a New Millennium, time is running out for Tata. For one, barely 33 months from now, on December 28, 2002, he will turn 65, the age at which executive directors of the Group have to hang up their gloves. Will Tata be able to see his dream of changing the group he inherited come true in the 2000s?
The answer would depend on what he is able to do in the next couple of years. Sure, in the past 2 years. Tata's moves have been swifter: he sold cosmetics company Lakme to Levers, Voltas' white goods division to Electrolux, TISCO's cement division to Lafarge, and paints major Goodlass Nerolac to Kansai. Still, Tata has much left to achieve. In the 2000s, the emerging opportunities are in the New Economy and Tata wants to flag off what could become the largest B2B venture in the country. In addition, he is prowling around for stakes in Internet Service Providers (ISP) as well as cellular and basic telephony operators. Will that mean that the Tata Group will do in the New Millennium what it couldn't in the last 2 decades? Much will depend on the team that Tata builds to help see his dreams come true.
Sanjoy Narayan

What the TBEM does
1. Provides a framework for the Group to become competitive
2. Uses quality as the route to acquiring competitiveness
3. Works as a competition to ensure participation
4. Applies ratings to monitor the process
5. Becomes a transformational tool for every company.

The Tata Business Excellence Model
Driver Processes Results

Strategic Planning
Objective-development, planning and resource allocation

Leadership
Creation of a system based on group values

Information and Analysis
Use of metrics to monitor performance

Customer and Market Focus
Determination of customer needs, complaint-management, and segmentation

Business Results
Customer satisfaction, product and service performance, and financial results

HR Focus
Appraisal, training, and workplace management

Process Management
Product design, manufacture, delivery, and supply
The Tata Business Excellence Model has no prescriptions, and is extensively adaptable. The choices of tools and the method of deployment lie entirely with the Company.It also shies away from making any suggestions about how the organisation should be structured and whether they should have quality-planning departments or not.

The need for the TBEM
1. Processes and practices were not customer-centric.
2. Group companies pursued size instead of agility
3. Performance standards varied between organisations
4. Knowledge and best practices were not being shared
5. There was no unified management strategy for the Group

The Foundation
JRD QV Awards Tata Brand Equity Business Promotion
Quality Practices Criteria for using brand
Customer Focus Code of Conduct
Process Improvement Ethical Practices
Quality Mindset Cross-Company Collaboration Apraisal System
Tata Business Excellence Model
Change Management Performance Improvement Competitive Processes

The genesis of the TBEM lies in the JRD QV Award, which was launched in 1994. In December, 1999, the Tata Brand Equity Business Promotion scheme was launched. These initiatives attempt to take the Group's companies through one of the toughest certifications of excellence in the world.

The Tata Groups

Survival Index

Strategy 152/200
Portfolio 100/150
Stability 70/125
Leadership 70/125
Oper. Effect 76/100
Adaptability 70/100
Financials 68/100
Value Added 25/50
Inv. Friendliness 10/50
The Score655

Chances of Survival Certain
This Survival Index is computed based on the methodology BT used to assets the chances of survival for India's leading business groups in its anniversary issue fated January 7, 1998

The Structure
Tata Quality Management Service
Drives the Movement
Monitors Application
Provides Training
Facilitates Knowledge Transfer
Group Executive Office Company
Apex Council Apex Council
Core Group Core Group
Cross-Functional Teams Cross-Functional Teams

The Tata Quality Management Services is the body that will drive the TBEM and monitor the application process.