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CONTENTS
PIONEERING ........................................... 08
TRUSTEESHIP ......................................... 14
GIVING ................................................... 20
COMMUNITY ........................................... 27
ETHICS ................................................... 34
EXCELLENCE ........................................... 39
INNOVATION ........................................... 46
LEADERSHIP ........................................... 52
GROWTH ................................................ 57
FOREWORD ........................................................ 06
THE TATA WAY06
It is common for colleagues at the Tata group to refer to the “Tata Way”
of doing things. One hears it frequently in meetings, conferences, day-
to-day conversations. That a certain action or decision is perceived
as not being in line with the “Tata Way” is reason enough not to do it;
similarly, when something passes muster as the “Tata Way” of doing it,
then that is, quite often, sound enough reason to proceed.
The “Tata Way” is part of a lexicon peculiar to the house of Tatas.
Commonly used and easily understood, but rarely defined. Elusive, yet
all-pervading. It’s one of those terms that have come to describe the
manner in which the group and its employees negotiate the world of
business. Depending on the context, it is associated with an ethical,
morally correct way to do business; a socially responsible approach to
business, or business with a conscience; or a tradition of pioneering,
of being the first-movers in various realms. Much like that other term
“Tata-ness”, the “Tata Way” has defied definition – it is just something
that a Tata employee feels and knows.
This booklet is an attempt to capture the various associations and
perceptions of the “Tata Way”. It is a depiction of the qualities that have
coalesced to give the Tata organisation shape and substance. It is a
chronicle that outlines how tradition and heritage, vision and fortitude
are in lockstep with accomplishment and progress in business. It is,
in the final telling, a snapshot of what the Tatas are all about, what
they represent, and how they have carved out a singular space for
themselves in the world of enterprise.
Most of what rests between the covers of this modest volume has
FOREWORD
THE TATA WAY 07
appeared in various publications down the years in some form or the
other. The intent here is not, then, to duplicate those efforts but, rather,
to elucidate the subject matter — the Tata way of business — through
the prism of a shared ethos and a common collection of stories.
It is an attempt to help employees — especially those who are
encountering this unique culture at close quarters for the first time
— to better appreciate the many elements that have made the Tata
organisation what it is.
From its pioneering endeavours to the trusteeship concept that
underpins its ownership structure, from its commitment to fulfilling
societal responsibilities to its steadfast allegiance to ethical practices,
from its emphasis on excellence and innovation in business to
its remarkable record with growth and leadership in a spread of
industries, the Tata group has plenty to be proud about. The Tata
Way, I am convinced, has shown us the direction in making this
possible, in bringing together more than 450,000 people who are
now part of the Tata family, in creating a fabric of business that blends
profitability and conscientiousness, in the fashioning of a philosophy of
entrepreneurship that is, simply put, unique.
I hope and expect that this publication will resonate with all of us: old
timers in the group, those crafting long-term careers at Tata companies,
and newcomers who are beginning to understand what this organisation
is all about. I wish you a pleasant journey as you follow the “Tata Way”.
Cyrus P Mistry
Chairman, Tata Sons
02THE TATA WAY08
PIONEERINGJamsetji was remarkable in that he adopted international standards in those days. He went to the best
consultants and was always looking to provide India with world-class enterprises. He had the ability to identify people, Indians and expatriates, whom he intuitively believed could execute and lead
his projects. He was a true internationalist in that sense and,
yet, a committed nationalist.— Ratan Tata
THE TATA WAY 09
Jamsetji Tata, the Founder of the Tata group, chose not to worry
too much about the risks attached to treading the solitary path,
concentrating instead on the boundless possibilities that could
be unleashed by a spirit of pioneering. This is the spirit that has
piloted the entrepreneurial endeavours of the Tata group, from its
inception through to the present day.
Jamsetji was, in the words of his biographer Frank Harris, “so far
ahead of his times that his countrymen could not always keep
pace with his broader ideas nor comprehend their drift”. That is
understandable given the context: colonial India tended not to be an
accommodating place for a native-born son wading into untested
business waters. Jamsetji made light of such deterrents and, in doing
so, laid the ground for a way of thinking that has characterised the
Tata group’s pioneering exertions in myriad fields of enterprise.
THE BIRTH OF THE EMPRESS The path-breaking inclinations of the Tata group found first
bloom when Jamsetji established, in 1877, the Empress Mills
in Nagpur in central India. The Tatas were considered, as one
historian put it, “backbenchers in the Bombay business world”
when this textile venture, the group’s first big industrial initiative,
was set up. Jamsetji’s appetite for risk-taking would grow in later
years but here, too, it was in evidence: First, Nagpur was not a
popular destination for textile projects at the time; second, the
Empress Mills introduced new technology such as ring spindles;
third, the mill was run by a board of directors, an extraordinary
practice for the time; fourth, it went against the prevailing practice
and charged, under the managing agency system of the day,
commissions on profits rather than production. The Tatas’ first
industrial venture, thus, heralded many firsts.
02THE TATA WAY10
PASSION FOR STEEL For all the challenges it faced and overcame, the Empress Mills
enterprise would pale in comparison with Jamsetji’s life-consuming
passion for Tata to be a large-scale producer of iron and steel. This
was as much a business proposition as it was an adventure into
the unknown.
“It requires no great insight into the industrial history of India to
realise that to think of launching steel production in India in the
late nineteenth century was, on the face of it, foolhardy,” writes
the historian Dwijendra Tripathi. “Historical precedence, prevailing
prospecting laws, the state of technological competence in the
country, the colossal financial requirement, and the indifferent,
if not downright hostile, attitude of the colonial government all
militated against the idea. And no one could have imagined that
steel manufacturing, even if somehow mounted, would yield
substantial profits in the foreseeable future.”
There was plenty of scorn to go around, too, most notoriously that
generated by Sir Frederick Upcott, then the chief commissioner for
the Indian Railways: “Do you mean to say that Tatas propose to
make steel rails to British specifications? Why, I will undertake to
eat every pound of steel rail they succeed in making.” Sir Frederick
had to eat his words — there is no account of him chewing on even
an ounce of the metal — as the plant started functioning in 1912,
after numerous twists and turns, in a place that is now called,
appropriately enough, Jamshedpur. It was at that point the largest
single industrial unit in the British Empire.
The baton of running the Tata group had by then passed to Dorab
Tata, Jamsetji’s elder son, and so it seemed had that trailblazing
02
THE TATA WAY 11
spirit of a father who, as the biographer
Frank Harris wrote, had to live with “those
curious impediments which dog the steps
of pioneers who attempt to modernise
the East”. Dorabji’s contributions to
the making of the Tata group were at
least as significant as those of Jamsetji,
and his accomplishments probably more
considerable. Not least of these was turning
another of Jamsetji’s pioneering ideas, generating
hydroelectric power, into reality.
Jamsetji had envisioned building a reservoir in the Sahyadri
mountain range near Bombay (now Mumbai) and harnessing the
energy produced by rainwater from the Roha river to generate power
for a city then drawing much of its electricity from hugely polluting
coal. The venture was not as difficult to execute as the iron and steel
undertaking, but the prospects of quick profits were just as distant.
NEW VENTURES The grandest of the ventures that did come into existence during
Jamsetji’s lifetime was the Taj Mahal Hotel in Bombay. Legend has
it that the Tata Founder set his mind on building it after being
denied entry into one of the city’s fancy hotels on account of being
an Indian. That is most likely untrue. What is not is that the Taj,
built at a cost of `42 million and opened to patrons in 1903,
was sumptuousness defined, unique for its time and among the
most luxurious hospitality properties in the world. It was the first
building in Bombay to be lit by electricity and had many other
firsts to its credit: American fans, German elevators, Turkish baths,
English butlers.
02THE TATA WAY12
The Tata group’s pioneering efforts in the airline venture and its
foray into information technology took flight during the stewardship
of JRD Tata, the charismatic leader of the group from 1938 to
1991. Tata Airlines was established as Tata Aviation Service in
1932 — the first flight in the history of Indian aviation lifted off
from Drigh Road in Karachi with JRD Tata at the controls of a Puss
Moth — and it quickly soared to success. Renamed Air India in
1948, it was nationalised by the government of Jawaharlal Nehru
in 1953, a decision JRD Tata did not take kindly to.
Tata Consultancy Services (TCS), the information technology
enterprise, was born in 1968 and quickly became an innovative
powerhouse that laid the seeds for India’s spectacular success as a
software dynamo. In the 44 years of its existence, TCS has broken
new ground in multiple ways, with its offshore and outsourcing
services and a creative feel for business that has seen it rise to
become one of the leading companies of the Tata group in terms of
size and revenues.
Developing passenger cars indigenously — the Indica and the
Nano — is yet another standout
example of the Tata group’s
pioneering instincts, as are its
attempts to fashion a spectrum
of products for consumers and
customers at the bottom of the
pyramid.
FOR GREATER GOOD There is, however, much about
the pioneering philosophy at
TATA AIRLINES WAS ESTABLISHED AS TATA AVIATION SERVICE IN 1932 — THE FIRST FLIGHT IN THE HISTORY OF INDIAN AVIATION LIFTED OFF FROM DRIGH ROAD IN KARACHI WITH JRD TATA AT THE CONTROLS OF A PUSS MOTH — AND IT QUICKLY SOARED TO SUCCESS.
THE TATA WAY 13
Tata that goes beyond products and profits: The labour-welfare
measures championed by Jamsetji and Dorabji (many of them
implemented at Tata group companies before they became statutory
even in the developed world); new forms of management, business
structures and strategies; the setting up of educational and research
institutions for the greater public good; the crafting of an ownership
structure based on the trusteeship concept; making enlightened
philanthropy an intrinsic part of the flow of business. All of these
reflect, in measures large and small, an original and pioneering
bent of thinking and execution.
“When you have to give the lead in action, in ideas — a lead
which does not fit in with the very climate of opinion — that is true
courage, physical or mental or spiritual, call it what you like.” This
was Jawaharlal Nehru’s eulogy for Jamsetji Tata on one occasion,
but he could well have been referring to the business Jamsetji
founded and inspired.
02THE TATA WAY14
TRUSTEESHIPThe wealth gathered by Jamsetji
Tata and his sons in half a century of industrial pioneering formed but a minute fraction of the amount by which they enriched the nation. The
whole of that wealth is held intrust for the people and used
exclusively for their benefit. The cycle is thus complete. What came from the people has gone back to the
people many times over.— JRD Tata
THE TATA WAY 15
The Tata name in any given Tata company comes from the
shareholding that Tata Sons, one of the two promoter holding
companies, has in it. Part of Tata Sons’ mandate is to invest in
operating Tata companies and to advance the group’s entry into
new ventures (a responsibility that is shared by Tata Industries,
the other promoter holding company of the group).
THE PRINCIPLE OF TRUSTEESHIP Philanthropic trusts endowed by members of the Tata family
hold a majority stake in Tata Sons. The biggest of these trusts
are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which
were created by the families of the sons of Jamsetji Tata. The
trusts own 66 percent of the equity capital of Tata Sons. The
returns from the investment that the Tata trusts have in Tata Sons
are funnelled into an extensive spread of philanthropic causes
that embrace institutions and common people in a wide variety
of spheres.
This one-of-a-kind system, where ownership resides with the
philanthropic trusts rather than individuals, has been fostered by,
and is based on, the principle of trusteeship. This commitment to
the principle of trusteeship remains, to this day, a distinctly ‘Tata’
characteristic.
SOCIAL ENTREPRENEURFor Jamsetji Tata, the Founder of the Tata group, company
and country — India in this instance — were almost
indistinguishable, and it is his legacy that gave birth to and
nurtured the tradition of trusteeship that defines the group.
Jamsetji said: “There is one kind of charity common enough
among us… It is that patchwork philanthropy which clothes the
02THE TATA WAY16
ragged, feeds the poor, and
heals the sick. I am far from
decrying the noble spirit
which seeks to help a
poor or suffering fellow
being. [However] what
advances a nation or
a community is not
so much to prop up
its weakest and most
helpless members, but to
lift up the best and the most
gifted, so as to make them of
the greatest service to the country.”
It is this sentiment from which springs Jamsetji’s idea of a
business organisation committed not just to profit alone but
to public good as well. As with some of his grandest
entrepreneurial concepts, the translating of Jamsetji’s thoughts
into action happened under the watch of his elder son, Dorab
Tata, a remarkable man who blended business brilliance with
altruistic instincts.
The personal wealth of Dorabji and his younger brother, Ratanji
Tata, and the manner of its disbursement, laid the ground for the
creation of the trusts that bear their names. Ratanji died in 1918
at the age of 47; the Sir Ratan Tata Trust (SRTT) was set up a
year later as per the terms of his will.
Today, SRTT and the Navajbai Ratan Tata Trust (set up in 1974
in memory of Ratanji’s wife) work together to bestow grants for
02
THE TATA WAY 17
various projects. A few months before his death in 1932, Dorabji
pledged his personal wealth to the newly-registered Sir Dorabji
Tata Trust. Dorabji, very much his father’s son, spelled out his
rationale of business when he said in February 1911 (at the
opening of the Tata hydroelectric project near Bombay): “To my
father the acquisition of wealth was only a secondary object in
life; it was always subordinate to the constant desire in his heart
to improve the industrial and intellectual condition of the people
of this country… It is a matter of the greatest gratification to his
sons to have been permitted to carry to fruition the sacred trust
which he committed to their charge.”
RAISING THE STAKESTata Sons, founded as a trading entity called Tata & Sons in
1868, is fundamental to the ownership structure of the Tata
group. This makes the Tata trusts the predominant owners of
what has been termed the Tata group of businesses.
Jamsetji and his sons used
Tata Sons as the instrument
to funnel their investment in
various business ventures.
Tata Sons’ holdings in the
group’s companies were often
undersized, but this was
alright in the business days
of old, when with the support
and trust of shareholders a
promoter company could
manage its enterprises through
a small stake in them. And this
THIS ONE-OF-A-KIND SYSTEM, WHERE OWNERSHIP RESIDES WITH THE PHILANTHROPIC TRUSTS RATHER THAN INDIVIDUALS, HAS BEEN FOSTERED BY, AND IS BASED ON, THE PRINCIPLE OF TRUSTEESHIP. THIS COMMITMENT TO THE PRINCIPLE OF TRUSTEESHIP REMAINS, TO THIS DAY, A DISTINCTLY ‘TATA’ CHARACTERISTIC.
02THE TATA WAY18
was the era of the ‘managing agency system’, which made that
kind of arrangement par for the course.
The managing agency system, established during the era of
the East India Company, was put in place to enable British
business promoters and backers to invest their funds in India,
the idea being that this would make it easier for them to control
such investments from abroad. Under the system the executive
authority of a promoter company became part of the contract
of management signed by the company being promoted, and
inviolable as such. (The managing agency system was abolished
by the Government of India in 1970). By the 1980s, Tata
Sons held a smaller share in Tata Steel than another big Indian
business conglomerate.
That began to change when Ratan Tata took over as Chairman of
Tata Sons from Jehangir Ratanji Dadabhoy Tata in 1991. Ratan
Tata, an architect by training, set about rebuilding Tata Sons’
shareholding in each group enterprise to close to 30 percent.
The strengthening of its stakes
in different Tata companies
allowed Tata Sons to better
manage these
companies and the
group as a whole,
and it has enhanced
the stature and the
assets of the Tata
trusts. The institution, as
ever, has benefitted.
THE TATA WAY 19
Left unsaid here is a fact rarely commented upon: the Tatas,
one of India’s most illustrious industrial families for well over a
century, never show up on any listing of wealthy people. Put that
down to an ownership structure that has endowed the Tata group
with the ability to add muscle and meaning to the legacy of its
Founder. And that is truly unique.
THE TATA WAY20
GIVINGWhat advances a nation or a
community is not so much to prop up its weakest and most helpless
members but to lift up the best and the most gifted, so as to make them of the greatest service to the country.
— Jamsetji Tata
THE TATA WAY 21
The ownership of the Tata group is unique. The Tata philanthropic
trusts hold 66 percent of the shares in Tata Sons, one of the
two promoter holding companies of the group. The wealth that
accrues to the trusts from this asset supports an assortment of
causes, institutions and individuals in a wide variety of areas. It’s
the trusteeship principle in full play, with philanthropy as its core
and credo.
The biggest of the Tata trusts are the Sir Dorabji Tata Trust and
the Sir Ratan Tata Trust, which were created with the personal
wealth of the two sons of the Tata group Founder Jamsetji Tata.
The logic and the method behind the formation of the Tata trusts
may have sprung from the minds of his sons, but it was Jamsetji
who pointed them to the path of structured and meaningful
philanthropy.
Jamsetji’s idea of philanthropy was far removed from
conventional notions of charity. It was much more than handouts
that he envisioned when he set up, in 1892, the JN Tata
Endowment. The first of the Tata family’s planned philanthropic
initiatives, it enabled Indian students, regardless of caste or
creed, to pursue higher studies in England. This blossomed into
the Tata scholarships, which were so prolific that by 1924 two of
every five Indians coming into the elite Indian Civil Service were
Tata scholars.
In later years the beneficiaries of the endowment would include
former President of India KR Narayanan, scientists Raja Ramanna
and Jayant Narlikar, and writer and actor Girish Karnad. More
importantly, it marked the beginning of the Tata commitment to
wealth-sharing. Jamsetji’s greatest effort, though, was concentrated
THE TATA WAY22
on establishing what would become the Indian Institute of Science.
He pledged `3 million from his personal fortune for it and sought
the support of the then British viceroy, Lord Curzon, and Swami
Vivekananda, among others, to make it a reality.
BUILDING ON A LEGACYSwami Vivekananda, in his backing of the
idea, wrote in 1899, “I am not aware
if any project at once so opportune
and so far reaching in its
beneficent effects has ever
been mooted in India...
The scheme grasps the
vital point of weakness in
our national well-being with a
clearness of vision and tightness
of grip, the mastery of which is
only equalled by the munificence
of the gift that is being ushered to
the public.”
Jamsetji’s sons, Dorab and Ratan, built on the legacy of their
father in a magnificent manner. Sometime before his death in
June 1932, Dorabji bequeathed most of his personal wealth
to the newly registered Sir Dorabji Tata Trust. Dorabji also set
up a trust in his wife’s memory, the Lady Tata Memorial Trust,
which he endowed with a corpus of `2.5 million for research
in leukaemia, and he donated more than `2 million to a clutch
of institutions. In the words of the Governor of Bombay, Sir
Frederick Sykes, “he put the coping stone on his life’s policy of
assisting those less well endowed with this world’s goods”.
02
THE TATA WAY 23
Ratanji, the younger of Jamsetji’s sons, died in 1918 at the
relatively young age of 47. He donated his extensive art
collection to the Prince of Wales Museum (now Chhatrapati
Shivaji Maharaj Vastu Sangrahalaya) in Bombay and left
directives in his will for his personal wealth to be used for
programmes in education, health, livelihoods and communities,
art and culture, and public initiatives. The trust bearing his name
was established in 1919.
Much has happened since those early years and the Tata trusts
have grown in number, with other members of the family
contributing to the charity corpus. Taken together, the trusts now
disburse — principally to nonprofit organisations but also to
other entities — nearly `5 billion to support initiatives in health
and education, livelihoods and agriculture, human rights and
culture, the environment and more, in India and abroad. Include
the contribution of Tata companies in funding social development
programmes and the total adds up to about 4.5 percent of the
net profits of the Tata organisation.
A VISION FOR THE COUNTRYA considerable proportion of the
Tata trusts’ resources have been
earmarked for the establishment
and further development of
institutions that have made
outstanding contributions to
the cause of India. The most
prominent of these are the Tata
Institute of Social Sciences, the
Tata Memorial Centre for Cancer
TAKEN TOGETHER, THE TATA TRUSTS NOW DISBURSE — PRINCIPALLY TO NONPROFIT ORGANISATIONS BUT ALSO TO OTHER ENTITIES — NEARLY `5 BILLION TO SUPPORT INITIATIVES IN HEALTH AND EDUCATION, LIVELIHOODS AND AGRICULTURE, HUMAN RIGHTS AND CULTURE, THE ENVIRONMENT AND MORE, IN INDIA AND ABROAD.
THE TATA WAY24
Research and Treatment, the Tata Institute of Fundamental
Research, the National Centre for the Performing Arts, the
National Institute of Advanced Studies, the Sir Dorabji Tata Centre
for Research in Tropical Diseases, the JRD Tata Ecotechnology
Centre, and the recently opened Tata Medical Center.
“Many have wondered whether this is baggage we can afford to
carry,” said Ratan Tata, then Chairman of Tata Sons, in a 2008
interview. “My view is that our expression of social responsibility
cannot be measured in terms of profit and loss. It is an enormous
contribution to the nation, an enormous expression of goodwill to
the communities around us. I would like to think this is the best
part of what Tata stands for… We really do care.”
THE TATA CHARITY CANOPY� There are two principal trusts operating under the Tata
umbrella: the Sir Dorabji Tata Trust (SDTT) and the Allied
Trusts, and the Sir Ratan Tata Trust (SRTT) and the Navajbai
Ratan Tata Trust.
� Over 75 percent of the funds of the many Tata trusts accrue
from dividends on the shares they own in Tata Sons, one of
the two promoter holding companies of the Tata group. The
remaining comes from statutory investments.
� The JN Tata Endowment was the first of the Tata trusts. It
was established by Founder Jamsetji Tata in 1892 to provide
scholarship loans to individuals for the pursuit of higher
studies abroad. More than 120 students are selected every
year from across India as JN Tata scholars.
� SDTT was established in 1932 by Dorab Tata, the elder
son of Jamsetji Tata. It is the largest, and one of the oldest,
philanthropic organisations in India.
THE TATA WAY 25
� Dorabji bequeathed most of his personal
wealth in 1932 to the trust that bears
his name. This wealth was estimated
at `10 million and comprised
substantial shareholdings in various
Tata enterprises, landed property,
his wife Lady Meherbai’s jewellery —
including the famous Jubilee diamond,
twice the size of the Kohinoor — and even his pearl-studded
tie pins and cufflinks.
� SDTT and the Allied Trusts’ grants for 2011-12 were spread
across three broad spheres: to nonprofits, institutions and
individuals.
� There are six thematic spheres in which SDTT and the
Allied Trusts extend support to nonprofits: natural resource
management and rural livelihoods; health; education; civil
society, governance and human rights; urban poverty and
livelihoods; and media, arts and culture.
� SDTT is best known for promoting six pioneering institutions
of national importance: the Tata Institute of Social Sciences
(set up in 1936), the Tata Memorial Centre for Cancer
Research and Treatment (1941), the Tata Institute of
Fundamental Research (1945) and the National Centre for
the Performing Arts (1966) — all in Mumbai. The National
Institute of Advanced Studies (1988) and the Sir Dorabji Tata
Centre for Research in Tropical Diseases (1999) are both in
Bengaluru.
� The Sir Ratan Tata Trust was established in 1919, with a
corpus of `8.1 million, following the death of Ratanji Tata,
the younger son of Jamsetji Tata; it operates in accordance
with his will.
THE TATA WAY26
� SRTT and the Navajbai Ratan Tata Trust’s disbursals in
2011-12 were in five thematic spheres: rural livelihoods and
communities; education; civil society and governance; health;
and arts and culture.
� The Allied Trusts are smaller trusts; while some of them have
a specific mandate, the rest are broad-based in their approach
to grant-making.
THE TATA WAY 27
COMMUNITYIn a free enterprise, the community is not just another stakeholder in business but is in fact the very
purpose of its existence.— Jamsetji Tata
THE TATA WAY28
Terms such as corporate social responsibility and corporate
sustainability are of relatively recent vintage. Not so the
commitment that Tata companies have shown over long years
in undertaking community development programmes aimed at
helping the people living in the areas around their operations. This
kind of support characterises the social uplift agenda that any
Tata company typically gets involved with. It embraces everything
from health and education to job creation and the environment,
and it has touched, and changed, countless lives. There is a more
concrete number to the resources that Tata companies, as a whole,
set aside for initiatives that come under the umbrella of community
development: in financial year 2012, Tata companies spent about
`3.9 billion on such programmes.
LEGACY OF ALTRUISM But one has to go beyond statistics to grasp how the Tata group has
stayed true to this element of its Founder’s altruistic legacy. Jamsetji
Tata needed no convincing that the community was a critical
component of the business of business. Those who followed him,
most notably, his sons Dorab and Ratan, and JRD Tata, provided
further impetus to this spirit of giving back to the community.
Over the years, the structures and the processes that govern
the group’s community-focused projects and programmes have
been strengthened. Crucial to this structure is the Tata Council for
Community Initiatives, a nodal body that guides and helps Tata
companies and employees with their community development efforts.
Established in 1996, the council brings together good practices
within the group while also charting out a range of sustainable
development initiatives in community outreach, environmental
THE TATA WAY 29
management, biodiversity
restoration, climate change
mitigation and employee
volunteering. It also helps
Tata companies address
‘sustainability reporting’ issues
and has, in collaboration with
the United Nations Development
Programme (India), put together
what is known as the Tata
Index for Sustainable Human
Development, a unique effort
aimed at directing, measuring and enhancing the community work
that Tata enterprises undertake.
COMMITTED TO COMMUNITY All of this translates into plenty on the ground: health and education
projects, water management and environmental protection, women
and child welfare, tribal and rural uplift programmes, even the
preservation and regeneration of endangered species like the
whale shark and the mahseer. This does not imply that a Tata
company will dive into anything and everything that comes under
the community development canopy. Rather, each group company
concentrates on initiatives that are of value to the community in and
around its operations.
The volunteering work that Tata employees do is a crucial strand
here. An evaluation in 2011-12 found that 46,629 registered
(and probably half as many unregistered) volunteers from 31 Tata
companies put in a total of about 6.5 million hours in community
related projects (just in that year). This kind of volunteering has
JAMSETJI TATA NEEDED NO CONVINCING THAT THE COMMUNITY WAS A CRITICAL COMPONENT OF THE BUSINESS OF BUSINESS. THOSE WHO FOLLOWED HIM, MOST NOTABLY HIS SONS DORAB AND RATAN, AND JRD TATA, PROVIDED FURTHER IMPETUS TO THIS SPIRIT OF GIVING BACK TO THE COMMUNITY.
THE TATA WAY30
been institutionalised by the council,
encouraging employees to use their skills
and interests to improve the quality of
life of people they would otherwise
not have interacted with.
Another standout manifestation
of the community engagement
endeavours of the group has
been the townships that a
clutch of big Tata companies have
nurtured close to their industrial
facilities. Tata Steel and Tata Motors
in Jamshedpur (Jharkhand), Tata Chemicals in
Mithapur (Gujarat), in Babrala (Uttar Pradesh), in Magadi (Kenya),
and Titan Industries in Hosur (Karnataka) are examples of such
townships. The Tata companies that sustain these cities are cast
in the mould of caretakers rather than gatekeepers. This attitude
has allowed Jamshedpur and its siblings to prosper in a manner
that befits the particular circumstances of their individual evolution,
without being encumbered by any unilateral doctrine.
That aside, many Tata companies have a dedicated team of people
implementing and overseeing their community initiatives. The Tata
Steel Rural Development Society is involved in a large variety of
projects in villages around Jamshedpur. Similarly, the Tata Chemicals
Society for Rural Development works in and around Mithapur and
in the rural spread near Babrala, with well-seeded programmes in
agricultural development, health and education. Add to that the relief
and rehabilitation efforts that the Tata Relief Committee and other in-
house entities undertake in the aftermath of natural disasters.
02
THE TATA WAY 31
A SPORTING SPIRIT Arts and sports are among the other spheres where Tata
companies, and the group as a whole, have contributed
significantly. The group has established a number of academies
for different sports disciplines, besides sponsoring events and
supporting talented athletes. The Tata Sports Club was set up in
1937 to encourage sports and sports persons within and outside
the group. Tata Steel, the most prominent of the group’s companies
in supporting sports, has established the Tata Football Academy,
the Tata Archery Academy and the Tata Adventure Foundation.
It has also created sporting infrastructure such as the JRD Tata
Sports Complex and the Keenan Stadium, the latter a regular venue
for international cricket, both in Jamshedpur. Among the sportsmen
who have benefitted from such Tata support are badminton player
Pullela Gopichand, tennis star Leander Paes, billiards world
champions Geet Sethi and Michael Ferreira, and cricketers Dilip
Vengsarkar, Ajit Agarkar and Saurav Ganguly.
CUSTODIAN OF ART Tata companies have also played
a significant part in preserving and
promoting India’s cultural heritage.
Art historian Priya Maholay Jaradi
wrote: “Using its tremendous
spread and influence to great effect,
the Tata group and its companies
have been able to play a vital
role in preserving and promoting
every component of India’s
national heritage. What began as
THE TATA CULTURE OF EXTENDING A HELPING HAND TO THE COMMUNITY IS TRULY AN EXERCISE IN EMPOWERING THE COMMUNITY IN SUBSTANTIVE WAYS, RATHER THAN THROUGH “PATCHWORK PHILANTHROPY”, AS JAMSETJI TATA TERMED IT.
THE TATA WAY32
a collector’s penchant and simple
philanthropy has merged with
the corporate culture of the entire
group. A sturdy and colourful
tapestry of art and industry has
been woven through a corporate
mindset that sees much more
than mere profits on the horizon.”
Companies such as Tata
Chemicals and Indian Hotels
are deeply involved in promoting
traditional arts and crafts. The
Tribal Culture Centre, founded by Tata Steel in 1990, is a showcase
for the artistic talents of the tribal communities of Jharkhand. The
Dare, Aranya and Athulya projects of Tata Tea (now Tata Global
Beverages) have helped differently-abled children and youth in
Munnar, Kerala, to mould a better life for themselves through the
medium of arts and crafts. There are many such stories, quite a
few told and recorded, plenty more still unknown to all but people
in the thick of them.
EMPOWERING THE COMMUNITY The Tata culture of extending a helping hand to the community
is truly an exercise in empowering the community in substantive
ways, rather than through “patchwork philanthropy”, as Jamsetji
Tata termed it. A story that Dr Jamshed J Irani, a former
managing director of Tata Steel, is particularly fond of illustrates
the point. The time was the early 1990s and the occasion was
a gathering of industrialists called by India’s then Prime Minister,
PV Narasimha Rao.
ARTS AND SPORTS ARE AMONG THE OTHER SPHERES WHERE TATA COMPANIES, AND THE GROUP AS A WHOLE, HAVE CONTRIBUTED SIGNIFICANTLY. THE GROUP HAS ESTABLISHED A NUMBER OF ACADEMIES FOR DIFFERENT SPORTS DISCIPLINES, BESIDES SPONSORING EVENTS AND SUPPORTING TALENTED ATHLETES.
THE TATA WAY 33
Representing the Tata group were Ratan
Tata and Dr Irani. “The prime minister
proposed that we business people set
aside 1 percent of our net profit for
community development projects
totally unconnected to the workers
and industry any of us was involved
with,” recalls Dr Irani. “Mr Tata and I
looked at each other; we didn’t make any
comment. Later, we drew up a chart that
quantified Tata Steel’s contribution on
Mr Rao’s scale. We discovered that,
over a 10-year period, the company had been dedicating between
3 and 20 percent of its profits to social development causes.”
Enough said.
THE TATA WAY34
ETHICSWe do not claim to be more
unselfish, more generous or more philanthropic than other people. But we think we started on sound and straightforward business principles,
considering the interests of the shareholders our own, and the health
and welfare of the employees, the sure foundation of our success.”
— Jamsetji Tata
THE TATA WAY 35
The value systems and principles by which the Tata group
operates are a critical part of the legacy of its Founder, Jamsetji
Tata, and those who have built on what he created. Growth by
any means and for its own sake — the doctrine of the cancer
cell — has no place in this equation. Jamsetji said: “We do not
claim to be more unselfish, more generous or more philanthropic
than other people, but we think we started on sound and
straightforward business principles, considering the interests
of the shareholders our own, and the health and welfare of the
employees the sure foundation of our success.”
CODE OF CONDUCT That foundation depends on the implicit as much as it does on
the explicit. The implicit component comes from the traditions
and the heritage that are so important to the group and how it
defines itself, and this has been ingrained by a cultural kind of
osmosis down the years. The explicit is more recent and, here,
enhancements have happened as the group has evolved, as
business practices have changed and the challenges of operating
in this age have multiplied.
The centrepiece of the explicit half of the ethical framework by
which Tata companies and people function is the Tata Code of
Conduct, a formal and comprehensive set of guidelines that set
down and reinforce the values that underpin the Tata group.
Formally introduced in 1998, it emphasises the core values
— integrity, understanding, excellence, unity and responsibility
— governing the manner in which Tata companies conduct their
businesses. It serves as an ethical roadmap that explains the
conduct expected of Tata employees, as well as others associated
with the group, in their personal and professional dealings.
THE TATA WAY36
The code strives to cover all aspects of business behaviour at
the individual and organisational level, from national interest
and financial reporting to equal-opportunities employment and
the acceptance of gifts and donations, from safety procedures
and product quality to corporate citizenship and regulatory
compliance. The code has undergone constant revision to make it
more wide-ranging and to incorporate inputs from the Tata group’s
international entities.
REINFORCING THE MESSAGE There are many methods followed to convey the message of,
and train people on, the code and its tenets. The chief executive
is the chief ethics officer in each Tata company and there are
ethics counsellors and an ethics network. There are regular
regional meets for ethics counsellors and other senior business
leaders; a web-based training module that aims to enhance
awareness of the code through case stories; a reference manual
for better guidance on the clauses of the code; programmes that
focus on values and personal commitment to the code (rather
than just compliance); and exhaustive assessments of the ethical
climate in a company.
There is more to the code than ethics, though, as Ratan Tata,
former Chairman of Tata Sons, once explained. “The management
of business ethics is an integral part of the overall excellence
initiatives undertaken by the group,” he said. “The adoption
of a common code of conduct reinforces our commitment to a
shared set of ideals and beliefs. More importantly, the code has
strengthened our determination to work together in our common
goal to maintain our leadership position in the industries and
markets that we serve.”
02
THE TATA WAY 37
TAKING A FIRM STAND It is not just through words that Mr Tata
himself stayed true to the beliefs
enshrined in the code. The Tata
group’s decision to mothball
its plans to start an airline has
been told many times, but is
worth repeating. This plan,
which envisaged Singapore
Airlines as a Tata partner and
collaborator, was put in cold storage
after considerations other than merit and
regulatory compliance came into play.
The Tata Finance issue is another example of the group
doing the right thing when the going got rough. The case involved
company executives who diverted funds to carry out certain irregular
and fraudulent securities transactions. When the Tata Sons board
became aware of these irregularities, it immediately informed
authorities such as the Reserve Bank of India and the Securities
and Exchange Board of India, and ordered an investigation by an
independent auditing firm. It terminated the services of employees
found negligent in their duties, provided support to the investigating
agencies and regulatory authorities, and, finally, ensured that no
investor lost any money. The Tata Finance issue pushed the group
to further put checks and balances in place.
Honesty, as the British writer John Ruskin noted, can never
be based on policy. Corporate houses cannot mandate ethical
business behaviour any more than the weather bureau can
summon rain or shine. But they can ingrain it in the character of
THE TATA WAY38
the organisation — through tradition
and a commitment to the letter and
the spirit of laws and regulations.
That is what the Tata group has
endeavoured to do.
“Business, as I have seen it, places
one great demand on you: it needs
you to impose a framework of ethics,
values, fairness and objectivity on
yourself at all times,” said Ratan Tata
in an interview. “It is easy not to do this; you cannot impose it on
yourself forcibly because it has to become an integral part of you.”
THE TATA CODE OF CONDUCT EMPHASISES THE CORE VALUES — INTEGRITY, UNDERSTANDING, EXCELLENCE, UNITY AND RESPONSIBILITY — GOVERNING THE MANNER IN WHICH THE TATA COMPANIES CONDUCT THEIR BUSINESSES
THE TATA WAY 39
EXCELLENCEThe business excellence movement
[in the Tata group] started as an award exercise to recognise quality. It grew from that into a corporate
excellence programme that went far beyond what we had ever thought it would be, and it has become deeply ingrained in the DNA of various Tata companies. It has had its impact on their performance and it has had an
impact on the way people think.— Ratan Tata
THE TATA WAY40
The last decade of the previous millennium saw the beginnings at
Tata of what would soon become an intense engagement for the
group’s companies: the pursuit of business excellence. What began
as a quest for quality — the holistic big ‘Q’ that refers to the quality
of the business process itself rather than the product-obsessed small
‘q’ — has since overcome initial resistance and various hurdles to
become an important tenet of the Tata way of doing business. The
instrument to translate this tenet into accomplishment has been the
Tata Business Excellence Model, or TBEM. The TBEM, introduced in
1995, has played a major role in bringing the companies together,
helping to define their common purpose and philosophy, and
strengthening the Tata brand.
The need to focus on the big Q was felt in the early 1990s, when
the opening up of the Indian economy brought with it the myriad
challenges of liberalisation, including unprecedented competition
from both domestic as well as foreign business entities. The
new economic landscape created opportunities for serious
soul-searching within Tata companies.
DESTINATION: EXCELLENCE “The dominant impression was that we were less nimble than
others, more resistant to change and extremely set in our ways,”
recalled Ratan Tata, former Chairman, Tata Sons, in his foreword
to Business of Excellence: The Tata Journey, in 2007. “What we
needed to do was benchmark ourselves against the brightest and
the best, and get away from doing things the way we had done
them in the past. The Tata Business Excellence Model set the tone
and created the foundation for what, I believe, was perhaps one of
the more critical transformation initiatives the group has undertaken
in recent times.”
THE TATA WAY 41
While the likes of Tata Steel and Tata
Honeywell were already pursuing their own
quality initiatives, the need of the hour
really was a common and coherent
approach that would be embraced by
all group companies. A movement
was what was needed and it began
with the precursor to TBEM: the
JRD Quality Value Award (JRD QV),
instituted in 1994 to recognise the
quality of managing an enterprise.
The first edition of the award had 12
participants — and no winners!
But that did not dishearten the quality
evangelists at Tata. Quite the contrary. The
award and the award process enshrined in TBEM — which is
based on the famous Malcolm Baldrige model — provided the
much-needed momentum to the business excellence movement
at Tata. The Malcolm Baldrige model is accepted universally by
businessmen as a hallmark of excellence. In 1996, Tata Quality
Management Services (TQMS) was set up as a division of Tata Sons
to guide the business excellence initiative at a group level. There
was no looking back.
THE QUALITY AGENDA In 1998, the JRD QV award process was recast as TBEM, creating
a better defined, more comprehensive and comprehensible
framework for the quality agenda. It wasn’t long before the group’s
business excellence efforts started paying off. Year 2000 saw Tata
Steel become the first Tata company to pass the stringent quality
eir own
ur
TBEM
THE TATA WAY42
test, crossing the 600-mark threshold on the TBEM scale to win the
first JRD QV award.
Today, business excellence is deeply ingrained in the Tata DNA, with
deep commitment from senior management as well as employees
spread across Tata companies around the globe. Thousands of
TBEM assessors — trained by the hundreds every year by TQMS
— carry the business excellence gospel to Tata companies far
and wide, measuring their success on a wide spread of business
excellence parameters.
Guiding and encouraging these companies and their personnel are
what are appropriately known as mentors, senior Tata executives
who employ their experience and knowledge to help the enterprises
being assessed understand feedback and build on opportunities to
learn, improve and grow.
In an ever-changing global
business environment, TBEM
enables Tata companies to be
alert and nimble, to enhance
their ability to succeed and to do
so consistently. A vital element
of the model is that companies
must remain proactive rather
than reactive, with a managerial
outlook that maximises benefits
for all stakeholders, including
employees, customers and
the community. The TBEM
assessment covers seven core
02
BUSINESS EXCELLENCE IS DEEPLY INGRAINED IN THE TATA DNA, WITH DEEP COMMITMENT FROM SENIOR MANAGEMENT AS WELL AS EMPLOYEES IN TATA COMPANIES AROUND THE GLOBE. THOUSANDS OF TBEM ASSESSORS — TRAINED BY THE HUNDREDS EVERY YEAR BY TQMS — CARRY THE EXCELLENCE GOSPEL TO TATA COMPANIES FAR AND WIDE, MEASURING THEIR SUCCESS ON A WIDE SPREAD OF BUSINESS EXCELLENCE PARAMETERS.
THE TATA WAY 43
aspects of business operations:
� Leadership
� Strategic planning
� Customer focus
� Measurement, analysis and knowledge management
� Workforce focus
� Process management and outcomes of financial and
non-financial parameters
� Business results
PERFORMANCE PARAMETERS The assessment focuses on key areas of business performance:
customer-focused results; product and service results; financial
and market results; human resource results; organisational results.
The ‘blue book’, as the TBEM manual is known, is the bible of the
excellence initiative, clearly spelling out the assessment criteria and
what they imply.
Designed to deliver strategic direction and drive business
improvements, the TBEM methodology offers companies an
opportunity to imbibe the best of global business processes and
practices. And as the business landscape changes, the model
itself stays relevant thanks to the dynamism built into its core.
In recent years, for example, the TBEM framework has been
adapted to include new business and societal initiatives, such
as corporate governance, safety, climate change and innovation.
One of the biggest — and perhaps less visible — achievements
of this groundbreaking movement in the Tata group has been the
creation of a language of excellence, a common vocabulary to
articulate the expectations and experience of a shared journey. A
common goal, communicated in a common language, has brought
THE TATA WAY44
Tata companies closer together than ever before as they share
best practices and knowledge, and help one another navigate the
pathways of business excellence.
Mr Tata summed up this ‘excellence-as-glue’ idea at the JRD QV
Award function in 2002: “I don’t think any of us expected that
[business excellence] would have such a profound and such a deep
impact on the group in many, many ways. For one, it brought the
group together; never before had this group operated as a group. We
operated as disparate companies in an environment, unfortunately,
of jealousy, envy and subjective wishes.”
ENGAGEMENT WITH EXCELLENCE As Tata expands its global footprint, organically and through high-
profile acquisitions, companies in the group which have adopted
TBEM have found it far easier to seamlessly integrate people and
companies into the Tata fabric.
Ever since the Tata group started taking TBEM into its international
markets in 2005 — South Korea-
bred Tata Daewoo Commercial
Vehicle became the first overseas
entity to buy wholeheartedly into
the model — excellence has
proved to be a strong binding
factor and a fantastic platform for
growth and consolidation.
It is not happenstance, then,
that business excellence is
closely linked to the Tata brand.
ONE OF THE BIGGEST — AND PERHAPS LESS VISIBLE — ACHIEVEMENTS OF THIS GROUNDBREAKING MOVEMENT IN THE TATA GROUP HAS BEEN THE CREATION OF A LANGUAGE OF EXCELLENCE, A COMMON VOCABULARY TO ARTICULATE THE EXPECTATIONS AND EXPERIENCE OF A SHARED JOURNEY.
THE TATA WAY 45
That explains why TBEM is a
cornerstone of the group’s ‘brand
equity and business promotion’
programme, which must be
signed by every Tata company
that wants to use the Tata brand
name. Another pillar of this
programme is the Tata Code of
Conduct, which lays down the
ethical guidelines that companies
and employees must follow to
remain faithful to the group’s
heritage and values. Thus, even
as excellence gets defined and
shaped by the Tata brand, the
brand itself gets enriched by the
excellence movement.
The Tata engagement with excellence continues to challenge group
companies to look within and around themselves, benchmark with
the best in the world, identify and address their own weaknesses,
identify opportunities for improvement, and push the Big Q envelope
further. It’s a journey without a finishing line, as Mr Tata said in
Business of Excellence: “Our quest for quality, for excellence in
business, should be never-ending. This is not a voyage where you
can rest your oars.”
THE TATA WAY46
INNOVATIONWhat’s important is that, whatever
we do, we have to be in the forefront, technologically speaking; we have to
be seen to be making exciting products for the customer… We cannot afford to be a ‘me-too’ company and expect to grow. We have to be creative on
the basis of our strengths: low costs, technological richness, innovation...
We have to be different from the competition if we have to do what
I have wanted us to do.— Ratan Tata
THE TATA WAY 47
Every year, on April 26, the many enterprises of the Tata group
get together to reward failure. Only, this is a different kind of
failure and a different kind of reward. Called ‘Dare to try’, the award
recognises an innovative idea that has failed in implementation, one
whose time has not quite come. The gathering where this award is
handed out is Tata InnoVista, an annual event where innovation and
creative thinking are encouraged and recognised, even celebrated.
Failure, in the context, is a by-product of the quest to innovate,
to find truly original ways to advance the cause of company and
employee. Importantly, Tata InnoVista records and rewards not
just ‘promising innovations’ (implemented successfully during the
year) and ‘leading edge innovations’ (most innovative business
ideas), but also those fantastic ideas that have failed to deliver the
desired results. The message is simple, loud and clear: it pays to be
innovative in the Tata group.
Innovation has always been a part of the Tata DNA — consider
the group’s pioneering endeavours in steelmaking, the generation
of hydroelectric power and other businesses; its unique ownership
structure; and several first-of-its-kind employee and community
initiatives — but a more focused approach towards nurturing the
creative effort began in earnest around two decades ago.
This has resulted in the spawning of strikingly original concepts
across the Tata group and their successful transition into products
and services. It has also led to an encouragement of the process of
innovation, which has now taken root in the group like never before.
Tata InnoVista is the most prominent of the elements in the
thrust that innovation has received at Tata, but there have been a
THE TATA WAY48
variety of other initiatives aimed at unleashing the creative beast,
in crafting an ecosystem conducive to the fostering of profitable
ingenuity in business.
Besides InnoVista, there is the Tata Group Innovation Forum
(TGIF), which conducts a clutch of programmes and projects that
offer group employees consistent exposure to the world of out-
of-the-box thinking. In this mix are innovation workshops, where
global innovation experts share best practices with Tata managers;
innovation missions wherein senior Tata executives visit leading
companies across the world to study how innovation unfolds there;
collaboratively structured innovation platforms that draw in Tata
people and external organisations and partnerships with academic
and research organisations to build outstanding research facilities.
There’s even an ‘Innometer’, to measure and monitor innovation at
Tata companies.
FLOWERING OF IDEAS Another interesting outgrowth of the focus on innovation has been
the innovation labs that many Tata companies now have. There has
been considerable investment in world-class research facilities such
as those set up by Tata Steel’s Europe operations, Tata Chemicals,
Tata Motors and Tata Consultancy
Services. Strongly woven into the Tata
Business Excellence Model (TBEM),
innovation, as a philosophy and as
a way of business, is now well and
truly part of the warp and weft of the
Tata way of entrepreneurship.
From the realm of the mind to the
02
INNOVATION HAS ALWAYS BEEN A PART OF THE TATA DNA... BUT A MORE FOCUSED APPROACH TOWARDS NURTURING THE CREATIVE EFFORT BEGAN IN EARNEST AROUND TWO DECADES AGO.
THE TATA WAY 49
reality of business on the ground, innovation at Tata
has travelled well beyond articulation to effective
implementation. The numbers at InnoVista
are a pointer to the progress that has been
made. In 2006, the year the competition
kicked off, it received 101 entries from
35 Tata companies. The 2012 edition
attracted 2,852 entries from 71 Tata
companies. Employees and managements
are no longer reticent, as they may have
been in earlier days, about bringing their
ideas to the big stage and a potential place
in the innovation sun.
The flowering of innovation that has happened in
this environment of creativity is there for the world to
see, and the products and services it has generated have been
standouts in their respective business segments — Tata Motors’
Nano, the world’s most affordable car; Tata Chemicals’ Swach,
the breakthrough low-cost water purifier; Titan’s Edge, the world’s
slimmest watch; Eka, Asia’s fastest supercomputer at that time, built
in just six weeks by the Computational Research Laboratory (seeded
by Tata Sons) in 2007; and Indian Hotels’ Ginger, the path-breaking
budget hospitality proposition. There are others in this august
company, some more successful than others, but all based on the
idea of innovation making a difference, to the bottom line and to the
manner of thinking that drives accomplishments in enterprise.
BREAKING NEW GROUND To get a feel of how Tata employees are adding an innovative touch
here and a brilliant idea there, sample a couple of winners at the
ovation at Tata
to effective
Vista
been
ion
m
ents
ve
eir
place
appened in
for the world to
THE TATA WAY50
2012 InnoVista Awards: Jaguar Land Rover’s technology that
automatically shuts a car’s engine when the vehicle isn’t moving
for a certain period of time, thus helping customers save fuel and
reducing the automobile’s impact on the environment; and Tata
Steel’s Europe operations’ high performance rail steel, which has
saved £150,000 over five years.
The free flow of ideas and the innovations born of it engender
a win-win proposition not just for Tata companies and their
ever-growing world of customers; the positive energy rubs off
on the Tata brand, too. The group is increasingly perceived as
an innovative brand, a reputation that is no longer restricted to
the group’s home market. Bloomberg Businessweek has ranked
Tata among the world’s 50 most innovative companies. Just as
the Tata brand goes beyond the profit motive into the heart of
the communities it touches, the
innovation impetus at Tata has
resulted in significant societal
benefits. The concept of what has
been termed ‘frugal innovation’
— the Nano and Tata Swach are
shining examples here — is built
upon the group’s commitment
to finding inexpensive solutions
for a specific segment of
the community. The Tata
commitment to making a
difference in this ‘bottom of
the pyramid’ space rests to a
large extent on its innovation
capabilities.
TO GET A FEEL OF HOW TATA EMPLOYEES ARE INNOVATING, SAMPLE A COUPLE OF WINNERS AT THE 2012 INNOVISTA AWARDS: JAGUAR LAND ROVER’S TECHNOLOGY THAT AUTOMATICALLY SHUTS A CAR’S ENGINE WHEN IT ISN’T MOVING FOR A CERTAIN PERIOD OF TIME, THUS HELPING SAVE FUEL AND REDUCING THE IMPACT ON NATURE; AND TATA STEEL’S EUROPE OPERATIONS’ HIGH PERFORMANCE RAIL STEEL, WHICH HAS SAVED £150,000 OVER FIVE YEARS.
THE TATA WAY 51
SOMETHING FOR EVERYBODY “But it should not be, cannot be, that low-cost
products come to mean inferior or substandard
products and services; definitely not,” said Ratan
Tata, former Chairman, Tata Sons, explaining
why ‘cheap’ is not a word that can find place
in the Tata lexicon of business. “The aim is
to create products for that larger segment
— good and robust products that we are
able to produce innovatively and get to the
marketplace at a lower cost.”
Innovation for the Tata group is, in the
circumstances, not just about commercial
profits for itself; there has to be a benefit
for the community. Innovation, or the
creation of the new, is critical to the finding
of this balance.
cost
dard
Ratan
ing
ce
s
g
THE TATA WAY52
LEADERSHIP Once we get the best people, the people who share our values and
ideals, we leave them free to act on their own. We do not fetter them.
We encourage them and give them opportunities for leadership.
— JRD Tata
THE TATA WAY 53
There’s a basic truth, an aphorism even, about leadership and it
is that actions speak louder than words. So, yes indeed, there
is a Tata way and it is envisioned, lived and propagated by Tata
people, managers and leaders.
A deeper look at the growth story of the Tata group — the expansion
from an Indian business house to a $100.09-billion (`4,757.21
billion) global conglomerate, with a worldwide spread of businesses
and over 450,000 employees — throws up the interesting insight
that the organic and inorganic expansion has been accompanied
by a perceptible rise in the value and reputation of the Tata brand.
Brand Finance, a UK-based consultancy firm, named Tata as
the 15th most valuable brand in its Global 500 report in March
2012. Far more important, the name of Tata is readily associated
with values such as trust and integrity. What sets Tata apart is
that a large part of the brand’s values are clearly displayed in the
behaviours of Tata people themselves. Tata employees are expected
to live the values, to firmly and unambiguously walk the talk.
In an interview with Tata Review in 2001, then Tata Sons Chairman
Ratan Tata had clearly put down his vision for the group’s leadership:
“The Tata group must lead India in terms of what it does, not only in
business but also as a corporate citizen and as a participant in the
country’s growth. This is a holistic view. We want our managers and
companies to drive their businesses using every means they can to
achieve their ends, but they must do it in a way which stands out and
continues the traditions that the group has established over the years.”
THE PRINCIPLES OF LEADERSHIPThis vision has been encapsulated in a formal framework that Tata
managers across geographies, cultures and businesses follow today.
THE TATA WAY54
The Tata way of operating is not a left-to-chance, loosely scripted,
random selection of expectations. When it comes to leadership
behaviour, a fly-by-wire management style is not encouraged.
Instead, there is a clearly defined and communicated structure
of behaviours called the Tata Leadership Practices (TLP).
Created in 2001, the TLP framework expresses the principles that
define the Tata leadership behaviour. What makes the TLP structure
extremely significant is that it forms the foundation of the Tata way;
it is the bedrock on which the Tata business ethos sits. It helps
draw the clear line that Tata leaders need to walk — from purpose
to values, from intent to behaviour, from context to situation. The
behaviours enshrined as Tata leadership practices can be directly
linked to each of the Tata group’s core values.
The TLP framework resides alongside the broader, corporate-led
initiatives that enable the Tata Code of Conduct to be practised
with rigour, supported by processes and systems that help in the
management of business ethics. But it goes beyond values to define
how a Tata leader is expected to discharge his or her normal duties
and responsibilities. This enables Tata managers and future leaders
to deliver superior performance by looking at leadership behaviour
in relation to three key areas: leadership of results, leadership of
business and leadership of people.
GUIDANCE FOR ALL By using these TLPs, a Tata leader understands how he or she is
expected to drive the performance of the company, boost innovation
efforts, deal with ambiguous situations, build effective teams,
and so on. The framework also helps define leadership behaviour
across hierarchies. To take an example, if the broad expectation
02
THE TATA WAY 55
is improving customer focus in any given
company, a top-level leader is expected
to stimulate new market demand, a
senior-level manager is expected to
sense new business opportunities,
a middle-level executive has
to explore and satisfy market
demands, and a junior executive
has to collaborate with customers to
add value. Apart from the leadership
practices framework, there are other
group-wide leadership development
programmes in place, such as leadership
seminars, interactions with management gurus, and workshops that
build and enhance necessary skills and capabilities.
A LARGE CANVAS Another singular aspect about the Tata leadership structure is that
a Tata leader is considered a ‘group’ resource; his or her qualities
are recognised beyond the boundaries of the organisation. There
are group human resources programmes that focus on recognising
and enhancing the leadership qualities of outstanding performers,
irrespective of company, business sector or geography, a worldview
kind of approach to treating people as valuable resources.
Additionally, the group has in place an entry-level, pan-Tata
managerial development programme, TAS (formerly Tata
Administrative Services), which provides cross-business, cross-
function experience to young managers in several companies before
they settle down in their job. This helps both the future Tata leader
and the organisation determine the best fit. The Tata Management
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Training Centre, based in Pune, helps group professionals add
to their knowledge bank. Its goal is to provide training to high
performers and develop leadership qualities.
By giving potential leaders a canvas on which to display their
capabilities, the Tata group is able to retain, and enhance the
capabilities of, its next generation of leaders, future managers,
thinkers and executors of its vision of business. It is these deep-
rooted initiatives to build the right kind of leadership that have
kept and will keep the Tata group and its many enterprises — part
of a globally dispersed, multi-cultural conglomerate — steady
on the course charted by those who came before. There can be
no doubt that the coming generation of Tata leaders is willing,
prepared and committed to carrying the baton, and the legacy
attached to it, forward.
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GROWTHMy vision for the Tata group is one which consistently delivers high
value for all shareholders. To do that the group must be businesses- and
customer-focused. It must be globally competitive and operate only in those areas where the group’s strengths are
best leveraged. The internal structure of the group will have to be such that all the group’s companies bring maximum value to shareholders consistently or
not remain in the group.— Ratan Tata
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F rom its first big industrial initiative — the Empress Mills, a
textile facility set up in 1877 by Tata group Founder Jamsetji
Tata in Nagpur, India — to its current stature as a business
conglomerate spanning many continents, the Tata saga is the
stuff of legend. It’s a story of visionary leadership, of unwavering
determination and sturdy fortitude. It is also a story of exemplary
and sustained growth.
Right through its history of over 140 years, the Tata group has
always been eager to tread into unknown terrain, to find the space
and the resources to grow in areas of business endeavour that
few, at least in India, had ventured into previously. Beginning with
its flowering in British-ruled India, where an Indian entrepreneur
such as Jamsetji, nurturing grand ambitions of industry and
nation building was an oddity, to its consolidation and expansion
in post-independence India, when the era of licences and
bureaucratic red tape stymied business, the group has braved
myriad challenges to stay on its chosen path of securing growth.
This is not quite the growth that everybody hares after in our
modern age; rather, it has been growth aligned to purpose.
To get a sense of that purpose, and the philosophy that underpins
it, consider the iron and steel venture that the group pioneered.
Alongside this trailblazing enterprise there came up a township
that has, ever since its establishment, become an exemplar of
planned urban development. The growth story would unfold
in different dimensions — with business creations in industry
segments as varied as energy and hospitality, aviation and
chemicals, tea and information technology — but with one
constant: a strong commitment to making profits in a socially
responsible manner.
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Until the 1980s, though, the Tata group was still
essentially a home-grown, Indian business
house. That would change dramatically
in the post-1990 years, when two
unrelated events combined to change
forever the outlook and trajectory of
the group’s future progress. The first
of these changes was the arrival at
the helm of the group of Ratan Tata, a
leader bent on transforming what had
been a rather stolid and staid business
house into a dynamic organisation with
its sights set beyond the shores of its birth.
The second change was the liberalisation of the
Indian economy, the opening up of a hitherto closed
environment to a wealth of new possibilities and opportunities.
Even as important changes took place at the national level, the
Tata group started putting in place structures that would make
it a far more nimble and united organisation than it had ever
been. It declared its brave new ambitions, at home and abroad,
by starting out on an aggressive expansion agenda, entering new
areas of business and new markets, creating new products and
services, and acquiring companies big and small along the way.
TAPPING NEW MARKETSIn 1996, the group set up Tata Teleservices to tap into India’s
burgeoning telecom market; in 1998, Tata Motors launched
Tata Indica, India’s first indigenously made car; 2002 saw the
acquisition of India’s leading international telecom service provider
VSNL (now Tata Communications); in 2004 Tata Consultancy
was still
ss
h.
of the
erto closed
THE TATA WAY60
Services went public in the largest private sector initial public
offering in the Indian stock market; and 2008 witnessed the launch
of the Tata Nano, the breakthrough small car that caught the
imagination of the motoring world. These are just the highlights of
a slew of manoeuvres that placed the Tatas on a growth trajectory
as unprecedented as it was unconventional. Just as significant was
the group’s foray into foreign markets.
In 2000, Tata Tea acquired Tetley, the biggest buyout up to that
point by an Indian enterprise of a company based abroad. More
such heavy-duty acquisitions followed. In 2004, the heavy
vehicles operations of Daewoo Motors, South Korea, became a
part of Tata Motors; in 2005, Tata Steel added the Singapore-
based NatSteel Asia to its fold and Tata Chemicals secured a
controlling stake in Brunner Mond, the British company. The
foreign play peaked in 2007, when Tata Steel made jaws
drop globally with its landmark deal for the purchase of Corus,
the Anglo-Dutch steel giant; and in 2008, Tata Motors made
headlines in the automobile
universe and beyond when the
Jaguar and Land Rover brands
joined its stable.
AT HOME IN THE WORLD Today the Tata group has operations
in more than 80 countries across
six continents, and its companies
export products and services to
85 countries. The group’s total
revenues stood at $100.09 billion
(`4,757.21 billion) in 2011-12,
02
THE TATA GROUP IS THE LARGEST FOREIGN INVESTOR IN THE UNITED KINGDOM AND THE COUNTRY’S BIGGEST INDUSTRIAL EMPLOYER. BESIDES NORTH AMERICA AND EUROPE, THE GROUP HAS OPERATIONS IN AFRICA, SOUTH AMERICA, CHINA, AUSTRALIA, THE MIDDLE EAST, SOUTH ASIA AND SOUTH EAST ASIA.
THE TATA WAY 61
with 58 percent of this coming from business conducted outside
India, and Tata companies now employ more than 450,000
people worldwide.
Tata Steel is among the world’s top 10 steelmakers. Tata Motors is
one of the world’s top five commercial vehicle manufacturers. Tata
Consultancy Services is a leading global software company. Tata
Global Beverages is the second-largest player in tea in the world. Tata
Chemicals is the world’s second-largest manufacturer of soda ash. Tata
Communications is one of the world’s largest wholesale voice carriers.
The Tata group is the largest foreign investor in the United
Kingdom and also the country’s biggest industrial employer.
Besides North America and Europe, the group has operations in
Africa, South America, China, Australia, the Middle East, South
Asia and South East Asia. And in India the group continues to
be the dominant business conglomerate, an intrinsic part of the
country’s way of life and of living. From luxury cars to affordable
automobiles, from software to steel, from salt, pulses and tea
to chemicals, from high-end hotels and palaces to value-for-
money budget stays, from power to telecommunications — Tata
companies touch people, at the top, the middle and the bottom of
the pyramid, in ways too many to count.
In the midst of all this heft there remains, cast in as much
solidity as ever before, the group’s traditional value systems and a
commitment to serving the needs of communities as much as its
customers and consumers.
The hunger to grow even further still rages, but the growth itself
is of a more inclusive nature, where business is done with an
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emphasis on the larger good of society, and on leadership with
trust — those are the themes that reverberate as the group, its
companies and its brands dream grander dreams and strive to
reach and breach new frontiers.
Ratan Tata articulated what these themes translate into when
he said in an interview to Tata Review, the magazine of the Tata
group: “One hundred years from now, I expect the Tatas to be
much bigger, of course, than it is now. More importantly, I hope
the group comes to be regarded as being the best in India — best
in the manner in which we operate, best in the products we
deliver, and best in our value system and ethics. Having said that,
I hope that a hundred years from now we will spread our wings
far beyond India, that we become a global group, operating in
many countries, an Indian business conglomerate that is at home
in the world, carrying the same sense of trust that we do today.”