Mr. Ratan N. Tata stepped down as Chairman of the Tata Group on Friday heralding a change of guard after a 20+ year tenure at the helm of the Group. I remember when Mr. Tata was first appointed Chairman in 1991, there was much discussion about his suitability for the role. Yet, Mr. Tata proved to be a visionary leader. He transformed a sleepy and traditional business group, that was a loosely aligned set of companies which shared a common name, in to a $100bn global behemoth that had seven business lines under centralized management. Mr. Ratan Tata has also been responsible for converting the Tata Group in to a true multinational corporation; in 2008 its revenues outside India overtook revenues from within the country.
Mr. Tata’s transformative impact on the Group did not stop there, he changed the governance within the Tata Group companies, introducing a compulsory retirement age for company directors. As a good friend and senior executive at one of the Indian majors said to me in a conversation the other day, “beyond a certain age, it is difficult to hold the myriad details that a top executive needs to have readily accessible in their minds, so that they can make the important decisions that determine the future of the business.”
Not only has Mr. Tata transformed the Group and steered it through turbulent times, but the moves the group made during his tenure have inspired Indian industry at large. In March 2000, the then Tata Tea acquired Tetley for 273 million pound sterling, the first “big” cross border acquisition by an Indian firm. Notwithstanding the mixed reception—there was the usual handwringing that Tata Tea had paid too much—the acquisition turned out to be not only a success, but transformative for Tata Tea, taking it from essentially an agricultural company with roots in growing tea to a global branded beverages player—by 2010, Tata Tea no longer possessed any tea gardens and changed its name to Tata Global Beverages to reflect its new persona and ambition. And then there was the huge $12bn acquisition of Corus followed by the $1.7bn acquisition of Jaguar and Land Rover from the Ford Motor Company. These moves not only impacted the Tata Group, but perhaps more significantly inspired other Indian firms to believe in themselves and internationalize, changing the face of Indian industry.
By his own rules, Mr. Ratan Tata has handed over charge to Mr. Cyrus P. Mistry. Mr. Mistry has big shoes to step in to. I wish him well.