A Century of Trust

Was just reading two Harvard cases about the Tata Group (given to us to prepare for the Tata Business Leader's Award - a business plan contest). Rekindled memories of "Beyond the Last Blue Mountain" - a biography of JRD Tata that I had read less than a year ago (somehow there is a chasm of time between WIMWI and my previous life in Bombay - it all seems so distant).

The history of the group is endlessly fascinating. Jamshedji Tata turned sleepy Sakchi into a well-planned small city (christened Jamshedpur after World War 1), established HR practices like a 8-hour working day and accident insurance decades before any law required them and initiated the group's unique tradition of contributing a significant share of the Tata family's profits to philanthrophical trusts. JRD oversaw the creation of jewels like TELCO, Tata Airlines (the future Air India) and TCS. I often wonder how well the Tatas would have done had they not been ensnared by increasing government interference from the 50s to the 80s. Would Tata Steel now be like a POSCO - with a production capacity of 30 million tonnes a year instead of its actual 5? Would Tata Airlines be competing with Singapore Airlines or Cathay Pacific for the title of best airline in the world?

The group has of course come back well since the baton passed on to Ratan Tata and economic liberalisation began in the early 90s. The turnaround of the group companies, the restructing and centralisation of the Tata group, success stories like the Indica and Tanishq, the internationalisation of the group with companies buying rather large foreign firms - all indicate the story of what might have been. Of course, it automatically brings to mind the obvious question - what might India's course have been, had liberal economic policies been adopted?

The Tata group is now capitalising on the internal restructuring done in the last decade. TISCO reduced manpower from 80000 to 40000 while raising capacity from 2 MT to 5 MT from 1990 to 2005, for example. It is now amongst the lowest-cost steel producers of the world. Companies like TISCO, Tata Motors, Indian Hotels, TCS, Tata Power and VSNL could gain global prominence within a decade. When Ratan Tata retires in 3-5 years time, he would have left behind a House in strong financial health and ready to compete with the world's best. I hope someone as capable can be found to succeed Ratan Tata.

Sounds like too much of an advertisement for the group? I am a shareholder of many Tata companies, so that's to be expected :) But I simply love the values and tradition associated with Bombay House, the headquarters of the group. As the centenary year of JRD's and Naval Tata's birth and Jameshedji's death draws to a close, a tribute to the Tatas is quite fitting for these pages.