Ratan Tata Curated
Chairman Emeritus, Tata Sons
CURATED BY :
+44 others
How did you have to tackle the claims of nepotism?
In 1991, JRD stepped down as the Chairman of Tata Industries. At first, there was no criticism, but when he stepped down from Tata Sons, there was vicious criticism. There were other aspirants for the position, who were vocal of him having made the wrong decision. so I did what I knew best -- maintained a dignified silence.
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what are the key qualities of the new age entrepreneurs?
“In past difficult times, entrepreneurs have displayed farsightedness and creativity that could not have been believed to exist. These became the flagpoles of innovation and new technology today, I won’t downplay the challenges and the difficulties embedded in these current times, confidence remains high in the inventive nature and the creativity of entrepreneurs today who will find ways to enable new or modified enterprises that would be the benchmarks of tomorrow."
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How will entrepreneurs adapt in these changing situations?
“It can all start on a clean sheet of paper that looks at ways of doing things that were thought of before. This crisis will force entrepreneurs to adapt and create,”
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Did you face any criticism from the public when you joined as chairman?
“If you were to find the publications of that time, the criticism was personal -- JRD got clubbed with nepotism and I was branded as the wrong choice."
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If you weren't the chairman of Tata Sons what would be your choice of profession?
“By the time I finished 6 years in Jamshedpur, architecture had become my hobby -- I enjoyed designing homes for myself and my mother, but apart from that, my life was dedicated to the business,”
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How was your first internship at Tata Sons?
“It was a total waste of time -- I was shuffled around from department to department, but nobody actually told me what to do! I guess, I was looked at as a family member, so no one said anything to me -- but I spent 6 months just trying to make myself look ‘useful"
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Based on the innovations can entrepreneurship create bigger opportunities in the future for India?
Based on the innovations can entrepreneurship create bigger opportunities in the future for India?
Based on the innovations can entrepreneurship create bigger opportunities in the future for India?
How do entrepreneurs choose between business priorities and the humane side of things? How can it be balanced?
How do you think the smokestack industry is responding to the covid crisis by innovation?
How do you think the smokestack industry is responding to the covid crisis by innovation?
What has been the essential focus of the TATA Group?
"Ever since, my life has been for and about growing the company. When I was appointed Chairman, it was widely believed that it was my surname that got me the position, but my focus was on creating something that was bigger than us all and on giving back, which has been entwined in the TATA DNA since the very beginning. With Jamshedpur for instance, we realised that while our workers were thriving, the surrounding villages were still suffering. It became our goal to uplift their quality of life as well… things like these came naturally to us."
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Did you ever think of starting a family?
"That’s what my life has been about — work became a lifestyle. I was either always at Bombay House or travelling, I guess that’s why even though on the personal front I came close to marriage with 2-3 different partners, but I couldn’t go through with it because they would have to really change and adjust to my lifestyle and that didn’t sit right with me.”
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What triggered the idea of the Nano?
"Even with the Nano – I remember seeing a family of 4 on a motorbike in the heavy Bombay rain — I knew I wanted to do more for these families who were risking their lives for lack of an alternative. By the time we launched the Nano, our costs were higher, but I had made a promise, and we delivered on that promise… Looking back, I’m still proud of the car and the decision to go ahead with it."
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How has life been after retirement? How has that affected your lifestyle?
People often ask if I’m truly ‘retired’ — and to that I say — there’s no doubt about it. I’m enjoying the separation from the company — I don’t look at newspapers and worry about the bad stuff anymore. But let me tell you, retirement isn't about playing golf, or lying on a beach, reading whilst sipping on a cocktail. In fact, never before has the urge to do more, been greater. From affordable cancer treatment, to looking into making the lives in rural India easier — I’m looking forward to this chapter of making it happen at the Tata Trusts. I’m trying to enjoy myself to be honest — I’m spending time with friends — old and new, across all age groups, who I’m constantly learning from.
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What is the role of Empathy?
Ratan Tata expressed deep anguish over the industry-wide layoffs that have taken place as a result of the coronavirus pandemic. “The initial tendency when the virus hit was to lay off people. Is that going to solve your problem? I hope we never have such a case, but if we did have another case of this type, I think we’ll have a much better understanding of what people could do, and companies could be reacting much faster in the right way, rather than just letting people go."
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What is the importance of ethics in an organisation?
“I stayed for four days at the plant to say that we are together. We overcame the strike and started to work again,” he said. This empathetic approach paid rich dividends not just for Tata, but also for Tata Motors as there were labour union agreements coming up and payment of bonus to the workers. The management was not in favour of such payments, but Ratan Tata was insistent on paying the bonus as the workers stood with them. Fortunately, the workers voluntarily decided not to take the bonus. “This was a psychological turnaround on the back of a rather dangerous situation,” Ratan Tata said.
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How do you inspire and drive the nations youth into the brightest of ideas?
“I do not have any magic grail...I have chosen to support enterprises that seem to attract me from the founders’ position and from what the company is trying to do." “Today, we are talking about the young people of India, who are the larger parts of the population in many countries. I am proud of the fact that we have a group of innovative and creative people who make successes of their young lives. I just wish to see the day when India really becomes the economic powerhouse, driven by the creativity and the ethical behaviour of its young population.”
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What message would you like to share with young entrepreneurs and managers?
sometimes entrepreneurs may make bad decisions or experience difficulties. During such times, it is important to note how one reflects or reacts to those downturns. The greatest thing one can do as a manager is when they return home at the end of the day, they should be able to say that they did the right thing, although it might have been difficult. “You are in the business to serve your customers, your shareholders, and all your stakeholders. Do it ethically, and do not jeopardise the safety."
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How will be the consequences of the pandemic affect business?
“We are in an arena we are not familiar with...We tend to be more innovative and creative to find solutions, we are currently in such a situation where there is no hiding or running away. There is no escape from COVID-19."
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How have you learned from the startups you have encouraged?
“There have been instances that have been learning experiences...getting involved in personal investments, as I have been trying to do in supporting startups, has been a learning experience for me.”
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What is your vision behind investing in the country's emerging startups?
“I have not brought any magic with me. I have chosen to support enterprises that seemed to attract me from a founder’s position on what the company is trying to do,”
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What is the connecting point of interest shared between you and your mentor JRD Tata?
A little nostalgic on JRD’s 116th birth anniversary. Mr JRD Tata and I shared a deep passion and interest in aviation.
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What are your thoughts about the house of TATA turning 150 i.e. a significant milestone?
Do you think when you look back the appetite for risk amongst the youth in India has increased?
Isn't it a very Parsi trait to have a titillating wit & why have you hidden it from people?
What message do you want to send out to all young professionals and aspiring entrepreneurs?
Do you believe corporate India has really pulled its weight in the area of Philanthropy?
What was the one thing that you took away from the interactions with JRD, including the core of his brand values?
When you took over & sat in your office in 1991, what was the one thought that raced through your mind?
Has it been tough to stick by all values especially during times where values were being trampled upon because of politics & competition?
What do you think went through the minds of the founders when they set this up & especially transferring their value in TATA SONS to the trust?
When you look back at the work that TATA TRUSTS has done, what do you feel and whats ignites this feeling of compassion and giving back?
Finally, how would Ratan Tata like to be remembered?
I would like to be remembered as a person who made a difference, not anything more, not anything less.
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Next year, and I know you do not like anniversaries, but next year, the House of Tata will turn 150. It is a significant milestone for any industrial group, especially in young, vibrant democracies like ours. What are your thoughts about that?
I am very happy to see that we have held together for that period of time. Many companies disintegrate in that kind of period or are just a tombstone and we should do everything we can to preserve it and to continue that. As I said earlier, the group may change. It may look different in the next 30 years, 50 years, but it should embody the same values and the same ethical standards that it has had. It should never forget that most of its earnings go to philanthropy, not in the pockets of founders and leaders and that it is doing something for the common good of mankind and that is very satisfying if that were to happen.
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Do you think, when you look back, the appetite for risk amongst the youth in India has increased? Earlier, we would follow traditional patterns of jobs, now more and more people are self-starters.
Depends on the area. People like the street urchins, what chance do they have? They look for a job. They live by day-to-day and they sometimes skate on thin ice in terms of the law. It is a difficult thing and to relate them to a middle-class family that works hard, goes to school or college and aspires to be in a company, the wants are different, the aspirations are different. But all of them put together would make a tremendously entrepreneurial India.
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What kind of resistance was it, to new ideas, to new ways of doing things?
I think, we were a group that would not work in a particular way for many years and we weren't fully sensitive to the changing environment around us. So anything that was new, we felt it was better to be where we were, tested and tried, I think, that's changed.
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You were initially frustrated with the resistance that you met from colleagues. Is that resistance over now?
Yes I do.
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With the small car project and the Jaguar likely to co-exist inside Tata Motors how will the organisation structure look like?
I don't think the two have to be looked at in continuity. I think it is possible that you can have high-end brands because the SUV part of it, Land Rover, can sit squarely on top of our business. The other side, I think is a luxury car we don't have and it would be a great mistake to try and integrate it. It should be nurtured as a brand and hopefully come back to its previous image which was a great image at one time.
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How have you changed as a person over the years?
I have become older. (laughs)
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Didn't any of the vendors have the pragmatism to really figure out that this was a big opportunity?
I think of those who would have to make an investment as against those who would have to provide components out of their existing facility, it is the first lot that would have had the disbelief. If you take a company like Bharat Forge, it will be really happy to forge front ends for a small car or crank shafts or something. But someone who would like to go and set up a new tail light factory for the small car or produce a part that would take a considerable amount of investment from him and you are not willing to give him the guarantee that you will off-take X, it's that kind that would not spend the money to try to kind of put together a proposal for that project as he doesn't think that project is really going to happen. It is that kind of situation. So, I should say that more of this car has been made under rapid prototyping by us than you would find in standard cars.
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For a project of this kind to succeed, suppliers also have to respond differently. How easy or difficult was it to drive innovation across the extended enterprise?
I think more than anything else the vendors disbelieved that the project was real. That's been a bigger issue, you know, because it has not been that they have not been able to respond. They did not expend their energies to respond to the same criteria we did, they didn't respond because they thought it was a hypothetical project. The real interest has come after they have seen us invest in the site in Singur. I think that the amount of vendor interest that we have created, the kind of inputs, the kind of aggression that we see from the vendors now has gone up exponentially because they now realise that this is a real project, there will be volumes and they have the chance to address that kind of demand.
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Was it a deliberate tack: the Rs 1-lakh figure?
No. I said quite openly that it was at Geneva Motorshow that the FT reporter asked me about the car and what it would cost and I said about a 100,000 rupees. It got flashed, that's how it happened.
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Were the initial years in this project a low point when the costs were increasing in 2005? Did you think that it may not be possible?
Yeah, it put additional pressure and that was also part of the reason why the project took longer than it did because it would have been very easy to say that let's scrap the Rs 1-lakh goal that we had set for ourselves and make it 2 or something, which also would have been different. So it would have been easy to say that let's go on in that sense. But, the view we took was that we should continue to operate towards the same goals.
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Recently, you suggested that it's easier to do business abroad and in this kind of an environment you have opportunistic companies coming to India whereas the more established companies from India are looking abroad. What is the single biggest change that you think business needs in the country to function optimally?
Yeah, I said that with a particular context. We have three greenfield steel sites just going around in circles, mining rights not being given, they are being given to X but not to Y, captive coal mines are not being settled. You want to build a car plant in West Bengal because you want the state to industrialise, for no other reason than that you want to industrialise that part of the country. You get caught in a political crossfire and you find yourself facing the gamble between here and building there sort of syndrome. So, then you ask yourself, this seldom happens in other countries. If you went out to build a small car plant in South Africa, it might be out and running by now. And I said this in the context of Corus. When I have acquired 18 to 20 million tonnes of additional capacity, I wanted to do it in India. I would still and I hope we can do it in India, but it would take another 5 years or 6 years, if everything gets settled. So for one reason or other, particularly now when land is involved or natural resources are involved it seems to be taking much more time to get something done in India than it would if I were to go to Brazil and buy an iron ore mine and set up a steel plant assuming that that were possible.
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Are you concerned about the IPR issues there or would you venture into that market?
I wouldn't venture into that market because it would be a matter of time before we would be out in that market.
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Has someone from China been interested to associate with you for this car?
No
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Is Fiat going to play a role in the overseas distribution and marketing of this product?
There is no agreement to play a role. But I think we both have a view that wherever one is stronger than the other we will seek to leverage that strength. Fiat has assembly plants in Brazil and Argentina. In other markets like South Africa, we have a better market presence than they do. So it varies, but we have not made any decision or even discussed this.
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But would you look at largely India-like markets?
Well, the obvious markets overseas for us would be the African markets, the Latin American markets like Brazil, Argentina and some of the Far East countries like Malaysia, Indonesia, etc. Those would be the markets. There are people who say that this product could be quite acceptable in Europe, but that is not the market that excites me so much.
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But would you look at largely India-like markets?
Well, the obvious markets overseas for us would be the African markets, the Latin American markets like Brazil, Argentina and some of the Far East countries like Malaysia, Indonesia, etc. Those would be the markets. There are people who say that this product could be quite acceptable in Europe, but that is not the market that excites me so much.
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But would you look at largely India-like markets?
Well, the obvious markets overseas for us would be the African markets, the Latin American markets like Brazil, Argentina and some of the Far East countries like Malaysia, Indonesia, etc. Those would be the markets. There are people who say that this product could be quite acceptable in Europe, but that is not the market that excites me so much.
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In terms of your global aspirations for the small car, how do you propose to sequence it?
I think the first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and then I would create a very low-cost, low break-even plant that a young entrepreneur could buy and that a bunch of young entrepreneurs could establish an assembly operation. Then Tata Motors would train their people who would oversee quality assurance and they would become a satellite assembly operation for us. So we would create entrepreneurs across the country over time that would produce the same car. We would produce all the mass items and ship it to them as kits so its similar to an SKD or CKD operation. The assemblers would also be the dealers for the car and thus we would eliminate one level. First, I would like to do that in India and it will be very satisfying if the small car created 10 or 15 satellite groups of young engineers who thought they could get together and do a business, but which they would never be able to get, normally, like in the assembly of cars or be involved in an industry of that nature. That will be a very satisfying thing for me. What we do outside India will probably be a more conventional distribution system. An assembly plant where we can assemble the product in a more conventional form.
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In terms of your global aspirations for the small car, how do you propose to sequence it?
I think the first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and then I would create a very low-cost, low break-even plant that a young entrepreneur could buy and that a bunch of young entrepreneurs could establish an assembly operation. Then Tata Motors would train their people who would oversee quality assurance and they would become a satellite assembly operation for us. So we would create entrepreneurs across the country over time that would produce the same car. We would produce all the mass items and ship it to them as kits so its similar to an SKD or CKD operation. The assemblers would also be the dealers for the car and thus we would eliminate one level. First, I would like to do that in India and it will be very satisfying if the small car created 10 or 15 satellite groups of young engineers who thought they could get together and do a business, but which they would never be able to get, normally, like in the assembly of cars or be involved in an industry of that nature. That will be a very satisfying thing for me. What we do outside India will probably be a more conventional distribution system. An assembly plant where we can assemble the product in a more conventional form.
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In terms of your global aspirations for the small car, how do you propose to sequence it?
I think the first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and then I would create a very low-cost, low break-even plant that a young entrepreneur could buy and that a bunch of young entrepreneurs could establish an assembly operation. Then Tata Motors would train their people who would oversee quality assurance and they would become a satellite assembly operation for us. So we would create entrepreneurs across the country over time that would produce the same car. We would produce all the mass items and ship it to them as kits so its similar to an SKD or CKD operation. The assemblers would also be the dealers for the car and thus we would eliminate one level. First, I would like to do that in India and it will be very satisfying if the small car created 10 or 15 satellite groups of young engineers who thought they could get together and do a business, but which they would never be able to get, normally, like in the assembly of cars or be involved in an industry of that nature. That will be a very satisfying thing for me. What we do outside India will probably be a more conventional distribution system. An assembly plant where we can assemble the product in a more conventional form.
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In terms of your global aspirations for the small car, how do you propose to sequence it?
I think the first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and then I would create a very low-cost, low break-even plant that a young entrepreneur could buy and that a bunch of young entrepreneurs could establish an assembly operation. Then Tata Motors would train their people who would oversee quality assurance and they would become a satellite assembly operation for us. So we would create entrepreneurs across the country over time that would produce the same car. We would produce all the mass items and ship it to them as kits so its similar to an SKD or CKD operation. The assemblers would also be the dealers for the car and thus we would eliminate one level. First, I would like to do that in India and it will be very satisfying if the small car created 10 or 15 satellite groups of young engineers who thought they could get together and do a business, but which they would never be able to get, normally, like in the assembly of cars or be involved in an industry of that nature. That will be a very satisfying thing for me. What we do outside India will probably be a more conventional distribution system. An assembly plant where we can assemble the product in a more conventional form.
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In terms of your global aspirations for the small car, how do you propose to sequence it?
I think the first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and then I would create a very low-cost, low break-even plant that a young entrepreneur could buy and that a bunch of young entrepreneurs could establish an assembly operation. Then Tata Motors would train their people who would oversee quality assurance and they would become a satellite assembly operation for us. So we would create entrepreneurs across the country over time that would produce the same car. We would produce all the mass items and ship it to them as kits so its similar to an SKD or CKD operation. The assemblers would also be the dealers for the car and thus we would eliminate one level. First, I would like to do that in India and it will be very satisfying if the small car created 10 or 15 satellite groups of young engineers who thought they could get together and do a business, but which they would never be able to get, normally, like in the assembly of cars or be involved in an industry of that nature. That will be a very satisfying thing for me. What we do outside India will probably be a more conventional distribution system. An assembly plant where we can assemble the product in a more conventional form.
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You have made the point earlier how you would like to see more IPR being created within the group. What to your mind are really the barriers that are coming in the way? What does it take for industrial corporations like Tata Motors to innovate in a knowledge era?
I think the one thing that needs to happen is that challenges need to be given to the organisation. Let's discuss about Tata Motors. In developing the small car, we have filed 40 patents in relation to the small car. Tata Motors since last year has filed some 200 patents; the year before we filed 30. And probably if I go back, then for three years we didn't file any. The truth is I think that if there are challenges thrown across and those challenges are difficult then some interesting, innovative solutions will come. If you don't have those challenges then, I think, the tendency is go on to say that whatever will happen, will take place in small deltas. In a way, this is my hypothesis: we have a history in India of being licensed manufacturers. Know-how came from somewhere, we produced the product, we badged it ourselves or we put the foreign badges, put it into the market and in some cases, Indian companies were free to enhance that product, while in other cases they had no right to touch that product from what it was. I think that reduced challenges to just meeting cost challenges in manufacturing etc. And therefore in manufacturing, we learnt from systems that foreign partners brought, we learnt from techniques that existed and we added some in India. We never really, except in the pharma area, tried to venture out on our own. And I think, many of our companies changed that. You know normally, if you want to do something, the normal reaction from the Indian manufacturer is who are the people doing this? See if I can get a JV with them and come to India. There are some who think I can do everything myself and there are some who make use of reverse engineering and come into the market. In either of those challenges, the real challenge is when you have some strength and you really choose to throw out the gauntlet that you can do X. And it ought to be the kind of challenge which somebody says that can't be done because then that really becomes the engine of innovation. So Kennedy said can you send a man to the moon? I think at that time, they certainly wouldn't have believed that it could be done. It was tough. Since then we haven't had those kinds of challenges. We haven't said we will send a man to Mars, we may put landers on Mars, but we have not done those kinds of things. It is those areas which really create the innovation that we need.
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You have made the point earlier how you would like to see more IPR being created within the group. What to your mind are really the barriers that are coming in the way? What does it take for industrial corporations like Tata Motors to innovate in a knowledge era?
I think the one thing that needs to happen is that challenges need to be given to the organisation. Let's discuss about Tata Motors. In developing the small car, we have filed 40 patents in relation to the small car. Tata Motors since last year has filed some 200 patents; the year before we filed 30. And probably if I go back, then for three years we didn't file any. The truth is I think that if there are challenges thrown across and those challenges are difficult then some interesting, innovative solutions will come. If you don't have those challenges then, I think, the tendency is go on to say that whatever will happen, will take place in small deltas. In a way, this is my hypothesis: we have a history in India of being licensed manufacturers. Know-how came from somewhere, we produced the product, we badged it ourselves or we put the foreign badges, put it into the market and in some cases, Indian companies were free to enhance that product, while in other cases they had no right to touch that product from what it was. I think that reduced challenges to just meeting cost challenges in manufacturing etc. And therefore in manufacturing, we learnt from systems that foreign partners brought, we learnt from techniques that existed and we added some in India. We never really, except in the pharma area, tried to venture out on our own. And I think, many of our companies changed that. You know normally, if you want to do something, the normal reaction from the Indian manufacturer is who are the people doing this? See if I can get a JV with them and come to India. There are some who think I can do everything myself and there are some who make use of reverse engineering and come into the market. In either of those challenges, the real challenge is when you have some strength and you really choose to throw out the gauntlet that you can do X. And it ought to be the kind of challenge which somebody says that can't be done because then that really becomes the engine of innovation. So Kennedy said can you send a man to the moon? I think at that time, they certainly wouldn't have believed that it could be done. It was tough. Since then we haven't had those kinds of challenges. We haven't said we will send a man to Mars, we may put landers on Mars, but we have not done those kinds of things. It is those areas which really create the innovation that we need.
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You have made the point earlier how you would like to see more IPR being created within the group. What to your mind are really the barriers that are coming in the way? What does it take for industrial corporations like Tata Motors to innovate in a knowledge era?
I think the one thing that needs to happen is that challenges need to be given to the organisation. Let's discuss about Tata Motors. In developing the small car, we have filed 40 patents in relation to the small car. Tata Motors since last year has filed some 200 patents; the year before we filed 30. And probably if I go back, then for three years we didn't file any. The truth is I think that if there are challenges thrown across and those challenges are difficult then some interesting, innovative solutions will come. If you don't have those challenges then, I think, the tendency is go on to say that whatever will happen, will take place in small deltas. In a way, this is my hypothesis: we have a history in India of being licensed manufacturers. Know-how came from somewhere, we produced the product, we badged it ourselves or we put the foreign badges, put it into the market and in some cases, Indian companies were free to enhance that product, while in other cases they had no right to touch that product from what it was. I think that reduced challenges to just meeting cost challenges in manufacturing etc. And therefore in manufacturing, we learnt from systems that foreign partners brought, we learnt from techniques that existed and we added some in India. We never really, except in the pharma area, tried to venture out on our own. And I think, many of our companies changed that. You know normally, if you want to do something, the normal reaction from the Indian manufacturer is who are the people doing this? See if I can get a JV with them and come to India. There are some who think I can do everything myself and there are some who make use of reverse engineering and come into the market. In either of those challenges, the real challenge is when you have some strength and you really choose to throw out the gauntlet that you can do X. And it ought to be the kind of challenge which somebody says that can't be done because then that really becomes the engine of innovation. So Kennedy said can you send a man to the moon? I think at that time, they certainly wouldn't have believed that it could be done. It was tough. Since then we haven't had those kinds of challenges. We haven't said we will send a man to Mars, we may put landers on Mars, but we have not done those kinds of things. It is those areas which really create the innovation that we need.
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Would the person have to be an Indian?
That's putting lots of words in my mouth. Theoretically, it need not be an Indian, but I think, it would be a good thing if it was an Indian as we are an Indian company, but we are attractively international so to a degree it could be a person from anywhere. But since almost 200,000 people are in India, he should have a keen understanding of India.
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Would you like someone from within or outside?
I don't think I would like to answer that because it would be prejudging an issue. It should be an open issue, an issue where the person could come from anywhere.
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Are you doing this search yourself or is there a committee at Tata Sons?
No, there is no committee at Tata Sons, maybe there should be.
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Do you have somebody in mind?
I have several people in mind and have a problem finding the right person.
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Didn't you find a successor that fitted the bill 100%?
No I didn't. I needed more time. And the reason that Mr A or Mr B or Miss or Mrs C is not named or in place because I think to do that too early is also bad because that person is then asking that question, when I am going to leave? And secondly, those who didn't want to unseat that person would be hard at work trying to make sure that happens three years or eighteen months before they think it should be announced and the person should be anointed and one should start to give that person a chance to operate.
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In the last few years things have started to come together. Don't you think it is a good time that you should concentrate on consolida-tion considering the last few years?
I would prefer to just say that I wish I was 10 or 15 years younger, not to do what you have said, but because today the country is really on the move which it could have been five years earlier, but it wasn't. And hopefully it will keep on moving in that direction. May be it will taper off, may be something will happen in the region that may make it happen. You can't say that just by staying you can make things happen better and that should not therefore be the reason to stay. You know, let us just take a hypothetical case. Suppose I had spent the last four years in this dream project and it didn't happen. There is tremendous disappointment, but it could happen. I think when it comes to time or point when you have to leave if it doesn't happen, then you could go out in disgrace. So you know there are times when you feel that in an ideal world this would be a nice time. That might be a nice time, and just by staying doesn't make it better.
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You have been quoted in the media the last couple of weeks saying that this would be an ideal time after the launch of the small car to step down. How serious are you about it?
All I said, you know, I think in everybody's life there is a certain amount of moments of satisfaction. You feel, that after that has been achieved it is a nice time to step away or change gears and that's why I said that in an ideal world this would be a good time to step away. I didn't say that this is what I would. You've achieved something, it is successful, it is a nice time to leave because you may not have the luxury of being able to do that, but it is a nice time to leave. And you don't want ever to have a situation where somebody sort of whispers, when is he going to leave? You know, recently I had an occasion to meet Michael Schumacher and I asked him, are you sorry you retired? And he said, No. I retired at the peak of my career. How much more could I have done? I may have gone down. I am now a test driver for Ferrari and I am enjoying what I am doing. And he said that I am enjoying my new life and I really am enjoying myself. And I think there is a lot there to what he said. You don't like to fade away because of hanging in there for too long, you love to be on the back of something that is exciting. So it is a true statement and not hypocritical.
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Is it bigger than the Corus deal?
Corus is a transaction. It got us a lot of visibility, but Corus is a trans-action. We didn't build anything. There is a different level of excitement when you are building something.
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In terms of the various things that you have done in your life, like this small car and Indica, would you consider this as more interesting?
I think so, because more new ground has been broken here than on Indica.
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But how would you signal differentiation to the customer?
I don't know because I don't know what they would have. All I would say is that probably of the players that we are talking of, I couldn't say that, because I was going to say that the outlets or the distribution networks might be an important thing. But I take that back because the two wheeler distribution outlets may serve well to do this and a tractor distribution outlet may also work well. So, I don't know what would differentiate this from the others. The product itself would have to be differentiated. The one thing I wish to do, is I want to have several follow-on products, following this. Moving up market because we have a great advantage, we start with a very low base so we add content to this. We are very competitive as we move up. Today for example, the Smart is an expensive car. If it started at a very low base and you added content, it would be a very competitive car when you loaded it. I feel that there is probably a market, maybe outside India more than India for a fully loaded power steering, automatic transmission, power windows, air conditioned kind of car with a bigger engine at a very affordable price, which is far lower than what is available elsewhere and we should be able to address that kind of market also.
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When other car makers enter the same space, how do you reckon the belly of the market will get segmented?
I think the best way to answer that is to again go back in time. Maruti was the only manufacturer in the low-end car space. At that time, I felt that it needed to be challenged so we started on the small car in that space. I knew at that time the European manufacturers and the other Japanese manufacturers would never be able to produce a comfortable car. The Koreans could, and they did. By the time the Indica came out, so did Santro, so did Matiz. And they came out all about the same time. Theoretically, I thought I was the only one. May be they thought they were too. But then we realised that we were all coming out at the same time, and we had three offerings of the new price dimension and a more modern car than the Maruti. That probably added considerably to the growth of the car industry and it probably should have had the same reaction as this one is because it is exactly the same thing. Maruti was producing about 150,000 cars at that time. The 800 was the only one and I think by the time the Esteem had come, 180,000 cars or may be 200,000 cars were being produced. A few years later, Indica was itself over 200,000 cars per year. So the same kind of paradigm change that took place at that time could happen within just the small cars. So, if Bajaj and Mahindras and whoever produce small cars, then 3 or 4 brands of small cars will be available to choose from. I don't believe that Tata Motors can fulfill the entire demand of the country.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Would you also have a lot of people emulating your example in the sense of wanting to build a $ 3000 car?
I think, my friend Carlos Ghosn has been the only person in the automotive area who has not scoffed at this. He has from day one said that this is a possibility that could only be done in a place like India. And he has not ridiculed anything. From day one he just said that it is possible in a place like India, but not possible anywhere else.
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Over the years as I have observed you, the thing that comes to my mind is the loneliness of the long-distance runner. Has it been lonely for you because you have dug in, in the face of considerable criticism, especially in the first eight to ten years?
Yes, it is interesting for you to say that because that really says a lot. But look at this particular project. You know, when I looked at the Indica, all my friends overseas said that you can't do it; its not the time and you will have to go through an agonising phase. My friends here said when it was under production that you would produce a lemon. They would beg me to distance myself from the Indica project. If things get OK, then of course, everybody is your friend again. But it can get, just as you said, fairly lonely. On this car, I think, there was a fair amount of ridicule when the project started that it is a pipe dream and in honesty that would have extended into the company also in certain quarters. That it can't be done and then I was caught in the web. And as one went along, it became clear that something was happening and we were going forward. Suddenly everybody is against the small car, it will pollute, it is going to congest, it is going to impair safety. But we decided that we will make a car that will meet all those criteria. We decided we will not compromise. We designed the car with a full frontal crash test and to also offset a side crash impact. It will meet all international standards of safety. It will meet emission standards, not only today's Indian standards, but also Euro IV, today as it stands. So, on safety and emissions we spared nothing.On fuel efficiency, we have a very fuel efficient engine which is no big deal because we have a very small engine. So, a 33 horse power engine will give around 50 miles per gallon. It is not too bad for a car. So, through this period of time, these have been the attacks. Fortunately, we have not sought any crutches in terms of concessions. So we have done more in fact in many ways than the so-called small cars have done or the micro cars have done in Europe which don't meet many of these criteria. We feel quite pleased and right now I am in a very lonely phase that on the one hand it is attracting a lot of attention positively, but it is also attracting a lot of attention negatively like everybody is taking potshots at in the form that this is not something that we needed to have.
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Who are your potential customers for this car? Are you really looking at tier II and tier III towns and cities?
I think I would rather not look at it geographically. I would say: who might be the buyer of this small car? Let's start at the top. If I were to look in the United States or in Europe, in some of the garages you would have a Bentley or two Bentleys' or a high-end Mercedes, and you may find a Smart also in that same garage because that person thinks it’s a fun extra car to have. He may have four cars, but also have a Smart because he thinks it is cute. Doesn't need it, but he may have it. Then you may have a person who needs a utilitarian form of transport. He is not looking for a lot of creature comforts; he wants to get around in a sensible way. Then you think of a person who is perhaps thinking of or owns an existing small car. And to him it makes sense to get it because it is more fuel efficient or its lower cost or whatever it may be. And then on the other side you have someone who aspires for a car which is beyond his reach. He doesn't have a car or he has a two wheeler or a three wheeler and this fills his needs. And then, this can come from anywhere in the country.
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There has been some criticism that this car is going to choke the already congested roads in cities. Do you think that is an elitist criticism?
Yeah, I asked myself. We produced about 7 million two wheelers earlier. Today, we almost have about 60-70 million two to three wheelers in the country. We produced about 1.4 million cars and at some point we will exceed 2 million. Nobody said anything about that. It only happens to be this car that is being targeted. You may say well OK the two wheeler takes lesser space. Our car pollutes if not less, then certainly not more than a two wheeler and I am not talking per passenger but as a vehicle. We conform to Euro IV in terms of our engine. Today Bharat III is required, we conform to Bharat III. All scooters and two wheelers are Bharat II today, not that they are not conforming, but that's what their standard is. So, all I want to say is that yes you may take a view that this small car will take less space than a large car. Yes, you may say that this car will carry four people instead of the normal two on a scooter and therefore you will have if, filled in with four people, you will have less on the road than two scooters. More of immediate concern, for anyone that drives a car, is that today two or three wheelers have become a little more of a menace on the road than a car has become because of their ability to weave in and out. And it makes an assumption that a small car will not replace a bigger car. It just looks at it as an increment. You produce two million cars, you produce half-a-million Tata cars, you produce 2.5 million cars. That's not quite the way it is going to work. We will cannibalise some of the existing low-end cars or cannibalise some of the existing two wheelers. Some of the cannibalisation will be of our own product and Indica is also going to feel the effects of this. So, it will not be that it will just sit on top of everything and there won't be a square inch of space on the road or anything of this nature. Secondly, we are looking at congestion in major cities. Have we drafted a form of affordable form of family transport for people in tier II or tier III cities. Is it their lot not to have it? Is it a sin to try to give it to them? Does it necessarily mean that the small car is only congesting the city roads in the major cities and that nothing is being done in the urban areas. Yes, we have high teledensity in the urban areas, we haven't done enough in the rural areas, but there is huge potential if rural India gets connected and the same is going to be true with transport.
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You think that this car is going to some way change the DNA of the group?
That is not what it was conceived for. Well, the fact that you are doing it to address the market, that's huge. It gives you an expectation of, you know, if we produce 50,000 of such cars then we are ready to undertake that exercise. From the time we are thinking that we could follow on with this, could be different fuels can be produced, an electric version of the car can be produced or hybrid version of this car or can we make this car the platform for a new set of personal transport. The one thing that I think we have established is that we have created an affordable, personal form of transport. Some may like it, some may not. Some may think it has things that it shouldn't have, while some may think it is coarser than it should be. But we have an affordable form of transport that will take four or five people in all weather conditions to where they want to go, running on regular fuel and not some exotic fuel.
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People are used to thinking within a certain framework. So how did you achieve breakthroughs in shaving off costs?
We haven't changed when you see the car. It is a four-door car, five-seat, rear engine and in many ways conventionally constructed. What has been done is like (in the case of) door locks, we have the same lock on all four doors, both left hand and right hand. We have some parts that are wing locked from inside. To remove the engine you can work at from the top, it is in the rear. Probably when you see the car, we have really packaged it rather tightly and I think most of the benefit we got on cost was that we used less steel and we just made the car smaller outside yet big inside.
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What were the most challenging moments to your mind?
They all relate to costs. Perhaps the bigger, more visible issue is that somewhere we needed to benchmark ourselves against something. And we took the Maruti 800 as a benchmark. In terms of acceleration and driveability, it should at least equal the Maruti and in some areas it should exceed the Maruti. So, somewhere along the line we had to increase the size of the engine to give us the kind of performance which we have now and the rest have been issues, you know, relating to costs. It meant just doing the same thing again and again to bring the cost down, and where to put the fuel tank and all those kind of is-sues.
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If one would really start at the very beginning, what really was the trigger for the idea?
Basically, just as an Indian, you know, I would be as concerned of my-self as one of the rickshaw pullers in Calcutta running with a rickshaw behind with two people sitting back. It bothered me. My mind will start thinking: Can we put a bicycle there? The same thing bothers me when I visit a plant also. The workers are bending over when the work piece should be raised or maybe they should sit in a pit or what-ever. Because I think human fatigue is something that affects safety. So in this particular case, you could not help but notice that there were three or four family members on a scooter, the kid standing in the front, the guy driving the scooter and the wife sitting side saddle holding a little kid. And when you're driving a car, you certainly say, Oh my god, be careful, they may slip. Add to that slippery roads and night time too. Any of these reasons can be dangerous for transport. That does not mean that the scooter should not exist because scooters are an evolution of bicycles and it is all the path of prosperity.And this seemed like a dangerous form of transport. So, I, to be frank if I might go through the process, I asked myself, what if you put two wheels on the back that will give greater stability? If you build a bar over the top could you save the occupant? I will stop there and come back.Last year, to my surprise I found that BMW had produced a scooter with the same bars that I had thought about with rubber bumpers on the side so that if they (the riders) fell they wouldn't hurt themselves and the seat there had a seatbelt. And I thought, that's exactly what I had thought about. The fact was that BMW had put this out though it was not successful and they had withdrawn it. But, someone else had also thought of the same thing. It had only two wheels not three. So, I set about thinking, can we make a four wheel vehicle from scooter parts initially and I, in fact, addressed an Automotive Component Manufacturers' Association (ACMA) meeting saying that can we all get together produce an Asian peoples' car. To this I never got very much response. The idea was a really low cost car that Malaysia, Indonesia and India could come together to produce jointly. We could produce one part, they could produce another part, and each one would exchange and have the rights. In fact, even for the Indica, I went to ACMA. I said can we have an Indian car because no car has been designed in India. That time I was actually criticised. This time I had no response. So, in this particular case I had no response. In fact, the person who showed some encouragement was Brij Mohan Munjal, but we never really took it further. And then we found that scooter parts were probably a real limitation. So we changed tack and we said let's take a clean sheet of paper and start thinking and conceiving a car. Why a clean sheet of paper? Because we thought that if we had to do something that was different, then we probably didn't want to have a legacy in any way or form and so we thought we should look at everything from scratch. And, initially I thought we could even have a car made from engineering plastics. But we found that several of these concepts do not lend themselves to either cost or volume manufacturing and have had to move away from that to a more conventional kind of car. So, that led us to configure a small car which would be not a three wheeler but four wheels. It would be a car, a full-fledged car and we started again in an evolutionary manner and we thought, and if I might say so, it really started with being a four wheel rural car. Do we have rolled up plastic curtains instead of windows? Do we have openings like auto rickshaws have instead of doors or do we have a safety bar? As we went on, we had many early concepts that went that kind of way till we finally decided that the market does not want a half car. The market wants a car. And if we want to build a peoples' car, it should be a car and not something that people would say, Ah! That's just a scooter with four wheels or an auto rickshaw with four wheels or not really a car and I was reminded of a very interesting concept that Chrysler did many years ago when they developed an Asian car. It was a plastic car and for those who may not know or remember, it was one piece, the whole car from front bumper to back bumper, moulded in one piece of plastic, half of it and the other half. And it was welded together to make the whole car. The most expensive part of any manufacturing unit is the paint shop. So this car with pigmentation with plastic parts, you didn't have to paint it, but no one liked the car because, in my view (I drove the car) it was very nice, but people wanted a real car and not something that someone would say was not a car, this is half-a-car or three-fourths of a car. So, with that kind of experience in mind, we decided we would do a car that would really pare the cost of a fair car. It has obviously been a long journey. It has been a longer journey than it should have been. I think we have easily taken two years or 18 months more than it should have been.
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Are you nervous? Is this much bigger than the launch of Indica?
I think I was much more nervous during the launch of Indica because we had never been in car manufacturing before. We were venturing into a new segment. We are again venturing into a new segment but in a product line in which we have 10 years of experience now.At the time of the Indica launch, you did not know whether the market would accept you becoming a car manufacturer from a truck manufacturer. We took some widely publicised goals at that time that we would be as big as the Ambassador, or we would have the same size of the Maruti or we would have a diesel engine. We made those statements. We didn't know those would be the kind of things the market would go for. So, I think at that time we were much more apprehensive and nervous than we are today.
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So what happened with that street urchin? Were you driving and then?
I always used to stop and talk to them because many of them are bright young kids who just do not have a chance. They are not interested in going to school. They are interested in a job and they make more money than they would make and they are just a part of India that is fascinating. It is the young India of tomorrow.
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The one thing that you have managed to hide very successfully from people is a deep sense of wit that you possess. We saw glimpses of it when you related that street urchin story. Is that not a very Parsi trait to have, I would not say wicked, but to have a titillating wit, and why have you hidden it from people?
I have not hidden it from people. Some people bring it out. The other day, had that not been mentioned, it would never have occurred to me to allude to something that I do all the time.
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You have sat on international boards. You continue to. You have feted by governments, nations, admired a lot. Who do you admire?
Two people that, apart from JRD Tata, whom I have mentioned, who I admire greatly and sort of oscillates between being a family member and a mentor and a businessman I admire, two people not connected with me have been an inspiration to me and have had a profound impression on what I have done and how I have done it have been Dr. Amar Bose who developed the Bose speakers, the Bose Corporation. He and I enjoyed a friendship that was very close and was very personal because he opened his company to me. We spent hours and hours together and discussed various things. In fact, I knew more about the Bose Corporation than most people might have done. And the other person is a person called Henry Schacht who was the chairman Cummins Engine Company where we had a joint venture. Then became the Chairman of Lucent which was the telecom company that merged with Alcatel. Henry continues to be today, Dr. Bose died a couple of years ago and those two people are people that have had a great influence on my career.
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So, then, I want to ask you which is your most despaired moment, as it were.
That is an easier one to answer because I always felt the greatest despair I had was when Tatas decided to put Central India Mills which was what Jamsetji started, into liquidation. If I recall, at that time, it was Rs 50 lakh. I thought this was a very un-Tata like move, but it was done and many people went out of work. I saw the misery that it caused. Blue-collar workers got taken care of by the government, but the officers of the company really suffered and that has remained in my heart as something that was a moment of despair.
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When you look back at this life, biggest achievement to your mind? What would you define as your biggest achievement?
I really would not be able to define that. There have been many moments which make one feel a sense of great satisfaction and there have been a few times when it is almost despair.
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But you used to play the piano at one time?
Long, long ago. And I actually started relearning the piano. I got a very able piano teacher to come and teach me, but other things overtook my ability to be consistent. On the piano, I had one real problem. I found that I could not relate my left hand to do something different from my right hand. It became a frustrating issue and that sort of waned my urge to do what would give me many hours of joy.
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But what do you feel?
I think you cannot just have one interest. You need to be able to jump. So I think I have been fortunate in having those interests. I failed in some ways, when I retired, I said I would relearn the piano. I have not done that.
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At your spritely age, you still have multifarious hobbies from tinkering and driving cars to flying planes to reading to architecture. Do you think in many ways, this cross-functionality shaped you?
That is for someone else to say.
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And to my mind, Modi is working on that and he has been working on that.
Yes, he has. Absolutely. He has built a vision of a unified India and people may disagree with that, but I think that that is what the country needs at this point in time. It needs everybody to rally around the direction that the leaders are giving us. So, one hopes that the young of tomorrow will be driven by that to some extent.
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I know you are not the preachy kind and you do not like pontificating, but there are going to be tons of young people watching this conversation. They are going to be watching it on television, they are going to see snippets online, many and you know this yourself, admire the House of Tata, they admire the Tata way of life and they admire Ratan Tata. If you were to send out a message to these young people who are watching the programme today, what would that be? It could be anything. It could be business, nation, whatever.
What I would tend to want to convey is that people should do what they believe is the right thing to do. However, usually, that is also the most difficult thing to do and it is the riskiest thing to do, but if they believe in something, they should pursue it and they should, like I said earlier, try to make a difference. Not a difference that is disruptive or negative but a constructive difference. One other thing I would like to add which sounds political, but it is not. We as a country or the citizens of a country need to get back that pride that we should have that we are Indians, not that we are Punjabis or Parsis or Tamils, but that we are Indians first, that we have a country that we belong to and we should be proud of. We seem to be losing that somewhere.
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What excites you about the House of Tata, the industrial bit and what worries you the most, if anything?
It is too hot a question to answer given what we have been going through in the last several months. All I would like to say is that I feel that the group is in very able hands with Chandra. Businesses are cyclic, they will have their ups and downs. We have been a group that has worked with companies when they are in peril and brought them up and I hope we can continue to do that. The group will probably look different over the next 10 years. There will be companies that were not there earlier and there will be companies that were there and not there 10 years from now because they will not be relevant or they may have been sold or transferred to another company. So the face of Tatas may change, but so long as there is still the same drive to make this an enterprise or a conglomeration of enterprises, that operate with ethical standards and value systems, I would feel very proud.
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The National Cancer Grid.
The cancer grid, nutrition and while the trust cannot take care of the country, we are setting some footfalls in the sand which I must say, the state governments and the central government, they are all supporting us fully and what we are trying to do is taken as being genuine and honest and it is very rewarding to see state governments and the centre working with us, things that some people would say could never happen.
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Now that you are at arm's length from the operations of the Tata Group, what excites you the most about the group and what worries you the most, if anything worries you at all?
What excites me is the area we are working in now in trying to transform the trust because we are actually in a manner of speaking, having the same excitement as one did in setting up an industrial enterprise, dealing now with trying to reach people, trying to provide healthcare.
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From your vantage point, seeing what you have seen of the trust, of the relationship that the trusts have with the people and with the holding company, do you believe corporate India has really pulled its weight in the area of philanthropy and involved itself in nation-building like in many other countries where individuals get involved with nation-building as well?
The only fair answer to that is there have been certain companies that would make everybody proud with what they have done be it in the pharmaceutical area or be it in chemicals or be it in areas relating to rural development, where they have done more than they need to do to have a public face. And there are companies who have not. But, I think, if you go to any country, you would have the same mix. Companies that are conscientious and compassionate about the have-nots in their country and those who do not care.
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As you said at the beginning of this conversation that there are still some sociological, societal issues that afflict our country. Let us imagine if the Prime Minister were to say, 'Mr. Tata, please lead one specific nation altering mission.' What would you pick, if asked?
First of all, I hope I would never be asked anything like that because I would not be the kind of person to lead that. I do not think I could answer that off the cuff and it is too important an issue to give a flippant answer. But, the way such a thing ought to be done is to be freed of political baggage that often, such a thing would carry and the freedom to the person who is asked to do whatever is necessary to make that happen. Far too often, you have a good idea that is squelched because of political or sociological things. It just cannot be done or it is too difficult to be done or it is too risky to be done as such with public funds and those might be the very things that are necessary to pull a country out of a particular morass that it may be in an area. So, I would like to duck that question.
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But I do not think you will ever be free in a sense. I am sure, Chandra comes to you, seeks your advice, seeks your views, he too needs a mentor, which brings me to a very interesting point. You have done so much from flying planes to running conglomerates to sitting on international boards. What is the one thing that continues to drive you to this day?
It is a difficult question to answer because you get driven by some fire within yourself. You do not necessarily know what it is. It could be the people who lead an organisation, it could be the passion with which somebody is pursuing what he wants to do. It may be taking the side of the downtrodden because he is being picked on. It varies from time to time, but there is an issue of wanting to make a difference. And if you can help make that happen, that consumes you and provides you with a motivation to go forward.
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It is interesting you mentioned the new India. Of late, we have seen you invest in a lot of start-ups. You are backing a lot of entrepreneurs, young people who are taking great risks. What is your philosophy and why do you choose the kind of investments you make?
First of all, the embodiment of vision that makes a start-up happen is important. I am not going to invest in a business that I have no interest in. So, the business or the vision of that start-up is important, first. But the most important issue is to meet the founders. I have changed my view sometimes from negative to positive, sometimes positive to negative with the founders. For example, a founder that intends to just scale up his company to sell off is not a company I obviously want to be with. A founder who has a passion to stay with something and build it into a sustainable company that is taking its place is somebody I tend to support. So, it varies. When I was Chairman, I could not take this kind of view because somewhere or the other, it would be conflicting with something that Tatas were doing. Now as a free person, it is in invigorating to do this and meeting a lot of young people who one day will be leaders of their industry and it is nice to interact with them.
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It is interesting that you mentioned a new India because you are playing a very interesting role in that new India. You have made several investments in start-ups from cab hailing companies to your favourite area which is pet care. How did you and why do you pick up these start-ups and what has been the engagement with these entrepreneurs that you have had?
I was interested in innovative companies, usually small. I had Tatas invest in a computer company in San Jose in the bay area in the 1970s and I have always been sorry that India was not a part of this new wave of entrepreneurs that have set themselves up both, in the east coast and west coast of the US. But I could do very little in it because while I was in Tatas, that would be a conflict of interest somewhere. So after I retired, I started taking the interest of looking at some of the new young start-ups in the country. Of course, it was a time when new start-ups were starting to take form in India. How would I make a decision? It is a learning exercise for me. I found that the real key to deciding on how much you invested and what you did and how involved you became was to meet the founders. The key would lie with the people that you met, who formed the company, they impressed you at times and at times they did not. Those that impressed you usually are the ones that led their companies to prosperity. Sometimes that went wrong. The vision of the founder, however small that might be, whether it would be pet care, whether it would be fashion or healthcare as the case might be, it is what that person had in his or her vision that would impress me. I made small investments in many companies and some of them have been those that I have been proud of.
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How was that meeting when you met Mr. Modi in those days and told him about this move?
What I have said publicly is he invited me to move the factory to Gujarat and I said we would come if we had a home and he said, I will get you the land you want in three days. And then he delivered that. On the third morning, he said,' here is the land that I promised.' And that just does not happen in India. So, Mr. Modi as Prime Minister now is offering India, the Indian people, a new India. We need to give him that opportunity to offer that new India. He is able, capable and innovative enough to look at India afresh and I for one, am optimistic that with his leadership, India will be that new India that he has promised.
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I remember you were particularly aggrieved at the loss of so many people, including people who were working at the Taj at that time. I want to come back to a large national picture. You have seen prime ministers, you have seen governments at work at the state level, at the international level. India is at an exciting time, at an exciting place. What are your views about Narendra Modi?
I have known Narendra Modi when he was Chief Minister of Gujarat. I turned to him when we had to change factories from Singur in West Bengal to Gujarat. I have seen him and will never forget the way he found solutions for a company that was looking for a home.
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I want to come back to the city you were born in - Mumbai. What was it like growing up, I know the personal trauma you went through on 26/11. What went through your mind on that evening? I remember you rushed to the Taj to see what was happening. What went through your mind and it must have broken your heart to a great extent?
To me, it started by one of my colleagues telephoning me and saying that there is some shooting at the Taj. I called the Taj and nobody replied from the switchboard. As things turned out, I was not allowed into the lobby. The police came and they pushed everybody out. Krishna Kumar was standing on the footpath outside, I was partly there, partly home watching on television and it became very clear in a couple of hours that it was not a gang fight or an underworld thing, it was an attack by terrorists or by enemies of the state. The next morning the government rang me to say it was all over. I, in fact, issued TV statement that morning, saying it was all over and it was not. It went on for three days. By that time, everyone knew what it was. It was an attack by the enemy of the state. My take on that was that whatever happened, we were under siege in this hotel and whatever they did we would rebuild the hotel. The city would stand up and not fall down. There was a tremendous galvanising of the citizens of Mumbai, something that made everybody very proud of the way everybody stepped up to play a role. Nobody walked away from the situation as it stood and you felt a great sense of pride that you were a part of this great city with citizens who are not running away from what we did.
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Were you always shy, you didn’t want the arc lights on you?
I think so because when I was in school etc, you wanted to be part of the school and not the rich man’s son or the chairman’s son or have a big car take you home while your classmates went by bus or smaller cars. I just wanted to be a normal person. I think I owe a lot to my father to ensure that we at no stage grew up, my brother and I, as pompous young people but as people who would like to be every day and I think that has stayed with me.
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You, too, have been pretty reticent and shy talking about the experiences that you went through. Some of the things that we are hearing now, we have never heard before. In your interactions with JRD, what was the one thing that you took away from that interaction? What was the core of his brand values or his kernel as it were?
I would think if I were to have to pick one, humility would be on the top of the list. He was just a person who would love to be anonymous and to some extent that has rubbed off on me. I love to be anonymous. As you go through life, you find that that becomes less so and less possible and then you look at seeking anonymity by hiding.
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In 1991 when you took over you were stepping into giant shoes - JRD Tata’s shoes. Then you brought the entire group together. I still remember the work that you did around brand Tata. When you took over and sat in that corner office in 1991, what is the one thought that raced through your mind because you were now the torchbearer and the legacy holder of almost 120-130 years of existence?
On the one hand, it was a big move for me, but on the other hand, I joined the group in 1962. I had been in various positions on the shop floor in Australia, in textiles, in steel, in Tata Motors through the years and it was in relative terms easy for me to relate to the bigger issue. The one thing I had which is maybe not so evident is, I had a terrific mentor in JRD Tata. I remember walking back from the meeting in which I was appointed the chairman when he walked back, I walked with him to his office and he told his secretary, we will have to move out of here now. I said no J, you don’t move out, this is your office as long as you want it. He said, really? I said yes, it is. He said, where would you sit? I said where I am sitting today, I have an office down the hall and that is fine. Then, I was deadly afraid that JRD would forget that he had stepped down because he never stepped off the companies. He remained on the board of Tata Steel or Telco at that time and I thought to suppose he runs the group from behind and forces his view on – he never did. In fact, he was my greatest mentor and the years that he was alive, I used to go into his office and say J, I wish this had happened 10 years ago, we have got such a great relationship. He said I wish so too. So, I was very lucky in having him there. He lent his weight when he had to, example the retirement age. Without his support, I could never have done that. He would explode if he thought something that was being done that was wrong. However, on the whole, he was a terrific mentor. He was like a father, brother, gave advice – a terrific relationship and very important, not enough has been said about that.
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You must have faced political pressures, economic pressures and yet you stayed the course?
Sometimes you did not know you were doing the right thing. All things are not black and white - you have choice, one choice leads you down a certain path long-term and another leads you down another path short-term and you have to weigh one issue against another and hopefully you make the right decisions, sometimes we don’t’ but we do it with innocence or naivete rather than intent and negativity.
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I like that because it is very easy to succumb?
Yes
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Has it been tough to stick by these values, especially during times when values were being trampled upon because of politics, competition etc.? Were there times that you often felt that thank God we were not the short-cut Tatas because you could have taken that short-cut?
I would be lying if I said there weren’t moments when those issues came up and those decisions had to be made. Happily, at every time boards stood together and leadership stood together in saying that is not what we do. We, over the years, on occasion have suffered as a result of that. However, on the whole, I believe it’s very important to come back at night and say ‘I have not succumbed.’
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While I completely agree about the relevance of the trusts, the one thing that a lot of people talk about is the Tata culture - the Tata way of life. If you work for the Tatas on one hand, it’s almost like we are working for a family, and on the other, it’s as if you are part of a legacy. How have successive leaders, before you JRD, how have you managed to retain that Tata culture in times which are sadly materialistic, competitive?
First of all, that culture becomes embodied in the DNA of an organisation. It is set off by the early leaders – the founder in our case, who never was in need of wealth because he had it all, but it wasn’t what drove him. The success of giving India its own independence in steel or power or in the hospitality area is what gave him the pride that he had made India self-sufficient. He didn’t at that time look at the companies as being ‘his’ but belonging to the country. Somehow, that prevailed through the years through his sons, and then, through JRD Tata for 50 years or so, where JRD would stand in a line rather than jump a queue, where he would give way to a customer first and not him and that humility become embodied in what all the leaders of Tata companies had done, and we should protect that ferociously. The day we lose that, I think we have lost an important facet of our input in the companies that we have. The day we decide to cheat, the day we decide to do something, hold something for us and not for the customer, I think we would have lost a very, very important asset.
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If you look at the trusts today, they span a wide range of sectors and there is a certain stress that you have laid on the technology being a great intervention in some of the applications. Where do you believe the transformation of trusts actually began and why?
If you look at India through the years, the needs of India have changed. We had food famines in the British times, we don’t have famines any longer. We had a majority of people living in the rural areas. Today, there is a vast migration to the urban areas, creating an important issue of urban poverty and hardships that didn’t exist before. Today automation and differences in terms of value chains etc. make human jobs less important than machine jobs in many companies. So, the needs of the nation have changed. Food shortages continue to exist in pockets, water shortage is something that never existed in the past but is an issue today. A much larger population, and creating jobs and knowledge, these are all the issues that are issues of the changing times. For the trusts to continue to do what they did at the turn of the century would be to be sitting in the twilight thinking that the issues of the country are the same and to me, that would have been a disappointment. So, the trusts have gone through and are going through the transformation that to use a short-term is making the trust relevant today if we had not done that they would have become irrelevant and created edifices that stood up as evidence of what the trusts did but did not make a contribution to the country.
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As you rightly said at that time there was no need, there was no mandate. Today we have CSR. What do you think went through the minds of the founders when they set this up, and especially transferring their value in Tata Sons to the trusts?
I think it was a different view of ownership. JRD Tata often used to refer to the Tatas as being the ‘trustees of the people’. The Tata family could have become tremendously wealthy by having distributorships, by having partnerships etc. in businesses, but most of the businesses whether it was steel, power, or institutions were set up as institutions for the country. So, Jamsetji Tata could just as well have dedicated Tata Steel to the nation or dedicated Tata Power to the nation, they belonged to shareholders and to the people. Personal ownership and personal wealth happened when it happened but was never the criteria for these companies to be established. So, it was natural that he did leave his ownership to his two sons and then his two sons who had no children left them in charitable trusts as beneficiaries of the companies that they held. So it is a refreshing change that gave way to ownership in an industry and not being for the beneficial interest of A or B or C but for the better good of humanity.
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There is an interesting anecdote about the conversations that Jamsetji Tata had with Swami Vivekananda aboard a ship?
I don’t specifically know about that conversation, but they met each other and were inspired by each other, I know that.
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Ratan Tata Trust will be completing 125 years of its existence, the first of the trusts. When you look back at the work that Tata trusts have done what are you feeling? What ignites this feeling of compassion and giving back?
I have a great sense of pride that over 125 years, Sir Ratanji Tata left his legacy to philanthropic causes, followed by his brother Sir Dorab Tata when he passed away -- he did exactly the same. Over the years, the Tatas have been structured by the holding company or the proprietors’ ownership being held by two charitable trusts. Over the years there was an increase in the number of charitable trusts that were created to work on the disparities that one found in the country, that time a colonial country, and to work for the common good of the common man. This was a different thing, it set up cancer hospitals, schools, institutions of that nature. It did also deal heavily in terms of individual hardships. So, through the years, the trusts have dealt with individual hardships, they have given scholarships to students. We have had past Presidents of India who had been scholars of those Tata Scholarships. We have created institutions which stand today, like the Indian Institute of Sciences -- the trusts did not set that up, Jamsetji Tata set that up.
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Will you try to acquire other established car companies?
I really don’t think we would on the prowl to acquire other car companies. If you say that contradicts what we’re doing now, I don’t believe it does. We were not aggressively looking to buy Jaguar and Land Rover. People brought us together, and we were happy to be considered as bidders. We will soon see what happens.
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What will you do if you aren’t the successful bidder for JLR?
We will continue to do what we do. Opportunites come along from time to time. Two or three years ago, nobody would have expected Ford to be interested in selling these companies. In any case, acquisitions are not the only form of growth. What you saw today - the Nano, revised Indica - represents good potential for growth. We will have plenty to do completing what we have started.
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Were you surpised by the Nano’s reception?
Yes. And we are very happy with it, as you can appreciate. People in the industry said it wasn’t possible, but now they feel they have to do it themselves. It proves there’s a large market at the bottom of the pyramid, a market big enough for others as well as for us. If we have started a trend, that will be satisfying to all of us.
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How is it that you’ve been able to make such a low-cost car as the Nano? What are other manufacturers doing wrong?
It’s not our job to embarrass or comment on other manufacturers. We live in a low-cost country. It is likely that the others have cost structures that make it more difficult for them than it is for us.
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What is the nature of your relationship with Fiat?
It is a very open relationship, friendly but not finite. It has the potential to be very deep or very slight, as we choose. But it is unique. Every time we have had a relationship with another company, they have wanted to own us or own a piece of us. But with Fiat it is an association of true individuals for the right reasons. We both want to keep it friendly and wide-ranging. We have listed our ways of co-operating as jointly developing new platforms, exchanging existing platforms and exchanging technology. Sergio Marchionne and I have agreed that Tata wants to regard Fiat as its preferred development partner, and vice versa, though of course, we would both still be open to relationships with other companies on the right terms.
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Why have you brought the Nano to Geneva? Do you have plans for the European market?
We will eventually address the European market, including the West, but not in the short term. We have been exhibiting our other cars at Geneva for 11 years. This was the first European show we came to, and we were treated with respect from the beginning and we feel an emotional attachment to it. The Nano received far more attention in Europe than we expected, so we felt we would not be very generous if we left it at home. But our priority market for this car will be India, and Africa after that. The issue will be to build up capacity.
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Do you own a Jaguar or Land Rover?
Neither, but I hope to have both, very soon.
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Tata Motors has a tech centre at Warwick University. If the JLR deal goes through, will that move to Gaydon?
We have no plans to move. Tata Motors wants to be an international car company, which means it needs a window on the latest technology, and the operation we have serves us very well for that. Some people believe Britain has lost its car industry, we don’t see it that way. There is still tremendous technological know-how in Britain, though it’s very understated, and we will continue to utilise it.
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How does Tata go about about injecting its own management ethos into the companies it owns?
We satisfy ourselves, early on, that the people in the company share our values and ethics, and that we can have good human contact with the management, because we would want the management to continue to be there. That is how we have worked with Daewoo, with Corus, with Tetley Tea and other companies we have acquired. We aim put our imprint on the company through a negotiation board, but the existing managers continue to run the company.
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As a car enthusiast, do you believe Jaguar should build a new sports car?
I really can’t express a view because we don’t own the company. But if the day comes when we do own it, I shall have pleasure in answering you, because I do have strong views on the subject. I look forward to answering your question...
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Could you tell us about your love of cars?
I have always had a personal passion for cars and so I have the credit and notoriety for getting Tata Motors into this business. The car business takes up a fair bit of my time, and rather more of my interest. It’s a more exciting business than others because the products have a far greater emotional attachment for their owners.
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What is your view of Jaguar’s and Land Rover’s forward model programme? Do you like what you see?
The teams from Ford and Tata are deep in due diligence work at present and I have not heard of any problem from that area. I have seen proposals for new models that look very exciting and impressive. We would not be arrogant enough to think we could arrive at this stage and bring something better.
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What is your main motivation? Is it to supply components from India or to build links with your existing business?
Our motivation is not based on outsourcing and it is not based on taking technology from these companies. The synergies we see are the fundamental ones of having in our midst two brands that we greatly respect. The world should look at brands like these for what they are. Who owns them is almost immaterial. Our challenge at Tata, if our bid is successful, would be to nurture them and make them thrive.
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Why do you want to own JLR? Is it the excitement and challenge of developing two famous car marques or is it more of a business decision?
What attracted us was the fact that these are two iconic brands, global in nature and highly respected for their products. We believe it is the duty of whoever owns them to nurture the image, to retain their touch and feel, and not to tinker with them. They are British brands, and they should remain British. Who actually owns them should not be very important in the way they work.
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You said 25 years ago that there was need for a change in the direction of the group towards technology orientation. Is there need for a new direction today?
You have really caught me off guard. If you were to challenge me, I would say that there may be areas that one may want to enter – like nuclear power, or retailing or real estate or whatever, wherever there are opportunities - even alternate fuels, because it reduces our dependence on fossil fuels. But all of those, in a manner of speaking, are mundane extensions of existing businesses. Today, I think some of us, like Mukesh Ambani, myself and those of us who head industrial units, ought to really focus on what we can really do to make the world a safer place, maybe 50 or 100 years from now. And that brings us to an issue that we should address in our own way. For instance, how can we deal with climate change and global warming, right now? The effects of it may not be felt now; in fact, we may pay a price for it today, but it will help the generations to follow. So can we use our visibility to create an awareness of the need to do something? Can we, in our own businesses, be conscious of this and set an example? For instance, I was, many years ago the prime mover in getting Tata Steel to rid itself of all the emissions that came out of the chimneys at Jamshedpur. You could not fly over Jamshedpur then, because of all the smog from the chimneys. Today, there is nothing coming out of the chimneys. We put in anti-pollution equipment and we are very pleased that we could do it. Did it cost us more? Of course, it did cost us an enormous amount more. Have we improved the quality of life of our employees by removing the red dust that was there everywhere in Jamshedpur – on all the trees and everywhere? Yes we have. Jamshedpur has become a different place. Telco, long before my time, planted 2,000 trees – it was a terrific thing for a company to do what was not related to its business. Can we create awareness about not polluting our waters? Can we be more sensitive to the environment, not so much by enforcement or by government dictum, but by our own effort? I have been spending a fair amount of time looking at alternate fuels, including hydrogen as a fuel in the future. I headed a government committee to see if it can be a fuel for motorcars in the coming years. Can we look at processes that will be kinder to the environment than we have been, and more sensitive? In fact, I am about to create a cell in Tatas that will look at just that and scan the technologies available that will result in success. Some of these new technologies will, in fact be translated into businesses. But, for most parts, just let’s look at our own businesses to see how we can design green buildings that will reduce energy consumption by ‘X%’; can we design our factories – I am talking about what may seem ridiculous today – but can we put solar panels on the rooftops of all our factories and see if we can harness the sun? Can we be more self-sufficient in power than we are today? It is these kinds of things that, I think, I would like to create in the short time that I have.
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And now you are moving down into the Rs one lakh car; do you still think that the big market is at that end?
Well, even when we entered the car business I always felt that about 60% of the market would be at the low end which, indeed, it is. In fact it’s the exact percentage that I had thought. And it’s an arbitrary low end because what I said at that time was that it was below Rs four lakh. So the question is: what is low? You have got the bottom end of that range; the challenge is whether you can change that bottom end and hit a broader base. Conventional wisdom says no; then you set yourself a task and ask: why not? And suppose you really make an attempt to do that, then you start with a clean sheet of paper and you start looking at all materials and see what you can do to reduce costs. You use adhesive instead of welding; you look at pigmenting instead of painting; and you look at a whole host of issues like that and wonder why we can’t get a car at that kind of price. If you have a bright team of young people who share that same kind of quest, you realise, yes, you can. The first thought we had was that of a car that will have no doors, or curtains instead of windows – not a bad thought. The genesis of that was: Why should four people endanger their lives by riding a scooter on slippery roads, a child in front and the mother holding a baby at the back? Can there be a better form of transport for them? And can it be at an affordable price? It wasn’t a bad solution -- it would have four wheels, seats and a curtain, so the passengers would be protected against rain. It won’t be a car but a four-wheeled transport. That’s how it started. Then, as we went along, it became clear that the consumer will not accept a glorified auto-rickshaw, but is willing to buy a car. So the doors got added on, the wind-up windows got added, and we finally ended with a car. Very easy to let the Rs one lakh kind of drift up; but we kept it at the same level. What we would like to offer is a Rs one lakh car and then an up-market version of it which we hope more people will get and may even have things like air-conditioning; but it would still be a very economic car. The only person who has taken our effort seriously is Mr Carlos Ghosn (CEO of both Renault and Nissan worldwide) who has recognised that it seems to be happening and that there is virtue in looking at developing a low-cost car in India. But everybody, including Mr Suzuki, said that it is not possible; and that makes it exciting because then it’s even more challenging.
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You were telling us about Telco, would you tell us how the decision to go into passenger cars came about?
Okay. You know Mr Moolgaonkar (Sumant Moolgaonkar was a legendary former chairman of Telco) and J.R.D. wanted to go into passenger cars much earlier than my involvement in Telco. I think they put up two or three proposals to the government which were all rejected, because of vested interests from the existing car players. And, as you may recall, Mr Moolgaonkar was actually the founder chairman of Maruti Udyog. He resigned, I think wrongly, because Maruti looked at passenger cars instead of commercial vehicles. He thought that there was a need for commercial vehicles in the country, even though it would mean that it was competition for Telco; but because they looked at passenger cars, he thought it was the wrong thing to do and resigned. I felt that since we already had 60% share of the commercial vehicle business, how much farther can we go in that segment? We needed to have another segment. I always felt that the car segment was going to grow; I felt that the buying public was going to move to cars and I was not wrong. From selling 50,000 cars a year for so many years, who would have thought that we would produce and sell one million cars in India? So, having been in the television business and seeing that grow, I was quite convinced that the car business was going to be a big business, provided we were at the lower end. So we set ourselves the task of designing and manufacturing the car, despite the fact that many people said it couldn’t be done. And that’s how we got into the car business.
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Is there a pitfall to your international expansion?
here is always a pitfall to anything you do. I was going to say, if you take risks, there will be pitfalls; but even if you don’t take risks, there can still be pitfalls. Another thing that I advocated very early when I took over, was that we should look at acquisitions and mergers as an inorganic means of growth, not organic growth alone. I think globalisation just made the availability of target companies that much bigger than they were in India. That would be the only difference.
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The Tatas are now at the forefront of international expansion, mainly through aggressive acquisitions. Is this something that happened because you think opportunities in India are not significant or had you always planned on looking for growth outside? What was the origin of this move?
It is part of my plan. You know, I have this annual meeting of communicating with the group and this has been the message over the past three years. I am delighted that the group has reacted to that. Where it started was … I forget the years -- I think it was in 1999 when Telco had its big loss. If you look at my chairman’s statement for two to three years, I had kept saying that the kind of growth we have been seeing cannot continue; we will probably see some downturn, but it did not happen. And then it suddenly happened. When it did, it was quite bad. The market shrank by about 40%. We had 60% share of the market; so what do you do? You can’t close down the plant, retrench people, or do any of those things that your counterparts would do abroad. So we just sat there and bled. We didn’t lose market share … we still had a 65% market share of a shrunk market. But we had capacity that was underutilised. We had nowhere to turn. That led me to believe that we must not focus on just one economy; we must be able to spread ourselves to multiple economies where this may be done, but that may be difficult. And that led me to say that we cannot be an India-centric group; we must, in fact, start to look very seriously, not just at exports, but at building capacities in serious businesses in other countries. So that was the genesis.
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Some of the new businesses that the Tatas entered into - was the objective to move away from commodity businesses to new businesses with high margins? In that case, a lot of the money is again coming from commodity-type businesses such as Tisco…
I never wanted to move the group away; I was just giving emphasis to inching into new areas. My hypothesis in the early 1980s was that Jamshetji Tata entered new businesses at the turn of the century -- businesses that Indian companies did not want to enter. They were indeed heavy industries -- steel, power, textiles, etc., but they broke new ground. What I was saying was that, in the 1980s, there were new technologies on the horizon such as biotechnology, electronics, computing, artificial intelligence and communications. So why don’t we, at this time, have a new wave for Tatas to get into these businesses? Never did I say - other than getting out of soaps and textiles and in those areas - never did I say that we should get out of steel or anything of that nature. In fact, what I was advocating at that time, which was not done in the Russi Mody era but was done later, was that we should get into flat products in steel and work up the value chain to high-end steel rather than the conventional construction steel, etc., which Tata Steel was doing those days. So it’s not true that I wanted to move the group away from our traditional businesses.
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Will you tell us about taking over at Tata Sons?
All I remember is… this was J.R.D.’s room … he had developed a minor heart ailment at Jamshedpur and was hospitalised. He was in the hospital when I came back from an overseas trip. I used to call on him everyday. Then he came out of the hospital. On a Monday, which was the day I used to meet him here, he told me that he planned to step down in my favour. I think it was driven by his heart problem or a feeling that he was not as well as he would have liked to be. People have asked me whether that was a surprise. Yes, it was a surprise, because at various times there were different people who were his choice of successor, which was okay by me. In fact, all along, I had assumed that one or the other of them would be his successor. I had only said to him, ‘don’t step down in favour of different people; step down in favour of only one person so that that person would have the strength’. So when I was chosen, I was a little surprised. When that took place, I set myself the task of restructuring the group. Much of it was the same plan as the 1982 plan, dressed somewhat differently by McKinsey. They did a wonderful job of representing the same plan, with one big difference; it now looked at portfolios rather than businesses. After that, we have kind of come back to businesses. My plan looked at businesses and they were looking at portfolios and companies as investments. This plan was accepted and we moved forward to restructure the group. “Restructuring” is, in fact, a bad term to describe the process; that’s one thing that we did not do too well. We did a lot things; but trying to reduce the diversity of the group to a fewer number of companies, fewer number of businesses, which is what we set out to do, is something we did not achieve. One of the reasons why we did not achieve that had to do with me. One of the first things we did when I took over was to decide what to do with Tomco (The Tata Oil Mills Company Ltd), which was losing money and had lost market share. Its management said, if I remember the figures, that we had to invest Rs80 crore for the next five years and we would not see any profits. So I told J.R.D. ‘why should we do this’? I told him, we should change the management or we should sell the company. I said, in my plan, there is no Tata Oil Mills, no Lakme and no textiles. So I said, ‘why don’t we look for a buyer for Tomco?’ That buyer, of course, was Hindustan Lever (now Hindustan Unilever), the arch enemy of Tomco and its greatest competitor for many years. The power centre within Tomco saw it as a grand betrayal of the Tata ethos. Here I had just come in and was selling the company to our greatest competitor and that too after having carved out a market in India as being the only Indian company to stand up to Levers! My father was the managing director of Tomco for many years and did much of that building up. But there weren’t many people who thought that it was a great idea. On the other hand, we perhaps did the most dignified thing; we ensured that shareholders had a good share in place of Tomco, we got Levers to agree to a three-year, no-touch situation for all employees, suppliers and dealers with no closure of operations. So, rather than go terminally ill, we thought this was a very dignified solution where everyone’s interests were safeguarded. If we had done it differently, we could perhaps have got more for our shares than we did, but I thought that it was a very good deal. What I didn’t take into account was the flak I’d get from the media and everyone else. As I look back, that probably was one of the major reasons why the subsequent restructuring really slowed down and I became very sensitive to “Can I do it in this company?” So we went through internal restructuring -- clustering companies with the same business under one major company which were all internal arrangements. I did not even look outside. We undertook an internal monitoring structure. What we did do successfully was to set some goals for companies to be competitive. We set some criteria for the companies. If not, we would restructure them or divest from them, etc. We forced the companies to devise a strategy for themselves that not only defined their domestic competitiveness but also eventually their global competitiveness. This, I think, was a big turning point, because most of our companies hadn’t begun to think of themselves in a truly competitive world -- leave alone a global world, not even an Indian world. So Telco would be quite happy to let Ashok Leyland increase market share so long as they were doing okay. Nelco, which at one time had 85% share of the radio market, allowed themselves to come down to 2% by thinking transistors were toys, and stayed in valves; while Bush and others went into transistors. We focused on ourselves and forgot about the world around. I think perhaps, of all the contribution, that exercise was most valuable -- of forcing companies to have a strategic plan for themselves about where they were going, defend the path which they had decided and meet the criteria that we had set. Intangibly, this was probably the most important thing that happened. There was a lot of resistance to it in terms of ‘what is your locus standi to dictate it to us?’ and ‘you may have a 26% stake, but how can you tell me to do this and not that?’ It became an issue of persuasion and some of these issues are quite significant. For example, one might be going into passenger cars from trucks. I was there so that wasn’t a question of convincing anybody, although that’s another story. But let’s say Tata Tea going out from the plantation business into branded products. It was a significant difference, because the mindset at Tata Tea was to grow in the plantation business. Suddenly it was freed of that and could buy its tea from anywhere, like any other tea company and it could focus on blending and branding products. Moving Tata Tea from a traditional tea company to a beverage company or a health-based wellness company -- all those have come out of a new mindset of not doing businesses the way you did them earlier or being reactive to your competition, but forging a new path for yourself. I think that was the most significant achievement of the restructuring.
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Can we go back to the Air India phase? This was an airline that belonged to the Tatas (until it was nationalised by the government in 1951). The experiment to ask private sector industrialists to head it failed at that time, but do you think it could have worked under different circumstances?
At that time, it was in effect changing the board to a private sector board. Apart from me, there were several private sector people on the board. So both Air India and Indian Airlines had private sector chairmen and a group of private sector people. There were two problems with that model. One was that the Civil Aviation Ministry did not wish to let go of its control. Initially, I had considerable misunderstanding with Mr Jagdish Tytler who was the civil aviation minister then. But later, I had a very good understanding with him and had no problem at all. I found that if you could go and explain something to him, he understood and would not stand in your way. But in the early days, the ministry representative on the board would object to everything I did. It was a no-go kind of situation. I found a way to work around this situation, which was to go into the issue before the meeting and discuss it; that worked reasonably well. The other thing that did not work is that Air India had become politicised and various people had developed vested interests. The senior employees and senior managers had links with ministers or MPs. I remember the time we wanted to start non-stop flights to London. Air India used to stop at Dubai purely because of vested interests. Dubai was only two hours away from Mumbai, but the flight crew would get two days off in Dubai and an allowance. On the next leg to London, you got two days off; New York three days off. Every other airline was flying direct to London. When we tried to change it, it brought all kind of forces into the forum and we were told how we were endangering the pilots’ health and being inhuman and so on. It was that kind of thing… every time we wanted to do something, there was a vested interest or a constituency that wanted us to leave it alone. Often, the ministry was a part of it and backed some of these people. If the ministry had left the company alone, to be run by its representatives who would wear the hat of directors of that enterprise and keep its interest in mind, then I think it would work. It works in France and some other places and it would work here; the only difference would be that, instead of reporting to a bunch of shareholders, you would report to the ministry as the owner. You would be responsible for the results and would be given the freedom to deliver those results.
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Then there was the face-off with the V.P. Singh government when J.R.D. Tata wrote a strong letter to V.P. Singh about allegations of foreign exchange violations over Tata Zug.
Yes, there was that also. Bhure Lal (former director of enforcement, foreign exchange) was heading an investigation. I don’t believe we did anything wrong and also everything was disclosed -- it was an issue of whether the child of a parent or the grand child of the parent company also needed to have the Reserve Bank’s approval/permission to register or not. The issue never really came to be proven because they couldn’t find anything that we hadn’t disclosed. I think that issue revolved more around Indian Hotels rather than the Tatas because Indian Hotels had a lot of foreign operations at that time. Anyway, after that things become hazy in my mind until 1991.
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The Bombay House issues of succession started appearing in the media
There was the shoot-out at Tata Steel, there was the Telco strike with Rajan Nair… we had some troubled years
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What sort of things, for example?
The things I just talked about. For instance, if somebody said: why can’t you have broad banding of licensing? Why should you be allowed to produce only trucks of over seven tonnes? If you have a licence for typewriters and technology becomes available for electric typewriters and electronic typewriters, why did you have to go and get a new licence each time? Why couldn’t you have a licence for typewriters and include whatever typewriter technology was available? You were heard. It is these kinds of changes that started then and were tremendously invigorating. I remember that Nelco had a licence to manufacture 2,000 calculators; and if you produced 2,010 calculators, you could be prosecuted. These were the kinds of issues that confounded one. You cannot set up operations for 2,000 units. We were hit by calculators smuggled from Taiwan where they could make 10,000 pieces a month. Those were the changes that were extremely exciting, but it sort of petered out after the first 18 months. I was fortunate enough to have had an opportunity to exchange views with Rajiv and be a part of the small group of people he called from time to time to seek opinions on some of these areas. Around that time, he made me the chairman of Air India. Like so many things that happened in the government, I was never asked (laughs heartily). Rahul (Rahul Bajaj) was made chairman of Indian Airlines. At least I was in India, but Rahul was overseas. We weren’t even told that we were going to be made chairmen; it was simply announced that we had been made the chairmen of Air India and Indian Airlines, respectively. For three years, I was in Air India. They were fairly unhappy years because during that time there was a lot of politicising of Air India which we won’t go into. The Rajan Jetley era and so on were sort of troublesome times and there were divergent views. I wanted to resign, but Rajiv refused to let that happen. So the day he lost power, I quit. I think I gained the ire of V.P. Singh who came into power and who may have thought that it was a reflection on his leadership, but it was not; it was only an issue of getting away from the political swings of Air India. Then things get a bit hazy in my mind, during that time…
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That is around the time you wrote the famous Ratan Tata plan.
Yeah. Around 1982, my mother was diagnosed as having cancer and I had just been made the chairman of Tata Industries, which was more of a titular thing, because there was nothing in Tata Industries; it was a shell company from the erstwhile managing agency days. So I thought, well, why not sit down and make a strategic plan? I had taken three months leave to be with my mother and I actually sat in the hospital and wrote that plan. After she died, I came back and presented that plan. Everybody said ‘it is very nice but it is not going to happen’. That’s because the plan talked about going into certain high-tech areas which were till then closed to the private sector. The management turned down that plan. I said, ‘well, I am the chairman of Tata Industries, so why don’t we go into these high-tech areas for Tata Industries?’ And we did. We entered into joint ventures with IBM, Honeywell, etc. Then, in 1984, Rajiv (late-former PM Rajiv Gandhi) came into power. It had no bearing on my plan, but it was as though he had the same view. So certain areas began to be opened up for the private sector. Telecom opened up - you were able to produce PABXs and telecom instruments. So we got into those areas. Areas that were in my plan such as VSAT (Very Small Aperture Terminal) communications didn’t get passed at that time, but the groundwork for that got done. Some parts of the telecom sector were opened up instead of saying that ITI (Indian Telephone Industries) would be the only manufacturer. The government also said that the main exchanges would come from different sources. So it became very exciting. Everybody looks at the 1990s as the period when reforms started, but actually they started during Mrs Gandhi’s (Indira Gandhi) time and Rajiv took it further. I had established, not a close relationship but a very exciting relationship with Rajiv Gandhi in terms of trying to do things in the country. We were exchanging ideas and he was actually executing many of them. Those were the days when Arun Singh and Arun Nehru were his advisors. I think, if I look back, those were probably the most exciting days of my career in India – the early days of Rajiv’s prime ministership. I was very fortunate to be a part of that period.
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Even though later on it became a television manufacturer?
By the time we were given a licence to manufacture television sets, so was everybody else. At that time ECIL (Electronics Corporation of India Limited) was the only major company allowed to manufacture TV sets; otherwise, only small-scale units were permitted. So our big growth was in industrial electronics. I was in that until 1984.
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Which year was this?
I was involved in Nelco from 1971 to 1984. I can’t remember the figures… but you would see that during that period, Nelco’s revenues went up, it wiped out the losses, the market share of products went up, and we started manufacturing televisions sets. Importantly, we also went into industrial electronics. Wipro and Nelco were the only two manufacturers of minicomputers. We went into drives, process control equipment and inverters which later got sold to Liebert. But, for some reason, everybody thought Nelco was a failure; in a way, it was a failure, only because it did not grow to become the number one electronics manufacturer in the country, because we didn’t infuse cash. Part of that was because, with the exception of J.R.D. Tata, everybody thought that radios were not the business that the Tatas should be in
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What did you want to do at that point of time?
I could be responsible for. In some ways, I did that for two years at Tata Steel. I again spent some time on the shop floor, and I went through various departments, but on a much more organised basis. I didn’t have that same sense of not having anything to do. It was quite structured and I was attached to the superintendent of each department and I used to be given many minuscule, unimportant assignments; but assignments nevertheless. I then ended up in the engineering office where I really got my teeth into some reasonable projects, one of which is Tata Steel’s growth shop today. There were several major projects at Tata Steel, including the expansion plan. I ended up at last, as technical assistant to the managing director who was at that time called the director-in-charge of Tata Steel – Mr Nanavati. Then I was called back to Mumbai and a little while after that I was shipped out to Australia to set up a joint venture for Tatas. It was with a cash rich, pastoral company with little industrial experience. The Tatas were supposed to bring in experience to forge an industrial enterprise. We formed the joint venture and we did some business; but obviously their thrust was on farm-related work and they were not interested in the projects we put up. I came back. The joint venture stayed on for about two years and was then wound up, as I had thought it would be. I came back to India and did a small stint with TCS at that time. This was in 1971. It was the early days of software exports. Actually it wasn’t software; it was something totally different. We had documents coming in from the US and they would be converted into punch cards and sent out. That was the extent of the software – document transfer from paper to punch card. TCS, at that time, had hundreds of punch-card operators who were converting documents into invoices and other things that could be processed. The good thing was that everything was being done within 24 hours and sent back to the US. I was involved in that when it had just started. Mr S. Ramadorai had not still joined. After TCS, I was made the director-in-charge of Nelco (The National Radio & Electronics Company) which, at that time, was losing a large amount of money. For some reason, Nelco, in perception terms, is something that is held against me. Actually, it was a great success story because during my time with Nelco, we moved the market share of radios from 2% to 20%. We wiped out the losses and paid dividends. The only thing that we didn’t do (which is because we did not get any infusion of cash from the Tatas) is that we didn’t really grow. The consumer electronics business needed a lot of cash to grow.
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Which year was this?
December 1962 to early 1963. Those six months, at that time, were horrible. But, looking back, I think they were very useful six months. I spent time in different departments on the shop floor of Telco. It was horrible at that time because you had nothing to do and you can imagine being in a particular shop for a week with no assignment and no place to sit. You can’t stand still; and every time you went near a worker, he thought you were doing a time & motion study. He didn’t know whether you were looking over his shoulders, when all you were trying to do is to learn, since you had nothing else to do. So it was a horrible six months. But looking back on it, I developed a wide knowledge base, which surprises some people. They wonder how I know about heat treatment or milling or something… it is because I spent six months in the company. The Pune plant did not exist at that time or probably was in the process of being built. At the end of those six months, I vowed that I would never work in Telco and I was moved to Tata Steel.
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You were all sure of your destiny then as industrialists?
es. By the way, another correction - I think Yusuf Hamied was also in Cathedral School. He didn’t come from Campion but he was in Cathedral. It is a little difficult to remember who was where. There was Dinshaw Pundole who was a classmate. He was a major squash player and ended up being the owner of Duke’s drinks which was later sold to Coke. In those days, we were just a bunch of fun-loving kids who were friends. We didn’t have any of the animosity to contend with (laughs). Then I went to the US. I had to go to a Prep school for a year because the College Board exams could not be taken in India at that time. Now you can take them here. I went to Cornell University. My father wanted me to become an engineer; so I spent two years at Cornell as an engineering student, didn’t like it and switched to architecture – which is what I wanted to do – and graduated as an architect. I went on to complete structural engineering, which was more to my liking and interest, rather than mechanical engineering, and graduated. I had a very happy time at Cornell; the five-year course for the architecture degree, along with the two-year structural engineering programme, made it seven years. Mainly because architecture design is a five-year degree course and you cannot get a credit for anything, you have to go through the full five years. So I had a happy time at Cornell; the only thing I did not like was the cold weather. It was something that I never got used to and, probably, never will. However warm you dress, you were never warm enough. So after I graduated, I wanted to be in some place where it was warmer and ended up in Los Angeles in an architect’s office. I would not have come back to India, since I was very happy there. But my grandmother fell ill and she asked for me; so I came back. And one thing led to another and I stayed here indefinitely because she continued to be ill. One day, J.R.D. Tata called me and said that I should be with the group even if it was temporary. So I was sent to Jamshedpur and spent six months with Telco (now Tata Motors).
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You had some illustrious schoolmates - what kind of influence, if any, did they have on you?
Nothing. In those days what did school children do? We were all part of the same class. I can’t even remember, for example, whether Ashok Birla was in Campion, I know he was in Cathedral and then left to go somewhere else. Yes, I think he was in my class for one year and then went to another school, I don’t know where. Rahul Bajaj was in my class in Cathedral …
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Can you tell us a little about your childhood and where you were born?
I was born in Mumbai, I can’t remember when (laughs). I grew up in Tata House, which is now the head office of Deutsche Bank; it was the house that my grandfather built but never lived to see it completed. My grandmother lived there and my father lived with her; so I grew up in that house. I went to school in Mumbai; most of my schooling was in Campion School, but the last three years were at Cathedral School because Campion ran out of classes. I joined Campion when it had started and each year it added a class; finally they didn’t have the money to continue for a while and a whole host of us had to go somewhere else. So people like, let’s say Bipin Mehta, who was in Campion went to St. Mary’s; his brother Zubin, who was in my class, but a year older, or for that matter Yusuf Hamied of Cipla, also went to St. Mary’s School. Some of us, like Ashok Birla and others, came to Cathedral School. So the last three years, I was in Cathedral School and did my Senior Cambridge from there and went overseas.
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What difference has the slowdown in the economy made to the projections of the Indica project?
The slowdown has not affected our strategy very much. It is just that the market will be smaller. The earlier optimistic projections were for an end-millennium demand of between 700,000-1 million cars per annum, with 60% in the small-car segment. The proportion remains the same but the likely demand in a year's time will be smaller than anticipated earlier. What is certain is that the low-priced segment will be the healthiest segment even though a lot of expected conversions from two-wheelers to cars may not take place
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How do you read the state of the Indian economy?
For the past 18 months or so, there has been a loss of sentiment, a dilution in the clarity of direction. Investments have been put on hold. This has come on the back of a period of aggressive expansion and diversification by industry. A gap has emerged between the economic fundamentals, which are far healthier than in our Asian neighbors, and the sentiment. It is this sentiment which has to change, which can only happen when we get back our sense of being on the move. This will not happen through sops. My greatest concern is that [the government is] still saying there is nothing wrong. That's dangerous because then there's nothing they feel they need to do.
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Then there's Concorde, your joint venture with Jardines. What do they bring to the table?
Firstly, Jardine Matheson is a strategic partner with Tata Industries (a Tata group company that promoted new ventures). Concorde is a joint venture with Jardine for setting up a car distributorship set up for Telco products. Jardine is the largest dealer of Mercedes in the world. They also sell cars for two or three Japanese makers. Concorde is a JV which they are running, not us. We have taken a stake. Their experience in this field is vast. They will bring in a new paradigm in car distributorship and customer support. We have all along been a truck manufacturer and so that's what our dealers have mostly sold. Indian car buyers have not really been exposed to customer care in a competitive environment. Honda has done a very good job, having given dealerships to new guys, mostly non-resident Indians. They have set distinctive and impressive standards. Concorde will set up model dealers. Our whole standards of customer care would upgrade if we have six or seven dealers with Jardine's standards
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Do you always prefer to go it alone?
Not always. We do have a joint venture with Mercedes. But we don't really have a choice in the case of those joint ventures which would tantamount to our giving up the company. Let's say that Toyota came with a proposal for a JV and wanted us to produce the cars they wanted. If that's all we do, it would virtually amount to giving up management control of company
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Most Indian car makers opted for joint ventures with international players. Why didn't Telco do the same?
We thought about it. Chrysler asked to see us after they broke up with Mahindra & Mahindra. They said we should get to know each other. We showed them our cars. They were then interested in tying up with somebody to manufacture the Neon. We looked at the option but didn't think it would do. We thought the Cirrus, in fact, would do but that there couldn't be much of a differential in the pricing. We talked, but after a while things somehow went to sleep. They wanted only a joint venture but we didn't want that. Anyway the relationship has continued. We've had technical exchanges, they have helped us in building testing facilities, in building disciplines
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What about Telco's truck-making operations?
Telco is totally committed to commercial vehicles where it is bound to remain a major player. What may well happen in the future is we may split the company into two business units.
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O.K., say the car is a success. What comes next?
We will need to develop variants of the same vehicle: maybe an estate version, or a three-box version. We will also look at the export markets in some countries. Not necessarily the developed countries but African countries, Southeast Asian economies, Australia. Our cars are more suited to Australia than those made by Japanese or Korean companies. In South Africa, also, we have hopes: in fact the car is undergoing road testing there right now.
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But the project is being seen by outside analysts as a gamble
Is the Indica more of a gamble than, say, Mercedes gambling on a low-priced small car? For Mercedes, this decision to go in for a small car was even more of a gamble because it is a gamble with their image of being the maker of the world's best luxury cars. Telco has no other image except of being a maker of commercial vehicles.
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If the Indica project were to bomb how would that impact on the Tata group?
Let's first define bombing. Let's say instead of producing 150,000-200,000 cars, as we hope, we end up producing only 50,000 or so. If the average realization per car is even as little as $600-$800 per car, we make money. For me, bombing would mean having to sell the car at a still lower price.At the same time, what we are getting for our investment is a plant that will produce cars, not just this car. Most of the jigs and fixtures that are there are not specific to the small car. I see the project not so much as a gamble as an investment in building the infrastructure of Telco.
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Do you see the Indica as your first big statement as chairman of the Tata group?
Since I got involved in Telco we first developed the first modular truck, the 407, then the 709 and now the 2213. These trucks broke away from the old face of Telco trucks. I was also just as much involved with the Safari, but nobody talks about the Safari. My involvement has been there with all Telco's projects--somehow the car has got hyped up.
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And your emotional investment?
Only to the extent of being a chief executive and directing it. The plans to enter the car sector were there even before I joined Telco.
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The small car is obviously a major gamble for you.
Let me put this in perspective., When I joined Telco in 1986, the then chairman Sumant Moolgaokar wanted to develop a passenger car. So we first went into a pick-up and then the Tata Estate model as in-house efforts on one platform. These were credible and creditable efforts, if a little crude. Then we initiated the Sierra, which was again a cut-and-paste job on the same platform. These were all bridge vehicles: rough and tough, not so well finished. We were making the transition to a manufacturer with a full range of vehicles, but we were making it inadequately. Our mindset was still the same as when we made vehicles for [truck] operators and not for car owners. But in this process we learnt a lot, often at the cost of the customer.All these vehicles were on manual lines. Our first automated line for passenger vehicles was for the Safari. That was our first major investment in this area. But when we decided on what finally became the Indica, we needed volumes. This meant a still larger investment: not just for this car but so that we also created facilities for other cars.For the Indica, we have tried to create a separate organization that will manufacture and market it: somewhat like what General Motors did for their Saturn project. We have set up a plant adjacent to our existing plant. But we have hedged the car gamble to the best extent that we can. In the worst possible case, even if the car initiative were to bomb, an investment of some $400 million will not gamble away the company. Our going in to the car business may be a gamble, yes, but not as much of a gamble as in getting into a new business or adopting a new technology.
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Do you think the Koreans could trigger a price war?
They will try to be below us, to beat us but I doubt they will go below us because they will then upset a lot of buyers who have already booked their cars and paid up in full
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You will have a lot of competition. Hyundai and Daewoo already have small cars in the market. Fiat is expected to bring the Palio to India next year and Opel may bring the Corsa.
Yes, but these cars are going to be positioned around the Maruti Zen, not around the Maruti 800. I am more concerned about the Koreans, whose pricing is more aggressive
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What factors will be critical for the success of your new small car, the Indica?
The pricing will be the key. We have worked to the objective of having it around the Maruti-Suzuki 800. We shouldn't end up being substantially higher.
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What was JRD Tata's reaction when you returned back to India and started working for IBM?
He called me one day and he said you can’t be here in India and working for IBM. I was in the IBM office and I remember he asked me for a resume, which I didn’t have. The office had electric typewriters so I sat one evening and typed out a resume on their typewriter and gave it to him.
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Did your grandmother's deteriorating health force you to return to a life you thought you left behind?
I was in Los Angeles and very happily so. And that was where I was when I left before I should have left.
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When you became chairman of TATA group, how hard was it for you to create a culture of positive change?
You said before that "I don't believe in taking right decision, I take decision then make them right" How did you come tobuild that philosophy?
How was your initial experience working in Tata Steel?
It was only after I moved to Tata Steel that I got specific assignments and my job got interesting. I started from the floor and really understood the plight of those working around me... By the time I finished 6 years in Jamshedpur, architecture had become my hobby -- I enjoyed designing homes for myself and my mother, but apart from that, my life was dedicated to the business
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How was the experience of your first internship in Tata Motors?
It was a total waste of time -- I was shuffled around from department to department, but nobody actually told me what to do! I guess, I was looked at as a family member, so no one said anything to me -- but I spent 6 months just trying to make myself look useful
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What is the final message or advise you want to give to the entrepreneurs who are still out there fighting this economy, hardships But innovating and still want to build new companies?
In some Sense Technology entrepreneurs do you think can be GDP additive in three to five year time frame?
Share Your thought in a situation government plays a important role where countries, corporation and entrepreneurs are collaborating how can government can support this?
Do you think India as a country with entrepreneurship and the technology around the entrepreneurs presents to the investors globally & in India in essence a bigger opportunity in next few years?
What message you want to give to the entrepreneurs who are dreaming of building companies & what should investors do at this point of time?
Innovation may be possible in the supply chain, in cutting out inefficiencies, in distribution chain where possibly technology can help,What do you think ?
If i take a step back and the industry as you called it a smokestack industry how shall smokestack industry deal with this, is it very different or is it same, is it innovation or is it waiting for this to recover ?
Suppose people are going out to buy groceries going to gym or doing B2B business Share your thoughts on life elements come in, and digital elements that come in the whole issue of payments whether they are willing to pay more, willing to pay same or will to pay less ?
Do you think consumer & entrepreneurs will come with live consulting at home using phenomenal app & what is your review on consumer behavior in this scenario which we are in an economy which is forcing changes in consumer behavior ?
What is the mindset of the entrepreneurs which you think you would advise them be in today because there is lot of hardships and cash considerations to go into the market today?
Do you Think Technology in the current scenario will actually play a major part in looking at the opportunity & solving the challenges now which India & entrepreneurs or business is facing?
What is your view on opportunity for the entrepreneurs & specially the technology field as we move forward on daily basis trying to combat what is around us during this pandemic time?
What's the final message for entrepreneurs at this moment? What would you advise entrepreneurs who are still out there, fighting this economy, fighting the hardships, but innovating, and they would still want to build new companies?
I think the motivator is within the entrepreneur. Just in the few minutes we've been talking to each other, we are drivers probably looking at the collapse of the world around us. And in a few minutes, we've been talking about the future that it may force on us. Not as a disaster, not as a destruction, but as an opportunity. And it's not you or I that makes that happen. It's the drive in the entrepreneurs’ spirit that enables that to take place. And so, I would say, the message that one would give would really be to look at this as a moment of opportunity and use that as in the means of seeing whether we can look at new areas in a new way. Time frames that were never before considered possible and can just have new ways to look at things that become the way of life. What would we be today if we didn't have the web? If we look back and say how did we manage with that or without it? It would be a good soul searching question to us. So, I think my message to an entrepreneur would be to use this time as an opportunity to innovate more. Not to discourage you, but look at this as a real opportunity to look at having a long-term vision, blue sky, and daydream through the whole technology routine. There are going to be areas that you can initiate not the same idea that you have in the past but fresh ideas that will sail you through this period.
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Any thoughts how governments can play a major role as countries are collaborating more, operations are collaborating, entrepreneurs are collaborating. Any thoughts on how the government can actually support this.
Yes, for example, look at the US. Then you look at what organisations like DARPA have done as the government supporting new technologies in biotechnology or integrated circuits or in the total variety of things the government has supported - three, four, five billion dollars, which the private sector would not have been able to do. They have ushered in new industries because of their ability to come up with the funds earmarked for a particular development. And if we, at a time like this, had a way of marshalling some funds. In certain areas, we could have another wave of innovativeness arising out of a problem just like we've had in World War II or the Cold War. We could look at the plus side of that which caused innovation to take place with or perhaps not have happened or taken much longer to do than they have done.
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Do you think India as a country with entrepreneurship and the technology around entrepreneurs you see right now presents to investors globally and in India, in essence, possibly a bigger opportunity next year?
I think it's not limited to India. What I'm about to say, I'd say with some degree of concern. You compare our situation to a World War, which was destructive, cities got bombed, manufacturing industries were disabled, and yet it was in those times that many new technologies were developed. Many scientific, some of them dramatically horrible in terms of what were done to human beings, but science was taken to a new height. But there are entrepreneurs who were supported by their governments to open new doors if you might. That could be the case again. It's not a world war but it's like a world war. There's a dramatic need for vaccines, there's a dramatic need for solutions. And strange things happen, and I think we really have to look back and say with so and so innovativeness really has its roots quite often at a time of crisis like the crisis we have on our hands today. So, there’s an initial throw your hands up you have this crisis and then there is our own innovativeness that comes to play. That's a time we need to support to invest. To not dismiss something as being too far out, but being something we should look at.
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Any specific message you would like to give entrepreneurs out there? They're still dreaming of building companies, but before that, they message investors. What do you think investors should be doing at this point of time?
I think investors should be keeping their powder dry, and that might seem to be very prudent. It may also be very self-defeating. Now might be the time when investors should be looking at opportunities like they did in the 70s and 80s, where it was driven by the creation of the integrated circuit or it was created by moving to a digital world or looking at nanotechnology as the means or looking at biology or sub nano driven projects, whatever it was the 70s and 80s were those kinds of heavy times when those things happen. So today, one could have a bunch of investors who would say I'll back this company because it's being driven to do something differently rather than say that right now is not the time to look at something new. I would like to say that to me, the virus will disappear in a period of time, but the innovativeness that we bring during these difficult times would be something we could look back on and say there was a good part of what we faced and the hardship that we went through, which had its up moments, which we availed of.
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How do you think entrepreneurs should balance the business part with the human side of things?
I'd like to say that is something I can’t answer generally because I think you have to be looking at individual businesses and the entrepreneurs that are driving those businesses. In many cases, the innovation of the change is driven by the innovativeness of the entrepreneur rather than the changes sitting to be undertaken. The opportunity is there, somebody has to see the opportunity and package it in a manner that makes sense. Debug it and push it forward. It's how far can you stretch the envelope. And I think what you're looking at and what you're experiencing is that there's no limit to that envelope, which a few years ago, we had kept saying we have stretched it to its limits. That doesn't hold true today and that's the opportunity.
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What is the mindset of the entrepreneur which you think you know you would advise to be in today, because there's obviously a lot of hardship and then cash concentrations. So, with what mindset does the entrepreneur go into the market today?
I think there could be multiple views on this. One could do it because the entrepreneur is enterprising, unwilling to sit and moan about the changing situation, and the need to undo what he has done. The other type is when it’s not looked at as a problem, but it’s looked at, as you said, as an opportunity. The excitement of finding a new way to do things. I know when I was a younger person in the organisation, one of the most exciting times that I have had is where you can sit down with a bunch of your colleagues and brainstorm. And when you brainstormed, it enabled you to look for different ways to do things to beat your competition, or to reduce your costs, or to change the way in which you operate. And if we are seeing that happen, it could bring about a new way, and it stops us from being traditional. It forces us to be innovative. And that would be the biggest opportunity we have. The next is, can we be innovative first? Can we do it better than our peers in other parts of the world? But that would come later.
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Do you think technology in the current scenario will actually play a major part in looking at these opportunities and solving the challenges, which now India and entrepreneurs are facing?
I think the answer is yes. We can find answers for how to operate in a new scenario. Our willingness to do that or our interest in finding those new solutions - those are the key. So, I guess one way to look at this is not to look at the changes that we are faced with, but to look at this as the new landscape or a new playing field, and applying our adaptive nature and innovativeness to finding solutions and hopefully looking back and saying this problem and this challenge gave us a new way to do things. I can say that looking at the situation as it stands, I'm sure there are going to be situations where we're going to say, why did we not do this earlier?
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Entrepreneurs are cutting costs and trying to survive, and in many cases, extending the runway. There’s a lot of hardship in terms of making sure companies keep afloat. But do you also see this as an opportunity for entrepreneurs, especially in the technology field, trying to combat what is around us. ?
I think that’s a very worthwhile statement to stay with for a while, because the people we're dealing with as young entrepreneurs are people who have found solutions or another way to deal with a problem when it occurs. It's that innovativeness that has enabled some of them to operate in the fields that they seem to be in. The means of finding a spot or a niche and a segment that they can operate in differently than the traditional way, and have young exciting things in that manner. So, it would be fair to say that we are going to see the same kind of innovativeness created in the same kind of situation like you have heard many times over. How you look at opportunities and how you package them are different, and this situation does give us an opportunity to innovate.
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In what ways do think you can create a sense of responsibly & integrity & evolve as a successful people ?
In what ways do think you can create a sense of responsibly & integrity & evolve as a successful people ?
What Does Ratan Tata feel looking at the young people or young companies in India the possibility they have or should keep?
Are Indian companies ready to implement the CSR mandate in a way that will make a difference?
I think many CEOs would say that they are doing it because it is required. But if we can get even a small number committed to making a difference, I think we will get projects that will be showcased of what one can do with such funds. CSR could become an avenue for innovative thinking of how you can improve the quality of life of the people of India, or it could be wasted.
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Are you worried that much of the CSR money will not be used well?
There could be a fair amount of abuse of these funds, and the government will have to do some regulation to make sure that the money is used effectively. It would not be a bad thing if the government designated a number of causes to which companies could give these funds. Even large public works projects could be funded this way. The government may have to define what the projects are and be ready to ensure oversight.
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Is it difficult for you to find NGOs ready to take on strategic partnerships?
Very often an NGO ignores or forgets the traditional outlooks of the community they are working in, and because of that, what they are trying to do, however well-intentioned, doesn’t work. Also, corruption and collusion can divert resources to personal use. For example, about five years ago we were funding 10 schools through an NGO in Bihar. On one of our site visits, we found that the principals and teachers were coming to school and signing in, then leaving the children unattended. The children played all day, and their parents didn’t even know. The students never got an education. But the principals and teachers got paid. To make matters worse, the government was paying for midday meals, but the kids never got fed. The money was divided between the principals and the teachers. So we stopped giving grants to those 10 schools. Who suffered? The kids suffered, and we were the nasty people who stopped the grant. But what could we do? A lot of that goes on. And now with the requirement that large companies in India devote 2 percent of profits to CSR [corporate social responsibility], a whole bunch of NGOs have lined up to receive these funds. What we will need to do is to see how much of this is well spent and how much just gets short-circuited.
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Do you encourage your grantees to partner with government agencies?
There is a tremendous need for NGOs and philanthropic organizations to consider partnering with government agencies. Unfortunately, there has been a view that the government shuns collaborating with NGOs or philanthropic groups because officials consider the so-called welfare of the people to be their business. But our own experience in working with state governments has been very positive. We have terrific cooperation, and without the infrastructure that government agencies have built, we could never have achieved the impact we have today.
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What advice would you offer to other philanthropists who seek to blend charity with strategic philanthropy?
My advice is to do thorough research before deciding where to get involved. A lot of money is less effectively used than it could be because an organization has not done enough research. Today, a large amount of philanthropy in India is deployed in traditional forms like building a temple or a hospital. India has to move into a more sophisticated form of philanthropy that is designed to make a difference rather than just building edifices.
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Do you consider program costs when evaluating grants?
Yes, at all times. The greatest challenge one has in working with NGOs is finding those that are well organized and not just a well-intentioned entity run by a bunch of society people. Those sorts of people often run something badly, have little or no financial discipline, and think they are doing a great thing when they are actually wasting resources. In recent years, we have asked for grants back when NGOs haven’t performed as they promised. This has added to our cost because it involves a fair amount of auditing and visiting and evaluating progress. It has also given us a great feel for which NGOs can be turned around by assisting them and those that can’t. In which case, they get their funds from somewhere else, not from us.
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So the trusts have shifted emphasis from charity to projects with sustainable impact?
I have been emphasizing that the trusts must be concerned about the sustainability of the communities where they work. Until recently, we would support an NGO for 8 or 10 years, and then want to move those funds to another community. We would assume that this community was now self-sustaining, but it wasn’t. So when we withdrew our funds, the NGO collapsed, the village programs collapsed, and we became the most hated organization in the village. So, sustainability is a new calling for the trusts.
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What changes have you made in the trusts’ operations, and what do you aspire for them to become?
A fair amount of our early philanthropy was in the form of charity to alleviate individual hardships—helping people with money for dialysis or for surgery, for example. And we worked with a lot of NGOs, supporting them with grants. We’ll continue to help alleviate individual hardships and support NGOs, but we also want to be more involved and to manage projects ourselves. We want to enhance our impact and ensure that interventions are sustainable. The question is: Can we fund a research project that aims to eliminate or control a certain disease and, therefore, has the potential to benefit a larger number of people, or should we stick with helping individuals suffering from that disease? We believe we can make a greater difference through large projects that serve mankind.
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Do you have a philosophy of philanthropy?
If I put it into one sentence, I think you really want to be doing things that make a difference. If you cannot make a difference, it’s just water trickling through a tap or leaking through a drainage system; it’s wasteful. Dr. [Jonas] Salk must have had a tremendous feeling of satisfaction when he developed the polio vaccine. Similarly, I think going after causes where you make a difference, rather than scratch the surface, is very much in keeping with the trend in new philanthropic endeavors.
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What were some of the experiences that have informed your approach to philanthropy?
Working on the shop floor as a young man, I saw close up the misery and hardship of the less fortunate and thought about how one makes a difference to improve lives. As I moved up through departments and divisions, I continued to see hardship and had more opportunities to do something about it. Now I’m trying to take the Tata Trusts to a different level of relevance in the 21st century to maximize the benefits the trusts seek to bring to disadvantaged communities.
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The fantastic Tata’s legacy is built on the core foundation of values. Were you exposed to the values of the Tata’s in your early life?
Is there a pitfall to your international expansion?
There is always a pitfall to anything you do. I was going to say, if you take risks, there will be pitfalls; but even if you don’t take risks, there can still be pitfalls. Another thing that I advocated very early when I took over, was that we should look at acquisitions and mergers as an inorganic means of growth, not organic growth alone. I think globalisation just made the availability of target companies that much bigger than they were in India. That would be the only difference.
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What do you want your legacy to be? How do you want to be remembered?
I think what I would like to do is to leave behind a sustainable entity of a set of companies that operate in an exemplary manner in terms of ethics, values and continue what our ancestors left behind. Not my legacy alone but a continuation of the legacy that extends over the last over a hundred years. I hope my successor will be as committed to that as I have tried to be. My only regret is that I am not 20 years younger because I think India is going through a very exciting period in its history.
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Is it hard to be an honest businessman in India?
I think there are many honest businessmen, I think there are many that bend. I’m happy that I have not bent, not that I am dishonest, that I have not bent.
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Where do you get the strength and the stamina to deal with all these different entities that you have to make sure do well? People are looking at you and watching you.
I think that’s the excitement of the job, that’s been part of the adrenaline that it gives you.
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Your companies, you have about 98 companies in your conglomerate, 395 thousand employees across the world, you’ve bought Tetley Tea, Corus Steel, Jaguar, Land Rover. How do you keep up with all this?
I would say that I am blessed with a very very good executive team that operates reasonably autonomously each of the companies. We have a review system, I am the non executive chairman of, nine or so, of the major companies. And on the nine companies it’s a little trying because you jump from one industry to another as the case may be but one has a reasonable knowledge of those nine activities and it’s been an exciting job.
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