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Corporate Dec 28, 2012

Ratan Tata: A hobbyist at heart

By Gita Piramal

Sceptics ruled Bombay House in 1991, the year Ratan Tata became head of the Tata Group. Accustomed to formidable characters such as JRD Tata, Russi Mody, Darbari Seth, Sumant Moolgaonkar, Nani Palkhivala and Sir Homi Mody, senior Tata executives looked askance at the bashful and inarticulate inheritor.

It took him almost a quarter century to win their respect. He had to earn his spurs over and over again. But then, the two traits Ratan Tata does not lack are resilience and courage.

Sceptics ruled Bombay House in 1991, the year Ratan Tata became head of the Tata Group. Reuters

During the journey, Tata redefined the role of the chairman in the 21st century. He was quick to recognise that the world was becoming design-led, innovative and geared for creative destruction.

So, he invented several business models, launched new product categories in distinctly different sectors, and introduced radical price points at both the luxury and mass market levels.

Like other design-led legends such as Sony's Akio Morita, Lego's Godtfred Kirk Christiansen, Ikea's Ingvar Kamprad, Apple's Steve Jobs and Pixar's Brad Bird, Tata enjoys getting his hands dirty on the shop floor, in the design studios, in the marketing department as well as the board room. The outcome: The Tata Group is beginning to represent India for great design in hi-tech areas.

Black sheep

As one of India 's oldest and most venerable groups, the Tata Group carries a lot of baggage, particularly human baggage. The group consists of a huge mass of people who prefer never to embrace change.

Today, like Janus, the Group seems to have two faces: A dense, rich and thick layer of old-timers steeped in the old Tata way of doing things; and a new, small (by Tata standards) and energetic group of design-friendly engineers and managers. Members of this 'club' can be found in virtually every company in the Tata Group. Mostly young (25-40 years old), the club has some greybeards (such as Tata Motors' Ravi Kant). Call them the 'black sheep' for the moment, a phrase used by Pixar's Brad Bird.

The USA 's Pixar is part of Disney, the unconventional part which keeps winning Oscars and keeps the cash registers ringing. Finding Nemo, Up, and Toy Story 3 are among the 50 highest-grossing films of all time. Pixar was a highly successful animation firm even before Bird was invited to join the team as director in 2000 but his brief was to make change happen, to prevent complacency.

To carry out the brief, Bird hunted out the black sheep in Pixar: the frustrated and the malcontented. "I want the ones who have another way of doing things that nobody's listening to," he told McKinsey in 2008, "all the guys who are probably headed out the door."

Unlikely as it may seem at first glance, there seems to be something of Brad Bird in Tata. He is a magnet for latent designers within the Tata Group. The designers don't always carry a visiting card saying they are designers. A blue collar worker in a foundry, a computer engineer in computer hardware manufacturing, a floor manager in a hotel-they emerged from the most unexpected of places.

Today, so many black sheep huddle together that collectively they have the muscle to force change inside the citadel. A small team of 20 managers swiftly ballooned to 560 design-friendly energetic hospitality providers at Ginger hotels. All 3,289 people working at Titan recognise the importance of design. The Nano design team grew from four to 500. That's the status at just three firms out of 390. Towering above them is India 's current biggest company: TCS (Tata Consultancy Services), a company that has completely reinvented itself under the benign gaze of its chairman.

Creative destruction

Successful strategy is typically not about pure innovation. Rather, it is most often about making the visible happen. Take the music business. Every insider knew about downloading. Every teenager knew about Napster. And every newspaper and magazine was talking about the future MP3 players.

As in most times of change, the major players don't want to act-in this case, the music companies and the music retailers. Enter Steve Jobs. He was perfectly positioned because he was a bit of an insider in the entertainment industry but didn't have any asset positions that would be threatened by a new design strategy. He didn't need to make a fantastic leap of imagination into the far future: He simply had to quickly and decisively act to cobble together a set of existing ideas.

Similarly, any and every car maker in the world could have made a Nano. They did not as they feared it would threaten their existing business. Tata proved that he is unafraid of creative destruction.

Adroit in cobbling together known but fresh ideas, Tata conceptualised and brought to market stylish, well-designed products possibly because he is a trained architect, a self-taught engineer, a leader by default and at heart, a hobbyist.

The architect side of him knows about creativity and the creative process. The engineer side of him knows about manufacturing capabilities and enjoys solving technical riddles. The hobbyist in him knows about operating in a small space with a limited budget yet, as head of the Tata Group, he can tap huge resources. And as a leader, he learnt the hard way about managing people. So, he simultaneously has knowledge of four things that aren't typically combined, especially in Indians and more particularly in Indian corporate leaders.

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