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Ratan Tata - My Role Model Global leadership, the Ratan Tata way

" It is a statement I feel quite awkward in acknowledging." That is Ratan Naval Tatas immediate reaction when he is told that he has been voted India Incs Best Brand Icon in the Outlook Business-CNBC Universe Pollthe result marks him out as the flag bearer of Indias global aspirations. The response is not at all uncharacteristic of Tata. He is an extremely private person, and yet one who has managed to transform the Tatas from a Rs 13,000-crore asynchronous group into a Rs 129,994-crore cohesive global organisation in 16 years at the helm. "All that I have been doing, in my own little way, is to make the group more competitive and bold," he says. Quite true to his nature, that also is an understatement. In the last few years, the group has wrapped up 35 cross-border acquisitions, including some mind-blowing large deals that are now much too famous to require a mention here. International revenues now account for over 50% of group revenues. (That figure was in single digits when he had taken charge.) And if there is one big reason why corporate decision makers judged him to be Indias Best Brand Icon, it has got to be his success in taking the group global. "Both Indian and global stakeholders are increasingly seeing us as a group that is making big plays, taking more risks than it was known to do in the past and managing large global takeovers with reasonable grace and finesse and, hopefully, success," Tata says.

The Mind Of A Leader There are many facets to Ratan Tatas global gameplanhis thought leadership in identifying the need to go global very early on; his wisdom in waiting to make the group more competitive

before going in for the international push; his skill as a leader in making this theme resonate all over the group; the aggression with which he has won some of these cross-border deals; and his unshakable resolve never to compromise on the ethics and values that the group has cherished for over 100 years now. The earliest evidence of Tatas thought leadership could be found in a document unofficially called the Tata Plan that he authored way back in 1983. Under the leadership of JRD Tata, the group got Ratan Tata (then Tata Industries Chairman) to draw up a blueprint for the future. In it Tata recommended that the group `seek substantial growth in international operations. He also suggested restructuring the group to address the global opportunity better. "Tata identified the theme of going global very early on, but his initial judgment was that the group was not yet ready to move on to this agenda," says Alan Rosling, Executive Director of Tata Sons. Rosling was hired personally by Tata in 2003 to lead the groups drive to internationalise. "To begin with, Tata focused on competitiveness. We have to earn the right to survive, he would say. Only when he judged that the group had moved to this position did he decide to stand up in 2003 to spell out the international agenda," Rosling adds.

A Man Of Ideas Managers who have worked with Tata closely say that he has identified many such themes. Internationalisation was one. The push to hire young mangers at significant, decision-making levels across the group is another. The entire focus on the bottom of the pyramidbe it the onelakh car, budget hotels or low-end watchesis his idea. So is the focus on research and development. "No doubt, he has been a big influence on the group in the last three-four years,"

says R Gopalakrishnan, Executive Director of Tata Sons. Rosling says, "he is a deep thinker, extremely strategic and long term. He is always two-three moves ahead." In driver's seat: Indica, INdia's first indigenous car, was launched in 1998 And once he has identified a theme, he often leads by communication. He employs a very consultative style in seeding these ideas or themes into group companies. He encourages people to open their eyes to look at an opportunity and gets them to think differently about issues. But he will never tell them what to do. Often, he communicates by asking questions. "Why cant you" or "have you thought about this"those are common phrases he employs. He will ask you questions that will lead to the theme. Rosling calls this the Tata way of "socialising ideas." Tata never imposes and never demands that people fall in line with his beliefs. Rather, he floats an idea, discusses and debates it and then allows managers to come up with what they would like to do about it. "He has had significant personal impact on the way the group has changed and internationalised, but he has done it through colleagues. That is what leadership is all about," says Rosling. Be Bold Admittedly, Tata has also been trying to increase the "dare quotient" of the group. He has been nudging his managers to be bold in their planning. This relatively new facet is perhaps best summed by the mindset with which Tata walked into the Corus auction. "Tata went into the auction with the intention to win," says Gopalakrishnan. "You are now beginning to see that attitude being reflected in group companies," he adds. Tata encourages aggression among group mangers in many ways. To begin with, he is always encouraging companies to think big and be bold enough to attempt the impossible. When such thinking leads a company to a cross-border deal, he makes himself available 24x7 to the CEO

doing the acquisition. "When you come to him for a critical decisionwhich will always be in some negotiationshe will give you a very quick answer," says Rosling. His responses would be crisp, leaving no room for doubt. The answers would be something along these lines: "Yes, I agree that we should offer this price" or "yes I agree we should withdraw" (the group has done that on occasions.) "His involvement in cross-border deals could be quite significant," says Rosling. And thats precisely what gives the CEOs the confidence to move ahead without doubts. Hands Off Yet, in all this Tata never comes in the way of a manager functioning. Yes, he might step in to make a broad strategic adjustment, but he does not interfere in operational issues. Only if his help or input is sought in something specific does he come into the picture. That can be said of his involvement in the global acquisitions as well. He is present as a member of the leadership team; he is not there in managing the process. He is available to CEOs as a sounding board, or to give advice. "That was precisely his role in the Corus acquisition," says Rosling. B Muthuraman, Tata Steel Managing Director was running the process, Arunkumar Gandhi, Executive Director, Tata Sons was in the negotiation and the bidding, Tata was there only to help with key decisions based on Muthuramans recommendations. Tata extends a similar philosophy into the way global acquisitions are managed and integrated into the group. Cultural compatibility is one big area in which due diligence is done before starting work on any cross-border deal. "This ensures that they are, in a manner of speaking, inclined to be in the Tata groove more readily," says Tata. He prefers a non-prescriptive

approach. "We do not take a William the conqueror approach to cross-border acquisitions," says Gopalakrishnan. "I have signed the cheque. So I am here to tell you how to handle things in the futurethats not what Tata believes in," he adds. Man Of Integrity A key issue that ensures cultural competency is ethics. This is where Tata has never diluted his value system. "I saw him stand by his principles, even though it cost him entry into the lucrative airline business," recalls a senior official of the group, referring to the jinxed Tata AirlinesSingapore Airlines proposal of the late 90s. "Tata has shown that there is no other way he will do business other than do it ethically," says Gopalakrishnan. He points to the Tata Finance episode (financial irregularities by senior company officials had led to the loss of few hundreds of crore) as an example. At that time, when the loss was yet to be ascertained (estimates ranged from Rs 500 crore to Rs 1,000 crore), Tata announced that the holding company would pump in the required money to prevent Tata Finance deposit holders or shareholders from suffering any loss. "By that one action, he gave a message that is far beyond all the speeches he could give in the next 10 years," he adds. "He is a deep thinker and extremely strategic. He is always 2-3 steps ahead"- Alan Rosling ED, Tata sons Tata lives by these high standards in the international arena, too. Before a meeting with the Prime Minister of a significant country, a senior group official suggested Tata lobby for a specific proposal that could help the group in that country. "Tata declined," recalls the official who made the request. "Unlike global CEOs, who never hesitate to lobby with governments, Tata seldom asks governments for specific favours," he adds. This despite the fact that Tata is growing in global statureamong other things, he is an advisor to South African President

Thabo Mbeki, the British government and Singapores Economic Development Board on international investment related issues and he is on the board of Mitsubishi Corporation, American International Group and JP Morgan Chase. "He has a very positive global stature," says Gopalakrishnan. "That does help group companies." Many believe that Ratan Tatas global leadership is now reaching iconic proportions, at least among his Indian peers. Like all icons in big business, his personality is beginning to reflect on the groups reputation. Again, true to his nature, rather than bask in the glory, he chooses to deflect the credit and attention showered on him away from himself. "I have spent a lot of time and energy trying to transform the group from a patriarchal concern into an institutionalised enterprise. It would be a mark of failure on my part if the perception gained ground that I epitomise the groups success," he says. Very few global business leaders are as selfless.