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Contents VOL 52 | ISSUE 1 APRIL 2014
13 TATA POWER
16 TATA INTERNATIONAL
Business
AND TRENT
39 TATA HOUSING
20 TATA CHEMICALS DEVELOPMENT
COMPANY:
24 TATA GLOBAL FOR A GREENER
BEVERAGES WORLD
Shilpa Sachdev
27 TATA PROJECTS
42 CMC: ENGINEERING
30 TATA STEEL MUCH-NEEDED
SOLUTIONS
33 TATA TECHNOLOGIES Nithin Rao
PRODUCTION
Mukund Moghe
Photofeature
EDITED AND CREATED BY
79 TAJ GROUP: MADE FOR ROYALTY
Sujata Agrawal
in association with
6JG+PHQTOCVKQP%QORCP[
Email: grouppublications@tata.com
Website: www.tata.com
CONTACT
Tata Sons
Bombay House
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Mumbai 400 001
Phone: 91-22-6665 8282
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Full speed ahead
After years of sluggish performance, the global economy seems
to be on the mend. Financial markets are doing well and optimism
is in the air. In keeping with this upbeat global mood, Tata chief
executives are busy preparing the ground for their companies to
push the pedal on growth.
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How did the company perform in housing finance being on the lower side in 2013-
financial year 2013-14? 14, it has performed well and met its targets.
It was a challenging year for us as the economy Housing finance is one of our key growth areas,
saw a significant downturn. Both inflation and we are quite pleased with its performance and
and interest rates were on the higher side of are confident that it is poised to grow significantly.
the spectrum, so we had to make significant Our home loan portfolio is around `66 billion;
impairment provisions for the investments we need to take this to `210 billion by the end of
that were already made and also for the non- March 2017. To achieve this target we will need
performing assets, which dented our profitability. to increase our productivity and improve our
In terms of revenue, we grew by 8 percent, in market coverage by tying up with many more
terms of operating profit we grew by 4 percent, builders, and we will need to bring down our
but if we look at it from the standpoint of cost-to-income ratio and keep a constant eye on
consolidated profits before tax, there was a decline NPAs, which at present is less than 0.5 percent. As
of about 15 percent. a strategy for growth, we are intensifying focus on
smaller towns and rural areas of India.
Do you see significant improvements Tata Capital Financial Services is our main
in financial year 2014-15? subsidiary and we feel there is potential to bring
We do not see any improvements in the economy it back on track this fiscal. To increase its revenue
in the short to medium-term period. On an and book size, we will need to consolidate our
overall basis, the economy will remain subdued position in areas such as acquisition financing,
this year as coping with inflation is going to be promoter financing and structured financing.
a challenge. Interest rates will continue to be on Syndication for our corporate clients is another
the higher side and flexibility to reduce rates or area where we believe we can do well. There is a
improve liquidity in the market may not be there. lot of scope in our traditional lines of business,
But we are confident we will make significant which includes channel financing, vendor
improvements in our performance this fiscal financing and trade finance.
as compared to last year. We have identified
pockets where we can do business in a profitable How has your Singapore subsidiary
manner. In terms of book growth, revenues fared during the fiscal? And what is
and profitability, we believe we can see a lot of the growth you are expecting from
improvements by reducing costs and intensifying private equity and venture capital
focus on collections and recovery. funds in India and abroad?
The Singapore subsidiary has done quite well.
Do you expect a decline in gross and We also have a proprietary investment portfolio,
net NPAs this fiscal? which invests in Indian and foreign currency
We plan to reduce our gross NPAs by 20- debt-paper of the government, public sector
25 percent this year. As far as net NPAs are undertakings and even well-managed private
concerned, we need to grow our provision companies. On a consolidated basis, our original
coverage from 20 percent to 50 percent in three investments have grown by 50 percent and we are
years. This will help us grow even in a more generating nearly 28 percent return on equity. The
challenging economic situation that may arise in subsidiary contributes handsomely to the overall
the future. bottom line of the company.
Our private equity and venture capital funds,
How would you assess the both domestic and international put together, have
performance of your subsidiary a commitment from investors of about a billion
companies in the current fiscal? US dollars. We have invested over 40 percent of
Tata Capital Housing Finance has done this corpus. By the end of fiscal 2014-15, we expect
exceedingly well. In spite of the demand for the percentage to increase to about 80.
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Analytics: We have a rich database relating to What are the steps being taken to
our customers across our businesses. We will achieve benchmark positions in the
use that to improve the topline, reduce costs, area of innovation, employee
and also get early signals about the quality of engagement, etc?
the customers. At Tata Capital, we have laid strong emphasis on
employee engagement from day one. We
Strong foray into the infrastructure space: recently concluded our annual Employee
We own 80 percent in Tata Cleantech Capital, Engagement Survey and achieved a grand mean
a joint venture with the International Finance score of 4.15, which places us in the 58th
Corporation. The company currently looks percentile of Gallups global database, an upward
at renewable energy, waste management movement of 9 percentile points compared to
M@MBHMF@MCV@SDQQDRNTQBDL@M@FDLDMS the last year. We have received a PCMM (People
among other areas. There are many segments in Capability Maturity Model) Level 3 certification,
infrastructure, including roads, ports, airports, the first among NBFCs. Our much-talked about
power generation and irrigation, where we Do Right initiative, which is an extension of our
can play an effective role. We also have an mission and brand philosophy (We only do
existing infrastructure portfolio. We are currently whats right for you) was recently featured in
exploring bringing together both the expertise, the global Facebook Studio Gallery and that
@MCENBTRHMFNMHMEQ@RSQTBSTQDM@MBHMFHM@ further highlights how we have set a strong
cohesive and strong manner. industry benchmark as far as innovation is
concerned.
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was money that consumers owed us in the most competitive formats of generation. To that
form of regulatory assets; the Delhi regulatory extent, it has its own importance.
authority took cognisance of this and said these The company would need to cope
would be amortised over the next eight years, with ongoing losses despite compensatory
thus bringing clarity on the matter. tariffs, which would accrue on account of
Going forward, we will hopefully have rupee depreciating exponentially in the last
the cash and the company can look at growth, 18 months. One expects to overcome these
which was kept under check in the past few challenges by enhancing efficiency and
years as we wanted to preserve cash. improving sales in the open market.
The Mundra project has been quite a Tata Power also forayed into
challenge and a concern for Tata international markets last year. What
Power. Are there still worries on that is the progress on that front?
front? What is the plan to mitigate We entered Africa, Turkey, Myanmar and
these? Vietnam. Work on these projects has started.
Mundra is a very large investment. It is a 4,000 The learnings from these ventures will, in the
megawatt project in a single location, with coming years, help us decide whether to pursue
features such as water being drawn from the sea, internationalisation or remain focused on
a dedicated jetty from where coal is transported, India, which, theoretically, still has plenty of
and so on. Its built on a very large scale. Such opportunities. In terms of other new markets,
large infrastructure projects do pose challenges we will only enter a market if there is a higher
in terms of building acceptability in the return on investment with a lower risk that can
neighbourhood, maintaining the infrastructure be managed. At the same time we want to ensure
and in ensuring that dispatch of power on a that we dont just acquire a one-off asset for
large scale happens on a continuous basis. We the sake of having a presence; the idea is have
also have to contend with a large number of significant presence in a market.
NGOs that have got involved because of the
large scale of the project. What are your priorities for the
While there are challenges, Mundra current year?
has a distinct advantage it contributes This year we will rekindle the spirit of growth
almost 3 percent of the countrys total power in the company; we will be exploring more
requirement from one location, in one of the opportunities this year. Power and energy
continue to be major challenges across different
geographies, particularly in developing
economies. Even in a mature market like South
Africa, not enough power is available, and that
gives us an opportunity to look at greenfield
projects and also acquire and manage projects
that are in distress. In the next one or two
years, Tata Power will focus on acquiring assets
which we can transform and turn into good
opportunities.
On the softer side, Tata Power has been
engaged in an initiative to realign the culture of
all the companies and subsidiaries within our
fold. With operations and projects in several
Tata Powers Mundra power project in coastal Gujarat is locations, it is important that we have one
Indias most energy-efficient, coal-based thermal power plant common culture to address our value system.
14 Tata Review
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We have a chief culture officer in Tata Power, In the next one or two years, Tata
which clearly demonstrates our commitment
to achieving this. Safety has been another key
Power will focus on acquiring assets
agenda at Tata Power and we will continue to which we can transform and turn into
focus on that aspect.
good opportunities.
What is your view on the recent
development where the Delhi shedding, etc. It is unfortunate that 64 years
government raised questions about after independence, we are still struggling with
power tariffs in the state by calling issues such as these.
for an audit of the distribution
companies? Speaking of the mix in the energy
That doesnt impact our business. As per the basket, what is the approach
rule, distributors are expected to administer adopted by Tata Power?
the subsidy to the customer only after being We are very conscious of the fact that we need
paid up-front. The long-term phenomenon to create energy security within the portfolio
of providing subsidies, however, is bad for the we manage. We have decided that 20-25 percent
power sector. Subsidies are good for the needy of our portfolio will be based on green assets,
sections of society, but beyond that it empties which are non-greenhouse gas generating assets.
the Governments treasury, makes consumers We are in hydro, wind and solar sectors,
inefficient and will eventually affect the and are trying to work on geo-thermal. All
performance of state electricity boards, making this gives us a good mix of power sources, but
it difficult for them to meet the demands of because of our India-centricity we are largely
expansion and maintenance targets. coal dependent; gas unfortunately has gone out
of India, and oil is far too expensive. However,
What do you see as the challenges we have a full portfolio of green assets in Africa
faced by Indias power sector? and Turkey.
The Indian power sector has been going
through a lot of changes, particularly on How does Tata Power and the power
account of fuel. The countrys energy security sector manage the increasing
policy needs realignment. Power is a subject pressure from environmental
where the Centre dictates policy, but decisions activists?
are taken by states. Tata Power has been proactive in terms of
So the states follow a myopic approach, various aspects related to sustainability. But
using whatever option is available on the most the nature of our business we use coal,
immediate basis and leaving out whatever is work on large tracts of land, potentially
expensive and requires a bit of effort. When we impacting flora and fauna attracts the
leave those types of opportunities out, we risk attention of environmentalists. It is important
using up one type of fuel resource completely to understand that having no power is a bigger
or totally leave out options that are needed for stress on the economy than polluting the
a cleaner tomorrow. environment using coal.
The other problem is that the sector is The government must find land that is
almost 90 percent controlled by state-owned away from habitation, where the impact on the
enterprises. The way these state-owned land and population is minimal. If we are able to
enterprises are set up, they are confronted with produce power at competitive rates with a lower
challenges on the power distribution front. impact on the environment, we can use that
The delivery aspects do not keep the customer power to service the economy. After all, power
as the focal point, resulting in blackouts, load ultimately is the cleanest form of energy.
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Lets start with Trent. The big news is the great job the Westside team has done in
that Tescos entry into the Indian building this chain of stores into a sustainable,
market has been finally approved. profitable business. Westside today is a great
What now? brand with a large base of loyal customers. I
Its been a long journey. Weve had an association believe that there is still huge potential to be
with Tesco since 2008 with an exclusive tapped and we have only scratched the surface of
franchising and wholesaling agreement. So this opportunity.
weve been working together for a number of
years. Now that multi-brand FDI has been Trents third brand, Landmark, has not
approved, Tesco will be able to invest in Trent been doing as well as the other two.
Hypermarkets. How do you propose to tackle this?
We have a large pipeline of to-be-launched Landmark, unfortunately, has been facing
stores: The existing 12 Star Bazaar stores will headwinds due to external and internal challenges.
continue and we intend to open at least five new Yet, we believe the format, with some modifications,
stores every year, in Maharashtra and Karnataka. has a space in the Indian retail landscape.
Star Bazaars association with Tesco We are planning to reduce the focus on books
underlines the solid foundations of the business, although books are still a quarter of the turnover
and is a signal of the untapped opportunity in the and look at new areas such as technology, gifting
Indian market. The operations and profitability of options and sports. The store portfolio will be
the business continue to improve, and the team is aligned more towards lifestyle products to reflect
performing well on our targets. market realities. We have also appointed a new
Meanwhile, we are evaluating other formats leadership to drive this business.
as well. We opened a smaller format called Star
Daily in Pune, a convenience store that is doing How have the changes in the business
very well. We plan to launch a second such store environment over the last 12 months
shortly. We believe that these mid-sized formats impacted your business?
will reach profitability faster. Its an exciting time In the apparel retailing space, competition has
for the business. increased with more international retailers entering
the country and existing players expanding their
How will the opening of the retail presence. Our response has been to focus on
sector to foreign players alter the the value we provide to our customers. We are
retail scenario in India? continuously improving our product range
The increased competition brought about by FDI to international standards while remaining
should, over time, bring in many benefits more competitive and offering value to our customers.
investments in backend infrastructure, reduced
wastage, improved supply chain efficiency, etc.
Sourcing from small industries and farmers
should help them get better prices; customers
will benefit from greater choice and value. Over
time, the benefits will reach more people as new
investments increase reach and competition. On
the minus side, this increased interest by foreign
retailers is certainly pushing up real estate costs!
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The food and grocery retailing business What changes have you had to make to
is a tough one. Star Bazaar is focusing on its ensure that your stores do well?
famous for fresh proposition in the retailing of Its continuous learning and we change our
fresh produce while also offering a great range of processes as per the requirements. For example, the
private label brands in staples, groceries, cleaning cost structures are different in India and our stores
aids, apparel, etc. reflect that reality, be it rental costs or supply chain
expenses, both of which are calibrated accordingly.
What kind of challenges does the retail Customer expectations are different Indian
sector face? consumers prefer assistance and attention when
The high cost of appropriate retail space is the single shopping, and our staff is happy to provide this. The
biggest reason for the slow pace of expansion of way we have tackled the issue of shrinkage is also
the industry. In addition, most of the regulations very different from the West; in fact, we have world-
covering retail are state legislations requiring a class processes for shrinkage.
multitude of permissions.
Still we are looking to open 10 new Westside Lets move on to Tata International.
and five new Star Bazaar stores during the year. We Last year, the company announced a
are not looking at any new verticals at the moment renewed vision, following a year-long
but are working on developing an internet presence. strategic planning exercise. How has
it translated in terms of business?
How do you exploit synergies between Last year, Tata International had laid out its
the various verticals of Trent? vision to be globally significant in each of its
Trents formats are already benefiting from chosen businesses by 2025. We decided to focus
working with each other and utilising each our efforts in five verticals leather and leather
others competencies. For example, the products, distribution, metals, minerals and
Westside management team works closely agri trading. Each vertical has designed its own
with the apparel team of Star Bazaar, given its strategy to differentiate itself in the market and
apparel retailing expertise, and the Landmark to excel at customer service.
management team engages with Westside and I am happy to say that in the last three
Star Bazaar for some categories. The Gourmet years, we have grown by 60-70 percent every
West business within Westside also works closely year from just `26 billion in 2010-11 to cross
with Star Bazaar to source its products. `100 billion in revenue this year, a big milestone
for the company. The primary focus for the next
Large-format retail in India works three years will be profitability.
differently than it does in the West. We have also restructured to run the
company by business rather than by geography.
Each business operates independently from the
others and the central team provides support to
the businesses in areas of strategy, finance, HR
and logistics. Our target is to touch `150 billion
in the next couple of years.
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For example, delivering coal to a customers portfolio has grown to include John Deere, Tata
factory instead of the nearest port is a new Hitachi, Jaguar Land Rover, etc. We are slowly
initiative for our minerals division. Our auto building our presence in other segments, such as
distribution team is working on how they can chemicals, healthcare and agricultural products.
provide logistics solutions instead of selling only Across all our segments, we are focusing on
trucks and buses. Each vertical has developed its becoming a world-class distribution business. We
unique approach to improve customer retention intend to engage deeper with existing customers
and increase profitability. You cant standardise to increase our share of wallet with them.
value creation.
We also intend to explore other geographies What are the challenges of being an
in Southeast Asia such as Laos and Cambodia international trading and distribution
and expand our footprint in Africa. company in todays times?
Most of our competitors have a huge head start
How does the leather business plan over us and the biggest trading companies have
to move up the value chain? revenues in excess of $200 billion, with well
In our finished leather business, we are focused established relationships both on the customer
on selling to premium footwear brands. This and the sourcing side. So we have to go the extra
year we start supplying leather to the automotive mile to win business. Trading is also hugely
industry through our marketing and technical people-dependent, and attracting the best talent
joint venture with GST Autoleather which remains our first priority.
is a global leader. The joint venture will be
operational in the next few months. We will use What investments have you made in
Indian raw material and low cost operations to your people, infrastructure and
supply premium leather to leading automotive systems? What are the human
companies. resources challenges you face?
In the leather products area, we are Because of the change in strategy of the
consolidating our position as a leading vendor company, we have over the last three years
in the elegant shoe segment while embarking brought in several new leaders in each of our
on a strong sales drive into the US market. (We verticals, each with domain expertise and global
currently predominantly serve the European experience. We are now working with Tata
shoe market.) We are also building our ladies Consultancy Services on revamping our global
shoe business through the Aerosoles brand. software platforms, and last year migrated to
new offices in Mumbai.
What is the vision for the African The biggest challenge is the cultural
market? diversity which is beginning to emerge across
Tata International has been operating in Africa the organisation. We recognise that our
for over 40 years. We have not only increased managers need to appreciate the different styles
our business there but also created a platform of management that come in a multi-cultural
for other Tata companies to enter Africa. We organisation and adjust to this.
continue to be the face of the Tata group on
the continent and are working to increase the What do you see as Tata
strength of the Tata brand in Africa. Internationals unique strengths?
Our distribution vertical has a presence We are operating in the right geographies, ones
across 14 countries and we intend to spread this that are exhibiting the highest growth rates at the
footprint. We have shown sustained growth in moment. In addition, being an Indian company,
revenue and profits, and have added several new we are uniquely placed to serve the Indian and
brands to our portfolio. African markets and have found it easy to earn
In auto distribution, for instance, our the trust of our counterparties.
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Tata Chemicals is a leader in most of its chosen at 3-4 percent. The major issues are with our
areas of business: its the worlds second largest cost structures in the UK and Kenya, where we
soda ash company; it covers over 100 million are struggling with high energy costs which are
households in the consumer products category; making these businesses structurally weak.
it leads the branded salt market with a market
share over 60 percent and is one of the category How has the company handled these
leaders in the business of pulses and water issues?
purifiers. We restructured the UK business by closing
Tata Chemicals (including Rallis and the Winnington soda ash facility. Close to
Metahelix) continues its deep engagement with `9 billion has been written off (including the
the Indian farming community, unmatched and impact of Netherlands and UK closures), and
unparalleled by any other Indian competitor. We the aftermath of the restructuring may continue
service over 10 million farmers, covering about for a couple of quarters. The Kenya business
85 percent of Indias arable land. We have about is examining its reconfiguration options this
800-odd of our own stores selling farm inputs financial year.
and we expect this figure to touch 1,200 stores We will need to manage key costs, such
by the end of the year. as energy and fuel, and make our processes
Nutraceuticals, the new business line much more efficient and effective. We have
developed by our innovation centre, will soon go a programme of lean Six Sigma that is being
into commercial production. executed in all our plants. The positive impact of
So heading into its 75th year of operations, these steps will be felt in our businesses soon.
the company is looking at positioning itself less
as a chemicals company and more as a holistic What is the way ahead for the soda
provider of products and services that are based ash business?
on science. We are happy with our market position and
the customer relationships we have established.
What is the strategic direction that We are addressing the cost competitiveness
the company plans to take in the issue in the UK and Kenya. Although theres no
long-term? immediate plan for capital investment in soda
The chemicals business is now a mature ash, we are investing in enlarging the product
business. Going forward, we have identified the portfolio to include higher value-added products
food and nourishment platform and the farm such as sodium bicarbonate products for use
input platform as two key pillars for growth. in the pharma, animal nutrition and flue gas
These will primarily be based in India, but treatment industries.
there is an export potential for the farm input
business, especially in Africa, South East Asia Coming to the agri business, how
and Latin America. And for this we are working has the market responded to TCLs
closely with Tata International. Our innovation high-value fertilisers? What are the
centres will develop speciality products focused prospects in this business?
on these two platforms. The agri segment has been one of the best
performers in the Indian economy. The company
Its been a tough year for the continues to benefit from the shift of the
company. What are the main factors Indian farmer towards higher technology and
affecting the soda ash business? higher productivity, which implies greater use
Its the UK and Kenya businesses that are facing of high quality seeds, crop nutrition and crop
tough times; the Indian and US businesses are protection chemicals. We intend to intensify
doing fine due to their competitive cost position. our investments in this business by investing `5
The soda ash market demand is growing steadily billion over the next two years.
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The company is looking at positioning basic filter purifiers around `1,000. We are, in
fact, the only brand in the sub-`1,000 category
itself less as a chemicals company and catering to the low-income segment. In the
more as a holistic provider of products and past three years, we have purified close to 7,500
million litres of drinking water. There is export
services that are based on science. potential in this business, but India will continue
to be our main market.
We would, however, consciously stay away
from products where government subsidies are What will be the impact of the
involved, and, keeping this in mind, we have changing demographics of India on
decided to not invest in the commodity segment Tata Chemicals in terms of the
of the agri business. The company also pulled marketplace, talent pool, customer
out from the Gabon fertiliser project, which base, etc?
was in line with this thinking. We will increase We believe that there are two broad trends
our investments in high-tech products such where we need to focus as India moves to a $3
as specialty fertilisers, herbicides, weedicides trillion economy with a large youth population.
and high grade seeds. We see the agri business The first trend is rapid urbanisation, which will
growing from it s current size of `80 billion to drive consumers towards packaged and branded
about `150 billion in the next few years. products from loose products. This represents an
area of tremendous market opportunity for us
TCLs line of food and nourishment in food and nourishment. Urbanisation will also
products is growing rapidly with create a pressure in rural India to move away
I-Shakti dals, besan etc. What is the from labour-intensive practices to practices
vision for this business? What are involving greater mechanisation and technology.
the new products planned? This means that companies like ours that supply
The vision is to deliver nutritious products products for higher productivity will stand to
that are branded and packaged for quality and benefit substantially.
convenience. We are well positioned to roll out The second trend will be generating
these products through our existing Tata Salt employment for the youth of the country.
distribution network that touches 120 million We believe that we need to play a key role in
households. The consumer business has tripled that space too, especially in skilling future
in the last three years and has crossed the `11 agriculturists.
billion mark. Our expectations are that it will
more than triple in the next five years. We The climate change bogey raises its
currently have a mix of basic foods (like dals) head with increasing frequency.
and complementary value-added products Given that Unilever is a big client,
(such as besan, a flour made from a dal). We are has the Unilever policy on supply
looking at options to expand the portfolio in chain sustainability impacted Tata
basic and ready-to-cook segments. Chemicals in any way?
We work with several entities like the UN Global
What is new in the Tata Swach Compact, Carbon Disclosure Project, Global
business? Are you looking at markets Reporting Initiative, etc. We have a strong
outside India? sustainability commitment which is in line with
In the water purifiers business, the market the Tata group policy on sustainability. Hence,
reception has been excellent and we have sold for us, partnering with customers like Unilever
over 1.1 million units. We now have a complete and Procter & Gamble has been a pleasant task.
range of products, starting from the high-end At Tata Chemicals, sustainability is reviewed at
reverse osmosis (RO) purifiers at `17,000, to the the highest level in the board. The actions are
22 Tata Review
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COVER STORY
cascaded down the line and our internal systems When it comes to social media and
are well embedded. The Unilever partnership digitisation, we are at an early stage. We have
just reaffirmed that we were on the right track. formed a small core team to see how we can
adapt our marketing and employee engagement
The Tata way of working implies a processes to social media. As a start, our new
strong focus on aspects such as Tata Salt campaign, with Mary Kom as the
innovation, sustainability, customer- brand ambassador, is being promoted on social
centricity, employee engagement, media.
etc. How does the company embed
these concepts in its operations? How difficult is it to maintain softer
These are integral to our business. Take values like sustainability, ethics,
customer-centricity. We have a diverse range of responsible citizenry and integrity in
customers, from multinationals like Unilever the world of hard numbers?
to housewives and farmers. And we are Companies have to deliver hard numbers, but
committed to delivering whats best for them. this cannot be at the cost of values. We believe
In our farm input business, we have walked that if you have high levels of integrity and
away from selling unsafe red-triangle products corporate responsibility, the delivery of hard
well ahead of regulations and laws. This is numbers becomes easier. We have found that
based on our customer insight as well as our employees and consumers are motivated, and
sustainability policy. the community is highly supportive. A lot of our
The market for Briskarb for flue gas brand equity rests on these pillars.
treatment grew out of the tightening of
emission control norms. Our Swach water Going into its 75th anniversary, what
purifier does not use electricity. These are lies ahead for Tata Chemicals?
all green products. Our innovation and As we embark on the new financial year,
sustainability focus is our strength. We have hopefully the impact of the restructuring of
four R&D and innovation centres that create the UK business should be behind us and the
products for the farm and consumer products reconfiguration exercise for the Magadi business
businesses. will be under way. We will be able to renew
and recharge the company and bring it back to
How does your company use new healthy performance.
technologies or new media in its The chemicals business is now a
operations? mature business; the farm business is in the
We see IT as the enabler to improving and early adolesence stage; and the food and
simplifying our customer delivery and employee nourishment business is in its infancy. There
processes. The company has invested in is an increased realisation that we are an
e-enabling our work processes and we are in enterprise with three distinct businesses and
the process of digitising them in a smartphone- business models and each one will need its own
friendly way. We have created a Centre for space to grow. The farm business and the food
Process Excellence and Consolidation (CPEC). and nourishment business are the two segments
Over a period of time, this centre will manage all that will need to be nurtured for the future
the back-end processes of the company. We have growth for the company.
started with the finance and accounts function In five-seven years, the Tata Chemicals
and soon other support functions will migrate business landscape will be very different,
there. CPEC is completely outsourced and Tata with all our businesses probably of similar
Consultancy Services is managing this for us. Its impact and size. We will be less of a chemicals
not about cost but about increasing efficiencies company, and more of a business thats serving
and effectiveness. society through science.
April 2014
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in India, encouraging people to take small steps Leadership Index for 2013. Today, we monitor our
for change. One of the strengths of the campaign carbon footprint in over 70 different sites in Asia,
was to take up issues before their time, for Africa, Europe, North America and Australia.
maximum impact. This year we focused on raising We partnered with Water Footprint Network
awareness about women-related issues. The first Netherlands and Tata Sustainability Group for the
campaign Choti si Shuruwat (a small beginning) Water Footprint Assessment (WFA) of TGB to
sparked more initiatives. Our annual report understand how to sustainably and equitably use
was a tribute to women who have contributed fresh water in our operations.
significantly to our business.
The Power of 49 campaign is our effort What are the new technologies that
to awaken Indian women to the power of your company is using to boost
their vote (women constitute 49 percent of productivity, improve
the electorate), with the expectation that an communication, manage costs, etc?
informed and participative female electorate will Technology is a key pillar for our growth.
evoke a positive response to womens issues and Our employees are located globally across
influence national development. The impact has different time zones, and technology is critical
been tremendous; 1.4 million women registered for collaboration.Our intranet, Source, allows
and discussed their issues on various platforms. teams to keep in touch with whats going on in
The data was mined to create a comprehensive the business.
The Power of 49 manifesto, which was presented We leverage technology extensively
to political parties in April 2014. across functions to build business efficiency.
The campaign took an exponential leap when Use of SAP systems has allowed easier global
the Tata group decided to adopt it as a group-wide integration and provided access to accurate and
initiative. Over 40 Tata companies and subsidiaries timely information for decision-making.The
joined the effort. CA Clarity tool for project and portfolio
management allows us to efficiently track
Sustainability is key for businesses. business benefits delivered by projects.
How is it translating at TGB? Garuda, our global system for product
Sustainability is at the heart of our plans for development and validation, serves as a
long-term success. The company has already repository of information on vendors, raw
made impressive progress. materials and finished products, and enables
TGB is an active member of the Ethical structured workflow between departments. The
Tea Partnership (ETP). The ETP is working new product development teams are able to use
with Rainforest Alliance (RA) to help tea estates the tool to experiment with different ingredients
achieve RA certification and improve social and during the development phase of a new product
environmental sustainability. Tetley now sources to tailor a formulation to meet specific cost, taste
20 million kilograms of tea (50 percent of its total or nutrition targets.
tea purchased) from RA-certified farms each year. Advanced Planning Scheduler is an optimiser
We train our tea-buying teams around the world solutionused by our tea buying and blending
on sustainability to help embed best practices. The function. It takes into account various factors to
India Sustainable Tea Programme TrustTea, work out the most optimum recipes, which are fed
launched by the Tea Board of India is an into SAP systems to enable buying and blending
initiative to sustainably transform the Indian tea for the recipes. The Supplier Offer Site was piloted
industry. TGB will participate in the development as an alternative buying channel in TGB. It used
and implementation of the programme, and technology to conduct the first reverse auction in
provide financial and technical support. the history of the tea industry. The pilot, last year,
TGB was rated as No1 in the consumer was a success and we intend to roll this out on a
staples sector in India on the Climate Disclosure larger scale this year.
26 Tata Review
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Can you tell us about your ongoing Tata group companies including Tata Steel, Tata
projects? Realty and Tata Housing are implementing
Over the next 12 months we have some major many projects in the infrastructure sector and
responsibilities. they have awarded substantial work to us. Tata
We have to construct and hand over 20 Steel has awarded work in the Kalinganagar
percent of the national grid projects awarded project as well in the Khondbond mines. Tata
to us by the Power Grid Corporation of India. Realty has given us the opportunity to work for
Our first engineering, procurement and its project, Tata Center at Gurgaon.
construction (EPC) contract for the We need to ensure that we provide value-
1x388MW, gas-based, combined cycle power based services at market competitive prices to
plant project for Pioneer Gas is nearing our group companies so that there is win-win
completion. synergy. Under the guidance of senior leaders, we
The 350-km-long twin track project for the have formed a group within all Tata EPC / project
DFCC is in progress. We need to ensure companies wherein we meet periodically and
completion of embankment in the next few review our best practices and areas where we can
months and we should start laying the tracks improve our performance.
so that we deliver this prestigious project on
time to Indian Railways. How will the current economic
The Khondbond mines ore crushing and uncertainties impact your business
beneficiation project, with a capacity of eight in the short-term?
million tonnes per annum, is an important The external economic scenario continues to
one as it will feed the new expansion of Tata be challenging for Indian industry. Both the
Steel. global and Indian economic situation have
We are involved in the construction of undergone turbulent times in the last four years.
civil, mechanical and piping works for the The external economic scenario continues to
Kalinganagar project of Tata Steel in Odisha. be challenging for Indian industry. There is an
The work is challenging, with an extremely almost complete collapse of the public-private
tight schedule. partnership (PPP) framework in India. Most
The National Mineral Development construction companies are debt-ridden, with
Corporation (NMDC) has awarded another practically no revenue growth, and banks are
blast furnace project to us for its 3.0 MTPA unable to support them as they are saddled with
integrated plant at Nagarnar in Chhattisgarh. non-performing loans and assets.
We need to ensure that this project is The impact has been substantial. In our
mechanically completed during the year. core business of power generation, we could not
Internally we need to ensure that we build see any movement during the last two years.
strong execution muscle. We need to be far more To counter this, we picked up orders in other
focused on field productivity, people skills and verticals. However, investment confidence, speed
systems efficiency. Always on time has been of project execution and payment cycles still
our motto and so far our general track record is remain stretched in all types of projects.
without any liquidated damages delays. Now we
want to advance into the area of ahead of time, by What is your long-term prognosis for
being proactive, rather than just being compliant. the business?
There are two aspects to this. One is internal
Huge investments are expected in focus and the other is market or external. As
building new roads, airports and we compete in a fierce marketplace, one needs
housing projects in India. What to tighten belts and build strong processes,
opportunities and challenges do you systems and skills to compete. At the same time,
see for Tata Projects here? as external forces, such as the slowdown, affect
28 Tata Review
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the business, one has to look for de-risking by We must continuously differentiate and
expanding into adjacent spaces and expanding
to newer geographic markets.
go up the value chain by adopting new
We must continuously differentiate and go technologies and we must de-risk the
up the value chain by adopting new technologies,
business by adding multiple verticals...
and we must de-risk the business by adding
multiple verticals and new growth dimensions.
Our seven verticals will become part of a Danieli Corus (a joint venture between Tata Steel
larger strategic business unit called EPC and Europe and Italian equipment manufacturer
construction projects, which will continue to Danieli), our consortium partner in the project.
remain our mainstay with a potential to grow Tata Projects has set an impressive safety
to `100-billion-plus revenues. We will have record of over 21 million safe working hours,
to venture into urban infrastructure; and to in the project and the blast furnace has been
reinforce bottom line results we will need to running smoothly for the last several months.
expand the services business. The current production levels are about 6,000
tonnes steel per day. The cost structure is at the
What are your plans to leverage industry-best level and we believe this furnace
opportunities in the water sector? will change the cost economics of the Rourkela
We believe that water is the next big business. steel plant.
We have two offerings in this space water
EPC projects and reverse osmosis (RO) units. How difficult is it to maintain softer
There are unfolding opportunities in the values like sustainability, ethics,
industrial water and waste management area. responsible citizenry and integrity
Regulation is becoming more stringent and given profit pressures and
availability of industrial water is becoming scarce. particularly in the current political
This provides substantial opportunity in the and bureaucratic environment?
industrial water and waste management area. We We are here to create a business that can last
have advanced offerings in the RO segment and many years and therefore has to be designed on
many products are in the market. the foundation of values such as sustainability,
ethics, responsible citizenry and integrity. I have
What will be your key focus markets no example of any business which is designed
outside India? on different parameters and has managed to
In our quality services business we have inspection last beyond a few years. So we are clear that as
offices in almost 32 countries. Our value an organisation, if we inherit these values and
proposition is to provide third party inspection integrate them into our business design we will
services for capital goods to and from India. create a performing and lasting business.
Recently we have also taken our EPC
projects and construction business internationally. Is it possible to manage work-life
Last year we entered eastern Africa and some balance?
parts of the Middle East. I love what I am doing. Therefore, this work is
life and life is this work for me. It does not bore
Could you tell us about the Rourkela me, it does not give me any stress. I am at a
Steel Plant blast furnace that you perfect mind body balance. An organisation
executed? must provide opportunities to achieve work-life
It is the largest blast furnace currently balance. At the company level, we must do
operational in India with furnace volume of outdoor meetings and family gatherings and we
4,060 m3 and production capacity of 8,000 ensure that every employee is able to live a
tonnes of steel per day. It is based on a design by stress-free life.
April 2014
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We continue to grow in a
difficult market
meeting at Bombay House,
he talks to Sangeeta Menon
on regulations, the challenges
his company faced in the
last year, growth prospects
for next year, and his focus
on making Tata Steel more
DPOEFOU
DSFBUJWF
BOE
DPMMBCPSBUJWFExcerpts:
For the financial year 2103-14, what
would you pick as the highlights for
Tata Steel India in terms of both
achievements and challenges?
The economic downturn has slowed down
businesses in India, particularly in the case of
auto and construction industries. But Tata Steel
India has, in a difficult market, managed to add a
8JUIJONPOUITPGUBLJOHPWFS million tonnes to its capacity in 2013-14, growing
by 12-13 percent. We not only gained in terms of
as managing director of Tata market share, but we also increased our volumes,
Steel (India and South East protected our margins (compared to last year),
and entered new segments.
Asia), TV Narendran has set
the ball rolling as far as future Given the tough market conditions,
where did the growth come from?
growth for the company is
The growth has come from both existing and new
DPODFSOFE"IFBEPGBCPBSE products. We have grown our share in the auto
30 Tata Review
April 2014
COVER STORY
industry from last years 39-40 percent to 43 percent projects in recent times. What does it
this year. We reached out to almost 6,000 SME mean for Tata Steel?
customers, a segment that has traditionally been We are looking at commissioning the project in
under-served by steel companies. We have built a the last quarter of 2015. The first phase of the
network of over 40 distributors to ensure that SMEs project will create capacity of 3 million tonnes at
get the steel they want. The effort has paid rich an investment of over `250 billion. Its a massive
dividends as we have sold a significant amount to financial commitment and we need to start
the SMEs, which contributed to the growth. production soon.
In terms of customer-centricity, we Kalinganagar has been a huge learning
have probably done more work in the market for us. The last time Tata Steel did a greenfield
than most steel companies in the world. Few steel project in India was in Jamshedpur when
companies have achieved the level of innovative the (Tata group) Founder and his sons did it. So
work we have done, the new routes we have when we went to a new place, in some ways we
developed and the engagement we have with our underestimated the challenges. We assumed that
customers. The weaker rupee helped as imports since we had a lot of equity and we went with the
shrank and we were able to step into that space. right intentions, everyone would welcome us.
Over the last year, India has turned from being a However, people have their own anxieties and we
net importer to a net exporter of steel, but given cannot take them for granted. So engaging with
the lucrative domestic market, we decided not to the community, listening to them, building trust
focus on exports. is something that must be done well ahead of the
project; it cannot happen alongside.
Tell us how the business has grown in
South East Asia in the last one year. Is the continued uncertainty in the
Tata Steel Thailand, which is largely focused regulatory environment a cause for
on the domestic market, has struggled over concern? How does this affect
the past four years due to operational, internal business and morale?
and investments related issues, but this year we CEOs in India spend far more time addressing
expect it to turn around. regulatory issues than CEOs in other countries
NatSteel, which is based in Singapore, has do. To be fair to the regulators, the industry has
joint ventures and downstream units in China, invited this scrutiny to an extent. There is a need
Vietnam and Australia. It is probably our only for the industry to look at responsible growth and
overseas business that has never made a loss. The be good corporate citizens.
business is self-sufficient and does not need cash In the next ten years, the demand for steel
infusion for growth. The Australian business, in India is expected to grow to about 180-200
where we were losing money after the 2008 crisis, million tonnes. So capacity of an additional
is being restructured. We exited the Philippines 100 million tonnes has to be built, for which we
business and are setting up downstream centres need to spend approximately $100 billion. Very
in Indonesia and Malaysia. few countries in the world have both the raw
For the business in China, which has grown material and the market. India has both. But if
significantly, we use the existing assets and we dont leverage this opportunity to translate
leverage the equity we have in the market to sell the richness below the ground to opportunities
almost 150,000 tonnes a month and 2 million above the ground, then we will be missing
tonnes a year. China is a thin-margin and quality- out. To support this, Indias regulations need to
conscious market, so we have to operate a nimble be simple enough to attract investors and tight
business that offers good quality. enough to ensure communities are not exploited.
The Kalinganagar project in Odisha, What are the factors that create
India, has been one of your biggest optimism for the company despite the
April 2014
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Innovation is a pre-requisite
for any successful company
in Singapore and has nine
global delivery centres:
Detroit (USA), Coventry (UK),
Pune and Bengaluru (India),
Stuttgart (Germany), Bangkok
(Thailand) and Brasov, Craiova
and Lasi (Romania).
April 2014
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15 percent, which is at par with the market In the automotive sector, emission standards
growth, but a little bit less than what we had are encouraging investments in smaller engines
planned. to drive efficiencies and reduce emissions.
In April 2013, as part of our diversification Furthermore, there is going to be an increase
strategy, we acquired Cambric, a US- in innovation in the embedded space, which is
headquartered global engineering services where significant innovation is being realised.
company with a significant footprint in Eastern The electric car and the driverless vehicle
Europe. Cambric has a very strong industrial will become meaningful propositions in about
machinery vertical, but this sector was three to five years. We believe that the work
somewhat challenged last year by the downturn we have done in the electric vehicle space has
in the commodity sector and the impact that given us strong capabilities in the packaging of
it had on mining. The good news is that we are alternative propulsion systems.
now beginning to see the synergies from the In aerospace, there will be higher demand
acquisition, and over the past six months we from India where military spending in percentage
have seen an improvement in the performance terms is going to be much greater than in most
of Cambric and the industrial machinery of the developed world. In industrial machinery,
vertical across the globe. emission standards are driving greater efficiencies
of existing engines, and various types of projects
What is your perspective on the will define the space for several years. Many of
growth potential for fiscal 2015? the clients we are working with in North America
At the beginning of last year we acknowledged and Europe are looking at value-engineering, or
that what brought us to the point of being a the application of frugal engineering principles to
$400-million dollar company is not going to existing products in order to achieve a price-point
take us to the $1-billion-mark. So we decided that is palatable to India.
to implement a programme of transformation On the information technology side of
in our sales and business development areas. our business, we have developed services in
We implemented a seven-point change areas such as product lifecycle management and
plan, making sure we target the right accounts. enterprise resource planning (ERP). The ERP
We went through a sophisticated selection scan supports applications such as SAP and
process to identify the right accounts that Oracle suites. We deploy these diagnostic tools
represent the right potential for us. in an organisation to reassess whether they are
We are bullish about the next fiscal and extracting value from the investments they have
are expecting to grow faster than the estimated made. We then make recommendations for
growth rates for our markets. technology and process changes.
We have seen sustained improvement
in North America over the past six to nine What are the steps being taken by the
months. Europe too is showing strong growth. company to ensure that it retains its
As for India, we are expecting significant leadership position across its areas of
improvement post the general elections. India operations?
is not just a market that supports the supply There are two frameworks that we leverage in
side of our business; we see it increasingly order to assess our position as an organisation.
become a manufacturing hub for the rest of the One is the Tata Business Excellence Model
world. So we are bullish about our prospects (TBEM) framework. We have used the annual
here. assessment to target the right type of investments
to improve our competitive positions. The
What are the new challenges and progress we have made in terms of our scores
opportunities for the company in the has underpinned our improved business
next two to three years? performance.
34 Tata Review
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COVER STORY
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36 Tata Review
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What was the thought process our businesses. We launched new plants for our
behind the name change from watches, jewellery and precision engineering
Titan Industries to Titan Company? divisions. We also ventured into two new
The name change was carried out to reflect categories helmets and fragrances.
the companys transformation from being a
manufacturing and marketing company to an How has the change in the business
entity which is more in the lifestyle space. It does environment over the past 12
not change things within the company in terms months affected Titan?
of operations. We will continue to design great The elections are coming up, and it is natural for
products, achieve manufacturing excellence and it to have an impact on the business. We havent
create great brands. We have been doing that for seen any major decision being taken by the
25 years, and we will continue to do so in the government in the past six months, and thats
future as well. So purely from the standpoint primarily because of the general elections.
of the company name, Titan Company is more Talking of the jewellery business, there was
wholesome than Titan Industries. no review of the regulatory measures primarily
Our vision is to create elevating experiences because bureaucrats were not willing to take
for people who interact with us as a company risks. At the same time the overall demand for
and our brands. We were doing all of this before, jewellery came down owing to a decline in gold
but now the new name has helped us crystallise prices and inflation that affected spending.
our vision better. Interest rates are on the higher side too
Over the last few years, we have become and Titan had to borrow after a period of zero
more business-like and business-oriented. Real debt. But these things are bound to happen in
economic value creation has been the hallmark a bad economic environment. As a company,
of the past ten years at Titan. We have been able we showed good agility in dealing with the
to achieve a value creating mindset within the situation.
company and not merely create great brands,
great marketing and great products. What are the plans for the next year
in terms of new businesses?
How would you assess the companys I dont see any new businesses being launched
performance in 2013? Please next year. The two new businesses fragrances
elaborate on the high points and the and helmets have to achieve some level of
challenges faced during the year. maturity. The eyewear business is also relatively
It was a very average year for us. The competitive new and has to reach a certain scale and size.
intensity in our businesses increased, but We are busy stabilising the business and making
consumer spending in many of our categories it grow.
was adversely impacted and that primarily The exploration of new business
meant that we ended up with marginal growth opportunities continues. Our new businesses
by the end of the financial year. division has been evaluating many
The biggest challenge we faced was in opportunities with the Titan Hexagon. The
the jewellery business. The industry saw Hexagon gives us the points to consider before
an unprecedented volatility in gold prices, we enter a new business.
significant regulatory measures against the
import of gold, increased borrowings leading to What are the challenges and
overall profitability being reduced compared to opportunities for Titan in the next
previous years. two to three years?
The high point was that we were still able In the next two to three years, India will come
to have a long-term view and not be constrained out of the bad economic situation it is in at
by the economic situation. We kept investing in the moment, and I say that because India has
April 2014
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38 Tata Review
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BUSINESS
T
raditionally, the real estate time when such a concept did not and Environment Design (LEED),
and construction industry exist in India. Today, it has the largest guidelines. We applied and got gold
has been a major contributor number of green buildings and all rating under the US norms, explains
to environmental its projects follow the guidelines of Mr Banerjee.
degradation, however, with growing the Indian Green Building Council Xylem IT Park has an
awareness of how this harms not just (IGBC). ergonomic design and architecture
our present but our future too, the When Tata Housing first which has the occupants health as
move towards sustainable practices is thought of going green, the IGBC its chief focus. The design boosts
growing in the industry. had not come into existence. So, employee productivity as well as
Taking the lead in adopting
innovative and sustainable practices
in India, Tata Housing Development
Company has launched a concerted
Some signicant projects
drive to build eco-friendly and green 7XKDL(3/@QJ!DMF@KTQT*@QM@S@J@3GDBNLO@MXlRQRS
buildings. Says Brotin Banerjee, green project. It received a gold rating under the Green
managing director and CEO of Building Council of the US, the LEED, guidelines.
the company: We were among Myst, Kasauli, Himachal Pradesh: Biophilic (biophilia is the
the first few companies in India to instinctive bond between humans and other living systems)
construct green buildings and we landscape designs.
did it because we believed that it was Riva, Bengaluru, Karnataka: Homes designed for senior
the right thing to do. Not only from citizens.
the point of view of making money Prive, Lonavala, Maharashtra: Smart homes integrating
or differentiating ourselves from the technology with day-to-day living.
competition, but because we believe La Montana, Talegaon, Maharashtra: Designs based on
that sustainability in business is the Spanish architecture.
only way forward. Santorini, Chennai, Tamil Nadu: Township with
Tata Housing pioneered Mediterranean-style architecture.
sustainable green development at a
April 2014
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40 Tata Review
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A model of a spiral garden in Indias first biophilic project, Tata Housings The Myst
launched project, the Santorini in a sustainable way of living. council which then deliberates on
Chennai, and an ambience of art Among its forays into new them; funds are allocated for those
and culture at Raisina Residency in areas is Tata Housings project Riva that are accepted. The company also
Gurgaon. in Bengaluru, which has homes encourages innovation at its building
In some projects, we have designed for senior citizens; Prive sites, with a target to implement at
used exclusive landscaping as a in Lonavala, which is a smart homes least one national and international
differentiator, points out project integrating technology with innovation each year.
Mr Banerjee. For example, it has used day-to-day living; and international The idea is to build a model
biophilic (biophilia is the instinctive mixed-use projects, including that encourages employees to
bond between humans and other one under construction at Male, participate and take a risk, points
living systems) landscape designs Maldives, and another soon-to-be- out Mr Banerjee. At Tata Housing,
in one of its projects, the Myst in inked one in Sri Lanka. we want to think differently and do
Kasauli in Himachal Pradesh. things differently. As a practice, we
Tata Housing, through its INSPIRING IDEAS aim to challenge people to think
subsidiary, the Tata Value Homes, In the highly competitive differently. In a brick and mortar
also has a sizeable presence in environment that Tata Housing industry, this brings a whiff of fresh
the affordable housing segment. operates in, it is very important to air. We also seek out customer
Even here the company is offering have a regular pipeline of creative feedback which we can incorporate
thematic projects with mixed use and innovative ideas. To ensure this in the projects.
development, where you have happens, the company has created Innovation and sustainability
different components which are an innovation council, a cross- are the two pillars that are taking
synergistic in the sense that they functional team made up of middle Tata Housing to new heights.
feed off each other, explains Mr and senior management leaders. The many awards it has won for
Banerjee. So you have a work, live, In a quarterly programme, all its projects and for its approach
play kind of an environment. Many employees have to stop regular work to business bear witness to
people now choose to live in such and participate in an intense debate its commitment to building a
townships as opposed to individual and discussion with their bosses sustainable world for the future.
buildings because they foster a and colleagues on new ideas for
sharing of resources and that itself is three hours. The ideas are sent to the Shilpa Sachdev
April 2014
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Engineering much-
needed solutions
From making life easier for people on the street A subsidiary of Tata
to e-governance solutions for governments, Consultancy Services (TCS), CMC
is a leading systems engineering
CMC delivers IT solutions that are technologically and integration company that
advanced and high on impact offers a wide basket of IT solutions,
ranging from application design
and development, to testing services
W
hen residents of saved: Lots. Convenience: Much more. and turnkey projects. In recent
Mysore city in the This mobile-enabled bus tracker is an years, CMC has also expanded its
state of Karnataka, answer to commuters woes, one international business by offering off-
India, commute by which eliminates much of the shoring advantages and delivering
bus, they no longer have to waste uncertainty in catching a bus. And this value through service level based and
time waiting at the bus stand. They is thanks to the GPS-based intelligent project scope based deliveries (see
can track the exact time of arrival transport system (ITS) implemented box: International focus).
or departure of the bus on their by CMC and deployed in the fleet CMC has developed core
mobile phones and save valuable of buses operated by state-owned strengths in several niche areas where
minutes by reaching the bus stop Karnataka State Road Transport it has delivered noteworthy projects,
just before the bus arrives. Time Corporation (KSRTC). and the transportation sector is one
42 Tata Review
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BUSINESS
of them. Take the bus ITS project. We solve complex societal or business
KSRTC is the first public transport
problems using technology while
body in India to introduce a system
where real-time information relating ensuring that there is a core product,
to the arrival of buses on specific which we develop.
routes is available for passengers R Ramanan, managing director and CEO, CMC
through large LED displays at bus
stops as well as text alerts on phones.
KSRTC implemented the ITS and is bidding for similar projects implemented a fuel dispensation fleet
project along with the federal Urban across India. It is also implementing management system covering more
Development Ministry under a an intelligent transport project in than 22,000 vehicles that transport
World Bank programme to transform Botswana in southern Africa. petroleum products across India.
the citys public transport system IOCL can track real-time movement
into an efficient, safe, commuter- and BIG TICKET SOLUTIONS of these vehicles, helping it prevent
environment-friendly operation. What CMC brings to the table is pilferage and monitoring the
CMC was selected as the systems its extensive domain knowledge in dispensation of fuel.
integrator for the ITS project. the transportation business. It has a CMC has worked extensively
CMC managing director successful track record of designing with the Indian Railways, providing
and CEO R Ramanan says that and implementing state-of-the-art it with its passenger reservation
the system is being rolled out IT solutions for large operators with system and even an unreserved
across Karnataka: The GPS-based extremely complex systems. ticketing system. We have created
product has been mounted on all The basket of transport solutions a generic ticketing system for rail,
local buses in Mysore. We are also from CMC covers railways (including road, ports and ships, which can be
implementing this ITS system for all metro rail operations), aviation, deployed by operators, travel agents
5,000 buses operated by KSRTC in roads and ports, with leading state- and hotels, says Mr Ramanan.
Karnataka. CMC has replicated the owned behemoths as key customers. The company is now
ITS in the state of Andhra Pradesh For Indian Oil Corporation, it has developing a state-of-the-art
ticketing and revenue management
system, a next-generation version
of the one it developed for the
The upward curve Indian Railways. This will enable
cloud-based and rich analytic-based
19.26
2002 2013 dynamic configuration of ticketing
products. Today, transport
operators want to offer flexible
products targeting various segments
12.23
of customers for different seasons,
explains Mr Ramanan. They want
All values in INR billion
April 2014
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44 Tata Review
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From left: A Karnataka State Road Transport Corporation control centre; the arrival schedule displayed in a bus shelter
of operationalising the business call for a high degree of domain internet of things (a concept that
process. knowledge, and electronic hardware envisages tiny sensors or identifiers
Real-time systems, sensor-based and software design capabilities. that can be attached to millions of
technology, or technology related For the mining industry, CMC smart gadgets or things) as an area
to devices used. has developed a pit-to-port solution, where we can contribute in a big way,
As a result, CMC has built up a which helps miners keep track of notes Mr Ramanan. This would
significant presence in sectors such as expensive equipment in remote mean integrating sensor technologies
transportation, energy resources and mines, tracking both their inventory and making a meaningful impact on
utilities, ports and shipping, mining, and commodities such as iron ore. the information collected and the
insurance, banking and financial We are now deploying our flagship actions taken on the basis of that.
services, e-governance, and education mine management solution in The company also runs about
and training. different parts of the world, adds 120 training centres across India.
Mr Ramanan. The focus is on creating job-enabling
REAL-TIME SOLUTIONS Another product that is going training programmes, both at the
CMC has over three decades of overseas is CMCs web-based, core technical and vocational levels.
experience in providing consultation, insurance product Genisys, which
design and development services, is being marketed to insurers in MOBILITY IS KEY
and testing services in real-time the Middle East, Africa and other CMC has recently launched an
systems. The embedded and real-time emerging markets. initiative called CMC 3.0, which
solutions and engineering services focuses on SMAC social, mobile,
group, which employs a thousand POWER OF THE INTERNET analytics and cloud services. It is
people, caters to some of the worlds Another exciting area of opportunity looking at integrating social media
leading product manufacturers, for the company is in e-governance. with an app that can be used in its
participating in their embedded CMC has developed portals for education and training vertical;
systems design, development and several state governments including likewise, CMC is integrating mobile
testing life cycle phases. those of Assam, West Bengal, devices with an app that is helping
For instance, for TRW Odisha, Chhattisgarh and Karnataka, multinational Unilever in its retail
Automotive, a global leader in which help citizens access operations. It has also developed
automotive safety, CMC has set various government services. The mobility apps for the banking and
up a 500-person centre in India, Chhattisgarh Online Information for financial services sector, helping
supporting its operations in Europe, Citizen Empowerment (Choice), for integrate core banking and core
the US and other parts of the globe. instance, enables citizens to access insurance solutions. Mobility is
TRW selected us as the only partner nearly 200 government services. getting integrated into virtually every
for its low-cost electronic design, In addition, the company has project that we do in some form or
remarks Mr Ramanan. implemented treasury management the other, says Mr Ramanan.
Similarly, CMC has a facility services for a couple of state CMCs vision is to be
in Bengaluru that supports Ansaldo governments and is also deploying among the global top-20 systems
STS, a leading technology company an integrated revenue and treasury engineering and integration
in the railway and mass transit management system for the revenue companies by 2020. And it is steadily
transportation systems space, in authority in Rwanda. moving ahead on this journey.
the areas of signaling and collision A new arena for growth is sensor
avoidance systems. All these services technologies. We are looking at the Nithin Rao
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T
ata Teas latest campaign, across Tata companies which has upmarket salon, it shows one of the
The Power of 49, is a joined hands with Tata Global women customers advising the rest
message that combines Beverages and the Tata Tea brand on using a pepper spray as a strategy
two powerful forces the to put the power of social change in for self defence. A young salon
100-million-strong informed women the hands of women across India. employee disagrees, saying that she
voter base in India and the power The campaign is receiving a terrific does not need the pepper spray as
of informed choice in an election. response from all over the country; she believes in the power of the kala
It also leverages the employee base social media in particular is abuzz teeka or black dot in other words,
the voters mark.
We got about 40,000 to 50,000 calls Her words instantly impress
a day, which is quite unheard of in this the women present at the salon,
space. A million and a half women have who realise the power of their
vote through which they can
logged in their issues.
choose candidates who can make a
Vikram Grover, vice president, marketing, South Asia,
Tata Global Beverages difference to issues such as womens
safety. Directed by Gauri Shinde, the
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commercial resonates well with Tata popular bahu (daughter-in-law) initiative on the ground on a large
Teas well-established advertising roles. The initiative titled Bahu scale, there is a chance that it will
style hard-hitting and direct, with Nahi Bahumat Hai uses these actors get hijacked by political forces, and
a strong message on social change. to encourage women across the that is something we dont want.
Vikram Grover, vice president, country to think about their issues He underscores the point, It is a
marketing, South Asia, Tata Global and log them in with the company. Tata initiative and we are going to
Beverages, explains the idea behind This successful initiative is pulling maintain a neutral stand.
the commercial, The Power of in as many as 50,000 calls a day
49 came about as a result of our from women. Mr Grover says, We DOWN TO THE PIN CODE
understanding of the attitude of have aggregated all these issues LEVEL
women towards elections. Women and created a manifesto that will be For promoting the campaign, The
in India dont realise the power that handed over to the political class to Power of 49 campaign is using the
they wield. They cast their vote not initiate a discussion about womens Jaagore.com website extensively
based on issues but on whom their issues which are largely ignored in to create a large base of informed
family is voting for. As a result, our country. voters. People can register on the
the political class does not pay too Tata Tea has entered into website to vote and log in issues.
much heed to their issues. Tata Teas a partnership with TV18 for In a deepening of the engagement,
women-oriented campaign aims to organising a discussion on womens Tata Tea has introduced an initiative
change that mindset. issues in India. Mr Grover explains called Push the Pin which is
the rationale behind the tie-up, The an interactive and GPS enabled
HALF OF THE VOTE BANK reality of politics in our country is application that allows women to
To achieve the extremely ambitious that if you try to organise such an log in issues like safety, education,
vision of creating 100 million
informed voters, it was necessary for
Tata Tea to launch a multi-pronged
campaign that aims to reach out to Bahu nahi bahumat hai:
all women of the country, regardless
of their background and education.
Soap stars weigh in
The first phase of this campaign
Tata Tea has partnered with popular soap stars from leading
was about inspiring women and
entertainment channels to spread the message of Power of
awakening them to the power of
49 and connect with women of rural and semi-urban India.
their vote by telling them that they
Vignettes with these leading ladies are being aired regularly
form 49 percent of the electorate.
on entertainment channels, where women are encouraged
The idea behind the second
to voice their concerns and vote based on issues. Some of
phase of the campaign which is
the leading ladies include Sandhya from Diya aur batti hum
now running across media platforms
(StarPlus), Akshara from Yeh rishtha kya kehlata hain (Star
is about helping women leverage
Plus), Kamla Tai from Ek mutthi asmaan (Zee TV), Gunjan
the power of the 49 percent by
from Sapne suhane ladhakan pan ke (Zee TV) and Anandi
encouraging them to vote based on
from Balika vadhu (Colors).
issues that affect them. For this,
In the vignettes, women are asked to call a certain
Tata Tea has entered into multiple
number to log in their issues and the response to this has
partnerships to maximise womens
been phenomenal. Mr Grover says, We got about 40,000 to
involvement from all over the
50,000 calls a day, which is quite unheard of in this space. A
country.
million and a half women have logged in their issues and this
In order to connect with
LTRSADSGDQRSSHLDSGDONKHSHB@KBK@RRG@UDFNS@L@MHEDRSN
women from rural and semi-urban
that represents the views of so many women.
India, Tata Tea roped in five well-
known TV actors who portray
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The Power of 49 team worked relentlessly to ensure the success of the campaign
health, etc along with their residence its own way by launching the largest Tata Tea has facilitated the voter
pin code numbers. voter registration drive the country registration of thousands of
This unique step taken by the has seen. These registration drives individuals across the country in
Jaago Re website will help create a are in partnership with Haiyya, a partnership with The Art of Living.
community of empowered users by Mumbai-based NGO, and The Art
initiating thought-provoking debates of Living. Haiyya is an NGO with AMPLIFICATION
and providing information that is expertise in training people; it has The Power of 49 campaign is getting
vital to young women voters. trained volunteers from Tata Global a big boost from the support of other
Mr Grover says, With Push the Pin, Beverages and other Tata companies Tata companies, which is helping
people can go online and log in their to conduct voter registration drives. the message reach further across the
issues at a pin code level. We have a Mr Grover explains, Haiyya has country. One example is the way Tata
large number of issues that are being created e-learning modules and other company representatives have trained
logged in at a very local level and we training collateral to help empower volunteers and conducted voter
will organise ways to feed in these volunteers whom we are calling registration drives at their offices and
issues to politicians in the hope that evangelists. When companies want sites of operation.
they will respond. to run voter registration drives, it An ideation workshop was held
Another interesting partnership is Haiyya that provides support to in December 2013 to familiarise
is with Google, where plans are facilitate these camps. Evangelists Tata companies with the concept
on to interview 1,000 candidates from different companies become and invite ideas. Evangelists from
from leading political parties. These volunteers for voter registration and different companies were trained to
candidates will give their views on train other volunteers within their take it forward in their respective
how they will be addressing the own companies. organisations. Vaibhav Rathi, brand
issues of women at a local level. Yet another feat is that the manager at Tata Global Beverages,
These video interviews will go a long Election Commission of India has says, Our intention was to first get
way in helping women choose the granted Tata Tea special permission employees within the group registered
right candidate. for bulk submission of registration to vote and then look at how each
forms across the country. The only company could communicate the
CREATING HISTORY corporate entity in the country that message of the campaign externally
The Power of 49 has created history in has been granted this permission, through their assets.
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I
ndias borders stand strengthened. All are products of a longstanding
Sophisticated weaponry stand public-private partnership between TRUSTED PARTNER
ready for protection: armoured the Tata group and the Ministry of A fine example of the public-private
amphibious platforms, blast-proof Defence (MoD) of the Government partnership model in defence has
vehicles, unmanned aerial vehicles, of India. been that between the Tata group
multi-barrel rocket launchers, Keen to reduce dependence on and the MoD a relationship
electronic warfare systems and imports and stimulate indigenous lasting over 60 years. Stepping up its
nuclear submarine control centres. innovation in the development of engagement significantly in recent
50 Tata Review
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Convergent defence solutions from the Tata group range from blast-proof
vehicles to multi-barrel rocket launchers to the Mars Orbiter Mission
years, the group has emerged as a defence spend, and significantly less
trusted and reliable partner for the than in many other countries. Financial
three wings of the forces the With expertise in technology
army, the air force and the navy. and project management and snapshot
The defence business generated the effective utilisation of a wide
`17 billion in turnover for the range of competencies, the Tata The Tata groups
group in fiscal 2013, and the 14 group is well positioned to enter revenue from the
companies involved in the sector into virtually any area where the defence business
have an order book adding up to MoD wishes to build private sector was over `17 billion
over `80 billion. Mukund Rajan, capabilities, adds Mr Rajan. in FY 2013.
brand custodian and chief ethics The unique strength of Going forward in FY
officer, Tata Sons, and member, the group is that it can provide 2014, this revenue is
Group Executive Council, notes convergent defence solutions expected to grow by
that the groups defence business for complex projects thanks to 40 percent.
will expand by a hefty 40 percent in collaboration between various The current order
fiscal 2014. There is tremendous group firms, thus meeting the book size of the Tata
scope for the Indian private sector multiple requirements of defence group in the defence
to play a much bigger role in customers. business is in excess
defence, he remarks. The private Three noteworthy examples of of `80 billion.
sector today has a relatively small this include:
percentage share of the total Indian System integration by the Tata
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Power Strategic Engineering defence space TASL, Tata Motors best-selling helicopters, the Sikorsky
Division (SED) on a Tata Motors and Tata Power SED. S-92, used for VVIP transport. The
chassis for the Akash missile company has three different units
system. TATA ADVANCED SYSTEMS: producing globally-competitive
The joint setting up of THE MISSILE SPECIALIST products for helicopters and the
engineering, tooling, training A 100 percent Tata Sons owned aerospace sector.
and assembly operations for company, TASL has signed contracts TASL is also the single
an aerostructure project in worth over `40 billion and has joint global source designated for the
Hyderabad by Tata Advanced ventures and partnerships with empennage (tail and tail assembly)
Systems (TASL) and Tata major global players in the defence, and centre wing box structures for
Consultancy Services (TCS). aerospace and security domains. Lockheed Martins C 130J military
Tata Power SED and TCS TASL operates Indias largest transport aircraft. It shows the
working together extensively on private sector, integrated, detailed kind of confidence that a company
security applications. part manufacturing facility for like Lockheed Martin has in us by
Of the 14 Tata companies aircrafts and helicopters in a joint designating us as the single source
involved in a public-private venture with Sikorsky. Says Sukaran for a major part, adds Mr Singh.
partnership with the defence forces, Singh, director, TASL: We are the The company has invested
three account for a substantial single global source for the assembly over `4 billion in the last five years
part of the groups presence in the of helicopter fuselage for one of the and has set up production facilities
spread over 450,000 sq ft across
India. Employing more than 1,500
people, TASL holds major defence
Tata rms in the defence sector licences and is a participant in
Tata Motors strategic development and buy-and-
Tata Power (Strategic Engineering Division) make programmes of the MoD.
Tata Advanced Systems Another major area of business
Tata Advanced Materials for the company is missiles.
Nelco TASL is the lead integrator for
Tata Consultancy Services the development and assembly of
CMC command and control systems for
Tata Elxsi Indias major missile programmes
TAL Manufacturing Solutions and it has created a design and
Tata Technologies development centre for indigenising
Titan Company missile sub-systems and mini-UAVs.
Avana Integrated Systems
Nova Integrated Systems TATA MOTORS: THE
Tata Industrial Services MOBILITY PARTNER
A Tata company whose relationship
Defence capabilities with Indias defence and security
Tata group companies have partnered with the defence forces is synonymous with that of the
forces across areas such as: group is Tata Motors. Indias largest
Command and control. automobile company (subsidiaries
Network-centric warfare including naval combat. include Jaguar Land Rover), with
Air defence tactical communication. consolidated revenues of almost $35
!@SSKDDKCL@M@FDLDMSRXRSDLR
billion in 2012-13, is strategically
Trusted compute platforms. moving from the logistics vehicle
segment into the combat vehicle
segment.
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Inspired by design
The focus on design and innovation has become Revathi Kant, associate vice
president, design, innovation and
stronger at the Tata group in response to the development, at Titan, explains,
growing awareness of how good design enhances Design enhances the brands image,
so keeping that in mind, we have
the value of the brand and creates stronger, created two separate teams for design.
longer-lasting consumer experiences We have a team that only does the
thinking work. Its functions include
understanding the business and its
How Titan
T
he difference between a customers, and developing a strategy
me-too product and a or an idea based on the design.
well-designed one is that thinks design Titans superior product
the former merges into aesthetics are a result of the
the background and the latter
stands out from the clutter. Design
combines creativity and innovation
O perating in the fashion and
lifestyle space where visual
appeal and user experience is of
seamless integration of design
thinking and, its next step, the
actual designing. Titans robust
to create a product that enhances paramount importance Titan design process called 3I design
the user experience and delights Company regards design as a crucial has stages for immersion, ideation
the consumer. function. Indias leading watch and implementation.
At Tata, a group of companies and jewellery maker, Titan has This design innovation at Titan
have come together to drive the developed two distinct capabilities: ensures that its conceptualised
new mantra of design-driven for thinking design and for and created products stand
innovation in order to build a executing design. differentiated in the marketplace.
sustainable, competitive advantage We try and use our design concepts
for their products and services. in the companys other business
A recent roundtable conference categories, so that efforts are not
titled Design@Tata was the setting duplicated within
for senior leaders from Titan the company, says
Company, Tata Technologies, Tata Ms Kant.
Global Beverages (TGB) and Tata
Elxsi to discuss why design is a key
function in their organisation
and how it translates into value
for the brand.
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BUSINESS
address the needs of the consumers. to converse, the colours it uses to cuisine, Bru had to make its
Says Mr Talbot, With the rapidly attract, etc. Whats needed is a presence felt in the premium end
changing demands and requirements clear objective for the design, says of the coffee market, which was
of consumers, blending creative Mr Talbot. This translates into an dominated by international brands.
design with technology has become idea or a strategy, while the rest is Tata Elxsis task was to uplift the
the need of the hour for companies. all about quality execution with a traditional imagery of the brand by
At Tata Elxsi, a design project strong focus on detail. creating an international appeal.
is broken down to several smaller A recent successful design To achieve this, it developed a
elements for a brand design, for makeover was for Bru, the 50-year unique pack design with a glass
example, it may include crafting old coffee brand from Hindustan finish and an innovative cap design.
the story of a brand, the values it Unilever (HUL). With the rise The premium look and increased
represents, the tone of voice it uses in consumer interest in gourmet visibility led to increased market
share for HUL.
Rishi Vora
56 Tata Review
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SPECIAL REPORT
Invested in innovation
Innovation is at the core of the Tata group. The group encourages
innovation through several programmes and, in 2012-13, spent
`132.23 billion or about 2.5 percent of its turnover on innovation.
Talking to Tata Review, R Gopalakrishnan, chairman, Tata Group
Innovation Forum, looks back at the innovation journey; Ravi Arora,
vice president at Tata Quality Management Services, shares the nuts
BOECPMUTPGJOOPWBUJPOJOUIFHSPVQBOEDIJFGUFDIOPMPHZPGDFSPG
TCS Anant Krishnan and chief executive of Tata Steel Europe Karl
Koehler talk about the innovation initiatives in their companies.
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SPECIAL REPORT
W
e didnt call it innovation in those a contemporary focus in the Tata group about
days, but innovativeness has always a decade back, when it was decided to adopt
been a part of the Tata groups innovation as a formal initiative.
sanskar (traditions), its way of The inspiration came from Ratan Tata, the
thinking. In recent years, we have adopted the then chairman of the Tata group, who spoke
global practices associated with encouraging of the need for innovation at the Business
innovation in the group, and these have added Excellence Convention 2004: To be leaders,
more power to the spirit of innovation that has we need to innovate. We need to bring out the
been such an integral part of the Tata way of creative strengths of our people and create an
doing business. environment where we do things differently
It is important to understand that there and do things others have not done.
are several myths about innovation. Disruptive This became the springboard for a host
innovations are not always planned for, they just of innovative practices in the group, with Tata
happen. Alexander Flemming never set out to find companies encouraging employees to feel free
penicillin, he stumbled upon it while researching to experiment and dare to take risks. The Tata
something else; chemically synthesised fertiliser Group Innovation Forum was set up in 2007, to
may not seem like an innovative product handhold Tata companies on their innovation
journey and to encourage, inspire and help create
When I look back, I am glad a culture of innovation within the group. This was
that we started on our formal a huge challenge because just like it is easier to
teach physics and arithmetic than to teach music
innovation journey the right way
or painting, it is much easier to work on processes
and chose the culture route. and structures than on culture.
R Gopalakrishnan, director, Tata Sons; chairman, TGIF The Tata group is largely a left-brain
organisation, full of engineers, MBAs, lawyers,
58 Tata Review
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SPECIAL REPORT
T
ata Quality Management Services about. The information is compiled on the
(TQMS) has been driving innovation Tata InnoVista website and is accessible to any
in association with the Tata Group Tata employee desirous of knowing about new
Innovation Forum (TGIF). We have a developments happening across the group.
team of four members who help to implement Tata InnoVista begins in November and we
the forums decisions. Group-wide initiatives and get about 2,000 projects from Tata group
programmes have been instituted by the team to companies across the world. In January, the
serve as triggers to spark innovation. online process of selection, which has been
One of the most popular programmes developed by CMC and involves more than 300
initiated across the group is Tata InnoVista, senior Tata executives, begins.
through which we try to inspire and motivate By February-March, 200 cases are selected
young middle-level managers to take up that are presented across seven places spanning
innovation projects. An amazing platform, it the US, the UK, Southeast Asia and India. The
enables the capturing of new and innovative winners then come to Mumbai for the final round
developments in the group everything that and the award ceremony. This year, the Tata
people are proud of and want to tell others InnoVista award ceremony was held on April 23.
An important step last year was to
encourage rewards and recognition at the
Innovation is like yoga; it may not
company level, and not only at the group level.
be necessary for survival, but is This year, for instance, companies like Jaguar
useful for long-time sustainability. Land Rover (JLR), CMC and Tata Consultancy
Ravi Arora, vice president, Tata Quality Management Services conducted internal InnoVista-like
Services programmes. Both JLR and CMC even call
their programmes Internal InnoVista. They got
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SPECIAL REPORT
Quiet start
2008
Growth
People
2010
Projects
Expanded scope
Categories
Jurors
2012
Companies
Consolidation
2014
5,000+ 1,700+ 8 300+ 70
programme that has been in place for more than recovery, whereas the former would need many
three years. more showers to sprout. Programmes like Tata
JLR also has an interesting programme in InnoVista and Tata InnoVerse PLUS have been
which employees are encouraged to come out designed to help companies maintain the rhythm
with innovative ideas on Tata InnoVerse. Teams of keeping a consistent focus and commitment
with selected ideas are then given two days to towards innovation.
come out with prototypes. A recent example was There are small nuggets of knowledge
the effective use of boot space for leisure purpose available within the group which promote
while the vehicle is parked. innovation at team level. Titan, for instance,
has a programme in which every functional
OBSTACLES ON THE PATH head is allocated about `100,000 to fund small
TO INNOVATION experiments leading to innovations. Once the
There is no company in the world that has funds are exhausted, they are replenished after
perfected the art of innovation. Innovation needs they make a presentation to the senior leadership
a long-term view. Most companies know how to on how the funds were utilised.
work on small improvements and incremental It is important to assign the right resources:
innovations, but they need to learn the art of creative maverick people to think
working on long-term, radical innovation, which of new ideas; and Everest climbers who would be
may not necessarily impact the quarterly results, willing to take on the journey of completing the
but lead to an accrual of benefits over a longer innovation, which is fraught with risks. The Dare
term. To make this happen, firms need to find to Try award in InnoVista attempts to spread this
a way to commit resources to innovate. Most message to climbers and coaches alike. Looking
importantly, they need a brave and objective ahead, I see senior executives across Tata group
method to kill a project. companies becoming more confident about
There are companies which feel that the managing the nebulous subject of innovation,
market is down, morale is down and it is not the yielding not only incremental innovations but
right time to work on innovation. Then, there also radical ones. This is important because the
are companies who spend time and resources, Tata portfolio in future and the markets it serves
and manage to find funds for innovation even will demand a higher propensity to innovate.
during bad times. Obviously, the latter spring
up faster during the first showers or signs of As told to Nithin Rao
62 Tata Review
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Innovation@TCS
Underscoring its strong strong Co-innovation Network (COIN) that
standing as a world-class IT connects to academic research, emerging tech
companies, venture capital firms and strategic
company, Tata Consultancy alliance companies, and Tata group companies.
Services has built a global We also encourage our leading business units,
such as insurance, banking and retail, to have
network of innovation labs. their own innovation units, so that they can
$IJFGUFDIOPMPHZPGDFS handle innovation in specific domains closer to
the customer.
K Ananth Krishnan speaks to
As for financial investments, we invested
Gayatri Kamath about TCSs over `7 billion last year on innovation. We have
innovation programmes and been consistently investing about 1.5 percent of
our total turnover on research and innovation.
how they deliver value Our patent count has grown exponentially in the
past two years. We have filed for 1,746 patents
What is the level of investment and 114 have been granted as of this year.
that TCS puts into research and
innovation? What kind of innovation is taking
TCS has been investing in research for over place in the labs?
three decades now. Our flagship lab was founded The research we do is grouped in three broad
in 1981 as the Tata Research Development and areas: software, scientific applications and cyber-
Design Centre in Pune. We built some of the physical systems. Each area has several projects
earliest toolsets for application development and involving emerging technologies.
support and this helped us deliver large software We have a 4E model for innovation
projects for prestigious customers globally. management. The core research in the labs
The innovation process itself has gained comes under the Explore phase. Once we
maturity with a clear framework that carries
an idea from exploration to a commercial The innovation process has gained
solution. And, we now have about 2,500 people
maturity with a framework that
in innovation, asset creation, research and
development, across the organisation. carries an idea from exploration to
We are also investing in the computer commercial solution.
science ecosystem in the country with a +!NANTH+RISHNANCHIEFTECHNOLOGYOFCER4#3
Research Scholar Programme. We have built a
April 2014
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SPECIAL REPORT
64 Tata Review
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SPECIAL REPORT
experience, design, social media consulting, leadership encourages creativity and problem
enterprise marketing management, etc. This solving.
service line has enabled TCS to acquire new
customers and to expand its footprint in What does TCS do to encourage
existing established relationships. It also helped innovation and innovators? Are there
establish our thought leadership in the area. any specific schemes, initiatives or
processes for this?
What, in your opinion, are the key We provide an intellectually stimulating
factors that can spark innovation environment with mentorship by senior
and ideation in the workplace, researchers of repute. We have a 4E innovation
outside of the innovation labs? framework where research progresses in a
Both the input and output mechanism streamlined fashion from idea to offering. We
for innovation must be well oiled to spark have annual awards for researchers as well as
innovation. Clear articulation of customer engineers in the innovation labs. We encourage
problems is the input that is essential. Quite collaboration with academia and other
often we lose the capability to understand the research bodies. We mandate tier 1 conference
customers pain point or his latent need. A attendance for executives for greater exchange
culture of creative dissatisfaction with the status of ideas. There is a separate cell to support
quo is critical to spark innovation. Associates researchers in patent filing.
must feel that continuous improvements are Our researchers have a distinct career path.
possible and that they can contribute to this We encourage role rotation for associates from
improvement. core research to research-related engineering,
Our customers too understand this spirit sales or co-innovation. They can also move to
and help foster it. Recently we had a hackathon business unit innovation teams. We also give
for an anchor customer. The customer had put them freedom from constraints. Researchers are
up prize money of US$25,000 and some gifts for not given revenue targets, but are encouraged
winners. Nearly 4,000 TCSers around the world to do what they are best at: explore new
participated and nearly 300 applications were technologies, write papers, file patents. They
submitted for review. do not have to make sales pitches or worry
Sometimes peer recognition can be a about go-to-market strategies. There is a team
greater motivator than a cash award. Inviting that helps them with market inputs, forging
everyone to participate in solving challenges, solutions with delivery units, providing pricing
openness to receiving ideas from all, models, etc.
transparency in response to ideas these are
triggers for people to think innovatively and What role can pan-Tata forums
engage in solving problems in new ways. The like TGIF or TQMS play in bringing
TCS social platform Knome allows the entire innovative products or ideas to the
enterprise to participate in conversations. For market?
instance: They are already playing a significant role by
For the live chat with the CEO, 76,000 enabling:
people logged in from 60 TCS locations; 700 Collaboration (Tata Swach is a case in point).
questions were asked. Crowd sourcing for ideas, especially through
Over 50 senior management chats have the Challenges Worth Solving initiative.
happened, and over 10,000 comments have Sharing of best practices.
been directed at leaders. Adoption of good initiatives Tata
Over 1,000 ideas were generated for 42 Innoverse, ECView.
focused challenges in two months. Recognition through awards such as
So, the right environment created by the InnoVista.
April 2014
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SPECIAL REPORT
Driving innovation
Karl Koehler, chief executive of Tata Steel Europe, explains
how the company uses innovation as a means to partner with
customers to help them address their challenges
I
nnovation matters to industries that operate catering to customers in specific markets. They
in mature markets such as the European work closely with customers in their sectors to
steel industry because its a key tool for understand their needs, which then direct the
growth. Discerning customers have evolved delivery, production and supply chain activities.
to become the key drivers of innovation in
global steel markets. Suppliers who know their PIPELINE TO INNOVATION
customers businesses and markets intimately To drive innovation through product and supply
stand to gain because customers are keen to chains, the marketing function established a new
form profitable, long-term partnerships in their product development (NPD) pipeline in 2011
efforts to taste success in their chosen markets. to capture ideas and funnel the best through
Tata Steels endeavours in the field of to commercialisation. An award-winning
innovation and R&D are framed within the adaptation of a management software tool has
context of customer needs. The companys been put to task for this particular purpose.
market strategy in Europe is targeted at The NPD pipelines success can be measured
providing customers with differentiated by the increase in new products and services in
offerings, which translate into products and the companys portfolio. Tata Steel launched 30
services that few others sometimes no others new products and services in the financial year
provide. This necessitated a redesigning of the that has just ended the highest number since
companys operating model. We believe the new the start of the programme. Another statistic that
model is unique in the steel industry a true points to the pipelines success is that the volume
differentiator. We created market sector teams of new products and services sold last year rose
by around 80 percent.
A major addition to new products launched
Tata Steels endeavours in the
last year was the new grade of heat-treatable,
field of innovation and R&D are case-hardening steel, C15E. Building on
framed within the context of decades of steel know-how, Tata Steel has been
customer needs. developing high-quality, complex steels of this
Karl Koehler, chief executive, Tata Steel Europe type after significant investment in production
processes and controls. The steel has excellent
66 Tata Review
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SPECIAL REPORT
formability and good punchability making it that the ULCOS partners regard as having the
perfect for wear-resistant parts that withstand best prospects to succeed. A combination of
extreme fatigue stress in demanding applications. Rio Tintos HIsmelt process and the Isarna (an
It also offers customers reliability and consistent old Celtic word for iron) process developed
quality. at IJmuiden, HIsarna has the potential to
Innovation has a major role to play in the reduce carbon emissions from the ironmaking
development of new systems and products. process by around 20 percent. The 60,000
A pertinent example would be the new tonne per annum HIsarna pilot plant is due
photovoltaic ground-mounting systems launched to start a fourth trial production campaign at
last year an essential component in solar IJmuiden in May to test production runs and
power generation modules. The systems can trial different raw material blends. The HIsarna
be built to order, based on individual customer plants development has been partly funded
needs. An innovative aspect of the system is that by the European Commission and the Dutch
it reduces material consumption by reducing the government.
number of piles needed for installation.
PROVING INNOVATION
CONSORTIUMS FOR INNOVATION Tata Steels R&D function is also the main
Another important driver of innovation is anchor behind another customer-oriented
the R&D function, which supports the NPD initiative that is taking shape, The Proving
pipeline. Its activities are aligned with the Factory, through which Tata Steel is working
companys customer-focused strategy. Besides with a number of partners to help bring to
the NPD programme, R&D has developed its market groundbreaking green technologies
own programme, Thrust, to boost work on which will power the cars of the future.
projects based on new ideas and concepts. Tata The Proving Factory will act as a bridge
Steel works with a consortium of customers, between green technology prototypes and
industrial partners and academia on these high-volume production. It will prove the
projects the company provides R&D viability of low-carbon vehicle technologies
resources and sample material.The automotive designed by small, high-tech British companies
Thrust team, for example, is collaboratively and university research departments in
working on a project to develop low-carbon production, increasing their chances of being
vehicle technologies. Collaboration with adopted by major motor manufacturers. Once
customers on a project increases its chances of completed, The Proving Factory will identify
commercial success. advanced technologies for vehicle makers and
The companys R&D activities focus on the carry out trials with a target of manufacturing
whole range of iron and steelmaking operations, between 1,000-20,000 product units a year
from raw materials to finished products. The using any one technology and between 10-20
focus also extends to customers own processes. different types of products.
Last year, for example, Tata Steel opened a new In a globally competitive sector such
hot press forming plant at IJmuiden in the as steel, policy makers and industry must
Netherlands to serve the companys automotive work together to deliver the right operating
customers by developing crash-resistant steels to and investment conditions to stimulate
make vehicles safer and more fuel-efficient. Tata technological breakthroughs. Steel has
Steel supports the development of breakthrough underpinned the development of modern
technologies to deal with the challenge of civilisation. The current generation of industry
climate change as a founding member of leaders have the responsibility to realise
the Ultra Low CO2 Steelmaking (ULCOS) steels full potential as a material. We, at Tata
consortium of European steel producers. Steel, will continue to focus on innovation to
HIsarna is a new ironmaking technology profitably grow with our customers.
April 2014
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IN CONVERSATION
68 Tata Review
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IN CONVERSATION
You have been an academic all going to happen overnight. Being world-class in
your life and have many stellar research, innovation and customer centricity are
achievements to your credit in not destinations; they are journeys.
that field. What made you leave
academia and join the world of In R&D, what does India need to
business? do to catch up with the rest of the
I have spent most of my working years in world?
academia and I continue to define myself as Compared with the rest of the world, India
an academic, but I felt that I had achieved all is investing too little in R&D. In the United
the goals I had set for myself. Also, I wanted to States they invest 3 percent of their GDP in
come back to India. Here the kind of academics R&D, in China it is 2 percent; in India it is only
I am into does not exist, except at the Indian 0.6 percent. Corporate GDP is much lower and,
School of Business and I did not want to live in therefore, a more substantial investment in
Hyderabad. When the opportunity to join Tata R&D is important. Chinas example shows that
arose, I realised that this was a great chance to we as a country can certainly do much more.
serve a group that has played a critical role in You need commitment, not only from corporate
the development of India. It was an attractive entities but also from the government.
proposition. Some other group or job and I Consider the United States and Israel: both are
would probably have said no. good at technology and innovation because
a large part of the investment in R&D comes
You have spent about seven months from the defence sector and, hence, from the
with the group. What has the defence budget.
experience been like thus far?
What I find truly exciting is that since it is Would a group like Tata, with
a diversified group there are always new multiple businesses and a presence
challenges. As an academician I took up in many industries, benefit from
consulting assignments for several companies; having a chief technology officer
I find myself playing the same role here in (CTO)?
the group. My job is to help companies find Most certainly. In a scenario such as ours, the
innovative solutions to their problems. So role of the CTO is not going to be to suggest
far I have worked with Tata Chemicals, Tata which technology to adopt, but to give advice
Global Beverages and Tata Industries. I see on how to manage technology: processes,
my job not so much about solving problems structures and systems. Companies can choose
as about increasing the imagination quotient to go with different technology platforms
of the solutions. depending on their need. The CTO can offer
guidance on what should be an outcome of that
Imagination means innovation and process as well as be a technology sniffer.
research and development. What is
your opinion about the investments In one of your recent interviews,
that have been made in R&D by the you made a distinction between
Tata group? concepts of the past, such as the
At the Tata group, we are going to compete made in China label, and of the
increasingly in a future where innovation future, when China will be defined
is a critical driver for creating differentiated by the owned by China label.
products and services. If innovation is going Could you elaborate on this?
to be the source of our competitive advantage, In the past 20-30 years, the made in China
its vital to have a good technology profile and label has become ubiquitous because China
sound investments in R&D. However, this is not is the manufacturing capital of the world.
April 2014
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IN CONVERSATION
Now the Chinese government has mandated is a country full of rich cultural myths. Dabur
that sources of natural resources should be is using this to market its natural ayurvedic
secured, which explains why the Chinese have products. Taj Hotels can similarly use the land
bought up large tracts of land in countries like of the maharajas and palaces theme. These are
Australia, Africa and New Zealand. A lot of cultural icons of India and we can do a much
the consumption in the world today is being better job of tapping into and marketing them.
driven by China, which is the largest consumer
of resources and products. Large companies The third route is to use the ethnic diaspora.
like Starbucks, hospitality chains like Starwood ICICI Bank has taken this route successfully to
Hotels, luxury motor car companies like BMW enter foreign markets, where it is expensive to
and Jaguar Land Rover, shipping companies advertise. If you can find a diaspora on which
they all say that China is the market. to build the initial set of sales, you can use these
Even Africa is booming, because China is resources to spread across the country. India has
consuming its raw material and resources. the largest global diaspora after the Chinese.
So the world is going from a made in China
phase to a made for China phase. This trend Would you agree with (Googles
will eventually lead to owned by China. executive chairman) Eric Schmidt,
who recently said that Indias
In your book Brand Breakout, you entrepreneurial innovators have
have advocated eight routes that the potential to build the next
emerging market brands need Google?
to take to establish themselves In a way, yes. Young Indians are being
globally. Which routes do you think increasingly exposed to the global economy and
could catapult Indian brands to the many of them want to build new companies.
international stage? Sooner or later, one of them is going to crack
Three routes are particularly relevant for the code: if not the next Google, then the next
Indian brands. The first is branding natural Whatsapp.
resources. India has a huge amount of natural
resources, but we have never branded them Do Indian and other emerging
the way the French and Italians have branded market brands need to invest
champagne and Parma ham, for example. more in building their global
These are good examples of branding products image, especially among western
based on the geographic location of that consumers?
product. We have Darjeeling tea, South Indian I dont think there is a need to build our image
coffee, red cinnamon and other spices, but among western consumers because that is
we have not used active branding for these. tremendously expensive. Unless you have a
The way to do that is to begin by defining good rationale for this strategy, I would advise
the region tightly. You then create a myth against it. Thats why most of the big global
around that region about its special qualities. companies coming out of emerging markets are
The French are good at creating these myths. business-to-business, rather than business-to-
Another example is Premier Cosmetics from consumer, enterprises.
Israel, which says its salt comes from the
Dead Sea, from where Cleopatra obtained her What changes would you
beauty secrets. India has many products where recommend in government policies
branding of natural resources will work. The in India to help Indian companies
government can play a big role here. expand overseas?
In my opinion, one obstacle to Indian
The second is the cultural resources route. India companies expanding overseas is the
70 Tata Review
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IN CONVERSATION
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COMMUNITY
Empowering migrants
Ignored by lawmakers, harassed by law-enforcers exercise, and migrants as a vulnerable
occupational group in urban spaces.
and viewed with suspicion by law-abiding citizens, There were hardly any models,
migrant workers and their families live on the fringes organisations, donors or defining
agenda to represent the group.
of society in urban areas. Aajeevika Bureau and Constitutionally migrant workers are
citizens. We have to make provision
Prayas, supported by the Sir Dorabji Tata Trust
for them, says Nayantara Sabavala,
and Allied Trusts, are part of a group of NGOs that deputy programme director, Urban
Poverty and Livelihoods at the Trusts.
provide support and an identity for migrants
The problem is that they are not
a tangible community. They dont
F
rom roads to high-rise jungles far from their rural homes. have any recourse if an employer is
towers in Indias cities and However, dreams of a rosy utopia are exploiting them.
towns, a large part of urban razed to the ground as they come face The Trusts next set about
construction is the result of to face with exploitation by labour identifying organisations to partner
the sweat and labour of migrant contractors and employers, and poor and support, and Aajeevika Bureau
workers. These nomadic workers are working and living conditions, with and Prayas, pioneering organisations
mostly landless labourers or small women suffering the added indignity in the field of migration, met their
farmers affected by shrinking land of physical and sexual abuse. requirements. The two-member
holdings, the vagaries of climate and family has since grown to a robust
decreasing yield per hectare, which A HUMANE VIEW partner network of 34 organisations,
make agriculture a fruitless exercise. In 2006, Sir Dorabji Tata Trust working across Rajasthan, Gujarat,
Dreaming of better living and the Allied Trusts (the Trusts) Uttar Pradesh and Odisha. The
conditions and financial security, identified urban poverty as an area of models experimented with by the
many look for subsistence in concrete focus as part of a strategic planning Trust partners and the lessons
72 Tata Review
April 2014
COMMUNITY
learnt are an invaluable resource Prayas provides migrants with of brick kiln workers, BT cotton
that can shape the corporate social a voice. It mobilises them to come workers, ice cream vendors and
responsibility policies of companies together as one to fight for their construction workers and negotiates
to fulfil their employability and rights. It works to form collectives with employers to improve wages
livelihoods agenda, and help bring
down Indias unemployment rates.
As Sugandhi Baliga, senior
programme officer at the Trusts for Justice delivered
Urban Poverty and Livelihoods,
explains, Migration is a reality that
could not be wished away. There was
a lot of introspection at the Trusts
since we have always believed in rural
development, including livelihood
and natural resource management.
There was an eventual realisation that
the changing economy will lead to
migration and it is important to focus
on migration explicitly.
April 2014
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COMMUNITY
and enable insurance and legal claim accident and the employer shies away about the facilities it provides.
settlements. Over `20 million worth from responsibility. The organisations Each organisation ensures that it is
of legal claims as well as insurance mediate with the employer to sort out reaching out to migrants and catering
claims worth a fair amount have the issue. Migrants bonded in chains to a need under the broad umbrella
been settled through these centres. of slave labour have been rescued of support outlined by the Trusts.
Primarily working at the through partner networks after calls
destination end, it has fellows for to the helpline. Whether it is helping PAVING NEW PATHS
coordination at the source end. out with KYC (know your customer) The Trusts intend to reach out
Fellowship, in the form of money norms to open a bank account or to 300,000 migrants through 60
and resources, is offered to bright, documentation for securing an source and destination level centres.
enthusiastic youth who are keen Aadhaar or ration card, the centres Innovative strategies, proposals and
to work for migrant welfare. The stand ready to help. approaches promise a bright future
fellows build strong networks with A fair amount of cross-learning for the Trusts interventions for the
the migrating villagers and form has happened as more organisations welfare of migrants.
connections with the community at have joined the fold of the Trusts An initiative in which the Trusts
the destination. support. Although the mobilisation are collaborating with academic
route of Prayas and the service institutions and think tanks is
OASES OF SUPPORT delivery mode of Aajeevika have been Strengthen and Harmonize Research
The support that Aajeevika, Prayas the two main models of operation, and Action on Migration in the
and partner organisations provide many partner organisations have Indian Context. An online portal
have proved invaluable to migrants tailored the modes to suit geography (www.shram.org) has been created
who land up bewildered and helpless and requirements. So an organisation as a knowledge community related
in cities and towns. Unique identity may provide a service where a teacher to migration in South Asia, with a
cards, provided after registration travels with a migrant group and specific focus on India. A repository
at the centres, have helped them teaches the children in their native of information, research studies,
walk out free when picked up by tongue. When the group is back in data, news clippings and articles, it
policemen in trains or after a robbery time for harvest or agricultural work, gives non-volunteers a glimpse into
in the locality. Theres a toll-free the children are able to appear for the world of migrants and migrant
labour helpline (with its tag line Daro exams and dont miss out on school. welfare activities. Members relate
math phone karo or fear not, make a Another may provide seasonal hostels experiences on the field in the
phone call) which has proved to be a for migrating children. Yet another blog space of the portal a wage
lifeline for migrants when they face may use puppets and theatre to tell negotiation settled in favour of
harassment, do not receive payments a story of the travails of migrants labourers, accident compensation
on time or if they have a work-related and in the process create awareness provided, and other such stories.
A Centre for Migration and
Labour Solutions has been set up
with Aajeevika to act as the technical
support unit to partners. A core team
provides orientation and conducts
technical support visits to new
centres. Workshops on providing
legal support and skills training,
financial inclusion, etc are held
to share knowledge. A half-yearly
newsletter on the latest developments
helps disseminate information.
Utilising the booming mobile
A group of successful trainees with their skills training certificates industry to enhance connectivity
74 Tata Review
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COMMUNITY
Shalini Menon
April 2014
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COMMUNITY
A rich volunteering
tradition
About 25,000 employees from Tata companies of rural communities and the
differently-abled.
signed up to be part of Tata Engage, the groups Specifically, volunteers are
volunteering programme, on the occasion of the engaged in teaching conversational
English skills, offering maths and
175th birth anniversary of the Founder, Jamsetji Tata science education, and working
towards computer literacy and adult
literacy, besides organising health
T
he fact that the Tata group COMMITMENT TO camps and creating awareness on
has a rich volunteering COMMUNITY health-related issues. They also
tradition was brought to Employees of the Taj have always organise water conservation projects,
light when nearly 25,000 worked for the benefit of the tree plantation and adoption drives,
employees from Tata companies community. Vasant Ayyappan, beach and fort cleanups, paper
across the world signed up to be director of corporate sustainability, recycling programmes, etc. TCSs
a part of Tata Engage, the groups IHCL, says: At the Taj, our core competency is also employed in
volunteering programme, which commitment to the community organising computer training for the
was launched on the occasion of the has been part of our DNA. Our visually impaired and in developing
175th birth anniversary of Jamsetji employees have been actively and maintaining IT-based systems for
Tata, the Founder of the group. volunteering for over 20 years. More Maitrees initiatives.
The success of the week- than 10,000 volunteers have spent Employees of Tata Chemicals
long drive indicated that while over 100,000 hours engaging in have always believed in setting aside
volunteering was a first-time various volunteer initiatives. time to make things better for the
experience for many, by itself it is by TCS has approximately 20,000 community. Volunteers put in 17,128
no means a new experience for the registered volunteers across the man hours in volunteering activities
group. There are many companies globe, working under the guidance across all its locations in 2012-13.
that have a rich volunteering of Maitree. These volunteers are Volunteering at Tata Chemicals,
tradition. These include, among involved in activities in areas managed under a programme
others, Tata Consultancy Services spanning education, health, called Harnessing Opportunities
(TCS), Tata Chemicals and The environment, and the economic for Peoples Empowerment, is an
Indian Hotels Company (IHCL). empowerment of women and intrinsic part of the culture of the
76 Tata Review
April 2014
COMMUNITY
VARIED EFFORTS
The companys regular volunteering
programmes include Arohan, a Volunteers from Tata Communications clean a beach in Hyderabad
childrens festival consisting of
a number of sports and cultural
competitions organised for children
of nine schools in Haldia in West
Bengal, India, eco clubs and eco
fairs held to create awareness about
local biodiversity, summer camp
and coaching classes to help school
children to improve their English
language skills and to ensure
personality development, science
workshops, special coaching classes Tata Swach water filters being distributed by Tata Chemicals employees
to prepare students for entrance
exams, cultural programmes, and eye
camps and blood donation drives.
Most volunteering programmes
thrive on the strength of a basic
structure that helps monitor the
activities and ensure that the purpose
behind them is being served. Nina
Screwvalla, global head, TCS
Maitree, says: We do not mandate
any minimum number of hours of
commitment on a monthly basis. But TCS volunteers at a summer camp at Sadhashraya School, Bengaluru
most of our activities generally take
up about two hours per visit.
She adds, Volunteers also have
the option of offline volunteering,
which involves preparing schedule /
syllabus, checking papers, calculating
customer satisfaction index etc.
While the activities themselves
are driven by volunteers, the
organisation offers infrastructural
and operational support under
the framework of TCS Maitree. Tata employees undertake a tree plantation drive
April 2014
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COMMUNITY
From left: Tata Africa Holdings (Kenya) employees visit St Bernards Home in Langata; volunteers from Tata Sons and
NatSteel Xiamen donated books and set up a library at Kulong Elementary School in Fujian Province
Associates who are registered The IHCL volunteering activities span a range of needs.
as volunteers are given the right programme has the backing of We provide capacity building and
orientation to match their skills as the MD and CEO of the company. entrepreneurship support, conduct
per the initiatives. Specially designed Hotel management reviews, donation drives and support child
volunteer training programmes are conducted by the respective development through education. We
conducted to guide volunteers. COOs, always include updates also work to empower local youth
IHCL does not mandate a on volunteering as part of their and make them employable through
minimum number of hours either. presentations, adds Mr Ayyappan. skill enhancement programmes.
Mr Ayyappan says: Employees Regular volunteering campaigns and In addition, IHCL supports rural
are encouraged to volunteer for a contests also help to drive registration communities in a number of ways
minimum of five hours a month. numbers. We are in the midst of and sources products required for
While we do not have dedicated instituting a volunteering policy to the functioning of the hotels through
budgets for volunteering, we assist help drive volunteering at a wider self-help groups, etc.
hotel management teams in setting level. Volunteering is also recognised At the close of every activity,
up NGO partnerships. The corporate at the companys Taj Annual hotels update details about the
team provides overall guidance to Business Excellence award ceremony. activity conducted on the companys
programmes run at hotels. We are Individual hotels also recognise annual community initiatives tracker
also constantly available for any volunteers for outstanding work. which is evaluated on a yearly
support and assistance required. Companies take volunteering basis. This helps IHCL to become
efforts seriously, mapping the aware of the results achieved by
AWARENESS PROGRAMMES experiences and lessons learned in its programmes. The activities are
Tremendous efforts are made to order to make steady improvements carefully monitored by a Give Back
encourage employees to sign up as in their endeavours. Ms Screwvalla Committee, whose members are
volunteers. TCS conducts numerous says: We organise volunteering appointed from among employees of
awareness programmes to encourage activities as per the guidelines laid each hotel.
associates to donate their time and down by TCS Maitree. At the end of Volunteerism works precisely
skills for various initiatives. Explains the activity, we conduct a baseline because volunteers work hard
Ms Screwvalla: We organise road study and routine tests to check the without expecting any compensation.
shows and visits by beneficiaries to progress made and the impact of our Their only hope is that they might
encourage volunteer participation. volunteering efforts. We also discuss be able to empower and develop the
Regular registration drives are the lessons that we have learned to community whose cause appeals
conducted besides an annual make sure that we have addressed to them. The company benefits
volunteers campaign. We also share the need of the beneficiaries. At from the goodwill generated by the
various learnings from our volunteers regular intervals, we seek 360-degree interactions, while the volunteer is
with our wider employee base. feedback from our stakeholders. enriched by the experience.
Reward and recognition programmes Similar efforts are made by
also help to encourage volunteers. IHCL. Mr Ayyappan says: Our Cynthia Rodrigues
78 Tata Review
April 2014
PHOTOFEATURE
Inspired by the Founders vision, the Tata Suites there are only eight to be found in
7DMSURSHUWLHVDURXQGWKHZRUOGUHHFWYDVWQHVVZLWKFORVHQHVVYDVWVSDFHVZKHUH
close attention is given to the smallest detail). They offer guests a taste of the royal
lifestyle that was once the sole preserve of kings.
In the following pages, Sujata Agrawal takes you through some of the Tata Suites around
the world, each a statement in itself.
April 2014
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79
PHOTOFEATURE
7KHUVWHYHU7DWD6XLWHUHVLGHV
LQ0XPEDLVUVWOX[XU\KRWHO
:LWKYHWKRXVDQGVTXDUHIHHW
RIDZHLQVSLULQJURRPVEHWWLQJ
WKHPDJQLFHQFHRIWKHKLVWRULF
building, the Tata Suite at the
108-year-old Tata Mahal Palace
encapsulates history, legend and
romance.
Luxury is carved into every corner
teak panel doors, furniture
clad in sterling silver metal
plate, hand carved sandalwood
pieces. Spacious bedrooms, a
private study room with a sit-out
overlooking the Gateway of India
and the busy Mumbai harbour,
an in-suite spa by Jiva, a private
conference room...
2QO\WKHQHVWHOHPHQWVJUDFH
the 7,500 square feet Tata Suite
at Taj Palace, New Delhi. The
suite has an aura of splendid
well-being which encourages
guests to feel that the universe is
indeed in harmony.
The lavish interiors are a union
of rich Mughal ornament and
pattern with elegant, modern
silhouettes and details, creating
an exceptionally indulgent and
luxurious residential experience.
Exquisite Hadji Jalili carpets,
delicate Murano chandeliers
and masterpieces by MF Husain
create the perfect balance of east
and west for the global traveller.
80 Tata Review
April 2014
PHOTOFEATURE
The Presidential Villa is the crown jewel of the heritage property. Lavishly spread over
3,500 square feet, the suite has primarily Victorian and gothic architecture surrounded by
lush green tranquility. The villa comprises the Tata Suite on the ground level. The suite has
two bedrooms, a sitting area with a dining area attached, a pantry and a guest washroom.
It opens out into a courtyard with a private plunge pool and a massage pavilion. A wooden
VWDLUFDVHOHDGVWRWKHUVWRRUZKLFKKDVDVLWWLQJDUHDDZRUNSODFHOLEUDU\DQG
bedrooms. Rooms done up in rich silk artifacts, exclusive pieces of art by Paresh Hazra
and exquisitely designed bathrooms with toiletries from Bvlgari offer unparalleled luxury.
April 2014
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81
PHOTOFEATURE
82 Tata Review
April 2014
PHOTOFEATURE
TAJ BOSTON
April 2014
Tata Review
83
PHOTOFEATURE
The only one of its kind in Sri Lanka, the ultra luxurious Tata Suite located on the 7thRRULVDZRUNRIDUWDQGDWULEXWHWR
OX[XU\7KH7DWD6XLWHKDVWKHQHVWGHFRUZLWKDIDEXORXVPDUEOHRRUUHHFWLQJWKHDOOXUHRIWKH,QGLDQ2FHDQDOLYLQJ
space adorned with a Grand Piano, a graceful dining area, and an exquisite master bedroom where one can wake up
to a soothing view of the ocean. An ideal place to relax and work, the room provides outstandingly aesthetic artifacts, a
WQHVVDUHDWKRXJKWIXOOLJKWLQJGHVLJQDQGVOHHNDQGFRPIRUWDEOHIXUQLWXUH
84 Tata Review
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PERSPECTIVE
The economy:
A rough sea ahead
A new government coming to power in New Delhi has to
put in place a long-term economic strategy that focuses on
investment, absorption of new technology and innovations for
future GDP and employment growth, says Siddhartha Roy
P
re-election political manifestos are governments economic strategy will have to
interesting to read, particularly when consider the political aspirations articulated in
read alongside Shells strategy planning its manifesto.
monograph New Lens Scenarios. There is a close connect between
The current Indian situation, best described business strategy and country strategy, adding
in Shells parlance as an ocean in a churn the concept of context to the strategy and
because of its inherent volatility, growing social structure paradigm. Post-war Japan, with little
tension and decline of trust in institutions, precious resources except manpower and coal,
has prompted political leadership across party depended heavily on its comparative advantage
lines to focus on income and employment in producing labour-intensive items. Belying
growth, lower inflation and inclusiveness. conventional logic however, it invested heavily
Similarly, water, food and energy, which the in high-value industries like petrochemicals,
Shell monograph calls stress nexus are also steel and shipbuilding, automobiles and
prioritised, as is urbanisation (essentially public consumer electronics. Finances for these
goods and services). Interestingly, issues such industries came from personal savings of the
as education, healthcare and low-cost housing Japanese population, which were chanellised
that have been deferred by the political left have
been taken up by a social left emerging out of
civil society movements. Siddhartha Roy is economic advisor to the Tata
After its disenchantment with the group. He advises Tata companies in the areas of
macro econometric studies, international economics
planning process, the country has never had a ANDTRADEPOLICYCOUNTRYRMLEVELCOMPETITIVENESS
consistent articulation of a long-term economic studies, industry modeling, new opportunity
strategy. Whatever the poll outcome, the new IDENTICATIONETC
April 2014
Tata Review
85
PERSPECTIVE
into postal savings schemes or Kieretsu Banks, and unutilised capacity across industries will
and routed into prioritised sectors by the necessitate policies for the revival of demand,
bureaucracy. At the same time, the government investment growth and energy tie-ups. The
kept the yen undervalued at 360 to a dollar manufacturing index is at a record low, with
between 1949 and 1971 to promote exports. 12 monthly moving average growth rate at 0.2
Other successful Asian economies like percent. National manufacturing policy wants
South Korea, Singapore or even post-1978 to propel manufacturings share in Indias GDP
China clearly reveal how political foresight from 15 percent to 25 percent. Lower demand,
brought government and business together high interest rates, stable but elevated energy
to achieve competitive advantage. Similarly, and raw material prices, and steady growth
in India, there is an inherent need to link our in wages have brought down margins. Lower
manufacturing system and services sectors to retained earnings, reflected in lower corporate
a strategic foreign trade policy derived in the savings, can stymie future expansion plans.
context of FTA, RTA, and WTO opportunities RBI has shifted its benchmark inflation
and threats. Unfortunately, foreign affairs is rate to CPI from WPI. The inflation rate as
often conducted at variance with international measured by CPI is currently prevailing at
trade requirements, thus losing out on critical marginally above 8 percent. The yearly moving
areas like energy and raw material security. No average is 9.7 percent. Food which has a 49.7
election manifesto considers Indias competitive percent weightage in CPI compared to 24.31
position which is critical for future GDP and percent in WPI showed a yearly moving average
employment growth in an open economy. inflation rate of 11.3 percent. Having taken a
The new government will take over at a stand on inflation and inflationary expectations,
time when GDP growth rate has decreased from RBI will find it difficult to bring down policy
9.5 percent (2005-06) to 4.5 percent (2012-13); rates significantly in the near future.
in 2013-14, third quarter GDP growth over From the macroeconomic stability
the same quarter of the previous year was 4.7 viewpoint, current account deficit at around
percent. Available indications suggest that 2.5 percent of GDP has markedly improved
growth can at best be around 4.8 percent in from 4.6 percent earlier. Present capital flows
2013-14. Unfinished infrastructure projects into the economy are sufficient; consequently,
rupee is gaining in strength. The foreign
debt situation is mostly under control.
CPI (All-India) Inflation 12-M MA (%, y/y)
13
Steps to curtail gold import coupled with
lower international commodity prices have
12
brought down growth in imports to -8.65
11.3 percent (April 2013-February 2014); while
11
difficult international situations have affected
exports, it continues to grow at 4.79 percent
10.2
(April 2013-February 2014). We need to
10 9.7 9.7
acknowledge that an overvalued rupee not
9.6
only affects exports adversely, but also brings
9
9.1 down landed cost of imported final goods (like
8.1
Chinese consumer goods) and affects domestic
8
manufacturers. Similarly, a sharp increase in
7.6 the speed of tapering or a fragile government
7
post-election can lead to a speedy exit of capital
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
86 Tata Review
April 2014
PERSPECTIVE
during sudden surges in capital flows which can as the return on bank deposits turned negative
swing either way. in inflation-adjusted terms.
Fiscal deficit is 4.6 percent GDP in 2013- The overall rate of investment was around
14; however, it must be noted that $15 bn in 34.8 percent in 2012-13, mirroring that of
subsidies have been rolled over to the next 2005-06, when GDP grew at 9.5 percent.
budget in July, and capital expenditure has Incremental capital output ratio was around
been cut drastically by the current government. 3.66 in 2005-06; GDP growth rate in 2012-13
These will have to be reinstated. The new was 4.5 percent, hence incremental capital
government will also be compelled to honour output ratio was 7.7. In other words, we used
the Food Securities Act, which will mean an more capital to produce an additional unit
additional expenditure of `230 billion. Rural of GDP. Capital productivity has come down
wage under MGNREGA has been raised in because of unfinished infrastructure projects
many states; with indexation benefits it can go and unutilised capacity in mining and industry,
up to `214/day. The Seventh Pay Commission driven by policy-related delays and demand
will soon bring its recommendations for salary deficiency due in part to higher interest rates.
hike in the government sector. Apprehension about El-Nino is widespread;
Rural wages have gone up by 6.2 percent besides, unseasonal frost and hailstorm
per annum in real terms during 2008-2012, in several states can take away about 0.5
with concomitant impact on urban wages, percentage point of agricultural growth.
particularly in labour-intensive sectors like In this context, the new government will
construction. It is a vicious cycle wage hike have to develop a long-term strategy based on
leads to price increase, which in turn creates a investment, absorption of new technology and
demand for a further wage hike. The second- innovations, and focus on select sectors where
round effect can lead to inflation persistence. rapid growth is possible for gaining competitive
All these will add to budget deficit in the advantage. The IT sector experience suggests
current year. The key issue is will the political that for a quick scaling up in a sector with future
economy allow the new government to hold potential one needs supportive institutions
back on steady MSP (minimum support price) without direct government intervention.
increase year-after-year and wage hikes. It is apparent that 2014-15 is not going to
So far as banking is concerned, stressed be an easy year. An immediate rise in economic
assets and NPAs continue to rise buttressed activity after the government changes cannot
by poor demand conditions, lower industrial be expected; however, a pickup in the global
margins and high interest rates in the economic activity and lower metal and energy
manufacturing sector; policy imbroglios prices could provide a favourable tailwind.
in mining and infrastructure are other Further, most political parties are not against
contributory factors. the growth of market economy.
With lower GDP growth, overall savings
rate has come down from 36.8 percent of GDP REFERENCES:
to 30.1 percent in 2012-13, largely affected Mardick, Jeff: Why Nations Grow; New
by lower corporate and government savings York, Century Foundation, 2002
during the period. Household savings have Vietor, H. K. Richard: How Countries
come down marginally from 22.4 percent of Compete; Boston, HBS Press, 2007
GDP in 2007-08 to 21.9 percent in 2012-13. Acemoglu, Daron and James A Robinson:
However, the problem has been exacerbated by 7HY.ATIONS&AIL,ONDON0ROLE"OOKS
shelving financial savings in favour of physical 2013
savings (earlier gold, now land and real estate Shell: New Lens Scenarios; 2013
in non-metro towns). The financial-to-physical Studwell, Joe: How Asia Works; London,
savings ratio has lowered from 52:48 to 32:68, 0ROLE"OOKS
April 2014
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PERSPECTIVE
T
his article discusses the relationship or representations of technology set out in
between technology and intellectual writing or even orally expressed, are valuable
property rights (IPR) touching upon trade secrets as they embody or represent
issues such as technology items and formation that has substantial commercial
their IPR aspects, the possibilities of value significance for a company. Moreover, they are
addition when technologists understand and the outcome of the judgment, effort, time and
apply IPR to technology items and issues, the money expended by people working for the
various IPR options technologists should be company or engaged by it.
aware of and the possible opportunities that
open up when IPR knowledge is applied to UNDERSTANDING IPR
technology. It is important to note that the trade secret
There are several technology items, the law protects only the facts, ideas, themes and
typical ones include drawings, blueprints, concepts embodied or expressed in these items
formulae, technology frameworks, standard and not their expression. This implies that
operating procedures, methodologies, companies can develop and own the trade
technical specifications, technical reports, secrets in their respective designs, drawings,
analyses reports, test and quality data, and processes or tools. This is called independent
technical parameters. creation and is permitted.
Four principal forms of IPR apply to The company that creates or engages
technology items or assets. Most manifestations others to create the aforesaid items will also be
entitled to copyright protection. However, such
protection extends only to original expressions
in media such as paper, discs, charts and pen
Subramaniam Vutha is an advocate and a consultant drives as well as electronic media. Therefore,
with the Tata group. He chairs the Intellectual Property
Strategy Committee at the Licensing Executives the expression of each of these items when
Society International. documented, and therefore fixed in a medium,
would also be eligible for copyright protection.
88 Tata Review
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PERSPECTIVE
Any ornamental or aesthetic and non- extending (and ensuring) the benefit of the
functional aspects of a product or tangible work done in various fields of technology. In
device could be the subject of design or the absence of such IPRs, any technological
industrial design protection. This can be advancement or creation would be open to
highly valuable when a consumer is likely to copying or imitation.
be attracted by the products visual appeal. IPR adds significant value that can
Any invention which is part of the above translate into market share improvements,
items can qualify for patent protection. For sustained product differentiation, improved
instance, if the product, tool, process or a realisation from premium pricing, superior
similar item has a feature that does not exist control over vendors, prototype makers and
in the state of the art at that point in time, it contractors; and other benefits. Furthermore,
could be a subject of patent protection. Such the use of IPRs as bargaining chips could result
a feature should involve an inventive step and in superior value from teaming arrangements
should not be obvious to someone trained in and collaborations.
that field.
Each form of IPR provides value addition THE IPR ADVANTAGE
to technology assets. In the journey from the laboratory or the
a. Trade secret protection enables companies development/design centre to the market, IPR
to protect the ideas, concepts, themes plays a crucial role in the opening up of new
and facts embodied in or represented by business avenues. For example, IP protected
technology items or assets, provided they product features can provide sustained product
are kept secret and / or shared only under differentiation in the marketplace. IPR provides
the obligation of secrecy. Internal processes, the basis for premium pricing and competitive
tools, designs, drawings, ingredients, advantage during bidding.
formulae and the like can be protected as In certain situations, even where the
trade secrets. technology owner loses to a competitor in a
b. A company can protect the trade secrets bidding situation, it is possible to license IP
of its newly introduced product from its protected technology to the competitor, thus
vendors, prototype makers or contractors acquiring significant value despite having
by imposing and enforcing an obligation lost the bids. IPR helps attract partners and
of secrecy. collaborators and also provide valuable
c. Industrial design in the ornamental or bargaining chips while negotiating with them.
aesthetic aspects of a product confers the In some cases, IPR helps offset and
right for its exclusive use on its owner. This thereby reduce the cost of technology
is of particular value in business sectors acquisition through barter or exchange, thus
where an attractive shape or configuration raising profits and profitability. New licensing
creates customer appeal. models enhance the sources of revenue and
d. Any invention involved or embedded enable companies to share their IP protected
in any product or process could be technologies with many potential users on a
the subject of patent protection. This non-exclusive basis.
empowers patent owners with the right Without IPR, technology and technology
to prevent the production, sale, use or assets hold diminished value and potentially
import of the patented product, its feature short shelf lives. On the contrary, IPR adds
or process without a valid licence from the sustained and significant value to technology. It
patent owner. is in the interest of technology creators, users,
IPR such as trade secrets, copyright, buyers and intermediaries to understand and
patents and industrial designs therefore leverage the rights and options that IP opens
empower technologists in several ways, up in the field of technology.
April 2014
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PERSPECTIVE
Revisiting Pi
Innovators and intrapreneurs have an opportunity to re-imagine
technology and the computing industry, to participate in the
creation of wealth, and to change the world, says Nirav Shah
I
n the last 30 years, the technology With the rise of the internet, the
sector has seen the rise of the internet, technology sector has served as the backbone
client-server model and the advance of to the global economy. Much like the
cloud computing. It has also built upon discovery of the numerical constant Pi, which
previous innovations such as personal transcends the worlds of physics and geometry
computing, graphical user interface and and lends itself to understanding and solving
telecom networks. Today, it is at the threshold problems related to image processing, DNA
of fundamental innovations that can unlock sequencing, musical notations and structural
quantum value for the next 30 years. engineering, the consequences of innovations
There are 700 million personal in the computing and communications
computers within enterprises; with the rise of field can be seen in education, health care,
smartphones and tablets, mobile computing entertainment, design and construction,
units form an installed base of 400 million commerce and governance.
units (36 percent of devices). Advances in computing and
But less than 5 percent of enterprise communications technology have resulted in
investment is focused on mobile devices, an exponential productivity rise and progress
highlighting a disproportionate dichotomy has been achieved in unrelated sectors such as
and a large profit pool shift; 95 percent of the energy, space, defence and health care.
$2.7 trillion investment in technology goes to With the rise of mobility and cloud
desktop or laptop related applications, services, computing, a similar wave of exponential
networking and data centre infrastructure for innovation can lead to business model
employees, partners and customers. evolution and structural changes in other
sectors. Machine-to-machine communications
and 3D printing can change business models
of automobile, manufacturing and even
Nirav Shah is a senior strategist, innovator, horse
RIDERANDANASPIRINGLMMAKERWHOHASBEEN pharmaceutical sectors. With genomics
KINDLYINCUBATEDBY4ATA#OMMUNICATIONS(ENDS technology, modern health care may
AMUSEMENTINSTUDYINGSHIFTSINCUSTOMERBEHAVIOUR simulate individual DNA patterns and print
PROTPOOLSANDTECHNOLOGY
individually customised medicines.
90 Tata Review
April 2014
PERSPECTIVE
spend
50%
algorithms, architectures, applications, nano 40% 36%
materials and chip designs to realise the 30%
400M base
potential of this new world. 20%
Besides, the lack of talent and best 10%
<5%
0%
practices related to smart mobile computing PC-based Mobile
leads to low returns for early adopters,
and disillusions investors. Most mobile
applications replicate current functions strategies, business models and existing
and do not make use of the true points of industry structure? If current immobile and
differentiation mobile computing can offer. A inflexible legacy systems were not a constraint,
modern insurance business model that adopts how would you compete?
usage-based insurance policy will benefit Furthermore, most organisations lack the
significantly from real-time dashboard enabled resources of very large companies to acquire
by connected cars and mobile applications. innovation through inorganic investments
A survey of CIOs indicate that more than such as HPs $10 billion acquisition of
two thirds of North American and European Autonomy or Microsofts $8.5 billion
insurers will increase investment in mobile acquisition of Skype. Businesses looking
applications; however, lack of alignment at untested business models are unlikely
with customer interests and poor technical to acquire large budgets for technology
execution will lead to low adoption rates. enablement. Businesses and CIOs will
Another challenge is inertia against have to learn to work with smaller firms
disruptive change. Incumbent insurance and individuals. Cloud computing helped
companies and others are unlikely to disrupt democratise the world of enterprise IT, letting
existing and profitable business models. startups such as Salesforce and Workday
Similarly technology companies which have become big names; the rise of mobile will
significant investment in current designs are accelerate that trend. Developing applications
unlikely to adopt radical approaches or refocus that build upon the work of others via APIs
existing research efforts. will allow innovators with lesser resources to
Innovators and intrapreneurs with realise their imagination.
unique insights, courage, perseverance and Even after overcoming these challenges,
assertive intent have a huge opportunity here you may find resistance, even ridicule. It helps
to re-imagine the technology and computing then to recall what was said of our Founder
industry. They can change the world, and Jamsetji Tata: When you have to give the lead
participate in a $1 trillion profit pool shift and in action, in ideas a lead which does not fit
in creation of wealth. It will also reshape almost in with the very climate of opinion that is
every other industry and sector out there. true courage and vision.
For those that are not part of technology Indeed, if iron and steel was the backbone
organisations, there is room for participation. of the industrial revolution, innovations in
If your organisation does not have a leading technology and communications will serve as
market share, how would you look at the the backbone of the digital revolution. This, I
current processes, sales channels, marketing believe, is the opportunity of a lifetime.
April 2014
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91
BOOK REVIEW
Once a Neanderthal,
always a Neanderthal
I
magine a world where almost everyone wakes organisational, but hormonal and emotional
up inspired to go to work, feels trusted and in terms.
valued during the day, then returns home
feeling fulfilled. Thus starts the synopsis I HAVE YOUR BACK
of the book on the first page and on online Man has conquered space and landed on the
book stores. moon. He can talk eye-to-eye to a person sitting
If you are in search of advanced half way across the world without taking a step
management techniques or business theories to out of his home. Human social structures have
achieve the ideal world that company heads evolved and physical abilities have changed.
across the globe are searching for, you will not However, says Sinek, the human brain is
find it in this tome. Simon Sinek, still wired to think in Paleolithic
in his second book, Leaders terms. The herd mentality of
Eat Last: Why Some Teams Pull humans to stay in groups for
Together and Others Dont does safety has not changed. The
not claim to offer this. hormones that trigger the
Instead, Sinek sticks to good emotions of love and trust, and
old biology and living conditions stress and aggression are still
in the Paleolithic ages to describe the same; and the responses
an optimal work environment, they trigger in the body havent
and what leaders have to look out changed even the teeniest bit.
for so that the delicate balance Humans no longer hunt or
inside the Circle of Safety is not gather food. Food is available
Title: Leaders Eat Last:
upset to pull an organisation into Why Some Teams Pull stocked on shelves in the mall.
a slow spiral down. Together and Others Dont We do not live in fear of attacks
More than external threats Author: Simon Sinek by wild animals or enemy tribes.
to a company or group, Sinek has Publisher: Portfolio / We now live in fear of hostile
focused on the internal factors Penguin, 2014 co-workers and being laid off or
that can bring a company down. Pages: 347 being superseded. We no longer
The factors he discusses are Price: `550 exult in the joy of a good kill
not economic, technological or after a strenuous chase. We now
92 Tata Review
April 2014
BOOK REVIEW
celebrate a target met within a short deadline. baby boomers, brought up in times of plenty,
However, somebody forgot to notify the became a me-first, selfish generation, looking
human brain that the environment outside the out only for themselves and led a change in
body has changed. It still reacts in the manner organisational cultures.
it was programmed to do since the beginning Also how US President Ronald Reagans
of time. If leaders understand the instinctive decision to fire 11,359 air traffic controllers
working of the brain, their battle to create an on August 5, 1981, and imposing a ban on the
optimal work environment is more than half strikers from working for the Federal Aviation
won, says Sinek. Administration (the ban was lifted in 1993
Sinek offers the theory that to become by President Bill Clinton) sent out a signal
a good leader you have to only ensure that to company heads and leaders that it was
emotions such as selflessness, love, trust and acceptable to cut human numbers to bring up
empathy flow abundantly through the group financial numbers.
and the human need, since Paleolithic times, to
feel safe within the group is met. Leaders have WHEN NUMBERS COME INTO PLAY
to build a circle of safety within which their An interesting example is how Bill Gore,
employees or group members live protected. co-founder of WL Gore & Associates,
Safe in the knowledge that their manufacturer of GORE-TEX products, caps
teammates will look out for them, even as his factories at the magical Dunbar number of
they look out for their comrades, members 150. Robin Dunbar, professor of evolutionary
work unitedly towards fulfilling their leaders anthropology at the University of Oxford,
and organisations goals, robustly and happily arrived at 150 as the number that people can
fighting external threats. maintain close relationships with.
Equally interesting is the discussion on
KEEP THE CIRCLE STRONG the consequences of abstracting humans to
Sinek, in the first 55 pages, introduces the numbers and the chapter on Yale psychologist
concept of the Circle of Safety and the selfless Stanley Milgrams study on why humans act
and selfish chemicals which help the free flow like lemmings and blindly follow orders from
of emotions that strengthen and maintain higher authorities.
the circle, and the bad chemical cortisol that Milgram conducted the study after the
causes stress and breaks in the circle. He trial of Otto Adolf Eichmann, the German
devotes a whole chapter to a detailed analysis of Nazi SS-Obersturmbannfhrer (lieutenant
endorphins, dopamine, serotonin and oxytocin colonel) responsible for managing the logistics of
and their role in keeping together a group rounding up and deporting Jews to concentration
in prehistoric times. The rest of the book is camps and ghettos during the Holocaust. He
devoted to support the circle concept and the was living under the assumed name of Ricardo
play of hormones in maintaining balance. Klement in Argentina for 15 years, till he was
Although the book is divided into eight captured and put to trial in Jerusalem.
parts, it progresses non-linearly with content Sinek may have attempted to put forward
put together rather haphazardly. Real and a fresh perspective on leadership; however, after
imaginary examples from the animal world and the introduction to the Circle of Safety, you may
the business, military and civilian worlds break lose interest as you realise that he has nothing
the tedium of the read, although the theories he new to say. The irregular manner in which
puts forward are sometimes illogical. the content is structured is also a put-off. The
So you are told how the war years, despite book could have done with a bit of editing for
being times of scarcity and hard toil, actually repetition and language.
encouraged cooperation, sharing, trust and
brotherly love, and kept groups strong; how Shalini Menon
April 2014
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BOOK REVIEW
Circle of safety
An excerpt from Leaders Eat Last: Why outside and seize the big opportunities.
Some Teams Pull Together and Some Dont Without a Circle of Safety, people are
forced to spend too much time and energy
The urgency to meet expectations, the protecting themselves from each other.
strain of capacity and other outside It is the company we keep, the
pressures all contribute to the constant people around us, who will determine
threats that a business faces. At all times, where we invest our energy. The more
these forces work to hinder growth and we trust that the people to the left of us
OQNS@AHKHSX
3GDRDC@MFDQR@QD@BNMRS@MS
and the people to the right of us have
We have no control over them, they are our backs, the better equipped we are to
never going to go away and that will never face the constant threats from the outside
change. Thats just the way it is. together. Only when we feel we are in
There are dangerous forces inside a Circle of Safety will we pull together
our organizations as well. Unlike the @R@TMHDCSD@LADSSDQ@AKDSNRTQUHUD
forces outside, the ones inside are and thrive regardless of the conditions
variable and are well within our control. outside.
Some of the dangers we face are real The Spartans, a warrior society in
and can have immediate impact, like ancient Greece, were feared and revered
layoffs that may follow a bad quarter or for their strength, courage and endurance.
an underperforming year. Some of us The power of the Spartan army did not
face the very real threat of losing our come from the sharpness of their spears,
livelihoods if we try something new and however; it came from the strength of
lose the company some money. Politics their shields. Losing ones shield in battle
also present a constant threatthe fear was considered the single greatest crime
that others are trying to keep us down so a Spartan could commit. Spartans
that they may advance their own careers. excuse without penalty the warrior who
Intimidation, humiliation, isolation, loses his helmet or breastplate in battle,
feeling dumb, feeling useless and rejection VQHSDR2SDUDM/QDRRDKCHMGHR@BBNTMS
are all stresses we try to avoid inside the of the battle of Thermopylae (the battle
organization. But the danger inside is upon which the movie 300 is based),
controllable and it should be the goal of but punish the loss of all citizenship
leadership to set a culture free of danger rights the man who discards his shield.
from each other. And the way to do that is And the reason was simple. A warrior
by giving people a sense of belonging. By carries helmet and breastplate for his own
offering them a strong culture based on a protection, but his shield for the safety of
clear set of human values and beliefs. By the whole line.
giving them the power to make decisions. Likewise, the strength and endurance
By offering trust and empathy. By creating of a company does not come from
a Circle of Safety. products or services but from how well
By creating a Circle of Safety around their people pull together. Every member
the people in the organization, leadership of the group plays a role in maintaining
reduces the threats people feel inside the Circle of Safety and it is the leaders
the group, which frees them up to focus role to ensure that they do. This is the
more time and energy to protect the primary role of leadership, to look out for
organization from the constant dangers those inside their Circle.
94 Tata Review
April 2014