Ratan Naval Tata Part-5

Ratan Tata's Workmanship !!!

Ratan The Manager

Perhaps the secret of Ratan Tata's success lies in his ability to think big -- and small. While he guides the Tata Group to pick up the luxurious Pierre Hotel in New York, he's also driving the launch of the budget Ginger hotels in India.

He has the ability to envisage an automotive business that encompasses diverse businesses such as the iconic Jaguar and Land Rover marques on the one hand, the world's cheapest car the Nano, on the other, and hardy, rough-road trucks sandwiched in between.

JRD is admired for creating world-class companies that could be globally competitive at a time when India was still not thinking scale and was instead leaning towards a socialist set up.

In contrast, Ratan had the vision to foresee the direction the economy -- and policy -- was taking, consolidate the business accordingly, and embrace change to leap ahead.

The group was totally unprepared for liberalisation, which was knocking on the door when he took over. Ratan knew the Tatas required a radical change in mindset and he set out to work in that direction.

He streamlined the organisation by selling some businesses and rationalised the processes and functioning of the Tata Group.

That explains why it still remains among the top three business groups in the country while many have fallen by the wayside -- or dropped in the rankings -- in the post-liberalisation era.

Yet almost none of this change came at the cost of people or employee morale. Be it the fixing of a retirement age for various employees or the creation of a close-knit group that could meet the group's ambitions, Ratan created a nimble-footed organisation.

Insiders say that those who were asked to leave were given full salary till the age of 60.

It's no secret that the genesis of the Tata Group's blockbuster moves can be traced to him. Tata's first global venture -- the February 2000 purchase of Tetley -- had begun five years earlier when Ratan Tata made a $318 million bid for the tea company.

That didn't work out, but Ratan didn't lose heart and kept an eye on the company's activities. The deal was finally clinched at $430 million. Sheer perseverance may have made that deal come true.

The Corus deal is also a telling example. A close associate recalls Ratan calling Tata Steel MD B Muthuraman, who was on a trip to Hong Kong. "I've learnt that Corus is up for sale. Do you think we can look at it?" he asked. After some thought, Muthuraman replied that they could perhaps pick up a strategic stake.

Ratan had different plans. "We must buy that company. Think it over," he advised. The next morning, Muthuraman called Tata to say he was game. With no disrespect to Muthuraman and other leaders who have spearheaded the various companies in the group, it must be said that such gutsy deals can't be done without a strong group backing or reputation.

The Corus deal is proof of the kind of goodwill the Tata Group has created for itself across the world, not just within the country. Unlike the Mittal Steel bid for Arcelor, which created a huge furore, the Tata bid faced little opposition.

Although the Anglo-Dutch company had several plants in the United Kingdom, there was little attempt to stop the deal by either political parties or trade unions. The Corus management was happy to support the deal, placing its faith in the group's reassurance that there would be no layoffs and that pension shortfalls would be taken care off.

Not just that. Given that Tata Steel was bidding for a company four times its size, it could not have funded the entire deal. In fact, the company put up just 25% of the equity; the rest was funded through foreign debt.

And even that was to be funded only through cash flows from Corus, with no recourse to Tata Steel -- a reflection of the credibility the group enjoyed in global financial markets.

Tata's big deals are balanced by projects focusing on the lowest common denominator. In fact, Tata has been among the very few to perfectly understand the pysche and the needs of the Indian consumer -- and build successful businesses around those insights.

That is, by recognising that the big market opportunity lies in making desirable products affordable for a larger audience and creating successful products to cater to a market need -- be it the passenger-car foray with the Indica in the early 1990s, the promise to create a Rs 1 lakh (Rs 100,000) car or for that matter, making water filters that don't need electricity (for rural areas).

Hemendra Kothari, the doyen of investment banking in India who has worked on most Tata Group deals, has watched Tata's working style closely. "He is a very discerning person when it comes to decision-making. And once he has made up his mind, he is prepared to go all out to achieve his objective, be it Corus or Nano," he says.

Tommorow i.e.28th December 2012 is the Last day Of the Mastermind/Genius behind the Success of TATA GROUP Mr.RATANJI TATA will step down from the Post of Chairman Of TATA GROUP.
Why 28th December bcoz its His BIRTHDAY....We Wish him a Wonderful and Cheerful sendoff and Birthday of his Life...
Share This post as much as you can so that this reaches to him as Our Love towards Him...
Yet more to Come...Stay Tuned...!!!