The titans of a great legacy being at historic clash, Tata Group the kingdom and its reputation has been continuously torn between two power egos of legacy and modernity in values with one of them at the helm of a holding company while the other as head of many important Group companies.
In what could certainly be one of the biggest corporate battles between the iconic ace business tycoon Ratan Tata and his successor Cyrus Mystery, the fallen heir-apparent blue-eyed boy of the poster group, the loathsome factor of the whole episode is the slugfest of allegations and counter-allegations flowing to hit the news headlines continuesly across different sections of media and the fact that there is no sign of let up from both the sides. There must be at least half a dozen spin-doctors who are good at not just calibrating insinuations and leaks, equally fixing media Moguls right from Delhi and Mumbai to the leading capital markets in the world are at work. In addition, there must be a host of board-room experts and legal veterans donning the war rooms of both the sides round-the-clock generating the news-slug with stated and hinted proofs to move the media mountains in their respective favour. In a country like India, the corporate battles of the kind involving leaders of great legacy when break the beneficiaries are mostly the sensational scribes, money milking attorneys and the PR crisis machinery at work while the biggest losers are naive yet earnings-hungry shareholders.
Between, August 8 to September 15, the day when Mystery presented an updated version of way forward strategy that outlined plans for the group till 2020 to the board of Tata Sons, the group witnessed a number of key developments including that of Ratan Tata nominating Venu Srinivasan, Ajay Piramal as additional directors being confirmed in subsequent AGM and Tata Trusts nominating Amit Chandra as director in Tata Sons. Were these developments part of normal course of business or signs of any measure of what was on the anvil for Mystery later?
Right from the ouster of Mystery, dismantling of Group Executive Council, dismissal of its three members including Nirmal Kumar, the strategy man who advised Mystery to his leaked email to Tata son’s board written on October 25, enumerating corporate governance allegations, the crisis only had gone on to deepen further for both the titans at the personal and professional level. Ratan Tata for his part had to jump to a lot of fire-fighting with clarifications to stock-exchanges, employees and investors on several matters even as allegations on Mystery surfaced that he kept the Tata Trusts in dark over certain key transactions. It was only on November 1, when Mystery’s detailed rebuttal was issued to the allegations from Tata side, Ratan Tata wrote an email to the group staff of how necessary it was to remove the man on the mantle in the interest of group’s future success. Thereafter, the statutory removal ritual of Mystery as Chairman from Tata Sons controlled group entities one after the other along with the allegations and counter allegations from both the sides in different veracity have been the escalation of the battle to next level even as there is a resistance from Mystery for the other entities where he has an upper hand that Ratan Tata may not find all that easy to deal with as it appears.
At a time when the impact of demonetization is bound to add its own dose of a bitter pill to the prevailing industry woes, the 150 years of Tata group’s legacy deeply imprint in India’s corporate history had to be embroiled with a narrative of an unprecedented battle for power at the Bombay house from within. It is quite natural even for a drop of pin to make noise leave alone the chairman of the company in a conglomerate like Tata group, and though it is not uncommon to come across such board-room upsets of trust deficits even by global companies like Apple, Citi, Volkswagen, Deutsche having faced their own, the key lesson for Tata group from all of them is that they have all carefully ensured that such upsets did not tarnish their image nor the value to their stakeholders.
The job of a visionary leader is to take equally the faith and trust of the stakeholders as much the vision of the company forward. In my opinion, both Ratan Tata and Cyrus Mystery have miserably failed in this mission. The very choice of Cyrus Mystery himself by Ratan Tata perhaps was not a decision in the right direction irrespective of his experience or capability even otherwise. The choice itself carried high risk as Ratan Tata settled for the son of the largest shareholder. How could a man himself who was on the selection committee and a familiar friend in the shareholder family with limited experience of managing a mid-tier construction company be the choice to run India’s largest conglomerate of a hundred companies with a total market capitalisation of around $100 billion?
Failure if alleged of Mystery is equally that of Ratan Tata himself as the important responsibility of a top most leadership is to plan a hassle-free and smooth succession in line with the values and vision of the company in the interest of the stakeholders and also ensure that it works well. Not only the succession itself was flawed, there was even the absence of professional grooming, which is equally the job of a great leader. Finally, Mystery’s exit could have been managed professionally much better without leaving the group vulnerable to legal and reputational damage.
To his discredit, Cyrus Mystery may claim that he inherited more problems than he could chew with only two companies in the Tata group delivering the bulk of profits, Tata Consultancy and Jaguar Land Rover. He may even have done reasonably well for resolving the issues, but he was not perhaps cut out for dealing with bureaucracy in the Tata group and lacked sheer political astuteness to carry the key stakeholders along with his vision, strategy and execution. It appears that he was unable to garner support especially from the board and Tata trusts whom it is alleged that he did not keep in the loop of certain important decisions.
Many professional leaders of business world mistake political astuteness for being politically treacherous to achieving the goals somehow or think politics as a bad word to shun it out completely without realising the fact that leadership as much equally a political process as management. Political astuteness is about knowing the sense of your polarity and a political strategy to deal with it even in a corporate context. The polarity can be an issue, value or even a person. Being in the know-how of who are ready to toe your line and who are not requires a deep personal observation and connect with your key stakeholders and an ability to take them all on board with you when required.
There are many million dollar questions that require more than common answers in the issue . There are equally costlier lessons to learn from the two unconventional fighters at combat. The obvious lessons of succession planning, corporate governance and trust apart the business leaders of today certainly require a lesson or two on how to develop the sense of polarity factor and mastering political astuteness for corporate excellence.