N Chandrasekaran & Tata Sons

Beyond The Obvious

Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.

– Marcus Aurelius

So it has finally happened. The TATA Group through its holding company, decided to move with alacrity to anoint N Chandrasekaran as the first non-parsi Chairman at the helm of the holding company TATA Sons. Given that the battle for control of the holding company shifted the field of engagement to the legal domain, there was considerable anxiety especially given that the group as a whole was losing reputation, value and equity on a daily basis. With the battle now shifting to the National Company Law Tribunal (NCLT), the matter is likely to come up for an express hearing given the sensitivity and the prestige of the matter involved. Chandra’s (as he is fondly referred to) elevation to the top job in the Group has not only been welcomed by the broader industry and markets, but is a reflection of the decisiveness with which the current leadership under the Interim Chairman Ratan Tata, seems to be reorganizing itself. Of course Chandra’s appointment is subject to clearances from NCLT as the matter pertaining to removal of Cyrus Mistry as the erstwhile Chairman is under consideration. Further a petition has already been filed to maintain status quo with respect to the affairs of Tata Sons, so Chandra’s selection is likely to need ratification.

So let us try and understand the significance of this decision. Chandra is a Group veteran having been with the crown jewel of the Group, Tata Consultancy Services, for over three decades now. He took charge of the company at a time when the global financial crisis had just hit and had left debris of institutions in its wake. Chandra not only skillfully managed this painful transition but also maneuvered TCS into a position of unassailable strength to become the most valuable IT company in the world just after IBM. TCS apart from Jaguar Land Rover happens to be the principal contributor to Group profitability and cash flows, accounting for nearly 80% of the Group profitability. Being India’s largest IT company with operations spread across almost 50 countries with a top line in excess of USD 16 Billion, TCS represents the pride, ambition and the excellence that the Group is known for.

The Obvious Gains –

Where does this appointment take the Group? Clearly there are obvious benefits and advantages this appointment brings, that come to mind. These include –

  • A TATA Group Insider – Has spent over three decades with TCS and TATA Group – understands the inner workings and dynamics of the Group
  • Relative young age – He is just 53 years and can potentially have a long innings at the helm
  • Strong Pedigree – Has successfully managed and maneuvered TCS – Group’s largest operating firm
  • Global Outlook – having straddled TCS operations across almost 50 countries, understands the challenges of running a global business conglomerate
  • Customer Centricity – More than half his time is spent traveling and visiting key clients across global markets
  • Managing Scale & Diversity – Successfully grew TCS into a USD 16 Billion global IT giant with over 3,50,000 employees
  • Leadership Style – Believes in collective and democratic decision making to augment leadership bandwidth and also improve decision making quality/ depth

TATA Sons faces a somewhat similar predicament and uncertainty as what TCS faced in 2008, given that only a handful of firms are contributing cash flows to the group kitty. Most of the firms are facing headwinds in varying degrees and there is a mountain of debt that needs to be serviced. The situation is quite demanding and needs careful and skillful handling in terms of managing the Group operating firms. It requires sharp focus, close attention and deep persistence to recreate a resilient business in shaping the destiny of the Group. More so, given that the Group is facing intense scrutiny both globally as well as locally, for the unwanted attention the removal of Cyrus Mistry brought in its wake. Given this complex background, it was evident that the Group needed a leader at the helm who was adept at managing challenging business environment and come with prudent, long term oriented strategic solutions. This is where Chandra’s ascent to the Chairman of TATA Sons assumes great significance.

‘Beyond The Obvious’ Value –

While the above are well distilled and broadly understood pointers, there are some deeper linkages that could perhaps become the vectors of building long term, enduring success at the TATA Group under Chandra’s leadership. These include –

  • TATA Brand – House of TATAs or the TATA Group is known as a proxy to Indian economy. It may not be an overstatement to suggest that it stands to represent ‘India Inc’ given its global footprint, size, scale, impact and touchpoints. So any adverse commentary on the Group is likely to negatively impact the potential of several other business groups. By decisively addressing the leadership challenge with an accomplished insider, TATAs will bring back the lost halo and prestige that the Group is known for.
  • Decisive Orientation – Chandra understands the importance and significance of achieving an internal orientation that aligns the objectives of the Trust, Holding Company and the Operating Firms into a unifying factor. This alignment will be defining to collectively gain promoter sponsorship for pushing through reforms as well as disruptive ideas
  • Institution Familiarity – Having spent three decades with the Group, as also led the Group’s largest business outfit for several years, he is familiar and aware of the institutional way in which the Group operates. Can hit the ground running with fast acclimatization and quick assimilation
  • Identity Supremacy – Is well versed with the underlying Philosophy as well as the Purpose that defines the priorities and pursuits of the TATA Group. He will be sensitive to the larger identity of the Group in terms of its defined outcomes, especially with respect to the social sector contribution. He has an acute understanding of connecting Purpose to Profit models and will use these effectively to forge closer synergies amongst operating businesses
  • Business Turnaround – Instead of taking the more comfortable path of looking at businesses as portfolio operation (which Cyrus Mistry tried to do at the expense of challenging the established collective identity of the Group), Chandra will bring a more nuanced strategic understanding to solve complex business problems and turning them around for enhanced profitability and value creation
  • Binding Force – Chandra is uniquely positioned to leverage global market access through the TCS platform and use it as a binding element to build deeper traction and linkages with global markets. Technology is a fundamental building block in virtually all businesses, thereby getting TATAs more invites to global high table of business
  • Deep Resilience – For a business group of the size of the TATAs, the most critical ability to drive through serious engagements is resilience. Critical changes will take time to demonstrate meaningful outcomes and given the fact that Chandra astutely navigated recent 4-5 quarters of difficult business period at TCS while managing stakeholder expectations, both within and outside, he will be able to bring that learning to good use
  • Team Builder – Chandra while being hands on, involved leader believes in giving sufficient latitude as well as autonomy to his management teams. He is known to build next generation leaders and has created extraordinary bench strength in a large business enterprise like TCS. Proof of this capacity building lies in the smooth transition of leadership mantle at TCS with his elevation to TATA Sons Chairmanship
  • Embraces Innovation – TCS under Chandra has been a proactive and significant investor in global innovation practices. This was made possible on account of successfully multiplying topline/ bottomline performances thereby creating sufficient capacity to channelise resources towards long term growth and value creating opportunities. Chandra will draw upon this significant strength and create a pan group, innovation culture to take the TATA Group into the next orbit

Clearly these are interesting times and the TATA Group has undergone an intensely disruptive event that may not only define its own destiny, but also the course of corporate trajectory in the country. In more ways than one it is seen as the template for managing diverse businesses that reflects abundant prosperity, shared objectives and long term value creation orientation. Chandra would be committed in his pursuits of the Founder’s vision and taking the Group forward towards higher purpose and sustainable growth.

The Road Ahead –

It is important to note that this will not be Chandra’s challenge alone. Given the adverse impact that the Group has gone through in the last 3 months, there is considerable effort required to bring it back to its glory days. It demands sharp internal alignment of purpose, priorities and pursuits in ensuring the entire team pulls its collective weight behind Chandra in this journey. He needs to assume the stewardship role in carrying the aspirations and hopes of the entire Group through the difficult waters. For that he will need to marshal all their support by commanding their respect and securing commitments unequivocally. It will not be easy but then Chandra comes suitably primed and prepared for the role. Given the overall situation and the challenges lying ahead, TATA Group could not have made a better choice.

Here is wishing N Chandrasekaran the very best in his new quest.

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My Leadership Agenda for 2015 – Part 2

Are we consciously establishing institutional legacy through definitive Leadership Practices?


In my previous post on this topic, I had posed specific issues that are plaguing Leadership across Boards / Corporations. Having understood the nature of issues confronting leaders, I now share the specific directives and steps leaders need to consciously take to bring sustainable, enduring change.

So what ails the current Leadership Framework and what can leaders consciously do to establish a strong institutional legacy and culture?

My Top 10 points that should define the agenda for Leaders and Corporations to focus on are as follows –

  1. Total Leadership – It is important for Leaders to first undergo “Mental Orbit Shift” to become successful change agents. Leaders will be better served by wearing different hats for different occasions – ‘Motivator’, ‘Manager’ and ‘Maker’. Each role brings different sets of competencies to the front and needs to be judiciously used. Leaders need to reinvent themselves and have to undergo several changes as required to deal with each situation and individual in a specific manner. Uni-dimensional leadership is history.
  2. Enduring Credibility – Biggest issue facing Leadership today is one of “Credibility” of its own actions. Leadership at the highest level is about demonstrating decisiveness, moral courage and integrity – it pays dividend to be morally upright every time, at all points in time, across all situations and across hierarchy. One cannot play favourites on this front. Leaders need to invest in personal equity through the harder, longer road. There are no shortcuts here
  3. Purpose Principles – Purpose is the fuel that drives our life engine, both as corporations and individuals – ‘Purpose is Life’. Purpose of Existence defines who we are, what’s our philosophy and what represents our core identity. An institution without Purpose is like an anchorless and rudderless ship that just floats around without meaning or substance. Leaders need to realize without purpose, they are just playing for luck.
  4. Go Long Go Deep – Today’s world is charaterised by myopic vision leading to short term orientation and decisions. This singular malaise has corroded our thinking cells to an extent wherein everyone expects instant gratification in terms of results, outcomes and benefits. To see enduring results and play for the high stakes, it is important to have a foundation that is deep and farsighted enough to make provisions for adjustments that are likely to come by during the course of a journey. Leadership needs to readjust their ‘scopes’ and sharpen focus on long term decisions and mental orientation.
  5. First Principles – Basic rule of any high quality ideation is – never make any assumptions. What appears to work today is already dated and be aware that it is functioning on borrowed time. Rate of obsolescence of an existing idea (however good it may appear) happens at a pace sharper and exponential than Moore’s Law. Leaders need to realize this basic rule and ensure they encourage disruptive thinking and ideation across all levels of corporation. First Principles represents this thinking and which has become main street courtesy Elon Musk who is a great exponent of this thinking practice.
  6. Exploration Mindset – One of the greatest test (acid test, if I may) of Leadership is how they treat and define failure. Ability to encourage and motivate teams to overcome fear of failure through a prescribed process is extremely crucial and priceless. It is this ability that sets up a culture of innovation and prepares individuals and corporations to be on the cutting edge of constant exploration. Leaders need to quickly learn and realize that they are only as good as their last credible exploration.
  7. Frugal Innovation – Innovation is a much bandied about term these days. It is assumed that innovation by definition involves deep resources and infinite capacities. I am afraid this could be not be any further from the truth. Frugality is the mother of all innovation. True innovation is about aligning competencies, existing resources, immense belief and a strong ‘can do’ mindset. Leaders need to cultivate a couture that seeks to judiciously and intelligently bring diverse competencies and resources together and create self-compression ecosystem that will disgorge invaluable ideas.
  8. Gamification Approach – Excellence is pursuit of internal motivations – passion and belief in making a positive difference. Current breed of high performers are looking for purposeful engagement beyond the standard trappings of a high paying job. This is where Gamification Thinking comes in. This is about applying game mechanics and game design technique to engage and motivate people to reach their objectives. Forward looking leaders globally are now increasingly turning towards Gamification techniques to motivate and fire up the passion of their teams.
  9. Holacracy Setup – Holacracy, an upcoming leadership paradigm, offers a comprehensive model for structuring, governing and running enterprises in a purposeful and meaningful manner. It moves away from the current command-and-control management system in a way that Purpose becomes the anchor point of corporation’s and leader’s objectives. Corporations such as Zappos have embraced this culture and are benefiting from it immensely. We need to encourage our leaders to start adopting this practice sooner than later.
  10. Open Collaboration – When was the last time you truly collaborated? This is not about getting a few individuals with diverse backgrounds into a room and expecting miracles. Collaboration happens only when we have deeply engaged people bound together by a common and shared set of objectives. And this collaboration does not happen in isolation in a garage – it happens when the Thinkers, Adopters, Makers and Users come together on a common platform. What we then have is sheer magic. It is this purposeful engagement that seems to be missing from our collaboration efforts. Leaders need to see this signal much earlier so that priceless time, efforts and resources can be channelised for superior outcomes.

Active Engagement and Communication with stakeholder community will form the bulwark for the Leadership Agenda 2015

While it would my endeavour to encourage leaders to focus on the above 10 Point agenda, Leaders and Corporations will do well to focus on some basic issues as well. In the age and time that we live in, it is important to treat all constituents of our stakeholder community (not just shareholder, who to a large extent is very well taken care of) with compassion, respect and dignity. This means, putting stakeholder engagement back on the prime business table of the Leadership and ensuring they are not only doing good, but are seen / heard to be doing good.

This means apart from being decisive and action oriented, Leaders need to exhibit deep empathy and reflections for stakeholders. Further it is imperative they frequently communicate through myriad channels that are available (offline and online) these days on the specific forward looking engagements that have been taken by the Board. This makes for credible, accountable and communicative leadership that believes in empowering the constituency through active engagement.

It is clear that corporations and leaders who are committed to develop, design and execute an integrated, holistic and cross-level Leadership Ecosystem will make significant advancement and headway in establishing a Breakout Business paradigm. This is very much achievable and is waiting to be leveraged and exploited to unleash the true potential of people, processes and systems. This needs radical changes to our current approach and challenge the established paradigm and assumptions that form the basis of our decisions. In the VUCA environment that we live in, these 10 Points for Leadership Agenda will provide the necessary leadership strength to future ready our businesses.

May the force (and the Leadership) be with you.