Inside the Corner Office | #12 Natarajan Chandrasekaran - Chairman of Tata Group

Yes, Thomas. I think it was the Bokky advisory board. The first we met, and then we didn't have much opportunity to spend a lot of time because I rushed back. But then again, we connected in 2023 through Bob. After that we have been in touch. I only wished that I'd spent more time with you.

Yeah, it has been a fascinating experience with the Tata Group. Now I'm entering my 40th year with the Tata Group, of which the first 30-odd years I spent with TCS. I would say that TCS was the best training ground I could have ever asked for, because as a leader in TCS and eventually the CEO of TCS, I had the opportunity to work with industry leaders like you in many sectors — insurance, pharma, banking, manufacturing, retail — every industry. And I got to travel and work in many geographies, from Latin America to US to Japan, every part of the world. So I had a very good idea about global businesses and industries. When I came here to Tata Sons, it was a big shift for me because it was a massive responsibility and also I was taking over from Ratan Tata, who was a legend, an icon. Big shoes to fill. So I never told myself that I'm getting into shoes — I just told myself that I'm getting into a job and I'm going to do what I can. And I really have enjoyed these last nine years now because I got a bird's-eye view of the world, of businesses, of markets, different industry challenges. And you would agree with me, the last five or six years have been the most volatile, most challenging, exciting, unpredictable years. So it has given me a tremendous opportunity to go through this period.

Yes, absolutely. I think I took it at a very difficult time. If you know, there was a big change that happened at that time — the previous chairman was removed — and so I came in at a time when there were quite a few tense moments. And in a group of this complexity, you have a lot of pluses and a lot of issues. The best thing about the group was it has always been loved by the whole nation with great admiration, a brand that is most respected, but we had a lot of financial challenges in different companies. I got on to addressing it in my own way, running a huge transformation, for which Mr. Tata gave me a free hand.

See, I think it was clear to me that I had big support, because the country as a whole wanted Tata to succeed always. So that goodwill was a huge source of strength. But at the same time I felt that I needed to do many things. One was get to financial fitness. So I brought in a huge focus on cash flows and balance sheet. I used to say: fitness first, performance next; direction first, velocity next. I came up with basic themes which were adopted by the group because I had to show some early successes. The moment you see it's not about driving it from the top — while you can do that, it's very important that you get everybody aligned, otherwise transformation of this scale cannot be done. Then I realized that the world is going through fundamental shifts — shifts in new energy, sustainability — which represent itself in different industries: power sector, steel sector, auto sector, trucks. In many industries in which we are present in a big way and are highly carbon-intensive, we need to do a transformation. We need to make big bets. We wanted to make big bets on the future because we can't have a portfolio of companies which are traditional. That's why I slowly moved the group towards semiconductors, batteries, electric vehicles, solar power, wind power, artificial intelligence, consumer internet — so many new industries I focused towards. For me it was simplifying the group, getting the balance sheet and financials strong so that they can move towards transformation, and then putting new capital in creating new businesses. That's the journey.

See, I think you and I know simplification is a journey — it's not a one-time effort. The complexity was huge: whether you look at the number of industries we were in, the number of duplicate companies that were there — many companies were in similar businesses — the number of markets in which we were present, the number of subsidiaries we had, the number of layers we had. The complexity was multi-dimensional. I felt that if you want to eventually get agility, speed, and efficiency, unless we simplify the group, it's going to be very hard. So we did it at multiple levels. For example, I initiated consolidation of our consumer products. We had two companies in the consumer businesses: a chemicals company was in the food business and there was a separate consumer company into beverages and foods. I removed the food business from the chemicals company and created one consolidated consumer company. The market loved it. In a couple of years the consumer company went from a billion dollars to twelve, thirteen, fourteen billion. And the chemicals company also got focused, market appreciated, and their PE ratios went up. When people saw that, they were willing to give up control. We had four companies doing defense businesses — I brought all of them together. Similarly, we had more than a thousand subsidiaries. We have closed down more than three hundred subsidiaries in these years and there's more to go. Some companies were in marginal markets: our consumer product company was small in Australia, from Poland, Russia — so we closed all of that. We said the big markets for us are India, the US, Canada, and the UK because we had presence there. In the UK we had bought Tetley. So let's focus on these four markets and exit elsewhere. These decisions were taken company by company. It's basically communicating, showing results, and nudging here, pushing there, and getting it done.

Yeah, we have lots of businesses: steel, motors, power, financial services, airlines, TCS — a huge number of businesses. But the main thing is, how do I communicate the power of coming together? We are one unique company, with all humility, which has such a wide set of skill sets. How do we bring the power of those skill sets together? We operate as individual companies but bring the full power of Tata. Once we do that, we can achieve a lot more. That was the whole mantra. First it was communication, then it was examples. In 2018 I had a brilliant opportunity because the government came up with a request for buying electric vehicles and we had to show an operating vehicle indigenously made. The government was willing to buy those vehicles. There were a couple of companies in India which had electric vehicles — we didn't have one. We had about eight months to produce a vehicle. I remember calling our head — a German leading Tata Motors passenger cars. He told me I must be joking. But I said no, we're going to produce a vehicle in six months. I got together experts from Tata Motors, our auto parts company, TCS, and another technology company — four or five companies with skill sets — formed a team of fifty people and put a leader. We gave them a mandate. Thomas, you won't believe — they produced a vehicle in six months.

And then that went through the qualification criteria and got qualified. It was not a perfect vehicle — we needed to do a lot of additional things over the next twelve months — but we had a vehicle which was running, which met the basic criteria: the mileage range and heat and other criteria. So that showed people what's possible. Since then, it has become a movement. Now it's not like everything comes to me — there are a lot of relationships. I started to create group forums. I created one event called 'Connect Tata Connect' which happens in April every year, where the top leadership, some six hundred people from companies, come and everyone talks about what they achieve. These kind of events and business excellence forums create a lot of connections. It's all about getting people to believe, getting people to aspire — the art of possible. Because you will never know more than the CEOs. We've got to accept that I'm never going to know more than the operating teams. If you can encourage them to think beyond, then facilitate conversations which can happen naturally, and if it can go down, then things happen. That's what has happened. We have achieved a lot of good success in One Tata, but the future is going to be hugely enormous.

I think the rigor of the process is very important. I encourage them a lot to think bold, work together, and come up with proposals. But the proposals go to the individual boards. They know that I'm behind it, but at the same time they have the opportunity to validate. The business case has to be validated, deadlines have to be validated, execution has to be guaranteed, resources have to be aligned. I follow the cycle: aspiration is the start, then comes strategy, then people, then execution, then monitoring and control. All are important. So you empower them, you have their back covered to some extent, but at the same time you've got to hold them accountable, and that comes through the formal governance process. There are boards, there are committees, and they do all that work. We don't interfere with the governance process. Every exciting project will not go through — some exciting project will get stopped — and so be it.

So I think, Thomas, I have developed a couple of important lessons early in life over all these years. Because I was in TCS, in a services-oriented industry — whether it was a customer query, customer call, or an employee at any level needing attention because he's serving the customer — I always had to be responsive and be available. I can't sit on protocols. I can't sit on hierarchy. I can't sit on process. If anyone tries to reach me, a customer, I will be there. If there is an employee trying to do something, needing a resource, needing help, I'll be there. That is something that got inculcated in me over the years. When it comes to running a group of this size, one thing I feel is: the best gift you can give people is attention. People really don't care whether you are solving their problems — sometimes you will be able to, sometimes you will not — but people cannot accept that if you're not willing to, at a time of need, respond to them. That problem can be one of many that comes your way, but for the person sending a message, this is an important one and he's waiting on it. So I try to prioritize responding to people. Sometimes I also feel that I'm over-accessible. I'm very comfortable working with whatever the other person is comfortable with — some people are comfortable with calls, some with WhatsApp, some with email. I'm quite happy with that. I don't think it's a special quality, but as a leader you are working with an ecosystem — be it your customers, your employees, and partners — you've got to be available. There are times when people misuse that. When they misuse, you don't respond. Over the years, you know which is a journey and which is not. [laughter]

The second one is: the best thing you can give is attention. It's not necessarily that you solve the problem. Many times you can point them in the right direction: 'Hey, didn't you reach out to this guy? Can you do this? Can you do that?' So many times it's providing direction.