Welcome to Inside the Corner Office, a podcast where you will be taken behind the scenes of the daily life of a CEO. I'm Thomas Buber, CEO of Axa. In each episode of this podcast, we will delve into a specific aspect of this role. You will see that making decisions from an office is definitely not what this job is all about. For every topic, we'll be joined by a leader of a major organization. I hope you will enjoy these discussions. Tune in and take a seat at the table. We are inside the corner office. Welcome back to Inside the Corner Office. Today, I'm happy to welcome Chandra, the chairman of Tata, one of the world's most respected business institutions. From starting as an intern nearly four decades ago to leading a global powerhouse, Chandra has redefined leadership through simplicity, endurance, and purpose. In this episode, we explore how he has modernized a legacy built on values, and what it means to lead a cultural giant in a fast changing world. Welcome, Chandra. Do you remember when we first met?
Yes, Thomas. I think it was the Bokhi advisory board.
Exactly. A long time ago.
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.
Exactly, you know, we will certainly spend more time together. When I look at your journey at Tata, it's an amazing journey and certainly amazing because you've been the first CEO and then chairman that was not of the family. So, how was that transition at the time when you arrived there? It was a fairly traditional company and you were faced with not being from the family and having to reinvent the company.
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, be insurance, pharma, banking, manufacturing, retail, every industry, and I got to travel and work with many geographies from Latin America to the US to Japan, every part of the world. So I had a very good idea about global businesses, about industries. So when I came here to Tata Sons, it was a big shift for me. Yes, 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 the businesses, of markets, different industry challenges. And you would agree with me, the last five, six years have been the most volatile, challenging, exciting, unpredictable years. So it has given me a tremendous opportunity to go through this period.
But at the time when you took over, did the family give you a fairly free hand to shape the company the way you wanted, or was it fairly constrained? Do you remember these first moments?
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 been loved always by the whole nation and great admiration, a brand that is most respected, but we had a lot of financial challenges in different companies. But I got on to addressing it in my own way and running a huge transformation for which Mr. Tata gave me a free hand.
Talking about this transformation because the company when you took it over had, I would say, a lot of legacy risks. Very traditional businesses, the financial situation was not the greatest. It was very capital intensive, and you decided to transform it into a future-oriented portfolio with much better financial construction. How did you do that? How did you take everybody on the journey because it was not an easy transformation?
See, I think it was clear to me that I have 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. So I used to say fitness first, performance next, direction first, velocity next. I came up with basic themes which was 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 represented itself in different industries in power sector, steel sector, auto sector, trucks, so in many industries in which we are present in a big way and highly carbon intensive. We need to do a transformation and we need to make big bets, and also we wanted to make big bets on future because we can't have a portfolio of companies which are traditional. So 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. So I think for me it was simplifying the group, getting the balance sheet and the financials strong so that they can move towards transformation, and then putting new capital into creating new businesses. So that's the journey.
You talked about simplifying the group. When I think about one of the leadership challenges amongst many that I have not achieved yet is simplifying AXA group. How did you simplify Tata at the time and what were your secrets?
See, I think you and I know simplification is a journey. It is not a one-time effort and then you get it done. So for us the complexity was huge. Whether you look at the number of industries we were in and the number of duplicate companies that were there, many companies were in similar businesses and the number of markets in which we were present, a number of subsidiaries we had, a number of layers we had. So the complexity was multi-dimensional. So I felt that if you want to eventually get agility and speed and even 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. So we had two companies in the consumer businesses. A chemicals company was in the food business and there was a separate consumer company which was into beverages and foods. So I kind of removed the food business from the chemicals company and then created one consolidated consumer company. Market loved it. In a couple of years the consumer company went from a billion dollars to 12.4 billion. And the chemicals company also got focused and market appreciated and their PE ratios went up. So when people saw that, then people were willing to give up control. We were four companies which were doing defense businesses. I brought all of them together. Similarly, we had more than a thousand subsidiaries. So we have at least closed down more than 300 subsidiaries in these years and there's more to go. And then 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 is India. Let's double down in India, and US is a market, Canada is a market, UK is a market because we had presence there and in UK we had bought Italy. So let's focus on these four markets and exit elsewhere. So these kind of decisions were taken company by company. So it's basically communicating, showing results, and nudge here, a push there, and getting it done.
What I found quite interesting when I was reading a little bit, it's like you simplified, you refocused the portfolio on fewer and larger businesses that were more financially sound, but you also made sure that you followed the logic of one Tata, meaning you tried to use synergies across the business. So how do I have to imagine that because the businesses are in very different segments you mentioned from consumer to chemicals to EVs?
Yeah, we have lots of businesses from steel, motors, power, to financial services, to airlines, to TCS, a huge number of businesses. But the main thing is how do I communicate the power of coming together is going to be huge. We are one unique company with all humility which has such a wide set of skill sets, and how do we bring the power of those skill sets together, and we operate as individual companies but bring the full power of Tata, and once we do that we can achieve a lot more. That was the whole mantra. And first it was a communication, then it was examples. Again 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, and the government was willing to buy those vehicles. And there were a couple of companies in India which had electric vehicles, we didn't have one. So we had about 8 months to produce a vehicle. So I remember calling our a German who was leading the Tata Motors passenger cars. He told me he must be joking. But I said no, we're going to produce a vehicle in 6 months. So I got together the experts from Tata Motors, our auto parts company, TCS, and another technology company, technologies in engineering, four or five companies which had skill sets, formed a team of 50 people, put a leader, and then we gave them a mandate. Thomas, you won't believe, they produced a vehicle in 6 months.
And then that went through the qualification criteria and got qualified. Yes. It was not a perfect vehicle, so we needed to do a lot of additional things over the next 12 months. But we had a vehicle which is running, which met the basic criteria, the mileage range and heat and other criteria. So that showed people what's possible. Then since then, I think it has become a movement, and now it is not like everything comes to me. There are a lot of relationships, and I started to create group forums. I created one event called Connect Tata, which happens in April every year where the top leadership, some 600 people from companies come, and everyone talks about what they achieve. And these kind of events and business excellence forums, a lot of connections. It's all about getting people to believe, getting people to aspire to the art of the possible, because you will never know more than the CEOs. I mean, we got to accept that I'm never going to know more than the operating teams. So if you can encourage them to think beyond, then facilitate conversation which can happen naturally, and then if it can go down, then things happen. And that's what has happened. And you know, we have achieved a lot of good success in One Tata, but I think the future is going to be hugely enormous.
So that means basically when you work with your teams, you give a lot of empowerment and you trust that they are collaborating well enough to make things happen. How do you find the right balance between on the one hand delegating a lot and empowering teams, but also making sure that things get done?
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 at the end of the day, 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. So the business case has to be validated. Deadlines have to be validated. Execution has to be guaranteed. Resources have to be aligned. So I kind of follow the cycle that aspiration is the start, then comes strategy, then comes people, then comes 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 have to hold them accountable, and that comes through the formal governance process. There are boards, there are committees, and they do all that work. So 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.
What is interesting, so I spoke to somebody the other day who works closely with you, and despite the fact that you have such a large portfolio of activities, the one thing he said was, 'Oh, he's always accessible. When I write him an email or SMS, no matter when I get an answer.' How do you balance, on the one hand, letting people work, letting the process work, but on the other hand being there, and how do you divide your time as well with so many different businesses?
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. And 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. And if there is an employee trying to do something, needs a resource, needs a help, I'll be there. So that is something that got inculcated in me over the years. So when it comes to running a group of this size, one thing I feel is the best gift that you can give to people is attention. Actually people really don't care whether you are solving their problems because sometimes you will be able to, sometimes you will not be able to. But people cannot accept that if you're not willing, at a time of need, if you're not willing to resolve to them. That problem can be one of many that comes your way. But for the guy who is sending a message, this is an important one and he's waiting on it. So I kind of try to prioritize responding to people. Sometimes I also feel that I'm over accessible, and I am also very comfortable working with what the other person is comfortable with. Some people are comfortable with calls, some people are on WhatsApp, some people are on email. I'm quite happy with that. So I don't think it's a special quality, but I think as a leader you are working with an ecosystem, be it your customers, be it your employees, and partners, you've got to be available. But there are times when people misuse you. When they misuse you, don't respond. Over the years, you know which is journey and which is not journey.
