The book reveals how Ratan Tata was uncomfortable with Cyrus Mistry’s decisions which he felt went against the clean image and reputation of Tata Group.
Ratan Tata, the late Chairman Emeritus of Tata Group, regretted his decision to back Cyrus Mistry’s ascension as the head of the conglomerate, his biography has revealed. “Cyrus Mistry’s British education blinded me. I naively thought that the DNA of a person with such an impressive education would be different,” Ratan Tata is quoted as saying in the book.
The biography, Ratan Tata: A Life, by Thomas Mathew, released Friday by HarperCollins India, also reveals that Ratan Tata regretted putting the committee under pressure which forced them to “act in haste”, and resulted in Cyrus Mistry being picked as the Chairman of Tata Group in 2012.
The late industrialist, who passed away earlier this month, also regretted issuing an ultimatum to the selection committee to back his chosen successor or he “would walk out on December 28, 2012”, and also rued staying away from the the selection process, an approach he later realized had been “very idealistic”, the book reveals.
Ratan Tata’s biography reveals that the appointment of Cyrus Mistry was ‘circumstantial’ because the selection committee failed to pick another suitable candidate, and ultimately chose Mistry to helm the top post following an interview which came after the panel examined his paper titled ‘Key success factors in managing the Tata Group’.
Mistry’s decisions threatened Tata’s reputation, image
The book reveals how Ratan Tata was uncomfortable with Cyrus Mistry’s decisions which he felt went against the clean image and reputation of Tata Group. The biography details how apprehensions arose when Mistry drove Tata Group into new ventures outside its core areas, such as infrastructure, where “bribes and corruption” could tarnish the Tata name and reputation.
Commenting on the failed joint venture with Docomo, when the Japanese telco won an award of $1.17 billion, which Tata refused to pay, Ratan Tata is quoted as saying: “If it has (Tata Group) made a commitment, it has to in good faith implement it.” The book reveals that Ratan Tata travelled to Singapore in 2017 to personally meet Docomo president, and paid the promised $1.17 billion owed by Tata, when N Chandrasekaran took over as the Group’s chairman.
Cyrus Mistry bypassed Tata Sons board
Further, the book reveals how discontent between Cyrus Mistry and Ratan Tata brewed when the former stopped consulting Tata Trusts on important decisions concerning the Tata Group. In the book, Ratan Tata admits he “misjudged Mistry’s approach to business”, and how acquisition of Welspun’s alternative energy assets by Tata Power for $1.45 billion, which lacked approval from the Tata Sons’ board was a “real flare-up”.
Cyrus Mistry modus operandi as chairman has been commented on by several Tata Group veterans, like current Chairman N Chandrasekaran, who recalled how Mistry’s group executive council (GEC) only comprised of youngsters and ignored veterans.
“Wisdom with experience is more sustainable,” says R Mukundan, MD of Tata Chemicals, while NP Sinha, former vice-president of Tata Steel puts it more bluntly, saying “his appointment itself I would not have done”.
How Ratan Tata tried to help Mistry
The book also describes how the ouster of Cyrus Mistry, who was ousted as the group’s chairman in October 2016, was not a hasty decision but a well formulated one. It reveals that Nitin Nohria, the dean of Harvard Business School, had been assigned by Ratan Tata to ‘help’ Mistry.
“Nitin, you have one job, and that is to see if there’s any way in which you can help him (Mistry) be successful,” Tata had told Nohria, who was incorporated into the Tata Sons board.
However, this move backfired for Ratan Tata as rumours began that he was “stifling the new chairman’s performance” and interfering in his work. Soon, the ties between Ratan Tata and Cyrus Mistry took a nosedive and the internal bickering also led to a dip in the Tata Group’s performance.
Mistry was ousted as the chairman of Tata Group in October 2016, and Ratan Tata knew that he “he would be misunderstood” for the move, and his reputation would take a hit, but he did it anyway because it was the right thing to do to protect the Tata name and reputation, the book reveals.
Ratan Tata’s authorised biography, Ratan Tata: A Life, by Thomas Mathew, was released by HarperCollins India on Friday, who has acquired the rights to the book for record. Thomas Mathew, the author, a former bureaucrat serves on the board of several large Indian companies.