Ratan Tata: Mendicant on the throne

By:Smita Mishra
The very word tycoon brings to the mind the image of a man dressed in unbelievably expensive crisp designer suit, attending business meetings in star international hotels, throwing lavish parties in unaffordable medieval palaces or sipping precious wine in some beach resort, owning islands, yatches, copters, planes and all riches that one can imagine. But Ratan Tata the man who heads 96 companies including world’s second largest tea business, Asia’s largest software firm, a steel giant, a worldwide hotel chain, and a flourishing car manufacturing arm is distinctly different from the so called “rich”,elite”and “page3” crowd.

“I’ve never had the desire to own a yatch, to flaunt,” says the 69 year old suave and introvert man whose unpretentious ambition ,strategic vision and firm determination has metamorphosed the Tata empire from a huge ,storied ,stodgy and unwieldy organization to a streamlined and profit making global conglomerate.

Very few know perhaps that the man whose very name is used as a synonym for wealth and fortune and who is supposed to be the owner and inheritor of untold riches lives not in a palatial mansion but in a modest Bombay apartment with two German Shepherds as companions. Neighbours consider him to be an extremely private person. They have never seen him throwing a party but have frequently spotted him playing with his dogs Tito and Tango in the neighborhood park. The only extravagance, which he indulges in, is a personal collection of cars. Even this embarrasses him and he excuses his interest as stemming from a love of design, not show.

The life of this reclusive and reticent man, who is credited by the economic gurus of catapulting the Tata Empire to the front row of global economic arena, has not been a smooth ride. When JRD Tata chose this distant, not so successful relative as his successor no wonder it raised many an eyebrow. People looked upon him as a man who has been in charge of NELCO and had failed to make it a success. Ratan Tata an architect by training joined the family business in 1962 at the behest of his uncle. Never treated with favour and never treated as a princeling he was more often handed some of the most hopeless units to look after. And Ratan too was unfortunately never the group’s big booster. In fact at the time he was named Chairman he privately admitted that the hugeness of the lumbering empire frightened him.

But perhaps he underestimated himself or forgot about the Tata blood running in his veins. Ratan Tata became Chairman in 1991.It was the year of grave economic crisis for India. But it was also the year of the beginning of economic reforms in India. Ratan was not the “always winning stuff” but he had an eye for strategy and an uncanny sense of perception of things. He smelt the change in the air and decided on an endeavor, which had appeared “dangerous” to the myopic contemporaries.

For years the group operated in a protected environment where competition was low as the entry barriers were very high. As the rival players were very few the companies did not care for newer technologies or even market shares. But as India opened up Ratan responded with a similar move dragging the group out of the cozy but stifling embrace of socialist India and overgrown conglomerate.

Tata knew that the 138 year old boat could not be rowed with the same old oar. It took better part of the decade but Tata’s vision is paying off. He revamped the operations of Tata steel and made it one of the lowest cost producers of the world. Under himTata Consultancy Service went public and Tata Motors was listed in the New York Stock Exchange .

He shelled out $435 million for Tetley Tea, making Tata the world's No. 2 tea company. He made the critics eat their words when he launched India’s first indigenous car- Indica. Those who had branded the car as “Ratan folly” went speechless when the car became an instant success and turned around Tata Motor fortunes. Under Ratan Tata the company touched almost all the new horizons..from telecom and teleservices to the recent Corus and South Africa ventures. But success has not eroded his values and Tata has religiously continued and personally contributed in the philanthropic activities of his predecessors. He draws a salary as any other Tata employee .

With almost all its group companies making profit, balance sheet of Tata Sons - the investment arm which lives on dividend shares should register brobdingnagian return and the Tatas should figure among the wealthiest in the world. But surprisingly it never happens. And the reason is that the Tatas over generations have raked off a large chunk of their wealth to trusts involved in social work. Incredible it seems, but 66% of the shares of Tata Sons is held by philanthropic trusts which also take away 8-14% of its profit every year. In India, given the extent of poverty and deprivation the role of private sector in mitigating the woes of the ailing masses in league with the government becomes a compulsion. And RatanTata has shouldered this responsibility very generously.

The Tatas were the first of India’s wealthy private donors to move beyond charity into organized strategic giving. Their role becomes more important in light of the fact that they can reach service to those grassroot levels where the foreign donors find difficult to penetrate due to various government regulations.And Ratan Tata has not forgotten the founder’s belief in the principle of active philanthropy.He has transformed Tata Sons into a fiercely active multinational without forgetting the old school values.

The mover and shaker of India’s largest and oldest conglomerate has very little dreams and desires for himself. All he wants is a holiday or two in between his hectic schedule not on some exotic foreign resort but to a small scruffy beach house at half hour boat ride across Bombay harbor with a small generator to meet the power demand and a good book to read. This winner of 2006 Award for Responsible Capitalism deserves much more than what he has got so far in the recognition of his unmatched and unbelievable contribution encompassing the extensive and varied landscapes of economy and philanthropy.