Natarajan Chandrasekaran’s first major decision as Chairman, Tata Group, was rather symbolic of the changes in store. Three months after taking over on May 30, 2017, he asked architects to refurbish Bombay House, the iconic headquarters of the 152-year-old conglomerate. The heritage building on Homi Mody Street in Mumbai’s Fort area had never been altered since it was built in 1924, based on design of Scottish architect George Wittet, who also designed the Gateway of India. The building had cracks in the roof, limited natural light and was vulnerable to termites. Chandrasekaran, who started his career with TCS and contributed hugely to its growth over three decades, wanted to make Bombay House vibrant, incorporating his idea of ‘One Tata’.
Until then, group companies had been working in silos within the building — complete with separate board rooms, conference halls and pantries. Movement of top executives was restricted within their companies. Chandrasekaran changed the office structure and created common conference halls. He also got a Starbucks counter opened on the ground floor. The aim was to remove the psychological barriers to one-ness.
The changes did not come a day too soon. The group was in desperate need of direction when he took over. Cyrus Mistry’s ouster as chairman and battles in the boardroom were hogging the limelight. And major group companies such as Tata Steel, Tata Motors, Tata Power and Tata Teleservices were burdened with unsustainable debt. Chandrasekaran channelled the group’s focus on resolving pending issues and ensuring improvement in performance. The chairman’s office was redesigned on the theme of ‘metamorphosis’, which is now being deployed to transform the 100-company group into a future-ready tech-enabled conglomerate. His four years at the helm have seen the group focus on three areas — identifying new business opportunities, modernisation of old businesses and resolution of lingering troubles.
Now, it is readying to build on those. With big opportunities looming in e-commerce, electronics, electric mobility, medical and diagnostics, renewable energy and payments, Chandrasekaran is re-emphasising on customer-centricity and financial fitness of highly leveraged manufacturing companies. Tata Steel, with ₹86,170 crore net debt, for instance, has to get out of troubles in Europe and focus back on the Indian market. Tata Power, with debt of ₹36,363 crore, needs to focus on renewables and consumer businesses, and Tata Motors, with ₹54,700 crore debt in the automobile business, has to get ready for electric mobility.
“Every business and industry is becoming an ecosystem business. It is not that you can create a product and then try to sell it. Everywhere you have to interact with the customer and the consumer,” Chandrasekaran says in an exclusive interview to BT. The group, he says, is working on Simplification, Synergy and Scale (3Ss). Each firm will be driven by artificial intelligence, data analytics and Cloud computing. They have to bring down debt to zero and follow sustainable practices.
“Tata Group, through its various brands, has a large number of consumers. But as a group, we need to offer them products and services that not only meet their demand and requirement, but do it in such a way that we simplify their lives,” he says. So, the group is building a digitally connected enterprise which brings together products and services to meet customer requirements, he adds.
As the son of a lawyer, Chandrasekaran lived a middle-class life in his early years, walking three kilometres to school, from his village Mohanur in Namakkal district of Tamil Nadu. After graduation, he wanted to be a banana farmer as his father had switched to agriculture. But life changed after the MCA degree from National Institute of Technology, Tiruchirappalli.
Observers say compassion comes naturally to him from his humble beginnings. A colleague in TCS says if he engages aggressively in the morning, he will come in the evening to patch up. This has come in handy during the past four years of refocusing the group’s energies and consolidating the recovery. These years were spent on identifying the group’s core competence — including products, services and geographies — pooling resources and strengthening balance sheets. Though some old issues of group companies are still pending, the group is on the cusp of transformation. Harsh Goenka, Chairman, RPG Enterprises, says Chandrasekaran is a thinker and a man of action. “At a time when technology is the gamechanger, his experience in TCS is helping him drive transformation in group companies.”
Digital And Electronics Play
Chandrasekaran is focused on strengthening the past and sowing the seeds for the future. He has reignited the spirit of entrepreneurship in the group, says Janmejaya Sinha, Chairman (India), Boston Consulting Group (BCG). At the outset, he had six key objectives — Indian consumer, data and digitisation, growing formalisation of economy, sustainability, selective infrastructure and nation-building opportunities, which go well with the Tata brand. The concept led to the creation of a new company, Tata Digital, which essentially targets e-commerce through a Super App.
Chandrasekaran brought together a team of tech experts from TCS and other companies to build Tata Digital. In August 2019, Tata Sons appointed TCSer Pratik Pal as CEO, Tata Digital. Pal was the global head of retail, travel, transportation, hospitality and consumer packaged goods industry unit. Another expert from TCS, Aarthi Subramanian, Group Chief Digital Officer, Tata Sons, is supporting the company in building the e-commerce Super App that will offer all products and services from the group. “The group has a large consumer base and each of our brands services millions of people. We are trying to connect them and give all products and services they need. Not only Tata products but more. It (Super App) is open architecture. We will have a strong loyalty programme, payments engine, financial products, and a number of other categories, so that it is a compelling value proposition,” he says.
Building an e-commerce application to compete with the likes of Amazon, Walmart-owned Flipkart and JioMart is not easy. Billionaire Mukesh Ambani is also working on the idea of building a Super App like WeChat and Alipay in China. Super apps serve as a single point to a wide range of products and services. WeChat and Alipay bundle online messaging (similar to WhatsApp), social media (Facebook), marketplaces (like eBay) and services (like Uber). The app will complement the group’s widespread retail presence — Trent, Infinity Retail, Tata Consumer Products, Titan and Voltas — and financial products companies such as Tata Capital, Tata Asset Management, Tata AIA and Tata AIG. The group is also in talks to acquire a majority stake in online grocery retailer Big Basket for $1.2 billion and e-pharmacy chain 1mg.
Chandra's 10 Point Strategy
1. Tapping digital experts from group companies to build India’s first Super App
2. Tata Power to invest only in renewable energy or consumer-facing businesses
3. Engineering capabilities pave way for Tata Electronics, Tata Medical and Diagnostics
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WE NEED TO REACH OUT TO MILLENNIALS GLOBALLY
Bata shoes are an integral part of almost every school-goer’s life in India. That is why most Indians believe that the brand — founded in what is now the Czech Republic in 1894 and headquartered in Lausanne, Switzerland — is local, despite operating in over 70 countries. The company, which does a ₹3,500 crore business in the country, recently appointed India CEO Sanjiv Kataria as its global head. Kataria, who had taken over as India head in 2017 and under whom Bata India’s profits rose 46 per cent, tells Ajita Shashidhar how India’s diverse footwear consumption habits have given him a unique understanding of customer needs across the globe. Edited excerpts:
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