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CONTENTS

PIONEERING ........................................... 08

TRUSTEESHIP ......................................... 14

GIVING ................................................... 20

COMMUNITY ........................................... 27

ETHICS ................................................... 34

EXCELLENCE ........................................... 39

INNOVATION ........................................... 46

LEADERSHIP ........................................... 52

GROWTH ................................................ 57

FOREWORD ........................................................ 06

THE TATA WAY06

It is common for colleagues at the Tata group to refer to the “Tata Way”

of doing things. One hears it frequently in meetings, conferences, day-

to-day conversations. That a certain action or decision is perceived

as not being in line with the “Tata Way” is reason enough not to do it;

similarly, when something passes muster as the “Tata Way” of doing it,

then that is, quite often, sound enough reason to proceed.

The “Tata Way” is part of a lexicon peculiar to the house of Tatas.

Commonly used and easily understood, but rarely defined. Elusive, yet

all-pervading. It’s one of those terms that have come to describe the

manner in which the group and its employees negotiate the world of

business. Depending on the context, it is associated with an ethical,

morally correct way to do business; a socially responsible approach to

business, or business with a conscience; or a tradition of pioneering,

of being the first-movers in various realms. Much like that other term

“Tata-ness”, the “Tata Way” has defied definition – it is just something

that a Tata employee feels and knows.

This booklet is an attempt to capture the various associations and

perceptions of the “Tata Way”. It is a depiction of the qualities that have

coalesced to give the Tata organisation shape and substance. It is a

chronicle that outlines how tradition and heritage, vision and fortitude

are in lockstep with accomplishment and progress in business. It is,

in the final telling, a snapshot of what the Tatas are all about, what

they represent, and how they have carved out a singular space for

themselves in the world of enterprise.

Most of what rests between the covers of this modest volume has

FOREWORD

THE TATA WAY 07

appeared in various publications down the years in some form or the

other. The intent here is not, then, to duplicate those efforts but, rather,

to elucidate the subject matter — the Tata way of business — through

the prism of a shared ethos and a common collection of stories.

It is an attempt to help employees — especially those who are

encountering this unique culture at close quarters for the first time

— to better appreciate the many elements that have made the Tata

organisation what it is.

From its pioneering endeavours to the trusteeship concept that

underpins its ownership structure, from its commitment to fulfilling

societal responsibilities to its steadfast allegiance to ethical practices,

from its emphasis on excellence and innovation in business to

its remarkable record with growth and leadership in a spread of

industries, the Tata group has plenty to be proud about. The Tata

Way, I am convinced, has shown us the direction in making this

possible, in bringing together more than 450,000 people who are

now part of the Tata family, in creating a fabric of business that blends

profitability and conscientiousness, in the fashioning of a philosophy of

entrepreneurship that is, simply put, unique.

I hope and expect that this publication will resonate with all of us: old

timers in the group, those crafting long-term careers at Tata companies,

and newcomers who are beginning to understand what this organisation

is all about. I wish you a pleasant journey as you follow the “Tata Way”.

Cyrus P Mistry

Chairman, Tata Sons

02THE TATA WAY08

PIONEERINGJamsetji was remarkable in that he adopted international standards in those days. He went to the best

consultants and was always looking to provide India with world-class enterprises. He had the ability to identify people, Indians and expatriates, whom he intuitively believed could execute and lead

his projects. He was a true internationalist in that sense and,

yet, a committed nationalist.— Ratan Tata

THE TATA WAY 09

Jamsetji Tata, the Founder of the Tata group, chose not to worry

too much about the risks attached to treading the solitary path,

concentrating instead on the boundless possibilities that could

be unleashed by a spirit of pioneering. This is the spirit that has

piloted the entrepreneurial endeavours of the Tata group, from its

inception through to the present day.

Jamsetji was, in the words of his biographer Frank Harris, “so far

ahead of his times that his countrymen could not always keep

pace with his broader ideas nor comprehend their drift”. That is

understandable given the context: colonial India tended not to be an

accommodating place for a native-born son wading into untested

business waters. Jamsetji made light of such deterrents and, in doing

so, laid the ground for a way of thinking that has characterised the

Tata group’s pioneering exertions in myriad fields of enterprise.

THE BIRTH OF THE EMPRESS The path-breaking inclinations of the Tata group found first

bloom when Jamsetji established, in 1877, the Empress Mills

in Nagpur in central India. The Tatas were considered, as one

historian put it, “backbenchers in the Bombay business world”

when this textile venture, the group’s first big industrial initiative,

was set up. Jamsetji’s appetite for risk-taking would grow in later

years but here, too, it was in evidence: First, Nagpur was not a

popular destination for textile projects at the time; second, the

Empress Mills introduced new technology such as ring spindles;

third, the mill was run by a board of directors, an extraordinary

practice for the time; fourth, it went against the prevailing practice

and charged, under the managing agency system of the day,

commissions on profits rather than production. The Tatas’ first

industrial venture, thus, heralded many firsts.

02THE TATA WAY10

PASSION FOR STEEL For all the challenges it faced and overcame, the Empress Mills

enterprise would pale in comparison with Jamsetji’s life-consuming

passion for Tata to be a large-scale producer of iron and steel. This

was as much a business proposition as it was an adventure into

the unknown.

“It requires no great insight into the industrial history of India to

realise that to think of launching steel production in India in the

late nineteenth century was, on the face of it, foolhardy,” writes

the historian Dwijendra Tripathi. “Historical precedence, prevailing

prospecting laws, the state of technological competence in the

country, the colossal financial requirement, and the indifferent,

if not downright hostile, attitude of the colonial government all

militated against the idea. And no one could have imagined that

steel manufacturing, even if somehow mounted, would yield

substantial profits in the foreseeable future.”

There was plenty of scorn to go around, too, most notoriously that

generated by Sir Frederick Upcott, then the chief commissioner for

the Indian Railways: “Do you mean to say that Tatas propose to

make steel rails to British specifications? Why, I will undertake to

eat every pound of steel rail they succeed in making.” Sir Frederick

had to eat his words — there is no account of him chewing on even

an ounce of the metal — as the plant started functioning in 1912,

after numerous twists and turns, in a place that is now called,

appropriately enough, Jamshedpur. It was at that point the largest

single industrial unit in the British Empire.

The baton of running the Tata group had by then passed to Dorab

Tata, Jamsetji’s elder son, and so it seemed had that trailblazing

02

THE TATA WAY 11

spirit of a father who, as the biographer

Frank Harris wrote, had to live with “those

curious impediments which dog the steps

of pioneers who attempt to modernise

the East”. Dorabji’s contributions to

the making of the Tata group were at

least as significant as those of Jamsetji,

and his accomplishments probably more

considerable. Not least of these was turning

another of Jamsetji’s pioneering ideas, generating

hydroelectric power, into reality.

Jamsetji had envisioned building a reservoir in the Sahyadri

mountain range near Bombay (now Mumbai) and harnessing the

energy produced by rainwater from the Roha river to generate power

for a city then drawing much of its electricity from hugely polluting

coal. The venture was not as difficult to execute as the iron and steel

undertaking, but the prospects of quick profits were just as distant.

NEW VENTURES The grandest of the ventures that did come into existence during

Jamsetji’s lifetime was the Taj Mahal Hotel in Bombay. Legend has

it that the Tata Founder set his mind on building it after being

denied entry into one of the city’s fancy hotels on account of being

an Indian. That is most likely untrue. What is not is that the Taj,

built at a cost of `42 million and opened to patrons in 1903,

was sumptuousness defined, unique for its time and among the

most luxurious hospitality properties in the world. It was the first

building in Bombay to be lit by electricity and had many other

firsts to its credit: American fans, German elevators, Turkish baths,

English butlers.

02THE TATA WAY12

The Tata group’s pioneering efforts in the airline venture and its

foray into information technology took flight during the stewardship

of JRD Tata, the charismatic leader of the group from 1938 to

1991. Tata Airlines was established as Tata Aviation Service in

1932 — the first flight in the history of Indian aviation lifted off

from Drigh Road in Karachi with JRD Tata at the controls of a Puss

Moth — and it quickly soared to success. Renamed Air India in

1948, it was nationalised by the government of Jawaharlal Nehru

in 1953, a decision JRD Tata did not take kindly to.

Tata Consultancy Services (TCS), the information technology

enterprise, was born in 1968 and quickly became an innovative

powerhouse that laid the seeds for India’s spectacular success as a

software dynamo. In the 44 years of its existence, TCS has broken

new ground in multiple ways, with its offshore and outsourcing

services and a creative feel for business that has seen it rise to

become one of the leading companies of the Tata group in terms of

size and revenues.

Developing passenger cars indigenously — the Indica and the

Nano — is yet another standout

example of the Tata group’s

pioneering instincts, as are its

attempts to fashion a spectrum

of products for consumers and

customers at the bottom of the

pyramid.

FOR GREATER GOOD There is, however, much about

the pioneering philosophy at

TATA AIRLINES WAS ESTABLISHED AS TATA AVIATION SERVICE IN 1932 — THE FIRST FLIGHT IN THE HISTORY OF INDIAN AVIATION LIFTED OFF FROM DRIGH ROAD IN KARACHI WITH JRD TATA AT THE CONTROLS OF A PUSS MOTH — AND IT QUICKLY SOARED TO SUCCESS.

THE TATA WAY 13

Tata that goes beyond products and profits: The labour-welfare

measures championed by Jamsetji and Dorabji (many of them

implemented at Tata group companies before they became statutory

even in the developed world); new forms of management, business

structures and strategies; the setting up of educational and research

institutions for the greater public good; the crafting of an ownership

structure based on the trusteeship concept; making enlightened

philanthropy an intrinsic part of the flow of business. All of these

reflect, in measures large and small, an original and pioneering

bent of thinking and execution.

“When you have to give the lead in action, in ideas — a lead

which does not fit in with the very climate of opinion — that is true

courage, physical or mental or spiritual, call it what you like.” This

was Jawaharlal Nehru’s eulogy for Jamsetji Tata on one occasion,

but he could well have been referring to the business Jamsetji

founded and inspired.

02THE TATA WAY14

TRUSTEESHIPThe wealth gathered by Jamsetji

Tata and his sons in half a century of industrial pioneering formed but a minute fraction of the amount by which they enriched the nation. The

whole of that wealth is held intrust for the people and used

exclusively for their benefit. The cycle is thus complete. What came from the people has gone back to the

people many times over.— JRD Tata

THE TATA WAY 15

The Tata name in any given Tata company comes from the

shareholding that Tata Sons, one of the two promoter holding

companies, has in it. Part of Tata Sons’ mandate is to invest in

operating Tata companies and to advance the group’s entry into

new ventures (a responsibility that is shared by Tata Industries,

the other promoter holding company of the group).

THE PRINCIPLE OF TRUSTEESHIP Philanthropic trusts endowed by members of the Tata family

hold a majority stake in Tata Sons. The biggest of these trusts

are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which

were created by the families of the sons of Jamsetji Tata. The

trusts own 66 percent of the equity capital of Tata Sons. The

returns from the investment that the Tata trusts have in Tata Sons

are funnelled into an extensive spread of philanthropic causes

that embrace institutions and common people in a wide variety

of spheres.

This one-of-a-kind system, where ownership resides with the

philanthropic trusts rather than individuals, has been fostered by,

and is based on, the principle of trusteeship. This commitment to

the principle of trusteeship remains, to this day, a distinctly ‘Tata’

characteristic.

SOCIAL ENTREPRENEURFor Jamsetji Tata, the Founder of the Tata group, company

and country — India in this instance — were almost

indistinguishable, and it is his legacy that gave birth to and

nurtured the tradition of trusteeship that defines the group.

Jamsetji said: “There is one kind of charity common enough

among us… It is that patchwork philanthropy which clothes the

02THE TATA WAY16

ragged, feeds the poor, and

heals the sick. I am far from

decrying the noble spirit

which seeks to help a

poor or suffering fellow

being. [However] what

advances a nation or

a community is not

so much to prop up

its weakest and most

helpless members, but to

lift up the best and the most

gifted, so as to make them of

the greatest service to the country.”

It is this sentiment from which springs Jamsetji’s idea of a

business organisation committed not just to profit alone but

to public good as well. As with some of his grandest

entrepreneurial concepts, the translating of Jamsetji’s thoughts

into action happened under the watch of his elder son, Dorab

Tata, a remarkable man who blended business brilliance with

altruistic instincts.

The personal wealth of Dorabji and his younger brother, Ratanji

Tata, and the manner of its disbursement, laid the ground for the

creation of the trusts that bear their names. Ratanji died in 1918

at the age of 47; the Sir Ratan Tata Trust (SRTT) was set up a

year later as per the terms of his will.

Today, SRTT and the Navajbai Ratan Tata Trust (set up in 1974

in memory of Ratanji’s wife) work together to bestow grants for

02

THE TATA WAY 17

various projects. A few months before his death in 1932, Dorabji

pledged his personal wealth to the newly-registered Sir Dorabji

Tata Trust. Dorabji, very much his father’s son, spelled out his

rationale of business when he said in February 1911 (at the

opening of the Tata hydroelectric project near Bombay): “To my

father the acquisition of wealth was only a secondary object in

life; it was always subordinate to the constant desire in his heart

to improve the industrial and intellectual condition of the people

of this country… It is a matter of the greatest gratification to his

sons to have been permitted to carry to fruition the sacred trust

which he committed to their charge.”

RAISING THE STAKESTata Sons, founded as a trading entity called Tata & Sons in

1868, is fundamental to the ownership structure of the Tata

group. This makes the Tata trusts the predominant owners of

what has been termed the Tata group of businesses.

Jamsetji and his sons used

Tata Sons as the instrument

to funnel their investment in

various business ventures.

Tata Sons’ holdings in the

group’s companies were often

undersized, but this was

alright in the business days

of old, when with the support

and trust of shareholders a

promoter company could

manage its enterprises through

a small stake in them. And this

THIS ONE-OF-A-KIND SYSTEM, WHERE OWNERSHIP RESIDES WITH THE PHILANTHROPIC TRUSTS RATHER THAN INDIVIDUALS, HAS BEEN FOSTERED BY, AND IS BASED ON, THE PRINCIPLE OF TRUSTEESHIP. THIS COMMITMENT TO THE PRINCIPLE OF TRUSTEESHIP REMAINS, TO THIS DAY, A DISTINCTLY ‘TATA’ CHARACTERISTIC.

02THE TATA WAY18

was the era of the ‘managing agency system’, which made that

kind of arrangement par for the course.

The managing agency system, established during the era of

the East India Company, was put in place to enable British

business promoters and backers to invest their funds in India,

the idea being that this would make it easier for them to control

such investments from abroad. Under the system the executive

authority of a promoter company became part of the contract

of management signed by the company being promoted, and

inviolable as such. (The managing agency system was abolished

by the Government of India in 1970). By the 1980s, Tata

Sons held a smaller share in Tata Steel than another big Indian

business conglomerate.

That began to change when Ratan Tata took over as Chairman of

Tata Sons from Jehangir Ratanji Dadabhoy Tata in 1991. Ratan

Tata, an architect by training, set about rebuilding Tata Sons’

shareholding in each group enterprise to close to 30 percent.

The strengthening of its stakes

in different Tata companies

allowed Tata Sons to better

manage these

companies and the

group as a whole,

and it has enhanced

the stature and the

assets of the Tata

trusts. The institution, as

ever, has benefitted.

THE TATA WAY 19

Left unsaid here is a fact rarely commented upon: the Tatas,

one of India’s most illustrious industrial families for well over a

century, never show up on any listing of wealthy people. Put that

down to an ownership structure that has endowed the Tata group

with the ability to add muscle and meaning to the legacy of its

Founder. And that is truly unique.

THE TATA WAY20

GIVINGWhat advances a nation or a

community is not so much to prop up its weakest and most helpless

members but to lift up the best and the most gifted, so as to make them of the greatest service to the country.

— Jamsetji Tata

THE TATA WAY 21

The ownership of the Tata group is unique. The Tata philanthropic

trusts hold 66 percent of the shares in Tata Sons, one of the

two promoter holding companies of the group. The wealth that

accrues to the trusts from this asset supports an assortment of

causes, institutions and individuals in a wide variety of areas. It’s

the trusteeship principle in full play, with philanthropy as its core

and credo.

The biggest of the Tata trusts are the Sir Dorabji Tata Trust and

the Sir Ratan Tata Trust, which were created with the personal

wealth of the two sons of the Tata group Founder Jamsetji Tata.

The logic and the method behind the formation of the Tata trusts

may have sprung from the minds of his sons, but it was Jamsetji

who pointed them to the path of structured and meaningful

philanthropy.

Jamsetji’s idea of philanthropy was far removed from

conventional notions of charity. It was much more than handouts

that he envisioned when he set up, in 1892, the JN Tata

Endowment. The first of the Tata family’s planned philanthropic

initiatives, it enabled Indian students, regardless of caste or

creed, to pursue higher studies in England. This blossomed into

the Tata scholarships, which were so prolific that by 1924 two of

every five Indians coming into the elite Indian Civil Service were

Tata scholars.

In later years the beneficiaries of the endowment would include

former President of India KR Narayanan, scientists Raja Ramanna

and Jayant Narlikar, and writer and actor Girish Karnad. More

importantly, it marked the beginning of the Tata commitment to

wealth-sharing. Jamsetji’s greatest effort, though, was concentrated

THE TATA WAY22

on establishing what would become the Indian Institute of Science.

He pledged `3 million from his personal fortune for it and sought

the support of the then British viceroy, Lord Curzon, and Swami

Vivekananda, among others, to make it a reality.

BUILDING ON A LEGACYSwami Vivekananda, in his backing of the

idea, wrote in 1899, “I am not aware

if any project at once so opportune

and so far reaching in its

beneficent effects has ever

been mooted in India...

The scheme grasps the

vital point of weakness in

our national well-being with a

clearness of vision and tightness

of grip, the mastery of which is

only equalled by the munificence

of the gift that is being ushered to

the public.”

Jamsetji’s sons, Dorab and Ratan, built on the legacy of their

father in a magnificent manner. Sometime before his death in

June 1932, Dorabji bequeathed most of his personal wealth

to the newly registered Sir Dorabji Tata Trust. Dorabji also set

up a trust in his wife’s memory, the Lady Tata Memorial Trust,

which he endowed with a corpus of `2.5 million for research

in leukaemia, and he donated more than `2 million to a clutch

of institutions. In the words of the Governor of Bombay, Sir

Frederick Sykes, “he put the coping stone on his life’s policy of

assisting those less well endowed with this world’s goods”.

02

THE TATA WAY 23

Ratanji, the younger of Jamsetji’s sons, died in 1918 at the

relatively young age of 47. He donated his extensive art

collection to the Prince of Wales Museum (now Chhatrapati

Shivaji Maharaj Vastu Sangrahalaya) in Bombay and left

directives in his will for his personal wealth to be used for

programmes in education, health, livelihoods and communities,

art and culture, and public initiatives. The trust bearing his name

was established in 1919.

Much has happened since those early years and the Tata trusts

have grown in number, with other members of the family

contributing to the charity corpus. Taken together, the trusts now

disburse — principally to nonprofit organisations but also to

other entities — nearly `5 billion to support initiatives in health

and education, livelihoods and agriculture, human rights and

culture, the environment and more, in India and abroad. Include

the contribution of Tata companies in funding social development

programmes and the total adds up to about 4.5 percent of the

net profits of the Tata organisation.

A VISION FOR THE COUNTRYA considerable proportion of the

Tata trusts’ resources have been

earmarked for the establishment

and further development of

institutions that have made

outstanding contributions to

the cause of India. The most

prominent of these are the Tata

Institute of Social Sciences, the

Tata Memorial Centre for Cancer

TAKEN TOGETHER, THE TATA TRUSTS NOW DISBURSE — PRINCIPALLY TO NONPROFIT ORGANISATIONS BUT ALSO TO OTHER ENTITIES — NEARLY `5 BILLION TO SUPPORT INITIATIVES IN HEALTH AND EDUCATION, LIVELIHOODS AND AGRICULTURE, HUMAN RIGHTS AND CULTURE, THE ENVIRONMENT AND MORE, IN INDIA AND ABROAD.

THE TATA WAY24

Research and Treatment, the Tata Institute of Fundamental

Research, the National Centre for the Performing Arts, the

National Institute of Advanced Studies, the Sir Dorabji Tata Centre

for Research in Tropical Diseases, the JRD Tata Ecotechnology

Centre, and the recently opened Tata Medical Center.

“Many have wondered whether this is baggage we can afford to

carry,” said Ratan Tata, then Chairman of Tata Sons, in a 2008

interview. “My view is that our expression of social responsibility

cannot be measured in terms of profit and loss. It is an enormous

contribution to the nation, an enormous expression of goodwill to

the communities around us. I would like to think this is the best

part of what Tata stands for… We really do care.”

THE TATA CHARITY CANOPY� There are two principal trusts operating under the Tata

umbrella: the Sir Dorabji Tata Trust (SDTT) and the Allied

Trusts, and the Sir Ratan Tata Trust (SRTT) and the Navajbai

Ratan Tata Trust.

� Over 75 percent of the funds of the many Tata trusts accrue

from dividends on the shares they own in Tata Sons, one of

the two promoter holding companies of the Tata group. The

remaining comes from statutory investments.

� The JN Tata Endowment was the first of the Tata trusts. It

was established by Founder Jamsetji Tata in 1892 to provide

scholarship loans to individuals for the pursuit of higher

studies abroad. More than 120 students are selected every

year from across India as JN Tata scholars.

� SDTT was established in 1932 by Dorab Tata, the elder

son of Jamsetji Tata. It is the largest, and one of the oldest,

philanthropic organisations in India.

THE TATA WAY 25

� Dorabji bequeathed most of his personal

wealth in 1932 to the trust that bears

his name. This wealth was estimated

at `10 million and comprised

substantial shareholdings in various

Tata enterprises, landed property,

his wife Lady Meherbai’s jewellery —

including the famous Jubilee diamond,

twice the size of the Kohinoor — and even his pearl-studded

tie pins and cufflinks.

� SDTT and the Allied Trusts’ grants for 2011-12 were spread

across three broad spheres: to nonprofits, institutions and

individuals.

� There are six thematic spheres in which SDTT and the

Allied Trusts extend support to nonprofits: natural resource

management and rural livelihoods; health; education; civil

society, governance and human rights; urban poverty and

livelihoods; and media, arts and culture.

� SDTT is best known for promoting six pioneering institutions

of national importance: the Tata Institute of Social Sciences

(set up in 1936), the Tata Memorial Centre for Cancer

Research and Treatment (1941), the Tata Institute of

Fundamental Research (1945) and the National Centre for

the Performing Arts (1966) — all in Mumbai. The National

Institute of Advanced Studies (1988) and the Sir Dorabji Tata

Centre for Research in Tropical Diseases (1999) are both in

Bengaluru.

� The Sir Ratan Tata Trust was established in 1919, with a

corpus of `8.1 million, following the death of Ratanji Tata,

the younger son of Jamsetji Tata; it operates in accordance

with his will.

THE TATA WAY26

� SRTT and the Navajbai Ratan Tata Trust’s disbursals in

2011-12 were in five thematic spheres: rural livelihoods and

communities; education; civil society and governance; health;

and arts and culture.

� The Allied Trusts are smaller trusts; while some of them have

a specific mandate, the rest are broad-based in their approach

to grant-making.

THE TATA WAY 27

COMMUNITYIn a free enterprise, the community is not just another stakeholder in business but is in fact the very

purpose of its existence.— Jamsetji Tata

THE TATA WAY28

Terms such as corporate social responsibility and corporate

sustainability are of relatively recent vintage. Not so the

commitment that Tata companies have shown over long years

in undertaking community development programmes aimed at

helping the people living in the areas around their operations. This

kind of support characterises the social uplift agenda that any

Tata company typically gets involved with. It embraces everything

from health and education to job creation and the environment,

and it has touched, and changed, countless lives. There is a more

concrete number to the resources that Tata companies, as a whole,

set aside for initiatives that come under the umbrella of community

development: in financial year 2012, Tata companies spent about

`3.9 billion on such programmes.

LEGACY OF ALTRUISM But one has to go beyond statistics to grasp how the Tata group has

stayed true to this element of its Founder’s altruistic legacy. Jamsetji

Tata needed no convincing that the community was a critical

component of the business of business. Those who followed him,

most notably, his sons Dorab and Ratan, and JRD Tata, provided

further impetus to this spirit of giving back to the community.

Over the years, the structures and the processes that govern

the group’s community-focused projects and programmes have

been strengthened. Crucial to this structure is the Tata Council for

Community Initiatives, a nodal body that guides and helps Tata

companies and employees with their community development efforts.

Established in 1996, the council brings together good practices

within the group while also charting out a range of sustainable

development initiatives in community outreach, environmental

THE TATA WAY 29

management, biodiversity

restoration, climate change

mitigation and employee

volunteering. It also helps

Tata companies address

‘sustainability reporting’ issues

and has, in collaboration with

the United Nations Development

Programme (India), put together

what is known as the Tata

Index for Sustainable Human

Development, a unique effort

aimed at directing, measuring and enhancing the community work

that Tata enterprises undertake.

COMMITTED TO COMMUNITY All of this translates into plenty on the ground: health and education

projects, water management and environmental protection, women

and child welfare, tribal and rural uplift programmes, even the

preservation and regeneration of endangered species like the

whale shark and the mahseer. This does not imply that a Tata

company will dive into anything and everything that comes under

the community development canopy. Rather, each group company

concentrates on initiatives that are of value to the community in and

around its operations.

The volunteering work that Tata employees do is a crucial strand

here. An evaluation in 2011-12 found that 46,629 registered

(and probably half as many unregistered) volunteers from 31 Tata

companies put in a total of about 6.5 million hours in community

related projects (just in that year). This kind of volunteering has

JAMSETJI TATA NEEDED NO CONVINCING THAT THE COMMUNITY WAS A CRITICAL COMPONENT OF THE BUSINESS OF BUSINESS. THOSE WHO FOLLOWED HIM, MOST NOTABLY HIS SONS DORAB AND RATAN, AND JRD TATA, PROVIDED FURTHER IMPETUS TO THIS SPIRIT OF GIVING BACK TO THE COMMUNITY.

THE TATA WAY30

been institutionalised by the council,

encouraging employees to use their skills

and interests to improve the quality of

life of people they would otherwise

not have interacted with.

Another standout manifestation

of the community engagement

endeavours of the group has

been the townships that a

clutch of big Tata companies have

nurtured close to their industrial

facilities. Tata Steel and Tata Motors

in Jamshedpur (Jharkhand), Tata Chemicals in

Mithapur (Gujarat), in Babrala (Uttar Pradesh), in Magadi (Kenya),

and Titan Industries in Hosur (Karnataka) are examples of such

townships. The Tata companies that sustain these cities are cast

in the mould of caretakers rather than gatekeepers. This attitude

has allowed Jamshedpur and its siblings to prosper in a manner

that befits the particular circumstances of their individual evolution,

without being encumbered by any unilateral doctrine.

That aside, many Tata companies have a dedicated team of people

implementing and overseeing their community initiatives. The Tata

Steel Rural Development Society is involved in a large variety of

projects in villages around Jamshedpur. Similarly, the Tata Chemicals

Society for Rural Development works in and around Mithapur and

in the rural spread near Babrala, with well-seeded programmes in

agricultural development, health and education. Add to that the relief

and rehabilitation efforts that the Tata Relief Committee and other in-

house entities undertake in the aftermath of natural disasters.

02

THE TATA WAY 31

A SPORTING SPIRIT Arts and sports are among the other spheres where Tata

companies, and the group as a whole, have contributed

significantly. The group has established a number of academies

for different sports disciplines, besides sponsoring events and

supporting talented athletes. The Tata Sports Club was set up in

1937 to encourage sports and sports persons within and outside

the group. Tata Steel, the most prominent of the group’s companies

in supporting sports, has established the Tata Football Academy,

the Tata Archery Academy and the Tata Adventure Foundation.

It has also created sporting infrastructure such as the JRD Tata

Sports Complex and the Keenan Stadium, the latter a regular venue

for international cricket, both in Jamshedpur. Among the sportsmen

who have benefitted from such Tata support are badminton player

Pullela Gopichand, tennis star Leander Paes, billiards world

champions Geet Sethi and Michael Ferreira, and cricketers Dilip

Vengsarkar, Ajit Agarkar and Saurav Ganguly.

CUSTODIAN OF ART Tata companies have also played

a significant part in preserving and

promoting India’s cultural heritage.

Art historian Priya Maholay Jaradi

wrote: “Using its tremendous

spread and influence to great effect,

the Tata group and its companies

have been able to play a vital

role in preserving and promoting

every component of India’s

national heritage. What began as

THE TATA CULTURE OF EXTENDING A HELPING HAND TO THE COMMUNITY IS TRULY AN EXERCISE IN EMPOWERING THE COMMUNITY IN SUBSTANTIVE WAYS, RATHER THAN THROUGH “PATCHWORK PHILANTHROPY”, AS JAMSETJI TATA TERMED IT.

THE TATA WAY32

a collector’s penchant and simple

philanthropy has merged with

the corporate culture of the entire

group. A sturdy and colourful

tapestry of art and industry has

been woven through a corporate

mindset that sees much more

than mere profits on the horizon.”

Companies such as Tata

Chemicals and Indian Hotels

are deeply involved in promoting

traditional arts and crafts. The

Tribal Culture Centre, founded by Tata Steel in 1990, is a showcase

for the artistic talents of the tribal communities of Jharkhand. The

Dare, Aranya and Athulya projects of Tata Tea (now Tata Global

Beverages) have helped differently-abled children and youth in

Munnar, Kerala, to mould a better life for themselves through the

medium of arts and crafts. There are many such stories, quite a

few told and recorded, plenty more still unknown to all but people

in the thick of them.

EMPOWERING THE COMMUNITY The Tata culture of extending a helping hand to the community

is truly an exercise in empowering the community in substantive

ways, rather than through “patchwork philanthropy”, as Jamsetji

Tata termed it. A story that Dr Jamshed J Irani, a former

managing director of Tata Steel, is particularly fond of illustrates

the point. The time was the early 1990s and the occasion was

a gathering of industrialists called by India’s then Prime Minister,

PV Narasimha Rao.

ARTS AND SPORTS ARE AMONG THE OTHER SPHERES WHERE TATA COMPANIES, AND THE GROUP AS A WHOLE, HAVE CONTRIBUTED SIGNIFICANTLY. THE GROUP HAS ESTABLISHED A NUMBER OF ACADEMIES FOR DIFFERENT SPORTS DISCIPLINES, BESIDES SPONSORING EVENTS AND SUPPORTING TALENTED ATHLETES.

THE TATA WAY 33

Representing the Tata group were Ratan

Tata and Dr Irani. “The prime minister

proposed that we business people set

aside 1 percent of our net profit for

community development projects

totally unconnected to the workers

and industry any of us was involved

with,” recalls Dr Irani. “Mr Tata and I

looked at each other; we didn’t make any

comment. Later, we drew up a chart that

quantified Tata Steel’s contribution on

Mr Rao’s scale. We discovered that,

over a 10-year period, the company had been dedicating between

3 and 20 percent of its profits to social development causes.”

Enough said.

THE TATA WAY34

ETHICSWe do not claim to be more

unselfish, more generous or more philanthropic than other people. But we think we started on sound and straightforward business principles,

considering the interests of the shareholders our own, and the health

and welfare of the employees, the sure foundation of our success.”

— Jamsetji Tata

THE TATA WAY 35

The value systems and principles by which the Tata group

operates are a critical part of the legacy of its Founder, Jamsetji

Tata, and those who have built on what he created. Growth by

any means and for its own sake — the doctrine of the cancer

cell — has no place in this equation. Jamsetji said: “We do not

claim to be more unselfish, more generous or more philanthropic

than other people, but we think we started on sound and

straightforward business principles, considering the interests

of the shareholders our own, and the health and welfare of the

employees the sure foundation of our success.”

CODE OF CONDUCT That foundation depends on the implicit as much as it does on

the explicit. The implicit component comes from the traditions

and the heritage that are so important to the group and how it

defines itself, and this has been ingrained by a cultural kind of

osmosis down the years. The explicit is more recent and, here,

enhancements have happened as the group has evolved, as

business practices have changed and the challenges of operating

in this age have multiplied.

The centrepiece of the explicit half of the ethical framework by

which Tata companies and people function is the Tata Code of

Conduct, a formal and comprehensive set of guidelines that set

down and reinforce the values that underpin the Tata group.

Formally introduced in 1998, it emphasises the core values

— integrity, understanding, excellence, unity and responsibility

— governing the manner in which Tata companies conduct their

businesses. It serves as an ethical roadmap that explains the

conduct expected of Tata employees, as well as others associated

with the group, in their personal and professional dealings.

THE TATA WAY36

The code strives to cover all aspects of business behaviour at

the individual and organisational level, from national interest

and financial reporting to equal-opportunities employment and

the acceptance of gifts and donations, from safety procedures

and product quality to corporate citizenship and regulatory

compliance. The code has undergone constant revision to make it

more wide-ranging and to incorporate inputs from the Tata group’s

international entities.

REINFORCING THE MESSAGE There are many methods followed to convey the message of,

and train people on, the code and its tenets. The chief executive

is the chief ethics officer in each Tata company and there are

ethics counsellors and an ethics network. There are regular

regional meets for ethics counsellors and other senior business

leaders; a web-based training module that aims to enhance

awareness of the code through case stories; a reference manual

for better guidance on the clauses of the code; programmes that

focus on values and personal commitment to the code (rather

than just compliance); and exhaustive assessments of the ethical

climate in a company.

There is more to the code than ethics, though, as Ratan Tata,

former Chairman of Tata Sons, once explained. “The management

of business ethics is an integral part of the overall excellence

initiatives undertaken by the group,” he said. “The adoption

of a common code of conduct reinforces our commitment to a

shared set of ideals and beliefs. More importantly, the code has

strengthened our determination to work together in our common

goal to maintain our leadership position in the industries and

markets that we serve.”

02

THE TATA WAY 37

TAKING A FIRM STAND It is not just through words that Mr Tata

himself stayed true to the beliefs

enshrined in the code. The Tata

group’s decision to mothball

its plans to start an airline has

been told many times, but is

worth repeating. This plan,

which envisaged Singapore

Airlines as a Tata partner and

collaborator, was put in cold storage

after considerations other than merit and

regulatory compliance came into play.

The Tata Finance issue is another example of the group

doing the right thing when the going got rough. The case involved

company executives who diverted funds to carry out certain irregular

and fraudulent securities transactions. When the Tata Sons board

became aware of these irregularities, it immediately informed

authorities such as the Reserve Bank of India and the Securities

and Exchange Board of India, and ordered an investigation by an

independent auditing firm. It terminated the services of employees

found negligent in their duties, provided support to the investigating

agencies and regulatory authorities, and, finally, ensured that no

investor lost any money. The Tata Finance issue pushed the group

to further put checks and balances in place.

Honesty, as the British writer John Ruskin noted, can never

be based on policy. Corporate houses cannot mandate ethical

business behaviour any more than the weather bureau can

summon rain or shine. But they can ingrain it in the character of

THE TATA WAY38

the organisation — through tradition

and a commitment to the letter and

the spirit of laws and regulations.

That is what the Tata group has

endeavoured to do.

“Business, as I have seen it, places

one great demand on you: it needs

you to impose a framework of ethics,

values, fairness and objectivity on

yourself at all times,” said Ratan Tata

in an interview. “It is easy not to do this; you cannot impose it on

yourself forcibly because it has to become an integral part of you.”

THE TATA CODE OF CONDUCT EMPHASISES THE CORE VALUES — INTEGRITY, UNDERSTANDING, EXCELLENCE, UNITY AND RESPONSIBILITY — GOVERNING THE MANNER IN WHICH THE TATA COMPANIES CONDUCT THEIR BUSINESSES

THE TATA WAY 39

EXCELLENCEThe business excellence movement

[in the Tata group] started as an award exercise to recognise quality. It grew from that into a corporate

excellence programme that went far beyond what we had ever thought it would be, and it has become deeply ingrained in the DNA of various Tata companies. It has had its impact on their performance and it has had an

impact on the way people think.— Ratan Tata

THE TATA WAY40

The last decade of the previous millennium saw the beginnings at

Tata of what would soon become an intense engagement for the

group’s companies: the pursuit of business excellence. What began

as a quest for quality — the holistic big ‘Q’ that refers to the quality

of the business process itself rather than the product-obsessed small

‘q’ — has since overcome initial resistance and various hurdles to

become an important tenet of the Tata way of doing business. The

instrument to translate this tenet into accomplishment has been the

Tata Business Excellence Model, or TBEM. The TBEM, introduced in

1995, has played a major role in bringing the companies together,

helping to define their common purpose and philosophy, and

strengthening the Tata brand.

The need to focus on the big Q was felt in the early 1990s, when

the opening up of the Indian economy brought with it the myriad

challenges of liberalisation, including unprecedented competition

from both domestic as well as foreign business entities. The

new economic landscape created opportunities for serious

soul-searching within Tata companies.

DESTINATION: EXCELLENCE “The dominant impression was that we were less nimble than

others, more resistant to change and extremely set in our ways,”

recalled Ratan Tata, former Chairman, Tata Sons, in his foreword

to Business of Excellence: The Tata Journey, in 2007. “What we

needed to do was benchmark ourselves against the brightest and

the best, and get away from doing things the way we had done

them in the past. The Tata Business Excellence Model set the tone

and created the foundation for what, I believe, was perhaps one of

the more critical transformation initiatives the group has undertaken

in recent times.”

THE TATA WAY 41

While the likes of Tata Steel and Tata

Honeywell were already pursuing their own

quality initiatives, the need of the hour

really was a common and coherent

approach that would be embraced by

all group companies. A movement

was what was needed and it began

with the precursor to TBEM: the

JRD Quality Value Award (JRD QV),

instituted in 1994 to recognise the

quality of managing an enterprise.

The first edition of the award had 12

participants — and no winners!

But that did not dishearten the quality

evangelists at Tata. Quite the contrary. The

award and the award process enshrined in TBEM — which is

based on the famous Malcolm Baldrige model — provided the

much-needed momentum to the business excellence movement

at Tata. The Malcolm Baldrige model is accepted universally by

businessmen as a hallmark of excellence. In 1996, Tata Quality

Management Services (TQMS) was set up as a division of Tata Sons

to guide the business excellence initiative at a group level. There

was no looking back.

THE QUALITY AGENDA In 1998, the JRD QV award process was recast as TBEM, creating

a better defined, more comprehensive and comprehensible

framework for the quality agenda. It wasn’t long before the group’s

business excellence efforts started paying off. Year 2000 saw Tata

Steel become the first Tata company to pass the stringent quality

eir own

ur

TBEM

THE TATA WAY42

test, crossing the 600-mark threshold on the TBEM scale to win the

first JRD QV award.

Today, business excellence is deeply ingrained in the Tata DNA, with

deep commitment from senior management as well as employees

spread across Tata companies around the globe. Thousands of

TBEM assessors — trained by the hundreds every year by TQMS

— carry the business excellence gospel to Tata companies far

and wide, measuring their success on a wide spread of business

excellence parameters.

Guiding and encouraging these companies and their personnel are

what are appropriately known as mentors, senior Tata executives

who employ their experience and knowledge to help the enterprises

being assessed understand feedback and build on opportunities to

learn, improve and grow.

In an ever-changing global

business environment, TBEM

enables Tata companies to be

alert and nimble, to enhance

their ability to succeed and to do

so consistently. A vital element

of the model is that companies

must remain proactive rather

than reactive, with a managerial

outlook that maximises benefits

for all stakeholders, including

employees, customers and

the community. The TBEM

assessment covers seven core

02

BUSINESS EXCELLENCE IS DEEPLY INGRAINED IN THE TATA DNA, WITH DEEP COMMITMENT FROM SENIOR MANAGEMENT AS WELL AS EMPLOYEES IN TATA COMPANIES AROUND THE GLOBE. THOUSANDS OF TBEM ASSESSORS — TRAINED BY THE HUNDREDS EVERY YEAR BY TQMS — CARRY THE EXCELLENCE GOSPEL TO TATA COMPANIES FAR AND WIDE, MEASURING THEIR SUCCESS ON A WIDE SPREAD OF BUSINESS EXCELLENCE PARAMETERS.

THE TATA WAY 43

aspects of business operations:

� Leadership

� Strategic planning

� Customer focus

� Measurement, analysis and knowledge management

� Workforce focus

� Process management and outcomes of financial and

non-financial parameters

� Business results

PERFORMANCE PARAMETERS The assessment focuses on key areas of business performance:

customer-focused results; product and service results; financial

and market results; human resource results; organisational results.

The ‘blue book’, as the TBEM manual is known, is the bible of the

excellence initiative, clearly spelling out the assessment criteria and

what they imply.

Designed to deliver strategic direction and drive business

improvements, the TBEM methodology offers companies an

opportunity to imbibe the best of global business processes and

practices. And as the business landscape changes, the model

itself stays relevant thanks to the dynamism built into its core.

In recent years, for example, the TBEM framework has been

adapted to include new business and societal initiatives, such

as corporate governance, safety, climate change and innovation.

One of the biggest — and perhaps less visible — achievements

of this groundbreaking movement in the Tata group has been the

creation of a language of excellence, a common vocabulary to

articulate the expectations and experience of a shared journey. A

common goal, communicated in a common language, has brought

THE TATA WAY44

Tata companies closer together than ever before as they share

best practices and knowledge, and help one another navigate the

pathways of business excellence.

Mr Tata summed up this ‘excellence-as-glue’ idea at the JRD QV

Award function in 2002: “I don’t think any of us expected that

[business excellence] would have such a profound and such a deep

impact on the group in many, many ways. For one, it brought the

group together; never before had this group operated as a group. We

operated as disparate companies in an environment, unfortunately,

of jealousy, envy and subjective wishes.”

ENGAGEMENT WITH EXCELLENCE As Tata expands its global footprint, organically and through high-

profile acquisitions, companies in the group which have adopted

TBEM have found it far easier to seamlessly integrate people and

companies into the Tata fabric.

Ever since the Tata group started taking TBEM into its international

markets in 2005 — South Korea-

bred Tata Daewoo Commercial

Vehicle became the first overseas

entity to buy wholeheartedly into

the model — excellence has

proved to be a strong binding

factor and a fantastic platform for

growth and consolidation.

It is not happenstance, then,

that business excellence is

closely linked to the Tata brand.

ONE OF THE BIGGEST — AND PERHAPS LESS VISIBLE — ACHIEVEMENTS OF THIS GROUNDBREAKING MOVEMENT IN THE TATA GROUP HAS BEEN THE CREATION OF A LANGUAGE OF EXCELLENCE, A COMMON VOCABULARY TO ARTICULATE THE EXPECTATIONS AND EXPERIENCE OF A SHARED JOURNEY.

THE TATA WAY 45

That explains why TBEM is a

cornerstone of the group’s ‘brand

equity and business promotion’

programme, which must be

signed by every Tata company

that wants to use the Tata brand

name. Another pillar of this

programme is the Tata Code of

Conduct, which lays down the

ethical guidelines that companies

and employees must follow to

remain faithful to the group’s

heritage and values. Thus, even

as excellence gets defined and

shaped by the Tata brand, the

brand itself gets enriched by the

excellence movement.

The Tata engagement with excellence continues to challenge group

companies to look within and around themselves, benchmark with

the best in the world, identify and address their own weaknesses,

identify opportunities for improvement, and push the Big Q envelope

further. It’s a journey without a finishing line, as Mr Tata said in

Business of Excellence: “Our quest for quality, for excellence in

business, should be never-ending. This is not a voyage where you

can rest your oars.”

THE TATA WAY46

INNOVATIONWhat’s important is that, whatever

we do, we have to be in the forefront, technologically speaking; we have to

be seen to be making exciting products for the customer… We cannot afford to be a ‘me-too’ company and expect to grow. We have to be creative on

the basis of our strengths: low costs, technological richness, innovation...

We have to be different from the competition if we have to do what

I have wanted us to do.— Ratan Tata

THE TATA WAY 47

Every year, on April 26, the many enterprises of the Tata group

get together to reward failure. Only, this is a different kind of

failure and a different kind of reward. Called ‘Dare to try’, the award

recognises an innovative idea that has failed in implementation, one

whose time has not quite come. The gathering where this award is

handed out is Tata InnoVista, an annual event where innovation and

creative thinking are encouraged and recognised, even celebrated.

Failure, in the context, is a by-product of the quest to innovate,

to find truly original ways to advance the cause of company and

employee. Importantly, Tata InnoVista records and rewards not

just ‘promising innovations’ (implemented successfully during the

year) and ‘leading edge innovations’ (most innovative business

ideas), but also those fantastic ideas that have failed to deliver the

desired results. The message is simple, loud and clear: it pays to be

innovative in the Tata group.

Innovation has always been a part of the Tata DNA — consider

the group’s pioneering endeavours in steelmaking, the generation

of hydroelectric power and other businesses; its unique ownership

structure; and several first-of-its-kind employee and community

initiatives — but a more focused approach towards nurturing the

creative effort began in earnest around two decades ago.

This has resulted in the spawning of strikingly original concepts

across the Tata group and their successful transition into products

and services. It has also led to an encouragement of the process of

innovation, which has now taken root in the group like never before.

Tata InnoVista is the most prominent of the elements in the

thrust that innovation has received at Tata, but there have been a

THE TATA WAY48

variety of other initiatives aimed at unleashing the creative beast,

in crafting an ecosystem conducive to the fostering of profitable

ingenuity in business.

Besides InnoVista, there is the Tata Group Innovation Forum

(TGIF), which conducts a clutch of programmes and projects that

offer group employees consistent exposure to the world of out-

of-the-box thinking. In this mix are innovation workshops, where

global innovation experts share best practices with Tata managers;

innovation missions wherein senior Tata executives visit leading

companies across the world to study how innovation unfolds there;

collaboratively structured innovation platforms that draw in Tata

people and external organisations and partnerships with academic

and research organisations to build outstanding research facilities.

There’s even an ‘Innometer’, to measure and monitor innovation at

Tata companies.

FLOWERING OF IDEAS Another interesting outgrowth of the focus on innovation has been

the innovation labs that many Tata companies now have. There has

been considerable investment in world-class research facilities such

as those set up by Tata Steel’s Europe operations, Tata Chemicals,

Tata Motors and Tata Consultancy

Services. Strongly woven into the Tata

Business Excellence Model (TBEM),

innovation, as a philosophy and as

a way of business, is now well and

truly part of the warp and weft of the

Tata way of entrepreneurship.

From the realm of the mind to the

02

INNOVATION HAS ALWAYS BEEN A PART OF THE TATA DNA... BUT A MORE FOCUSED APPROACH TOWARDS NURTURING THE CREATIVE EFFORT BEGAN IN EARNEST AROUND TWO DECADES AGO.

THE TATA WAY 49

reality of business on the ground, innovation at Tata

has travelled well beyond articulation to effective

implementation. The numbers at InnoVista

are a pointer to the progress that has been

made. In 2006, the year the competition

kicked off, it received 101 entries from

35 Tata companies. The 2012 edition

attracted 2,852 entries from 71 Tata

companies. Employees and managements

are no longer reticent, as they may have

been in earlier days, about bringing their

ideas to the big stage and a potential place

in the innovation sun.

The flowering of innovation that has happened in

this environment of creativity is there for the world to

see, and the products and services it has generated have been

standouts in their respective business segments — Tata Motors’

Nano, the world’s most affordable car; Tata Chemicals’ Swach,

the breakthrough low-cost water purifier; Titan’s Edge, the world’s

slimmest watch; Eka, Asia’s fastest supercomputer at that time, built

in just six weeks by the Computational Research Laboratory (seeded

by Tata Sons) in 2007; and Indian Hotels’ Ginger, the path-breaking

budget hospitality proposition. There are others in this august

company, some more successful than others, but all based on the

idea of innovation making a difference, to the bottom line and to the

manner of thinking that drives accomplishments in enterprise.

BREAKING NEW GROUND To get a feel of how Tata employees are adding an innovative touch

here and a brilliant idea there, sample a couple of winners at the

ovation at Tata

to effective

Vista

been

ion

m

ents

ve

eir

place

appened in

for the world to

THE TATA WAY50

2012 InnoVista Awards: Jaguar Land Rover’s technology that

automatically shuts a car’s engine when the vehicle isn’t moving

for a certain period of time, thus helping customers save fuel and

reducing the automobile’s impact on the environment; and Tata

Steel’s Europe operations’ high performance rail steel, which has

saved £150,000 over five years.

The free flow of ideas and the innovations born of it engender

a win-win proposition not just for Tata companies and their

ever-growing world of customers; the positive energy rubs off

on the Tata brand, too. The group is increasingly perceived as

an innovative brand, a reputation that is no longer restricted to

the group’s home market. Bloomberg Businessweek has ranked

Tata among the world’s 50 most innovative companies. Just as

the Tata brand goes beyond the profit motive into the heart of

the communities it touches, the

innovation impetus at Tata has

resulted in significant societal

benefits. The concept of what has

been termed ‘frugal innovation’

— the Nano and Tata Swach are

shining examples here — is built

upon the group’s commitment

to finding inexpensive solutions

for a specific segment of

the community. The Tata

commitment to making a

difference in this ‘bottom of

the pyramid’ space rests to a

large extent on its innovation

capabilities.

TO GET A FEEL OF HOW TATA EMPLOYEES ARE INNOVATING, SAMPLE A COUPLE OF WINNERS AT THE 2012 INNOVISTA AWARDS: JAGUAR LAND ROVER’S TECHNOLOGY THAT AUTOMATICALLY SHUTS A CAR’S ENGINE WHEN IT ISN’T MOVING FOR A CERTAIN PERIOD OF TIME, THUS HELPING SAVE FUEL AND REDUCING THE IMPACT ON NATURE; AND TATA STEEL’S EUROPE OPERATIONS’ HIGH PERFORMANCE RAIL STEEL, WHICH HAS SAVED £150,000 OVER FIVE YEARS.

THE TATA WAY 51

SOMETHING FOR EVERYBODY “But it should not be, cannot be, that low-cost

products come to mean inferior or substandard

products and services; definitely not,” said Ratan

Tata, former Chairman, Tata Sons, explaining

why ‘cheap’ is not a word that can find place

in the Tata lexicon of business. “The aim is

to create products for that larger segment

— good and robust products that we are

able to produce innovatively and get to the

marketplace at a lower cost.”

Innovation for the Tata group is, in the

circumstances, not just about commercial

profits for itself; there has to be a benefit

for the community. Innovation, or the

creation of the new, is critical to the finding

of this balance.

cost

dard

Ratan

ing

ce

s

g

THE TATA WAY52

LEADERSHIP Once we get the best people, the people who share our values and

ideals, we leave them free to act on their own. We do not fetter them.

We encourage them and give them opportunities for leadership.

— JRD Tata

THE TATA WAY 53

There’s a basic truth, an aphorism even, about leadership and it

is that actions speak louder than words. So, yes indeed, there

is a Tata way and it is envisioned, lived and propagated by Tata

people, managers and leaders.

A deeper look at the growth story of the Tata group — the expansion

from an Indian business house to a $100.09-billion (`4,757.21

billion) global conglomerate, with a worldwide spread of businesses

and over 450,000 employees — throws up the interesting insight

that the organic and inorganic expansion has been accompanied

by a perceptible rise in the value and reputation of the Tata brand.

Brand Finance, a UK-based consultancy firm, named Tata as

the 15th most valuable brand in its Global 500 report in March

2012. Far more important, the name of Tata is readily associated

with values such as trust and integrity. What sets Tata apart is

that a large part of the brand’s values are clearly displayed in the

behaviours of Tata people themselves. Tata employees are expected

to live the values, to firmly and unambiguously walk the talk.

In an interview with Tata Review in 2001, then Tata Sons Chairman

Ratan Tata had clearly put down his vision for the group’s leadership:

“The Tata group must lead India in terms of what it does, not only in

business but also as a corporate citizen and as a participant in the

country’s growth. This is a holistic view. We want our managers and

companies to drive their businesses using every means they can to

achieve their ends, but they must do it in a way which stands out and

continues the traditions that the group has established over the years.”

THE PRINCIPLES OF LEADERSHIPThis vision has been encapsulated in a formal framework that Tata

managers across geographies, cultures and businesses follow today.

THE TATA WAY54

The Tata way of operating is not a left-to-chance, loosely scripted,

random selection of expectations. When it comes to leadership

behaviour, a fly-by-wire management style is not encouraged.

Instead, there is a clearly defined and communicated structure

of behaviours called the Tata Leadership Practices (TLP).

Created in 2001, the TLP framework expresses the principles that

define the Tata leadership behaviour. What makes the TLP structure

extremely significant is that it forms the foundation of the Tata way;

it is the bedrock on which the Tata business ethos sits. It helps

draw the clear line that Tata leaders need to walk — from purpose

to values, from intent to behaviour, from context to situation. The

behaviours enshrined as Tata leadership practices can be directly

linked to each of the Tata group’s core values.

The TLP framework resides alongside the broader, corporate-led

initiatives that enable the Tata Code of Conduct to be practised

with rigour, supported by processes and systems that help in the

management of business ethics. But it goes beyond values to define

how a Tata leader is expected to discharge his or her normal duties

and responsibilities. This enables Tata managers and future leaders

to deliver superior performance by looking at leadership behaviour

in relation to three key areas: leadership of results, leadership of

business and leadership of people.

GUIDANCE FOR ALL By using these TLPs, a Tata leader understands how he or she is

expected to drive the performance of the company, boost innovation

efforts, deal with ambiguous situations, build effective teams,

and so on. The framework also helps define leadership behaviour

across hierarchies. To take an example, if the broad expectation

02

THE TATA WAY 55

is improving customer focus in any given

company, a top-level leader is expected

to stimulate new market demand, a

senior-level manager is expected to

sense new business opportunities,

a middle-level executive has

to explore and satisfy market

demands, and a junior executive

has to collaborate with customers to

add value. Apart from the leadership

practices framework, there are other

group-wide leadership development

programmes in place, such as leadership

seminars, interactions with management gurus, and workshops that

build and enhance necessary skills and capabilities.

A LARGE CANVAS Another singular aspect about the Tata leadership structure is that

a Tata leader is considered a ‘group’ resource; his or her qualities

are recognised beyond the boundaries of the organisation. There

are group human resources programmes that focus on recognising

and enhancing the leadership qualities of outstanding performers,

irrespective of company, business sector or geography, a worldview

kind of approach to treating people as valuable resources.

Additionally, the group has in place an entry-level, pan-Tata

managerial development programme, TAS (formerly Tata

Administrative Services), which provides cross-business, cross-

function experience to young managers in several companies before

they settle down in their job. This helps both the future Tata leader

and the organisation determine the best fit. The Tata Management

THE TATA WAY56

Training Centre, based in Pune, helps group professionals add

to their knowledge bank. Its goal is to provide training to high

performers and develop leadership qualities.

By giving potential leaders a canvas on which to display their

capabilities, the Tata group is able to retain, and enhance the

capabilities of, its next generation of leaders, future managers,

thinkers and executors of its vision of business. It is these deep-

rooted initiatives to build the right kind of leadership that have

kept and will keep the Tata group and its many enterprises — part

of a globally dispersed, multi-cultural conglomerate — steady

on the course charted by those who came before. There can be

no doubt that the coming generation of Tata leaders is willing,

prepared and committed to carrying the baton, and the legacy

attached to it, forward.

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GROWTHMy vision for the Tata group is one which consistently delivers high

value for all shareholders. To do that the group must be businesses- and

customer-focused. It must be globally competitive and operate only in those areas where the group’s strengths are

best leveraged. The internal structure of the group will have to be such that all the group’s companies bring maximum value to shareholders consistently or

not remain in the group.— Ratan Tata

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F rom its first big industrial initiative — the Empress Mills, a

textile facility set up in 1877 by Tata group Founder Jamsetji

Tata in Nagpur, India — to its current stature as a business

conglomerate spanning many continents, the Tata saga is the

stuff of legend. It’s a story of visionary leadership, of unwavering

determination and sturdy fortitude. It is also a story of exemplary

and sustained growth.

Right through its history of over 140 years, the Tata group has

always been eager to tread into unknown terrain, to find the space

and the resources to grow in areas of business endeavour that

few, at least in India, had ventured into previously. Beginning with

its flowering in British-ruled India, where an Indian entrepreneur

such as Jamsetji, nurturing grand ambitions of industry and

nation building was an oddity, to its consolidation and expansion

in post-independence India, when the era of licences and

bureaucratic red tape stymied business, the group has braved

myriad challenges to stay on its chosen path of securing growth.

This is not quite the growth that everybody hares after in our

modern age; rather, it has been growth aligned to purpose.

To get a sense of that purpose, and the philosophy that underpins

it, consider the iron and steel venture that the group pioneered.

Alongside this trailblazing enterprise there came up a township

that has, ever since its establishment, become an exemplar of

planned urban development. The growth story would unfold

in different dimensions — with business creations in industry

segments as varied as energy and hospitality, aviation and

chemicals, tea and information technology — but with one

constant: a strong commitment to making profits in a socially

responsible manner.

THE TATA WAY 59

Until the 1980s, though, the Tata group was still

essentially a home-grown, Indian business

house. That would change dramatically

in the post-1990 years, when two

unrelated events combined to change

forever the outlook and trajectory of

the group’s future progress. The first

of these changes was the arrival at

the helm of the group of Ratan Tata, a

leader bent on transforming what had

been a rather stolid and staid business

house into a dynamic organisation with

its sights set beyond the shores of its birth.

The second change was the liberalisation of the

Indian economy, the opening up of a hitherto closed

environment to a wealth of new possibilities and opportunities.

Even as important changes took place at the national level, the

Tata group started putting in place structures that would make

it a far more nimble and united organisation than it had ever

been. It declared its brave new ambitions, at home and abroad,

by starting out on an aggressive expansion agenda, entering new

areas of business and new markets, creating new products and

services, and acquiring companies big and small along the way.

TAPPING NEW MARKETSIn 1996, the group set up Tata Teleservices to tap into India’s

burgeoning telecom market; in 1998, Tata Motors launched

Tata Indica, India’s first indigenously made car; 2002 saw the

acquisition of India’s leading international telecom service provider

VSNL (now Tata Communications); in 2004 Tata Consultancy

was still

ss

h.

of the

erto closed

THE TATA WAY60

Services went public in the largest private sector initial public

offering in the Indian stock market; and 2008 witnessed the launch

of the Tata Nano, the breakthrough small car that caught the

imagination of the motoring world. These are just the highlights of

a slew of manoeuvres that placed the Tatas on a growth trajectory

as unprecedented as it was unconventional. Just as significant was

the group’s foray into foreign markets.

In 2000, Tata Tea acquired Tetley, the biggest buyout up to that

point by an Indian enterprise of a company based abroad. More

such heavy-duty acquisitions followed. In 2004, the heavy

vehicles operations of Daewoo Motors, South Korea, became a

part of Tata Motors; in 2005, Tata Steel added the Singapore-

based NatSteel Asia to its fold and Tata Chemicals secured a

controlling stake in Brunner Mond, the British company. The

foreign play peaked in 2007, when Tata Steel made jaws

drop globally with its landmark deal for the purchase of Corus,

the Anglo-Dutch steel giant; and in 2008, Tata Motors made

headlines in the automobile

universe and beyond when the

Jaguar and Land Rover brands

joined its stable.

AT HOME IN THE WORLD Today the Tata group has operations

in more than 80 countries across

six continents, and its companies

export products and services to

85 countries. The group’s total

revenues stood at $100.09 billion

(`4,757.21 billion) in 2011-12,

02

THE TATA GROUP IS THE LARGEST FOREIGN INVESTOR IN THE UNITED KINGDOM AND THE COUNTRY’S BIGGEST INDUSTRIAL EMPLOYER. BESIDES NORTH AMERICA AND EUROPE, THE GROUP HAS OPERATIONS IN AFRICA, SOUTH AMERICA, CHINA, AUSTRALIA, THE MIDDLE EAST, SOUTH ASIA AND SOUTH EAST ASIA.

THE TATA WAY 61

with 58 percent of this coming from business conducted outside

India, and Tata companies now employ more than 450,000

people worldwide.

Tata Steel is among the world’s top 10 steelmakers. Tata Motors is

one of the world’s top five commercial vehicle manufacturers. Tata

Consultancy Services is a leading global software company. Tata

Global Beverages is the second-largest player in tea in the world. Tata

Chemicals is the world’s second-largest manufacturer of soda ash. Tata

Communications is one of the world’s largest wholesale voice carriers.

The Tata group is the largest foreign investor in the United

Kingdom and also the country’s biggest industrial employer.

Besides North America and Europe, the group has operations in

Africa, South America, China, Australia, the Middle East, South

Asia and South East Asia. And in India the group continues to

be the dominant business conglomerate, an intrinsic part of the

country’s way of life and of living. From luxury cars to affordable

automobiles, from software to steel, from salt, pulses and tea

to chemicals, from high-end hotels and palaces to value-for-

money budget stays, from power to telecommunications — Tata

companies touch people, at the top, the middle and the bottom of

the pyramid, in ways too many to count.

In the midst of all this heft there remains, cast in as much

solidity as ever before, the group’s traditional value systems and a

commitment to serving the needs of communities as much as its

customers and consumers.

The hunger to grow even further still rages, but the growth itself

is of a more inclusive nature, where business is done with an

THE TATA WAY62

emphasis on the larger good of society, and on leadership with

trust — those are the themes that reverberate as the group, its

companies and its brands dream grander dreams and strive to

reach and breach new frontiers.

Ratan Tata articulated what these themes translate into when

he said in an interview to Tata Review, the magazine of the Tata

group: “One hundred years from now, I expect the Tatas to be

much bigger, of course, than it is now. More importantly, I hope

the group comes to be regarded as being the best in India — best

in the manner in which we operate, best in the products we

deliver, and best in our value system and ethics. Having said that,

I hope that a hundred years from now we will spread our wings

far beyond India, that we become a global group, operating in

many countries, an Indian business conglomerate that is at home

in the world, carrying the same sense of trust that we do today.”