A Tribute To Ratan Tata: Authors Of 'Jamsetji Tata' Share Their Memories | Icons With Ramesh Damani
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00:00Peter Drucker famously said, culture eats strategy for breakfast.
00:16So, what were the cultural cornerstones that have enabled the rise and the rise of the
00:24Hello and welcome to Icons. I am your host, Ramesh Damani.
00:28Tatas, the salt to software giant is one of the few institutions of independent India that makes us all proud.
00:55The group was founded by the late Jamshedji Tata, father of Indian industry, the greatest philanthropist of the 19th century
01:04and a one-man planning committee are just some of the monikers used to describe him.
01:10To discuss his life, legacy, I am joined by the authors of the book, Jamshedji Tata, Powerful Learnings for Corporate Success.
01:20Please help me welcome two veterans of Bombay House, R. Gopalakrishnan and Harish Bhatt.
01:27Gentlemen, welcome to Icons. – Thank you. – Thank you. – So nice to have you.
01:31You know, Stephen Coffey, your author, so you have read his book, he talks about seven traits of highly effective people
01:38or seven habits of highly effective people. You have dissected the Tata group into ten Ps.
01:43How did that exercise start, Gopalji? – You know, Stephen Coffey has given seven ideas of effective people
01:53which is at an individual level today. We were intrigued by the fact that
01:58Jamshedji Tata began his enterprises with a certain philosophy
02:02and has somehow kept that philosophy alive for 150 years. – Which is unparalleled in corporate world.
02:10Unparalleled is probably the right word. I am sure there must be the odd one but I am not aware of it.
02:16So, people were slicing the cucumber, if I may take the metaphor, horizontally and getting slices.
02:22So, how I created TCS, how I created Tata Steel and so on, Titan. But we wanted to cut it vertically.
02:30And that caused me to ask exactly the question that you have touched upon. What was this cultural pillars
02:37that come through the vertical slice and that's how we arrived at the ten Ps. Principles, perseverance and so on.
02:46Let me pick on the first one. You talk about principles Gopalji and that has always been the
02:51cornerstone of any Tata enterprise and it was principles that saved Tata Steel
02:56from bankruptcy 100 years ago. Tell me that story. – There is a story with regard to say Tata Steel
03:03which appears in the book which I am going to ask my esteemed colleague Harish Bhatt to narrate.
03:08But before I get to that, I just want to say where does principles fit into this. You have to have a philosophy
03:15and that Jamshedji Tata had this philosophy of community being center stage is fairly well-known and doesn't require me to repeat it.
03:23But that's a niyat. That is your objective, strategic intent. But out of that niyat comes niti, conduct.
03:32And principles are related to niti. So, I am a very strong advocate of niyat, niti and niyam.
03:39And we should not get lost in the niyam, forgetting the niti. And the niti first item that came there is principles
03:48which is what are the guiding principles that you are going to leave for successors to manage this enterprise.
03:56And the story of Tata Steel and how it came near to bankruptcy in the 1920s is narrated in the book as an example of that.
04:05And I would request Harish Bhatt to… – Yeah, Harishji, please step in and explain to me how did Tata save Tata Steel from bankruptcy?
04:12So, Ramesh, it's a fascinating story. You know, Tata Steel began production of steel in the 1910s, 1911 or 1912 is when it started.
04:21Which was audacious anyway to begin with. – Which was audacious anyway. The British were scoffing of Jamshedji Tata's idea.
04:27But Tata Steel became a reality because of Jamshedji Tata's vision and his son Dorabji Tata who then became the second chairman of the Tata group
04:35after Jamshedji passed away in 1904. He made sure that Tata Steel came to fruition eventually.
04:43Sometime by 1914, 1915 World War I had started. Tata Steel had also undertaken some expansion work towards the end of the 1910s.
04:54But because of the aftermath of World War I, the demand for steel collapsed.
05:00And it collapsed in places like Japan which were a primary customer for Tata Steel.
05:05And as a result, by the time you got into 1922, 1923, 1924, Tata Steel was facing very tough times.
05:14And Dorabji Tata was the then chairman of the Tata group. Now, in the meanwhile, Dorabji Tata many many years ago had also got married to a lady called Meherbai Tata.
05:25Correct. – And he was deeply in love with her. So, he had gifted her what was at that time the largest diamond in the world.
05:32It continues to be the sixth largest diamond in the world. – Bigger than the Kohinoor if I am not mistaken.
05:36Yes, the Jubilee Diamond and it was 254 carats in size. It was so expensive that I am told whenever they took it out of the locker,
05:44they had to pay a premium to the insurance agency. Now, I will tell you why this story gets interesting as we go along.
05:51Sure. – So, one day in 1924, Dorabji Tata seated in the headquarters of the Tata group in Mumbai
05:58receives a telegram from Jamshedpur, from Tata Steel. – All is lost.
06:03Saying that we have no money to pay our workers their next tranche of wages.
06:07Now, what does Dorabji Tata do? It was a very perilous state that Tata Steel found itself in.
06:13What he does without blinking an eyelid, Lady Meherbai Tata and he commit their entire personal wealth to save the company.
06:24His entire personal wealth at that time was about a crore of rupees which would be I am sure many hundreds of crores today
06:31but about a crore of rupees that included this Jubilee Diamond, the largest diamond in the world.
06:37Salaries had to be paid irrespective. – Yes. – No one had to be laid off.
06:40So, he went to the Imperial Bank of India which is the current State Bank of India
06:44and he pledged his entire wealth including the Jubilee Diamond and raised a loan of one crore of rupees.
06:51And that was used to pay the workers of Tata Steel. Not a single worker was retrenched.
06:56The company continued production and as you went into the 1930s Tata Steel once again became a very prosperous enterprise
07:05and of course the pledge was redeemed that Dorabji Tata had made.
07:09But what amazes me Ramesh is that here is a man whose principles told him that he had to stand by the company
07:17that the Tata Group had promoted. Even though the Tata Group was not the only shareholder of Tata Steel.
07:22Tata Steel had an IPO by 1906-1907. – It was actually the first listed company in India.
07:28And today if you go to Jamshedpur and if you visit the Dorabji Tata Park what Tata Steel have done
07:35is that they have erected a large replica of the Jubilee Diamond made in steel to pay tribute to this courageous decision of Dorabji Tata.
07:43Always remind them. But let me take you into this century from 19th century to 20th century not to the 21st or 20th.
07:50Those same principles came at a crossroad with the company called Tata Finance which was a dark chapter in the history of the Tatas.
08:00But ultimately its finest hour. Can you throw some light on that Gopalji?
08:05We were all completely caught by surprise. And there were lot of people who were very distressed.
08:14And at a particular shareholder's meeting of a company called Tata Chemicals where I was the vice chairman
08:20and I was sitting next to Ratan Tata who was the chairman.
08:23An old Parsi shareholder got up and he said I don't know what I will go home and tell Frenny
08:28because I put all my savings into this Tata Finance. I know you have the right to reject my question because this is a
08:35shareholder's meeting of Tata Chemicals. But I really need to tell Frenny something.
08:41It's a very human. And to my great surprise, I am sure he must have thought about it, but he got up
08:50and said I am allowing you to ask this question on Tata Finance in Tata Chemicals.
08:55Ratan Tata. And I want to tell you that we don't know exactly what the damage is.
09:01But not one of you retail investors will suffer. That's my assurance today.
09:06And then he sat down. And I was sitting next to him and I said, boss, what have you done?
09:11You have no idea whether it's 50 crores, 100 crores, 5000 crores. He said, if you want to say the right thing, you must say it at the right time.
09:19And that is the message of both the Tata Steel story, which is separated in time by about 90 years
09:25between Tata Steel and Tata Finance. But the behavior was exactly the same.
09:30Own up, clean up and move ahead. Take responsibility. Let me just briefly ask you about another incident that took place
09:38when the terrorists attacked Bombay and Indian hotels, the Taj, the famous Taj Hotel,
09:43the iconic Taj Hotel was, you know, a scene of grim crimes out there.
09:47Again, the Tatas with the same principles stood by the staff and the employees and the customers of the Tata Hotel.
09:54Yes, I think I think it is a very dark day. An attack which was very dastardly in nature.
10:03I think the facts of what happened on the day are in the public domain. Many people lost their lives.
10:09Some members of the public and some employees of the Taj. But yes, I think the Tata stood by the employees,
10:18stood by the people who had lost their lives. –Financially and morally. –Financially and morally.
10:24There was a welfare fund which was established, which has helped rehabilitate all those families and made them come back into the public domain.
10:35I just like to add a little personal overlay to the, what, because this is in my knowledge. I am not sure it's in the book.
10:41But it happened on a particular day and the next morning, unbeknownst to us that this is going to happen, I had a meeting at 10 o'clock with Ratan Tata.
10:49I said, I must go because there were no cell phones, if I remember right, or if there were, they were very rare. –Sporadic.
10:57So, I turned up at 5 to 10 and he was there. And both of us were probably looking bleary-eyed and I said, you know, we are not in the mood for the meeting.
11:07Why did you come? And he said, well, I had committed to you to see you at 10. But I agree with you, we are not in the mood, can we postpone the meeting?
11:15And then we broke off. You see, this is a very small point. I mean, as a chairman, he had the liberty to get his assistant to…
11:22No one would have questioned that at that time. –That's right. The second thing I want to mention is a story told to me by the head of HR in Taj.
11:30And he said that he was taking Ratan Tata around to meet the wounded employees. I am using this story to illustrate the empathy part of it.
11:40Not just the intellectual part. And he was very eager to show that we had taken a lot of trouble for our employees.
11:47So, he kept saying various things. And at the end, he said, sir, have we done everything properly? Is there anything else you want us to do?
11:56He said, no, I have not come here to judge whether you have done everything properly. I have come here to ask myself and answer the question, what else should we be doing?
12:05That's a very important lesson to remember. We think business is all about money. Business must have money to survive.
12:12But business without emotion is not going to survive. And that is a very major lesson that I take away.
12:19Let me get to another P that I find fascinating. You know, they persisted with Tata Steel and today it's an iconic company in the Sensex,
12:2730 stocks of India. Persistence is what enabled Harishji, Titan to survive.
12:37Can you give me that story of how Titan was finding its way and then became this huge company?
12:43You know, Tanishq is today the most preferred jewellery brand across the country. The most preferred brand of modern Indian women.
12:51But we should know that in the first six years of Tanishq, it was not a profitable business. It was losing money.
12:58There were strategic errors that were made by initially introducing 18 carat gold, 18 carat studded jewellery.
13:06Yes, but for Indian women gold and jewellery is about Sridhan. It's not just adornment, it's also investment.
13:14And Indian women would buy 22 carat gold. And there was a time when there was a lot of skepticism about the Tanishq business including within the Tata Group.
13:25But Mr. Xerxes Desai, who was then the managing director of Titan, stood by the business.
13:32Mr. Desai has told me, I have interviewed him for the story and he said, Harish, the market opportunity was so huge,
13:39I would let them close this business over my dead body. That's what he said.
13:43It was 50,000 crores at that time but today it's more like 3 lakh crores.
13:463 lakh or 4 lakh crores is the size of the market today. So, Mr. Desai stood by that because he thought the market opportunity was huge.
13:52There was a change made in the strategy of Tanishq. 22 carat gold jewellery was launched.
13:58Something called the carat meter was launched.
14:01Explain the carat meter. That's a fascinating story.
14:03So, you know, Tanishq at that time did a survey of jewellers across the country.
14:09And they found that jewellers were not actually offering 22 carat gold as 22 carat gold.
14:14They were offering a lower caratage, let's say 17 or 18 carats.
14:19And Tanishq decided that we would offer 22 carat as 22 carat and be totally transparent about it.
14:24But now, how do you prove to the customer that 22 carat is 22 carat?
14:29And you are probably wearing a 17 carat jewellery or bangle.
14:32Possibly. So, what happened was that senior executives of Tanishq found a laboratory instrument called a spectrometer.
14:40You know, if you have studied physics, you know the Fraunhofer lines of every metal.
14:44So, every metal has its unique Fraunhofer line. Gold has and lead has and copper has and so forth.
14:49And they found that this instrument could actually read what the purity of that metal was by examining the surface of the metal.
15:00And that became the game changer. So, that laboratory instrument was brought back to India.
15:04And in a stroke of marketing genius, it was called the carat meter.
15:08And it was put into every Tanishq store. I have actually seen women come into Tanishq stores during that period of time.
15:15I used to be a junior manager in those days. They would test their wedding jewellery on the carat meter,
15:21break down and cry when they found that it was not the pure 22 carat gold that was promised.
15:27And that was a game changer. So, Tanishq along with purity brought also modern expressions
15:34of traditional Indian designs of jewellery into the market. And you have seen the last 20-25 years of Tanishq
15:41it's flourished and become the largest and the most preferred brand of jewellery today.
15:46But it happened because Mr. Desai at that time when the business was making losses
15:51stood by the business and made sure that he gave it his full support.
15:56He was very very persistent in his pursuit of that idea. And that's something that I narrate in this book and in this story.
16:03And you stand by your products whether it was in Tata Finance or now in Tanishq. You stood by your product.
16:09Absolutely right. You stand by your product and most importantly Ramesh you stand by the customer.
16:14P also stands for progress and progress often takes place outside your comfort zone.
16:20How did a person who became a superpower in steel and salt move to software? What is the story behind that?
16:27So, this is a tradition that has been set up over a long period of time. Progress comes
16:32because the leaders look at themselves as windows who are bringing
16:36outside perspectives into the business. Jamshedji Tata used to travel a lot and he
16:41realized that from textiles he would move to steel and so on and so forth.
16:46I won't go into every single episode. But come to the 60s which is when Tata consultancy came up.
16:53We had this wonderful power engineer called Fakirchand Kohli.
16:58F.C. Kohli. F.C. Kohli is a marvellous, he is the father of Indian IT.
17:02Father of Indian IT industry absolutely. And he had come back with a masters in control systems and transmission lines.
17:13And he implemented a primitive sort of digital infrastructure to control the load centers of Mumbai.
17:21And people were impressed. And Tata sons felt that we have a lot of data. Should we do something about it?
17:29So, they asked, number of people were involved. I am not going into all the names. But at one stage Mr. Kohli was
17:37requested to go and take charge of this. And here he was, the senior person in Tata power being asked to go and do a startup.
17:46Many people think startups are interesting phenomenon of today. But everything in Tata was a startup at some stage including Tanishq.
17:55And reluctant Mr. Kohli went along and he had certain principles which he was very happy to explain.
18:04He said, it is not worth doing business if you can't make money out of it. At least avoid losing money.
18:11And gradually over the next 20 years, he built up data processing capability. And then technology and time brought their fortunes.
18:24And TCS took off. And Ram Durai who succeeded Mr. Kohli took it to even greater heights and so on and so forth.
18:32So, this attitude of embracing the future is what I am trying to emphasize that the leadership of Tata has always looked at
18:40embracing the future. Now, can you imagine a company which started as a textile company
18:46today looking at chips. We celebrate icons. Andrew Carnegie for steel, Henry Ford for automobiles,
18:54Juan Trippe for airlines, Thomas Watson for computers. All of that is rolled into one guy.
19:02You know, another P that you didn't mention particularly but it stands for philanthropy. And that's been almost the hallmark of the Tata group.
19:10How has that shaped India? I mean that philanthropy has shaped India with so many institutions. Just can you talk a little bit about that Harishji?
19:16Yes. So, you know, Jamshedji Tata, his driving philosophy was that the community should be centre stage in the Tata group.
19:26And his sons donated their wealth to the Tata Charitable Trusts and it is through that that the Tata Charitable Trusts are today
19:36holding 66% of the equity of the parent company Tata Sons. What this means is that 66% of the dividends that Tata Sons issues
19:45goes to the Tata Trusts which are mandated to serve the community in different ways.
19:50Instead of hospitals, institutes, scholarships. Yes, and just look at what the Tata Trusts have done over the century and 25 years of their existence.
19:59There are some of the finest Indian institutions like the Tata Memorial Cancer Hospital in Mumbai.
20:05The Tata Cancer Hospital in Kolkata. There is a network of cancer hospitals coming up today across the country.
20:12You would have seen the news just a couple of years ago about seven new cancer hospitals which had been inaugurated in the state of Assam.
20:19Joe Biden talks about the cancer moonshot. But Tata has thought about it 50, 75 years back.
20:24You could say that. And if you look at, you know, the Tata Institute of Social Sciences, the Tata Institute of Fundamental Research,
20:31more recently the National Centre for Performing Arts, NCPA in Mumbai or just the fight against COVID-19 when it happened in
20:40just two or three years back. All building blocks for a good civil society.
20:44Yes, so all this, all this I think, all this and more the Tata Trusts have contributed to.
20:49So the Tata Trusts have several verticals focusing on specific initiatives.
20:53And it comes from the cash flow that Tata Sons generates. It comes from the dividends that Tata Sons issues to the Tata Trusts.
21:00And since the Tata Trusts hold 66% of the equity of Tata Sons, there is a constant flow of dividends.
21:06Money from the community given back to the community.
21:08And I think JRD Tata said this very well. Exactly what you have said today.
21:12JRD Tata said what came from the people has gone back to the people over and over again.
21:18You know. That has been the philosophy. Absolutely right. Of course, one of the great sartaps,
21:23the great leaders of the Tata organization has been JRD Tata.
21:26We are, you know, my age, 50, 60, you probably still remember about him.
21:30But he was famous for sartaps, you know, the people that stands for… I want to give you few names
21:36generally from JRD Tata's era and give me a synopsis of them so we can get, relive the memories of them.
21:43I will start with you, Nani Palkiwala. You know, JRD Tata stated and he acted in line with that statement
21:51that I want to get people who are better than me. And I suspect Nani Palkiwala was one such.
21:57Legal luminary. He was a legal luminary. He was a finance minister. India never had a finance minister.
22:04And he was a source of wisdom which JRD probably valued. I wasn't there when Nani came into the board.
22:16But I was there in the end period before Nani died. And his budget speech was famous across the stock market.
22:24And he educated the Indian public during the emergency time. –Supported Ms. Gandhi actually also.
22:29Yeah, but at one stage he filed a case against and JRD was horrified to learn that he is going to fight the Prime Minister.
22:37And Nani Palkiwala told me this story himself. He said, I offer to resign from Tata Sons.
22:43And he says, no, you are doing what your conscience tells you. You will stay in Tata Sons. And the whole thing went through.
22:49You are the great son of India. –Great son of India. No question. Another great Tata Sarkar was Darbari Seth.
22:56Not well known to the current generation but iconic in many ways. –Yeah. So, I have had the privilege of working as Darbari Seth's executive assistant.
23:04Amazing. –And he was a technocrat par excellence. He built Tata Chemicals. –And plotted 40 or so to build Tata Chemicals.
23:11Yes, he was very young. He had just returned from the US after doing his post graduation in chemical engineering there.
23:17When JRD Tata got him into Tata Chemicals and Tata Chemicals was going through a very tough phase at that time.
23:23Because Mithapur was a very dry area. It did not have the water required and people had virtually given up. –It had a drought too.
23:32People had virtually given up on that company. But Darbari Seth working with a very very passionate team built Tata Chemicals.
23:39He built water recycling plants. He ensured that Mithapur withstood the ravages of drought.
23:44He ensured that the technology to make soda ash which was known to very few people at that time was perfected in Tata Chemicals at Mithapur.
23:53And then look at what more he went on to do. He went on to launch Tata Salt which is today I think… –The world's largest selling salt.
24:01The world's largest selling salt but reaches half the population of India. –And Tata Tea. –Yeah, he then inspired and launched Tata Tea
24:10which is India's favourite brand of tea today. –And he was plucked by JRD Tata almost from… –Yes, he was very young when
24:17JRD Tata brought him into the Tata group and then he stayed with the Tata group until he retired.
24:22Much like Nani Palkivala did. –How about Rusi Modi? –You know, I didn't know Rusi Modi personally because he had left before I joined the group.
24:31He is quite a character though. –But I am told that he was a fantastic human relations person and he had a tremendous instinct for people.
24:38And while everything may not have been perfect about him, there is nothing perfect about any leader for that matter,
24:44he was a wonderful leader for Tata Steel at a very crucial time. And people remember Rusi Modi very fondly
24:51for plucking them out, for giving them a chance to move ahead and developing talent in Tata Steel.
24:58What will history write about Sumanth Mulgaonkar? –So, Sumanth Mulgaonkar was a perfectionist and a person who sought excellence in everything that he did.
25:09He would insist that every single machine, every single vehicle that came out of the Tata Motors plant which was Telco at that time,
25:21was par excellence in world class. When he put up the Pune plant of Tata Motors, he wanted a world class plant that India should be proud of.
25:30But let me tell you something which many people may not know. When he put up this plant in Pune, he also spent 15 lakhs of rupees in putting up a lake next to the plant.
25:40And people asked him, Mr. Mulgaonkar, why are you putting up this lake? But he was very clear.
25:45He said that I want to return to the environment what this plant probably takes from the environment.
25:50And that lake flourishes until today. It also has a nursery, it has many trees, migratory birds which come there.
25:56And J. R. D. Tata famously said of Sumanth Mulgaonkar, he said that we did not have to, you know, create a lake to build a truck.
26:04But we did and I am so proud that we did that. –You know, there is a saying that sometimes men create history and sometimes history creates men.
26:14And I think we will keep debating that whether the Tatas create these managers or the managers create Tata.
26:19But there is a fantastic manager and a poet called William Yates who said this to the public.
26:26Do not wait to strike till the iron is hot, but make it hot by striking it.
26:32Jamshedji Tata was such a colossus and he did the striking for India Inc. both figuratively and literally.
26:39RIP to a true Indian icon and many thanks to both of you for sharing his wisdom and his legacy with us.
26:46Thank you. We will see you soon on another episode of Icons. Have a great day. I am Romesh Damani.