Digital warrior to Tata Sons Chairman

N Chandrasekaran

MUMBAI: “How will you handle manufacturing? You have no experience running steel or auto”, selection committee members mandated to find Ratan Tata’s successor asked Natarajan Chandrasekaran, the chief executive officer of Tata Consultancy Services, while interviewing him for the top job at the Tata Group.


“I cannot all by myself. I need a team to guide me” — the answer from the 53-year-old could not have been more blunt and candid.

For the five wise old men who were asking the questions, this was a throwback to the early 1990s, though the challenge then was the opposite.

hen Ratan Tata took over from JRD, he too had no experience in technology and relied on FC Kohli to build TCSBSE -3.38 % into the group flagship.

Chandrasekaran’s — or ‘Chandra’, as he is almost universally referred to — answer made it evident he was ready to hit the ground running, according to people involved in the selection process.
Chandra was picked over three other serious contenders — Jaguar Land Rover CEO Ralf Speth, Harish Manwani of Unilever and Sir George Buckley of the Smiths Group. Tata, the interim chairman, will become chairman emeritus of Tata Sons.

ET spoke to half a dozen officials in the know to piece together the behind-the-scenes moves that finally led to Chandra’s selection. Nobody wanted to come on record.

On Thursday evening, before the Tata Sons board met to select the occupant for the corner office, the selection panel briefed the Nomination and Remuneration Committee (NRC) of the board about its unanimous choice. Some of the members of NRC — Tata himself, Ronen Sen and Venu Srinivasan — were also on the selection panel, so the meeting was brief. This was followed by a meeting of the entire board where Chandra, who arrived after addressing the media on TCS’ quarterly results, was “officially”given the news. Sources said both Tata and Chandra made short speeches.

The baton was ready to be passed on once again.

A day before — on Wednesday — Chandra was told by Tata and his aides to expect the big news. “Along with Speth, Chandra is the latest inductee on the Tata Sons board.

More importantly, ahead of the EGMs, Tata chose him to travel the world with Ishaat Hussain and face the investors. That shows the confidence the group has in him,” said a Tata Group member.

After the board meet at Bombay House, the group headquarters of the $103-billion conglomerate in south Mumbai, Chandra and fellow Tata Sons board member Amit Chandra drove back together to the TCS head office.

Pretty early on during selection interviews, the search panel came to the conclusion that, despite the global nature of the process, an internal candidate was to be preferred — one who understood the complexities and ethos of the House of Tatas.

 An external candidate would need some months to grapple with the diversity,” quipped an old group associate. Speth, while an internal candidate, was not an insider in the sense Chandra is.

Manwani’s age (64), coupled with the fact that his entire career has been spent in the FMCG (fast-moving consumer goods) sector, went against him, said people aware of the search process, even if his corporate credentials were impeccable.

In contrast, Chandra, at 53, potentially can hold the top job for 17 years. A passionate marathoner, he clearly has the stamina to endure a long innings.

“Look at his value-creation track record and the scale of operations he manages at TCS along with his personal leadership traits and the respect he generates,” said another official involved in the process.

“He has grown TCS substantially from what he inherited from S Ramadorai and helped it topple Infosys as the IT bellwether,” he added.

Strategically too, at a time when digital technology is disrupting storied businesses the world over, including manufacturing, someone with Chandra’s background “brings that cutting edge” that is demanded from a top executive, according to people aware of the selection process.

He has also been instrumental in leading business transformation for many of his global clients. And that in turn has given him invaluable insights into customer centricity.

Given TCS’ geographical spread and sectoral repertoire, there could not have been a better choice,” feels Suhel Seth, a long-time Tata associate. “In many ways, Chandra is in the same mould as Tata himself — combining compassion and competence with humanism.”

Under Chandrasekaran, TCS had identified a series of future leaders, so taking him out of the organisation would not have triggered a major dislocation.

His finance deputy was the obvious choice to follow in his footsteps

Chandrasekaran’s job is clearly cut out. He has already emphasised that he is looking to create his own brain trust at the earliest. So that would mean the long awaited group chief financial officer’s position getting filled.

Some would even expect the creation of a vice-chairman’s role — something that Cyrus Mistry had promised the Tata Sons board but never did.

The selection panel or the board could not have done that for him. He has to lead that initiative,” said a senior Tata Group official.
In the end, the transition, though on expected lines, could not have been smoother.

 

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