Three things to learn from the ouster of Cyrus Mistry and Boardroom fights in the Tata group.

Wisdom –Doer –Customary Blog

Amidst of the flourishing businesses and great newer initiatives, to a common man’s perspective Tata was growing in leaps and bounces with their product design, scale and consumer understanding. Suddenly with all that into existence a bomb stating the departure of Cyrus Pallonji Mistry was dropped which shocked the Industry. Tata group said “Its board of directors had removed Cyrus Pallonji Mistry, 48, as chairman of the conglomerate and named Ratan Tata, chairman of Tata Trusts, the largest shareholder in Tata Sons, as interim chairman for four months.

Prelude

Tata group is the largest Indian Conglomerate of diversified business entities. They stand as the emblem of Ethics, Integrity and are perceived in the highest regards by the Indian Business Community.  All these years, their achievements and solidarity of their Business Model are taught in all the premium Business Institutes in India and the Group is crowned as the pioneer of the Indian Industrialisation.  

Recently the esteemed group had great facelifts in its Technology and Automobile Businesses. The cashcow among all the entities in the group “Tata Consultancy Services” seems to lead the Indian Technology segment (also is one of the biggest Indian Technology Services Company in India) has achieved bigger contracts and expanded their operations globally. Also the recent design changes in the Tata Motor’s manufactured vehicles have been appreciated from all corners (including critics) of the Industry. 

While this was happening Tata Group’s turnover has dropped to $103 bn in the year 2015-16 from $108 bn in the previous year which resulted to an overall debt of $24.5 bn to the group. With the growing demand of research and planning in product designing especially in segments like Technology, Defense Manufacturing & Automobile, the group has been struggling to keep pace with Innovation and Sales. This downturn is supposed to be the major cause of concern which lead to the conflict and finally the departure of Cyrus Mistry.

As an Entrepreneur following are the lessons to be taken from the current crisis!

• Research Consistency is key to great Product Design and Development.

Tata had all the privilege of putting across all sources of design and development in the progressing Indian Automobile segment back in 2000’s. However it lacked heavily in its design and performance which took away the time bound opportunity from the Indian maker and other foreign players like Hyundai and Renault took the plunge and took the market share which Tata could have had strived for. Recently they are bringing the change consumers are looking for however they are unable to seek balance between Innovation and Sales and it is impacting on the accrued loss/ debt in the book of accounts.

• Its never Money but timely execution that decides the fate of a company!

Tata Group has the maximum potential and a firm base in their Home grown land than any other competition but what matters more is “Time”. They have missed the opportunity in the Automobile and Ecommerce segment. Tata Group did launch Croma Online Store but it had never been able to make an impact. Now even if they try to bring something like Tata Cliq into existence it will not be able to win the trust and marketsize like Amazon or Flipkart. So the opportunity which is gone is not going to be replaced, not even with money.

• Responsible Leadership is defined by Time and not by Age!

Ratan Tata has been a great patron of Ethics and Integrity. What he brings with himself is unfathomable depth of leadership qualities and skills which has always helped the esteemed Tata Group to sail through even in the toughest times. He founded TCS and bought Jaguar which resulted to a great win for the company and post his chairmanship in the group he was highly acclaimed of his extended support and seed investments in the Startup Community.

https://www.youtube.com/watch?v=N69zDGjfkNk