Mumbai: On the face of it, there is a lot that differentiate the incumbent from the successor - Ratan Naval Tata and Cyrus Mistry. Tata was 54 in 1991 when he took the mantle at Bombay House, the headquarters of the the salt-to-software Tata group. At 44, Mistry is a lot younger.
Tata already had a job offer from IBM back in 1964, which he refused at the behest of a certain Jehangir Ratanji Dadabhoy (JRD) Tata to enter the House of Tata for a long and fruitful career.
Mistry joined the board of Shapoorji Pallonji & Co - a firm that his grandfather founded - as director in 1991, the same year Tata took over as chairman of Tata Sons. Three years later he was appointed managing director of the Shapoorji Pallonji Group.
Tata assumed leadership role more by circumstance, rather than choice, while Mistry, many say, grew into the role.
Tata loves going out for long walks with his dogs. Mistry loves horse-riding and is an avid golfer.
Though not bearing the famous surname that goes with the territory, Mistry, a civil engineering graduate from Imperial College, UK (1990) and an M Sc in management from the London Business School, is considered an "insider" in the Tata Group.
Mistry is part of the extended family (his sister Aloo is married to Tata's half-brother Noel); he also represents the largest shareholder and has served on the board of Tata Sons as director for five years.
His affable nature and a tendency to shun the limelight, much like Tata, seem to have clinched the deal for him, say relatives, friends and associates.
His friends, peers and former employees described him as hardworking and patient as a manager, and not much given to grand gestures.
A leading industrialist who has known Mistry for many years, said that while initially the choice appeared surprising, Mistry's elevation seemed obvious in retrospect.
"It was a surprise, but now, in hindsight, he seemed to be the most obvious choice - someone who was there right in front of you and yet no one realised it. Of course, it certainly helps that he is a significant shareholder in the Tata group," the industrialist, who did not wish to be identified, said.
Tata Steel has Rs60,000 crore of debt, some 81,000 employees and revenues of Rs1,45,000 crore with a very poor consolidated growth rate. Worse, Mistry has over 100 companies to look at instead of a clutch of companies way back in 1991.
Baptism by fire, one could say, to use a cliche. The good part is that it had worked for Tata; set the stage for him to show his mettle. By extension, it could work for his successor, too.
“Neither Mr Russi Mody, the previous MD, nor I, if we were put in that situation, would have been able to save the company… when the ship is sinking, you have to put a man who is at the steering. It was at that time that I saw Mr Ratan Tata at work,” B Muthuraman, former managing director of Tata Steel, who was then a senior executive at the Jamshedpur site, is quoted as saying in R M Lala’s book
What followed was a stream of fresh ideas, newer technologies, better marketing strategies and big ambitions, which eventually converted a sinking 2 million tonne per annum (mtpa) steel plant into an 18 mtpa global steel player, ranked sixth in the world.
“…he sounded different from any one of us. He made us question the unquestionable; he made us think big and gave us confidence. He empowered us. He brought team spirit in us,” said Muthuraman in the book.
But one bad acquisition and a highly dampened western market have left the company reeling again, just ahead of the change of guard.
“Tata Steel is in a very bad shape. The company is bearing heavy with a massive debt and the management in Europe (Tata Steel Europe’s team) is predicting very tough times ahead,” said the vice-president of a leading equity research firm.
The moot question, therefore, is – can Mistry do it?
His colleagues reply in the affirmative.
“He is no stranger to wealth creation and managing difficult times and cross cultures,” said a top official in the company.
During his 16 years as the top boss of Shapoorji Pallonji and Co, the infrastructure group’s revenues have grown 18 times and the company has spread its wings to various countries.
“He has a penchant for management ideas and always makes it a point to buy and gift books on new management principles to his team whenever he is back from a foreign journey,” said the official.
Also, Mistry is known for his democratic style of leadership, freshness of ideas, emphasis on quality, ability to go for the impossible and concern for sustainability – pretty much the same qualities which helped Tata salvage the vessel.
