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JRD Tata: A life extraordinary
August 19, 2004
The year 2004 is significant for the Tata Group, as it marks the 100th birth anniversary of JRD Tata and Naval Tata and the death centenary of Jmsetji Tata.
For two generations and more JRD epitomised a way of life and a culture of business that cared for the country and its people.
"The 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 in trust 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." -- J R D Tata
Born in Paris on July 29, 1904, Jehangir Ratanji Dadabhoy Tata was the second child of Ratanji Dadabhoy Tata and his French wife Sooni.
Established in 1859, the Tata Group was already India's biggest business conglomerate when Tata became its fourth chairman in 1938. He was then just 34 years old.
Under his leadership, the Tata assets climbed from Rs 62 crore (Rs 620 million) in 1939 to over Rs 10,000 crore (Rs 100 billion) in 1990.
In 1939 the group included fourteen companies with sales of Rs 280 crore (Rs 2.80 billion); in 1993, the year of his death, sales were Rs 15,000 crore (Rs 150 billion) contributed by over fifty large manufacturing companies, besides innumerable holding, investment, subsidiaries and associate concerns, making it India's biggest business group.
During the last half of the twentieth century Tata entered several new businesses, many of them unconventional, and produced a vast range of products -- from airlines to hotels, trucks to locomotives, soda ash and other heavy chemicals to pharmaceuticals and financial services, tea and air conditioning to lipsticks and cologne.
The group seemed to make everything and do everything. One of Tata's earliest achievements was to cajole ten rival cement companies to merge and form the Associated Cement Companies, run by the Tatas.
JRD strengthened existing businesses such as steel, power and hotels. At the same time, the group lost interest in some of its older core businesses.
As an industrialist, JRD Tata is credited with placing the Tata Group on the international map. As an aviator and pioneer flier, he brought commercial aviation to India.
As a patron of the arts, he was revered by India's artists, sculptors and performing artists; under JRD's tutelage, the Tatas became the biggest buyers, promoters and supporters of the art world in India.
And as a philanthropist, he was respected for keeping alive and building up the tremendously active Tata charitable trusts.
Against all odds
His achievements have to be seen through the lens of India's economic and political history. Under British colonial rule until 1947, India was strait-jacketed by a foreign exchange crunch for almost forty years after independence, which gravely limited industrial entrepreneurship.
From 1964 to 1991 severe government controls on big business further curbed the growth of the Tata Group.
Analysing his own performance, JRD Tata insisted that his only real contribution to the group's smorgasbord of companies was Air-India. For the rest, he generously gave credit to his executives.
Any chronicle of the Tata Group's growth therefore has to take the contribution of these larger than life men into account. JRD's story is, in many ways, as much theirs as his own. Yet, it would be a mistake to under-assess JRD's role. As one of the senior Tata executives, Darbari Seth, once said, 'Mr Tata was able to harness a team of individualistic executives, capitalizing upon their strengths, downplaying their differences and deficiencies; all by the sheer weight of his leadership.'
The leader and the motivator
Leadership, according to JRD meant motivating others. 'As chairman, my main responsibility is to inspire respect.'
Sometimes referred to as the 'chairmen's chairman,' JRD adopted a management by consensus style: 'When a number of persons are involved I am definitely a consensus man,' he once said, adding: 'but that does not mean that I do not disagree or that I do not express my views. Basically it is a question of having to deal with individual men heading different enterprises. You have to adapt yourself to their ways and deal accordingly and draw out the best in each man. If I have any merit it is getting on with individuals according to their ways and characteristics. In fifty years I have dealt with a hundred top directors and I have got on with all of them. At times it involves suppressing yourself. It is painful but necessary. To be a leader you have got to lead human beings with affection.'
Be that as it may, Tata spotted talent easily. And once he was confident that a manager would perform, he gave him (alas, no women) a long rope. If they wanted to be on their own, like Sumant Moolgaokar, he left them to it. If they occasionally wanted a shoulder to cry on, like Darbari Seth, JRD was there.
The supportive climate he built developed entrepreneurs such as Sir Homi Mody, Sir Ardeshir Dalal, Sir Jehangir Ghandy, Russi Mody, Sumant Moolgaokar and Darbari Seth, and others who created billions in wealth for the group and the country.
It was an environment where scientists of international repute such as Homi Bhabha, leading lawyers such as J D Choksi and Nani Palkhivala, and economists such as John Matthai, A D Shroff, D R Pendse and Freddie Mehta could flourish.
This attitude contrasted sharply with the prevailing management styles of other Indian business leaders. Large Indian companies tend to fall into three categories: public sector ones run by the government, multinational affiliates, and those promoted by family dynasties. While the Tata Group firmly remained a family concern -- to date, four out of its five chairman have been Tatas -- JRD's professionalism stood out from the crowd.
Moreover, in most of the family firms, the top management tended to belong to the same community as the promoter family. With the Tatas, it was different: only merit counted.
Tata's role model in management was the British civil service. How was it, he wondered 'that a young Briton straight from college, could come to a foreign country and administer various departments with such distinction?'
The Tata Group faced a constant shortage of managers, and JRD carried out many experiments to expand and improve the pool of talent. His first attempt -- the formation of the Superior Staff Recruiting Committee -- failed when none of the recruits stayed with the corporation.
Eventually he formed the Tata Administrative Service and the Tata Management Training Centre at Pune. This commitment to professionalism served the group well. In 1971, for example, when the coal industry was nationalised, Mohan Kumaramangalam, the then industry minister, left Tata Steel's coal mines untouched on the ground that these efficiently run mines would provide a model for the nationalised mines.
JRD's respect for his managers bound the group. 'I am a firm believer that the disintegration of the Tata Group is impossible,' he once declared.
Most business groups have disintegrated or drifted apart because of family ownership and management, with rival family members wanting to go their own way. In contrast, the Tata Group companies are run by professionals who firmly believe in the trusteeship concept laid down by J N Tata as also by Mahatma Gandhi.
A university dropout, JRD was something of a self-taught technocrat, and died long before the phrase 'war for talent' was coined. Yet, almost every senior Tata director from the 1930s onwards held a degree from a foreign university. Tata willingly financed bright young boys who wanted to go abroad for further education.
He was also a vital bridge between the scientific establishment and the government through his founding of the Tata Institute of Fundamental Research, and as the longest serving member of the Atomic Energy Commission.
Tata's personal interest in technology, combined with India's isolation in the 1950s and 1960s, spurred several group companies, particularly Tata Steel and Tata Chemicals, to innovate in their fields. At Tata Steel, a Research and Control Laboratory had been opened in 1937, and its researchers developed an extensive variety of special steels for applications as varied as parachute harnesses and razor blades.
The lab also developed a high-tensile alloy steel -- Tiscrom -- which made it possible for the Howrah Bridge in Calcutta to be built entirely from Indian materials. Another corrosion resistant, low-alloy high-yield strength steel -- Tiscor -- was used for the manufacture of all-metal steel coaches on the Indian railways.
According to JRD, quality had to match innovation. He intensely disliked the laid-back Indian attitude, and much of his fabled short temper was triggered by the carelessness of others. He stressed: 'If you want excellence, you must aim at perfection. I know that aiming at perfection has its drawbacks. It makes you go into detail that you can avoid. It takes a lot of energy out of you but that's the only way you finally actually achieve excellence. So in that sense, being finicky is essential. A company, which uses the name Tata, shares a tradition. The symbol 'T' has to be a symbol of quality.'
The achievements of the Tata Group would not have been possible without the support of its workforce. Before JRD took over, the labour situation at key Tata plants was frequently tense despite the fact that management had poured millions into subsidised housing for workers, offered free medical and hospital treatment, as well as free education and was miles ahead of government legislation in terms of labour practices.
For example, Tata Steel pioneered the eight-hour day in 1912, long before the principle had been accepted in the United States or Europe (Britain introduced the twelve-hour day in 1911).
Tata Steel introduced leave with pay in 1920, and in India this was established by law in 1945. Tata Steel set up a provident fund in 1920, which was not legalised until 1952.
Tata asked the question: if the workers were being treated exceptionally well, why were they frequently discontented and mistrustful and hostile towards the company?
A benign boss
According to Tata, the crux of any successful labour policy lay in making workers feel wanted. One of the inherent drawbacks of modern industry with its large and concentrated labour forces was that each man felt 'that instead of being a valued member of a friendly and human organisation, he was a mere cog in a soulless machine.'
'Because of this, a worker's attitude towards management becomes one of indifference, mistrust and coldness often tinged with hostility. He is easily led to feeling himself the victim of callous and unfair treatment and little is needed to make him look upon his employers as his enemies and break out into open conflict.'
Tata Steel became one of the earliest companies in India to have a dedicated human resources department. Expressing surprise that the company had functioned for so long without one, Tata commented: 'If our operations required the employment of, say, 30,000 machine tools, we would undoubtedly have a special staff or department to look after them, to keep them in repair, replace them when necessary, maintain their efficiency, protect them from damage, etc.'
'But when employing 30,000 human beings each with a mind and soul of his own, we seem to have assumed that they would look after themselves and that there was no need for a separate organisation to deal with the human problems involved.'
Jehangir Ratanji Dadabhoy Tata died in Geneva on November 29, 1993, and made his money in India. Few addressed him with the full pomposity of the name with which he was born; he was simply 'JRD' to the world, and Jeh to his friends.
JRD was India's most well known industrialist, widely respected for his enormous contribution to the development of Indian industry and aviation in particular.
Tata headed India's largest industrial conglomerate with uncommon success. But this was only one aspect of his life. He was also a man of great sensitivity and was pained by the poverty he saw around him and sought vigorously to alleviate it.
He also was a philanthropist who wanted India to be a happy country and did all he could to make it so; a patron of the sciences and the arts; and a man with a passion for literature, fast cars, skiing, and flying.
Courtesy : Tata Central Archives