2009 will see Tata Steel, TCS and Tata Motors lose their top men to retirement. Is the Tata Group prepared for this, or even the larger leadership crisis?
For analysts looking at the latest quarterly reports and the share prices on the bourses, TCS, Tata Motors and Tata Steel’s are surely counters that will be closely monitored. All three companies will bid adieu to their current CEOs and there is already a lot of gossip, speculation and even cold blooded analysis of who will be the lucky (?) successors (See subsequent stories & columns). The succession (s) comes at a critical time – particularly for Tata Steel and Tata Motors; companies that are really struggling to digest the big ticket global acquisitions (Corus & Jaguar Land Rover) that catapulted them to the global big league.
But this is really a side show in the succession drama that will unfold in the house of Tatas. The real challenge for Ratan Tata and his advisors will be to find someone of stature, maturity and chutzpah who can succeed Ratan Tata in 2012 when he turns 75 and finally (reluctantly?) relinquishes control. In a way, the wheel will turn full circle because everybody was worried about the possible successor to JRD Tata when he was getting ready to hand over the reins in the late 1980s. And when JRD finally handed over the mantle to Ratan Tata, most analysts thought he could not fill the boots of JRD. In fact, Ratan Tata has postponed the headache of choosing a successor by behaving a bit like Pakistani military dictators who habitually postpone their retirement! Back in the 1990s, when Ratan Tata was battling for supremacy with powerful chieftains like Russi Mody of Tata Steel, Darbari Seth of Tata Chemicals and Ajit Kerkar of India Hotels, the group introduced a new ‘retirement’ policy that cooked the goose of these chieftains. It was decided that all executive chairmen had to retire when they turned 65 and even non-executive chairmen had to let go after they turned 70.
For analysts looking at the latest quarterly reports and the share prices on the bourses, TCS, Tata Motors and Tata Steel’s are surely counters that will be closely monitored. All three companies will bid adieu to their current CEOs and there is already a lot of gossip, speculation and even cold blooded analysis of who will be the lucky (?) successors (See subsequent stories & columns). The succession (s) comes at a critical time – particularly for Tata Steel and Tata Motors; companies that are really struggling to digest the big ticket global acquisitions (Corus & Jaguar Land Rover) that catapulted them to the global big league.
But this is really a side show in the succession drama that will unfold in the house of Tatas. The real challenge for Ratan Tata and his advisors will be to find someone of stature, maturity and chutzpah who can succeed Ratan Tata in 2012 when he turns 75 and finally (reluctantly?) relinquishes control. In a way, the wheel will turn full circle because everybody was worried about the possible successor to JRD Tata when he was getting ready to hand over the reins in the late 1980s. And when JRD finally handed over the mantle to Ratan Tata, most analysts thought he could not fill the boots of JRD. In fact, Ratan Tata has postponed the headache of choosing a successor by behaving a bit like Pakistani military dictators who habitually postpone their retirement! Back in the 1990s, when Ratan Tata was battling for supremacy with powerful chieftains like Russi Mody of Tata Steel, Darbari Seth of Tata Chemicals and Ajit Kerkar of India Hotels, the group introduced a new ‘retirement’ policy that cooked the goose of these chieftains. It was decided that all executive chairmen had to retire when they turned 65 and even non-executive chairmen had to let go after they turned 70.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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