Did Tata Know in 2012 that Mistry Was Not The Best Fit?

"Ratan Naval Tata, Chairman of Tata Sons along with Cyrus Mistry (who will succeed him in December 2012) at the Auto Expo being held at Pragati Maidan" *** Local Caption *** "Ratan Naval Tata, Chairman of Tata Sons along with Cyrus Mistry (who will succeed him in December 2012) at the Auto Expo being held at Pragati Maidan on Thursday. Express photo by Oinam Anand. 05 January 2011"

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The aftermath of ousting of Tata Group Chairman, Cyrus Mistry was probably not what the Tata Group, or Mr. Ratan Tata would have anticipated. Then again, could there have been sufficient signs even as Mr. Tata was looking for the next Chairman for the group many years ago?

A little short of 4 years ago, the challenging task of identifying a successor for Mr. Tata was completed. Cyrus Mistry seemed like a strong and obvious fit. A strong choice, given his qualifications and abilities. And from purely a cold, financial angle, it probably felt obvious too. After all, Cyrus’ father, Pallonji Mistry, is the single largest shareholder in the Tata Group, with a whopping 18.4% in the holding company, Tata Sons. In that sense, no other individual or family was as incentivized to want the group to grow and prosper.

However, Mr. Tata’s task was to identify someone to surpass his vision, dedication, and passion toward a large conglomerate and its home country. And in such a scenario, lending disproportionate weightage to the most financially invested individual or family, while seemingly a no-brainer, was not particularly prudent or without risk.

Mr. Mistry had initially demanded a free hand and little interference, as conveyed by his recent letters to the board. Those requests, while reasonable, could have been a little too much to expect. After all, he wasn’t merely handed the keys to one of the biggest conglomerates, or a group of profit-making companies. He was handed the keys to 148 years of vision, passion, rich culture, traditions and practices. It takes a lot more than business acumen to run or improve on that.

The business world thrives on profits, loud marketing, overwhelming sales pushes, and frequent deception or misrepresentation. But while the Tata Group may have its shortcomings (read this insightful article by The Economist on the mess facing the group currently), I’d even go a step further and call the Tata Group a religion. Few people in India feel as strongly about any other Indian company.

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Ratan Tata and Cyrus Mistry in more cordial times | source: link

In his eagerness and urgency to find a successor, many years ago, Mr. Tata probably made a critical mistake. Perhaps forgetting that passion and intention always beat qualifications and skills. Recent emails by Mr. Mistry suggest that he was offered the position back then, which he declined on more than one occasion. While Mr. Mistry is probably as capable as anyone else shortlisted for the position, the fact that he needed much convincing was perhaps a clear sign he was not the right fit for the role.

“Passion and intention always beat qualifications and skills.”

So in the Tata Group’s search for a Chairman, did they underrate important qualities in favor of someone most financially invested, assuming such a person would be naturally inclined to do his or her best for the group? Passion, however, is not an easily replaceable or interchangeable quality.

The unfortunate result was best described by Oogway‘s  subtly put pearl of wisdom to Shifu – ‘one often meets his destiny on the road he takes to avoid it.’

oogway

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