Ratan, thank you so much for joining us today.
It’s an honor to speak with you.
And I know I speak for many here in the audience when
I say that we’ve been looking forwards to this for quite some time.
>> Thank you [INAUDIBLE].
>> I wanted to start at the beginning of your career.
As the dean mentioned, you were educated at
Cornell as an architect and a structural engineer.
And plan to spend the rest of your career in the United States.
但您回到了印度 从车间开始干起 我很好奇
But you returned to India starting on the shop floor, and I wonder what
that was like as a young man returning from the United States to India?
嗯 老实说 这可以算是一次文化冲击
>> Well, quite frankly, it was, as much a cultural shock.
I’d been away for ten years and, things had changed, then
yet they had not changed, and the difference was quite substantive.
In addition to its, I didn’t return to India to spend time on the shop floor.
So I, I didn’t really understand what was being done.
And several times during that period of time I thought of going back to
the U.S., and pursuing my career as an architect.
>> You spent several years, as the dean mentioned,
moving around different parts of the Tata organization.
Were you surprised when you got the call from
your uncle in 1991 to be Chairman of Tata?
>> Yes I was.
Mainly because, there were many contenders [INAUDIBLE] handful
of contenders for that position from his own team of, of people.
And, it happened very suddenly, and you, you begin to feel that,
the leader, he was there for 50 plus years as chairman.
And you start to believe that somebody’s immortal
and that he’s, he’s going to be there perpetually.
So when he calls you and says this is what he wants
to do, it shakes you up and suddenly you feel all alone.
And you faced a quite a formidable challenge as the, as the dean mentioned.
When you took over as CEO, the organization
Tata, was large and sprawling with independent business heads.
That regarded their own, their own businesses, their
own personal fiefdoms to necessarily play together well.
And you went in to an economy that was changing rapidly.
And your uncle was considered a titan of Indian business.
And very large shoes for a young CEO to fill.
How did you go about establishing your
credibility as a leader in those early days?
>> I had two, two problems.
One was with the actual market problems of, of a large,
business house that had operated very traditionally.
And, and the other was internal to the company of, of several titans
if you like, who, who, didn’t want any change to take place.
And I guess a certain amount of resentment also.
So the first five years were akin to, Clint Eastwood, if you like.
which, which tended to be
filled with trying to get these elderly, very prominent people out of the way.
Not done with bullets, just done with persuasion
and, and, and sorry to say with money.
Uh,so the first five years were spent
in creating an environment where change was possible.
And then, I’ve been blessed with an organization that has
been displaying considerable spirit in wanting to make a change.
And, many things that we did had not been done before.
But I was always pleased to see
that the response from the organization was tremendous.
Without that, it could not have been done.
>> And one of the things that many of us here at
Stephens, we study, is the inertia of organizations in the face of change.
How did you go to inspire the leaders and front-line
staff to, to believe in the vision that you set out.
And some of the changes that you wish to implement?
>> That was difficult and to some extent,
I would have to humbly say that I failed.
One, one of the first, promises I
made publicly was that we’d rationalize the group.
And reduce the number of businesses and reduce the number of companies.
I often talk about the first thing that I did with great gusto which is
退出那些我们不擅长的领域 像肥皂 化妆品
to get us out to the soaps and toiletry business which didn’t seem to fit.
And I ran head long into an issue of what were we doing.
We were getting rid of, a company that had second and third generation employees,
it was, an unheard of thing.
And, who was this person that was making change for the sake of change?
>> And I got attacked from all, all, quarters.
The media attacked me, the, the stock market attacked me, and
of course there was the resentment from within, within the company.
So which company would follow now after this?
That result was the new chairman, so keen to succeed
and not wishing to have failure, suddenly being bombarded from all quarters.
There was no second company that got sold, and I put
my tail between my legs and try
to look at other forms of of growing.
And you’ve said in the past that risk is a necessary part of a business philosophy.
And certainly over your career you’ve made some significant bets.
And the dean mentioned a number of the acquisitions.
I would also think here of the launch of
the, the Indica India’s first indigenously manufactured motor vehicle.
How did you get comfortable making such consequential decisions and,
to your point, convincing others to, to follow you into them?
>> I think convincing myself that it would work was, is, is a judgment
call in terms of the faith you put in your people to do this.
And case in point was on the Indica.
Conventional wisdom said that you couldn’t enter
the car business without having a collaboration.
And certainly to think of de, designing a car
domestically and producing it was an unheard of thing.
And my friends, as we launched the car, started to distance themselves from me.
>> And it wasn’t from me, it was to distance themselves from failure.
>> And it was the trust one had in the
young, young team to put this together that drove it.
>> The, the other is from time to time, I think change
has caused a lot of people within the company to, to
question the wisdom that such a change would be based on.
>> And I’ve been lucky and in some cases, its been difficult, but
by in large India is a country that has such a great potential.
That change is by and large well received.
And we’ve heard a lot of anxiety about the Indian economy,
and we know that there’s a lot of potential there.
But there’s been recently at least there is a lot of
noise in the press about how reform hasn’t kept pace with growth.
>> And there’s possibly cramping in this growth potential.
What do you think lays ahead for the future of India?
>> Well you know I’ve always been very positive about the new India.
And I’ve been saddened by the fact
that after several years of, very progressive growth,
there’s been a stumbling, activity.
That is been a country driven by accusations of corruption.
Not wrong accusations, rightly so.
Crony capitalism and a government that
has withdrawn it’s base of, of growth.
At the same time I, I feel that, that its been,
that it’s bottomed out and we’re on a path again to grow.
But we’ve got to rebuild.
We’ve gone from a eight, 8% plus growth rate, down to sub five briefly.
We will grow back to the growth rate we had.
We will need to control inflation, but I think India will, once
again the same spirit of the people will, make it, make it happen.
And one of the things that you mentioned is, that’s often remarked about in India.
And for that matter, a number of
emerging markets, is this phenomenon of crony capitalism.
And you’ve spoken in the past about how you value personal integrity,
both in your own leadership, but also in the leaders you admire.
Have you ever faced an opportunity which you had to turn down
for, for ethical reasons, or for the ethical consequences of that decision?
>> Sev, several, several instances with, with that would be so.
I think, perhaps, the, the most visible one
was, when we wanted to form an airline.
Oddly enough we were asked to form an airline by, by the then Prime Minister.
The vested interests made sure that we didn’t
form an airline through three successive Prime Ministers.
And that was the most visible of, of the thing which we walked away from.
Be, because we could have probably had it
by succumbing to subjective issues of bribery or corruption.
And we walked away from that.
>> When airline would have been something we really wanted to do.
We pioneered aviation at the turn of the century and it
was emotionally something that we would have liked very much to be in again
I know both you and your uncle JRD were both aviation enthusiasts
I can imagine the disappointment you must have felt.
One of the, one of the hallmarks of your, your ten
years here has, in fact, been the move away from, from India.
In transforming Tata from an Indian business into a true multinational.
What’s prompted the move abroad and, what were some
of the biggest challenges you faced, in doing so?
To a great extent it was the, the, the issue of having the need to grow.
And the need to take of you that you had
grown in India in some cases of fairly substantial market share.
And that as a group, we ought to look beyond the shores of India.
To another economic cycle in which we would operate.
当然 现在看来 也是有得有失
Now the, yes, it’s pluses and minuses.
We didn’t ever foresee that Europe would go through
the downturn that it did, and that was where our major investments lay.
所以说 那是一段追求增长的过程 我们通过调整基本法
So it was the quest of growth and, and changing the ground rules
to say that we could grow by acquisitions which surely we had never done.
The international expansion there was not without
some controversy and aside from the economic rationality.
There’s also emotional consequences and I’m thinking
here of the acquisition of Tetley tea.
The idea of the beloved British Tea brand being bought by
an Indian company, must have stirred, stirred some hearts in England, and
>> If, if they did, it is quite quiet and dignified.
The more vocal one was.
The more vocal was, was when Jaguar and Land Rover got acquired.
>> And that was far more emotional and far more visible.
different, different reactions from different quarters.
some, some concerned that an Indian company was going
to take over, vaulted to very venerable brands.
What were they going to do with it.
>> Ford had made, not been able to make a profit with them, so
what was this Indian company that had no experience in the premium car segment.
Do with such a company.
Concern by the workers that we were going
to close down plants and move them to India.
And a general feeling of, in England, that another English brand was gone.
>> Quite frankly what we did after we got involved was
to tell the management of the company to make their own destiny.
That we support them in terms of what they wanted to do.
And of course, the marketplace has been very conducive to what we have done.
>> So I, I think the Jaguar Land Rover thing was much more fiery than the tea.
但是 正如我所说 仍然是斯文有礼的
Then there’s that very, very quietly and then as I said in a very dignified way.
>> No doubt the British stiff upper lip [LAUGH] was what they applied there.
>> [LAUGH] Yes.
One of the remarkable aspects of Tata is its sheer complexity.
It strikes me as being an enormously difficult challenge
to be able to manage this company day to day.
集团拥有 院长刚提到 大概50万的员工在世界各地
You have, as the dean mentioned, almost half a million employees world-wide,
over 100 operating companies, 36 of which are, are publicly listed.
Dominick Baron of McKenzie, when he was here this week spoke
about great leaders needing to have both microscope and a telescope.
That is an ability to focus on the fine details where they really count,
but also to see the larger picture.
And to see the secular trends transforming the markets.
How did you go about managing Tata day to day
and balance that need for a micro and macro perspective?
I think by and large all our companies
have had strong CEOs that have run the businesses.
the only, only thing I would say is that I’ve had a funny type of rule.
Where you, you sit apart looking at the over all company on a strategic basis.
And then when there is a problem
you go into the company much more than may happen answer in the world.
Where you find yourself playing the same role as a CEO in terms of
either firefighting, or moving a company in another direction.
And then, move back again into a macro position where you’re
looking at the company or the group in its broader sense.
So it, exactly what you said.
It inadvertently has been what has been done.
How did you make sure that you had
the information you needed to make the decisions?
So we’ve had past PFTT CEOs come in and speak about
how they would covertly conduct visits to the front line.
And, and visit factory floors, just to get to,
to gauge the spirit morale of their workforce.
>> I think that that’s an absolute given.
The worst thing that can happen is to, is to determine where
the company’s going through the eyes or the mouth of one person, i.e.,
>> Far more is gained by walking on the shop
floor and talking to the people and trying to communicate.
One of my weaknesses has been, I think,
never communicated and now for I adequately with our people
Partly because I’m, I’m a shy person.
because I didn’t realize the importance of communication.
But I think communication with the
employees is an exceedingly important function.
从这个意义上讲 公司主席要常与员工沟通 常露面
That any company chairman has to do and be visible in that sense.
>> Did you ever have to overrule?
Or disagree with decisions made by some of the leaders of your businesses?
Based on information you were hearing from.
>> Oh yes.
>> From the front line.
>> Very much so.
That, that’s usually quite an eye opener because you have a trusted CEO.
And you find either inadvertently or consciously you’re
getting a colored picture of, of a situation.
Another one of the approaches that you took at, at Tata.
Which is a hallmark of you tenure is
the focus on the bottom of the pyramid consumer.
And we all know the story of the TATA and NANO
and a number of us visited your factory last year in Gujarat.
And I was pleasantly surprised to find that I could fit quite comfortably inside.
>> I’m glad you did.
Well, I heard it was modeled after, after you.
So the, someone of your stature needed to fit comfortably.
But the NANO as we spoke about before
the interview has also met with some, some challenges.
And so I’m curious whether you’re still as
enthusiastic about the bottom of the pyramid market today.
And what lessons do you take from the, the NANO episode?
>> Good question.
The Indian Market, the known consumer market’s about 250 to 300 million people.
If you take the base of the pyramid.
And look at, at developing products below that into the, into the
segment of the market that’s moving into that consuming era area.
The market size extends to 500 to 600 million people.
It’s a huge market.
300 to which you don’t have products to address.
So if you can think of how to, how to reach that, how to
reach that market, you have an exceedingly
large potential market.
And a case in point, might be the cell phone industry in India.
当我成年后 进入了学校 要等七到十年才能得到一部手机
When I grew up in, in school you waited seven to ten years to get a telephone.
There was a government incumbent company or a government monopoly.
That it had limitations that it refused to grow rates were high.
So apart from people like me.
A little shop keeper or
a, a hand cart puller let’s say, could never
dream of having connectivity other than through a payphone.
Today with cellphones, it’s bypassed all of that.
And, and the handcart pusher can
buy a prepaid SIM card and a low-cost phone and he’s connected.
He has a number.
He can be reached.
He has an identity and it’s self esteem.
So you have cell phone subscribers that are maybe 600 million in India.
And the fastest growing industry that the country has seen.
So, it has come because technology has made a phone available
and it’s no longer dependent on copper wires or optical fiber.
And this is happened again, who would have thought that ten years ago you
would have had 500 million telephone subscribers in India.
So, I think the potential of the Indian market
is huge if you address yourself to, to that.
I don’t think the NANO adequately did that.
And we, the lesson we learnt is, you can’t do something on the
basis of trying to sell it the same way as you would sell another car.
We should have been selling it like once sold a scooter or a motorcycle.
And instead of two wheels give them
four wheels in a safe form of family transport.
We’ve learned our lessons on that and we rectify that as, as we go forward.
So, important profit motives.
But also social consequences of, of really addressing that market.
>> And Tata has a remarkable record of, its involvement with philanthropic causes.
And how do you view the role of organizations like Tata?
And the, in particular, the role of
corporate social responsibility in addressing needs in society.
>> Well I think, this, this transcends to personal life also.
You’ve got a country with tremendous disparity of income.
You’ve got very rich people on the one hand, and abject poverty on the other.
You have to be sensitive to the fact that,
this gap cannot continue to widen while,
there’s a large discontented number of people.
Who are looking at the inequities of, of the environment as they see it.
因此 对于企业来说 我觉得它们应该有意识地
To, for companies therefore, I think there has to be a, the sensitivity
to doing something in the, in the communities around which you operate.
And, and making an effort to, to raise the quality of life
so that there’s, there’s not envy and, and distaste for what was there.
But look, the companies looked at, in a more positive sense,
and in enhancing the quality of life of the people around them.
We expend about 4% of our net, net profit,
in these rural development activities, and we do it ourselves.
And someone may argue that this is shareholders’ money.
Which it is.
But I think it has bought a sense
of, of not just tolerance, but a sense
of welcoming our companies in wherever they’ve been.
And enhancing whatever we have been trying to do in the product
area or the services area to community area, being part of the community.
>> Would you view the role of corporate social responsibility, it’s being
quite different in the United States versus an emerging market, like India?
>> I don’t know enough about the United States to make a comment,
but I think in one form or another it, it becomes an issue.
That all corporations will have to, have to deal with.
我们认为 作为一个商人 要考虑到自身形象
And, and we think as, as businessmen, have to consider ourselves.
And removing the image of being the ugly
businessman, the venal businessman, and being heads of, companies.
whose interests go beyond that of their company to the communities they serve.
And if I think if we can do that,
we can undo an image that has been created over
the last century, of greed and self serving desires.
So, I think its something we need to be sensitive about.
>> Stanford has a reputation for entrepreneurship, and many of
the students here in the crowd have aspirations to be entrepreneurs.
Do you think the innovation taking place in the merging
markets is going to be driven by more multinationals like Tata?
Or do individual entrepreneurs have the ability to
disrupt major markets in India and others like it?
>> I would hope that it’s the latter.
I would hope that we can homegrow enterprises in various countries.
I think what the United States has had, which is very different is it’s had a,
an environment where a good idea driven by people with merit.
Has a better chance of being supported and financed
and nurtured than you might find in developed countries.
Very often a good idea, dies in, in, a developed country, or even, I mean
不对 我是说发展中国家 甚至在其他发达国家也常这样
a developing country or even a developed country outside the United States.
最终 他们来到美国 然后获得成功
And, and that person finally moves to the United States and makes a success.
And it’s because the environment allows that to happen.
So I think there’s a need for supporting environment to take place.
But I would hope that we would see more and more local companies being
能开拓进取 勇于创新 最终成为全球性企业
entrepreneurial and creative and being at some stage, global players.
>> And certainly we’ve seen a number of
countries try to replicate the success of Silicon Valley.
And, have found that it takes a unique mix of ingredients.
>> Whether it’s human capital, legal institutions, and so on.
Are you hopeful that India will be able
to, to create that dynamic within its own country?
I think the potential exists, whether India does or doesn’t will depend.
Unfortunately it’s a much greater extent on government
policy than it does in a totally free environment.
I mentioned when you took over that many, many external observers they
thought you had large shoes to fill in taking over from your uncle.
Now, with another transition of power Cyrus Pallonji Mistry has
his own large shoes to full, that of yourself.
I wonder what advice you’d give Cyrus as he takes on this task as Chairman.
>> I’ve told Cyrus that he needs to be his own person.
that, finally, it was something I did.
I realized the shoes I had to fill were far too big
for me to mimic the person I would, I was following.
And I just decided that just be myself and do
what I thought was right would be the way to go.
I told Cyrus the same thing.
I think he.
He should feel that he is being his own person.
And let his personality and his
conscience, if you might, drive him.
>> In a moment, I’m going to, to turn it over to the audience for questions.
But one last question before we do with you.
In Stanford we ask one question of all our applicants of the MBA program which is
what matters most to you and why?
I wonder how you’d answer that question?
>> I’d obviously fail.
>> In, in Standford because I don’t
know how I can answer that question [INAUDIBLE].
To me I think short term the transition of suddenly having a lot of
time and being able to be the master of that time is, is a lovely luxury.
Whether that luxury becomes boredom?
As time goes on, it’s something that will need to
be seen and how it gets filled with other pursuits?
As head of the trust, I will be involved
in some of the things we’ve talked about a little in the past few minutes.
I was trying to make a difference in, in what,
in the quality of life of the people in, in India.
But, to what extent did my next few years would
lead, lead me to fulfil that or change from that view, I don’t know.
所以 不得不说 我可能通不过（MBA申请考核）
So, with humility, I’d have to say, I wouldn’t fall into.
>> The success model, the Stanford
graduate would, in answering your question.
>> I think, over a lifetime of, of, service
that we can, we can draw in conclusions to.
Some of things that have clearly mattered to you
in terms of the impact that you’ve had on, on Indian society.
我想 如果严肃一点 我会说
>> I think, I think, if, if, seriously, if if I said I would like
to be seen as being someone who could continue to try to make a difference.
I think that would be a very satisfying thing for me to achieve.
>> Well, I think that’s a great point to, to turn it over to questions.
>> A question we have been struggling with in some of
our classes, is the role that large companies have in creating macro-changing.
You’re clearly doing that in India.
And I’m wondering if you, if you have any anecdotes
of ways in which you’ve been able, by your position.
To influence the government to make certain decisions that were in
the best interests of the country, when, maybe, they wouldn’t have.
>> Your, your question relates to how we are, how we
are channeling or deciding how, how and where to channel our funds.
And in that sense or?
>> Or almost be the influence that a large business, a large business that is, that
has a vision for, for good for the
country can have in changing what influencing policy, positively?
I, I think I don’t know if I’m answering your question adequately.
But I think large business has, has to have an element of,
of orienting themselves to, to serve a social need also.
In addition to, just serving, a business need.
And in our case I think there’s, we may be driven by a, by business motivation.
But we’re, we should always be conscious of, of
areas that we feel are not in the public interest.
And now going into dangerous waters, but we withdrew from
activities in the, in the liquor business.
Because we felt that this was an area that, that tended to be,
serving a consumer base that we, that perhaps we didn’t want to be in.
We, we look very hard about being in, in certain natural resource business.
Which, which should become rather venal in terms of how those businesses were run.
And I think similarly we’ve entered buis, businesses that,
maybe small, in a small way which have been what we considered to be.
The worthwhile thing to do, for the communities, that we’ve, been in.
But, I don’t think there’s, there’s been an, an open, in a, in a very
constructive way to do, what you’ve, what you’ve suggested, as yet.
Thank you Ratan.
拉坦·塔：塔塔集团: 走出印度 走向世界