14 Sep Cyrus Mistry talks of Sustainable Growth;of team Wants Companies to be ‘Agile’
Tata Group Chairman Cyrus Mistry warned his group companies to be ‘agile’ and customer focused; and has hinted at a new Organisational structure for the 148 year old conglomerate. In an interview to the Group’s in-house magazine, Mistry said that the strategy for turning around Tata Motors was bearing fruit; and that a suit of new products would soon help Tata redefine the future.
“We have organisations which have strong hierarchical structures and processes that actually mirrors those structures. If we have to be agile in today’s environment, we need to think of other organisational structures”, Mistry, who took over from former Chairman Ratan Tata in 2102, said. “This would involve having network structures which work alongside traditional hierarchical structures. Care should be taken to have the right composition of teams in such embedded network structures, which can collaborate and break through hierarchical processes when needed”.
Mistry did not elaborate, but the interview provided a rare opportunity for outsiders to gauge his approach to solving some of the group’s toughest problems and challenges. He did not shy away from acknowledging these challenges, but said that the group must evolve its own strategy without being taken by outside experts motivated by immediate transactional gains. In a clear indication that he prefers a gradual and evolutionary approach, Mistry said that he has chosen active transformation rather than revolution as the group’s guiding policy.
“We should not be afraid of taking tough decisions for the right reasons with compassion”, he added.
Mistry’s reign has been beset by trouble in Corus, the British steel operations of Tata Steel, and Tata Motor’s inability to turn around. While software behemoth TCS has forged ahead as the Industry leader, other companies have struggled to put their problems behind them. O Tata Motors, on which he shouldered the responsibility for 18 months until the new managing director joined in May, Mistry is seeing initial signs of a turnaround.
“On reviewing the passenger car product plan, it is evident we had challenges in aspirational design and an over reliance on diesel power trains”, said Mistry. “These contributed to challenges in Brand perception and health of our dealership network. Product and service quality were areas that needed strengthening”.
“Tata Motors identified eight strategic imperatives, set up over a hundred cross functional teams, comprising executives from various levels of organisation, but especially designed to ensure an opportunity to its young leaders.
“This strategy has paid dividends…our journey has just begun, but we can already see the green shoots of a turnaround”, he said. “We have a rich pipeline of innovative products that I am confident will redefine Tata Motors in the future”.
The passenger car business launched a slew of products in the past one year and has arrested the slippage in market share in the past three months.
Mistry said that that group companies will focus on overseas operations without ignoring local business opportunities. “Today, one has to look at opportunities with a global landscape in mind for most industries”, Mistry said in his first ever interview to the Group’s in-house magazine since taking over in 2012.
“However, one has also to consider the business environment, and India is particularly well placed when compared with several other markets, in terms of growth prospects in multiple sectors”. The group earns 70% of it $103 Billion revenue from its overseas operations after it purchased marquee JLR Motors and Tata Steel Europe (erstwhile Corus). The group has invested $79 Billion in the past one decade both in India and overseas, and in the past three years has invested $28 Billion to build new plants and expand capacity.
Mistry, who took over from Ratan Tata, said that group companies will have to adopt a strategy to get closer to consumers, anticipate their need, and try to build a balanced portfolio to ensure that at an aggregate level, that businesses are more insulated from business cycles.
He took the examples of watch-to-jewelry maker Titan Industries and Washing-Machine to Fridge maker Voltas, showing lesser volatility and showing a smoother earning graph. He also warned that if companies are not agile, it could leave them behind.
Mistry, who misses golf, spoke of his cordial relationship with Mr. Tata; the take-aways from his interaction in his first year, the ease with which the former chairman donned two hats, and continues to seek advice on aviation and aerospace. “While sitting on the board of an operating company, his first duty was to the company and its board; equally, he represented the promoter company and its interests”. Mistry, who will be celebrating his 25th wedding anniversary, considers his wife Rohiqa as his best friend. He credited Tata for protecting the heritage of JLR brands with his eye for detail. “I continue to interact with Mr. Tata and seek advise on aviation and aerospace. I need to ensure that there is good alignment of strategy between Tata Sons and Tata Trusts”.
Read the Main Article here: http://economictimes.indiatimes.com/news/company/corporate-trends/cyrus-mistry-talks-of-sustainable-growth-wants-companies-to-be-agile/articleshow/54311757.cms