By Sourav Majumdar & Sulekha Nair
After an intense 14-month wait, when Tata Sons finally announced the name of the relatively unknown 43-year-old Cyrus Pallonji Mistry as the Chairman-Designate of the venerable Tata Group (2011-’12 turnover $100.09 billion) one November evening in 2011, it took most of Corporate India by surprise.
Mistry was hardly seen as a probable contender for the top job at the sprawling salt-to-software group which is part of Indian corporate folklore.
A five-member search panel had been constituted in August 2010 to hunt for a successor to Ratan Naval Tata, who is slated to retire after he turns 75 on December 28, 2012. The panel included Mistry, but he had excused himself from the deliberations once he emerged as a candidate. By all accounts, the committee’s task was Herculean.
Finding a successor to Ratan Tata was never going to be easy and RNT, as he is known in corporate circles, had transformed the group into a massive global player with aggressive strategies and global ambitions across its several businesses.
Under Ratan Tata, the group had grown from around $10 billion in revenues in 1991 to about $83 billion by 2011, with iconic acquisitions like Tetley, Corus and Jaguar Land Rover under its belt.
A Mistry at Bombay House
The move to select a person who would possess the capabilities of becoming chairman of the Tata Group was a meticulous process. And it had to be. After all, in the Tata Group’s 144-year history, the group has had only five chairmen: Jamsetji Nusserwanji Tata, Sir Dorab Tata, Sir Nowroji Saklatwala, JRD Tata and Ratan Tata. Only one of them did not carry the Tata name.
This was going to be one of the most-watched corporate searches in India and, predictably, during the course of the panel’s sittings, several names were speculated upon in the media. Prominent among these was another Tata—Noel, chairman of Trent Ltd. and also half-brother to Ratan Tata; NR Narayana Murthy, Founder and Chief Mentor, Infosys; Indra Nooyi, CEO, Pepsico among others.
And so, when a perceived 'outsider' like Cyrus Mistry, son of Pallonji Mistry who has an 18.4 percent stake in Tata Sons and is its single largest shareholder, was named successor to Ratan Tata, there was more than a minor element of surprise.
However, after the initial reactions, many who had followed the Tata Group closely saw this appointment as a logical one. After all, Mistry had also been a director in Tata Sons since 2006 and was well aware of the Tata culture and ethos. Mistry is also related to the Tata family by marriage—his sister is married to Noel.
In more than one sense, then, Mistry was far from an outsider at Bombay House. And from Ratan Tata’s initial comments following his selection as the next Tata Group chairman, it was clear that Mistry had the complete confidence of the illustrious gentleman whose shoes he would be stepping into.
Tata said he had been impressed by the ‘quality and caliber’ of Mistry’s participation on the Tata Sons board and his ‘astute observations and his humility’. In some ways, Mistry is seen as the perfect successor to Ratan Tata—quiet and understated, with the right qualities and pedigree.
Several Tata-watchers see the appointment as a mix of continuity and change and the fact that RNT himself groomed Mistry for a full year when the latter was group Vice-Chairman is also bound to help him when he takes over at Bombay House, the landmark South Mumbai headquarters of the group.
Ratan Tata’s comments on Mistry, in a sense, were reminiscent of what JRD Tata told his biographer, Russi M Lala, after the appointment of Ratan Tata as chairman in 1991. In an interview to The Economic Times, Lala said he had asked JRD on the choice of Ratan Tata as his successor. “Was it because of his integrity?” JRD replied, “Oh, no, you can’t say that! It would imply that the other contenders did not have integrity. I think he will be more like me.”