A Mistry at Bombay House

BySourav Majumdar

His is a name that’s crying out to be punned on. And rightly so. For those following the unfolding story of who will eventually succeed the mighty Ratan Tata as the boss of Bombay House, the mystery has finally been solved. Cyrus Pallonji Mistry, 43, will be the next chairman of the $83 billion Tata Group. But the appointment of this lesser-known member of the Pallonji Mistry family will clearly be a mystery that will still take time to unravel, as he steps into his new role, first as vice chairman of the Group, and then, in December 2012, as the next boss of Bombay House.

To many, the name Cyrus Mistry, will evoke little or no reaction. And his choice as the person best suited to fill in Ratan Tata’s giant shoes will doubtless evoke gasps of disbelief in some circles, no matter how well those several corporate leaders who are being quoted in the media try to couch it. The reason is simple: while the initial speculation was that someone of a global stature would be best suited to lead the Tata Group - labeled a salt-to-swanky cars conglomerate by sections of the media - the guesses then were about Noel Tata, Ratan Tata’s half brother and Cyrus Mistry’s brother-in-law, being the ideal candidate since he carried the Tata name. That possibility faded away somewhat from the middle of this year.

Cyrus Mistry, in most ways, is a choice hard-boiled Tata insiders may not really be surprised with. Mistry has not just the right pedigree, he also comes with enough experience of how the Tata Group - now transformed rather dramatically over the years by Ratan Tata - actually functions. Being already a member of the Tata Sons board and also, ironically, of the selection committee set up to search for Ratan Tata’s successor, his curriculum vitae is in sync with the basic requirements of being a Tata man. And being a part of the family which controls 18% in Tata Sons does help.

The best thing about this transition, perhaps, is that Cyrus Mistry will have the benefit of being mentored personally by Ratan Tata over the next year. Tata has promised to give him the exposure and guidance required before he finally takes over at the corner room in Bombay House in what is arguably the most-watched corporate appointment in years. Tata’s style of management, his ability to take decisions and his way of dealing with challenges will, of course, be a huge learning for the young engineer who has been described by those who know him as quiet and intuitive.

Ratan Tata has, particularly over the past decade, transformed the Tata Group from a stodgy, old-world empire into a giant of international size and scale, and with a massive global footprint. One of the biggest attributes which Ratan Tata has given to the group is a silent aggression, perhaps most demonstrated in the manner in which Tata Motors has transformed itself. Not only in the manner in which Tata pursued its passenger car plans in the wake of severe odds, but also in the way in which it gobbled up Jaguar Land Rover in a jaw-dropping acquisition some years ago. Ditto for the manner in which the group pursued with its plans of becoming a global player in steel, with the nail-biting acquisition of Corus, widely believed at the time as being the most ambitious move by the group yet.

Clearly, the greatest challenge for Cyrus Mistry will be to milk these acquisitions better over time, and face the challenges of a fast-changing global economy where Europe and US are facing major crises of confidence. Despite the size and scale, a number of Tata companies will face their own significant challenges in India and across the world as the economic situation comes up with new problems. The bigger the size, the greater the challenge. Mistry will soon have to grapple with that, whether it is the challenges of the automotive sector or in steel or retail.

The other challenge, as Marico boss and Ficci president Harsh Mariwala pointed out in a television programme, is that his people management skills will also be tested to the hilt because a number of his direct reportees across companies and businesses will be far older than he is. Most of them are Tata veterans in their own right, and bring enormous experience with them. His style will therefore have to be inclusive and subtle if he is to extract the best results. No rocket science, this, but a challenge nonetheless.

Cyrus Mistry will also have to shoulder a massive burden of expectations - not just from the Tata Group, but also the extended stakeholder family of investors, customers, dealers and even policymakers. Tata is much, much more than a corporate house. It is an ethos, a culture, a set of proven values. Ratan Tata has added global ambition and aggression to that list. Being Cyrus, therefore, will be far from easy when filling the shoes of a Tata.