The Tata Group, comprising over a 100 companies, has roped in veteran diplomat Subrahmanyam Jaishankar to oversee the group’s global strategy development. A Tata Sons statement said: “In his new role [S Jaishankar] will be responsible for the Tata group’s global corporate affairs and international strategy development. Dr Jaishankar will work with Tata companies to help them strengthen their business presence and positioning in their respective geographies globally.”
For his appointment, the Tatas, it appears, could convince Prime Minister Narendra Modi to waive-off a mandatory, one-year, cooling off period stipulated for bureaucrats seeking to join the private sector.
But why Jaishankar?
Jaishankar may not be able to influence bottom lines as such, experts told Firstpost. The Tatas, they said, are looking to tap the career diplomat’s expertise in navigating the power corridors in countries of interest to the conglomerate, which raked in around two-thirds of its revenue from outside India in financial year 2016-17.
Prior to leading India’s foreign ministry, Jaishankar worked in North America, across Asia and in eastern Europe -- all key markets for the salt-to-software conglomerate. He served as the Indian ambassador to the United States, China and the Czech Republic, and also served as high commissioner to Singapore.
Three firms in the Group -- TCS (17 percent), Tata Motors (43 percent) and Tata Steel (17 percent) -- contribute over 77 percent of the conglomerate’s revenue, according to a Credit Suisse report, and, incidentally, the top markets for these firms are the US, China, and Europe respectively.
The fact that Prime Minister Modi cancelled the cooling off period in Jaishankar’s case speaks volumes about his rapport with the Prime Minister’s Office (PMO), and the Tata Group want people who matter in power, said Kris Laxmikanth, CMD, The Head Hunters India.
Jaishankar reportedly enjoys Modi’s trust, acting as his unofficial foreign policy advisor. He has accompanied Modi on foreign trips that secretaries usually aren’t a part of. “When it comes to an overseas acquisition or negotiations, the Tata Group could not have hired anyone better than Jaishankar, who can open doors for them,” Laxmikanth added.
The Tatas will benefit from Jaishankar’s deep understanding of geopolitics and international political economy, according to management consultant Harish HV. “He cannot be seen as a lobbyist as, by that yardstick, the Group will have to hire a lobbyist in every country. Jaishankar will not have much of an impact on the Group’s bottom lines but the Group will be able to draw in on his deep experience in foreign affairs and use that to its advantage,” Harish added.
The government’s loss is the Tata Group’s gain, opined Arvind Singhal, Chairman, Technopak Advisors. The government doesn’t have to let go of its top civil servants when they reach retirement. But, as the “Group has made significant investments globally, Jaishankar will be able to guide the group. He is an expert on China and could advise the Group on further investments in China,” said Singhal.
What’s important is that Jaishankar will have a well-defined role, as president for global corporate affairs. “He is not a glorified lobbyist,” added Singhal.
The global IT industry is witnessing a technological transformation. Artificial intelligence (AI), cloud computing, robotics and automation are taking the sector by storm. These changes are impacting the way Indian IT firms do business, outside and within India. Furthermore, protectionist policies are also forcing IT firms to tweak their delivery models.
For instance, US President Donald Trump’s stand on outsourcing has been well-documented. Indian IT firms have been pulled up for, allegedly, not hiring enough foreigners for foreign jobs. In such ‘delicate’ situations, Jaishankar could help the Tata Group navigate pitfalls, the experts added.
Jaishankar isn’t the Group's first exceptional hire. Previously, the Tatas hired former Bombay Stock Exchange (BSE) CEO Madhu Kannan, who served as Group Head of Business Development and Public Affairs until October 2016 and was also a member of the Group Executive Council.
In 2009, with Ratan Tata at the helm, the Tatas hired Alan Rosling, who was a special adviser to former UK Prime Minister John Major.
Updated Date: Apr 25, 2018 07:17 AM