The TATA-MISTRY SAGA

The TATA-MISTRY SAGA

On 24th October 2016, Cyrus Mistry the then chairman of the prestigious group TATA group was sacked. This news shocked the country and the entire industrial world. The TATA group has had just six different people heading the group in its 150 years of existence. This is a relatively small number as compared to other global competitors. Mistry was sacked just four years post being appointed the chairman of the TATA group. This incident has a lot of learnings that we need to grasp.


Image Name: Six Chairmen who’ve led the Tata Group since 1868

1) Ratan Tata was always known as the revolutionary leader who took drastic measures to modify the structure of the TATA Group to keep the firm in business. He took a firm stand and executed the actions that he found most appropriate. Ratan Tata was forced to take such steps as the Indian Govt. was making policy shifts on industries. In a similar situation, Cyrus Mistry as faced by the problems arising from a global slowdown.

The TATA group receives about 65% of its revenues from overseas countries.

At such time Mistry tried to implement certain measures which went unsupported by the board of directors. Multiple such instances led the board to sack Mistry. The learning from this incident is that it is imperative to position yourself properly such that you can carry out work efficiently and also that as time passes people’s opinions vary but the system stays constant.

2) Taking charge of such a large firm is never easy. Like they rightly say, “With great power, comes great responsibility.” Ratan Tata was a very successful chairman and a man of multiple abilities; it may well be true that the TATA Group may never find another chairman who is capable of filling his gigantic shoes. Mistry had a different view of the big picture, and when he stepped into the game, there was not much time for him to settle down for the situation was boiling. The important message to take away from this experience is that it is never easy to take up a position of extreme power and to maintain your perspectives; it is necessary to make certain negotiations before accepting the offer.

3) One size never fits all. Strategies and ideas implemented by the predecessors of Cyrus Mistry were successful, and hence it was believed that those would be the standards to work by. What went unnoticed was the changing industrial times and competition. Mistry had his methods which were not appreciated. It always happens that people are criticized until they succeed, beyond which their plans become the new gospel. Hence, it is vital to pitch your idea in a way that is acceptable by all.

“The Trusts, which are chaired by Ratan Tata and control about 66% of the shareholding of Tata Sons, were also reportedly unhappy that the performance of Tata Sons was increasingly dependent on only two companies” – Tata Consultancy Services and Jguar Land Rover

4) Great minds think alike, is more of hearsay. In reality, every individual is unique and perceives problems differently. Whether it is shadow training or on the job training, it is impossible for the successor to take up all task in a similar fashion to as they were previously.

5) Change is the only thing that is constant, and it is imperative for the older generations to acknowledge this. It is extremely crucial for those leaving the organization to remotely guide the newcomers while at the same time not enforce their beliefs on them. The shift in mindset and thinking probably came around like a big barrier for successful transfer of the TATA Group to Mistry.

What we learn from practical situations is far more important than what we have to take away from classroom learnings and seminars. It is instances like these that help us to be prepared for the future. The example of the TATA Group is one of great value, for it is the first negative mark on the otherwise clean history of one of India’s largest, most respected and prestigious firms.

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