Youngsters raring to go as Tata heavyweights near retirement
Suman Layak October 23, 2009
Ernest Hemingway famously bestowed the honour of the ugliest word in the language to "retirement." At the House of Tatas, however, retirement has few connotations of revulsion; rather it is being greeted with a well-thoughtout big-picture strategy for succession planning. Ratan N. Tata (72) is slated to hang up his boots in three years but, before that, a clutch of his trusted lieutenants at Tata Sons will be calling it a day. Syamal Gupta (75), RNT's close friend and a Director on Tata Sons (who joined Tata Steel -then Tisco-as a trainee engineer at 21) retired in August 2009. Also likely to take his final bow soon at Tata Sons-the key promoter company of the group-is Vice Chairman N.A. Soonawala (73), one of the most visible faces in the larger Tata companies, as Director on various boards. If two other Tata Sons stalwarts, J.J. Irani (73) and R.K. Krishnakumar (71) also step down by 2011 and 2013, respectively, it would complete a generational shift at Tata Sons.
The flurry of retirements is not restricted to Tata Sons; across the group, there are boots of all sizes and variety that are being hung up at the frontline companies. And these could well be the gentlemen who go on to replace the old guard at Tata Sons. In 2009, three high-profile managing directors moved on-Ravi Kant at Tata Motors, S. Ramadorai at TCS and B.Muthuraman at Tata Steel. All three (who turned 65 this year) were elevated as Vice Chairmen of their respective companies with Muthuraman also being made Chairman of Tata International.
Clearly, CEOs like Chandraeskaran, who have age on their side, are what Tata Sons are increasingly beginning to identify (in sharp contrast Telang at Tata Motors and Nerukar at Tata Steel have just three and five years ahead of them as CEOs; Chandrasekaran has 19). At Tata Chemicals, R. Mukundan took over at 42-he's 43 today-from Homi Khusrokhan early this year, making him the second-youngest MD in the group. The youngest would be Mukund Rajan, 41, who is leading Tata Teleservices (Maharashtra), after a stint as Vice President at Tata Sons (where he had also worked in the Chairman's office). Others in the youth brigade include Anil Kumar Sardana, who took over at Tata Teleservices in 2007 at 48, N. Srinath, who was handed over the reins of Tata Communications in 2007 at 45, and Raymond Bickson (53), who stepped into Indian Hotels' corner room in 2004 when he was 48. And let's not forget one Noel Tata, who is 53 today, but took charge of Trent when just 43.Unclear Mandates
Often what appears messy and unclear works out well in the long run, as the players involved in the race succeed (or don't succeed) in proving their abilities. In 2001, when Irani retired as MD of Tata Steel to become Vice Chairman, Muthuraman was made Managing Director. But three others, T. Mukherjee, Firdose Vandrevala and A.N. Singh, were made Deputy Managing Directors on the same day. A healthy tussle had ensued for the top job before the announcement. It seems the complicated arrangement worked well for Tata Steel. There will be another round of succession at the major Tata companies-Tata Power in two years, Tata Motors in three years and Tata Steel in five years. That brings us back to Tata Tea. Khusrokhan had retired as Managing Director of Tata Tea in 2004 and it was stated that the retirement age was 60 in that company. Going by that rule, Percy Siganporia (now 58) will have to retire in 2011. The group can, of course, change the rules and extend it to 65 like in the other Tata companies. The other option: Peter Unsworth, who is just 51 and arguably an appropriate candidate to become overall CEO of the beverage major.
When talking about his own retirement, Ratan Tata on more than one occasion has said he would prefer a man in his 40s or early 50s to replace him when he hands over the chairmanship. Reason: The new CEO should get an unrestricted play for 20 years. The likes of Mukundan, Rajan, and Chandrasekaran are just what the Chairman ordered. With regard to his own successor, RNT has a man in his early 50s who, for good, measure, also carries the Tata name. But the family moniker may have little bearing at a time when there's so much of vibrant talent jostling for a piece of some big action in one of India's most diversified and dynamic conglomerates.