When Ratan Tata steps down as leader of the Tata Group, it will be a landmark moment in the groups history. For more than two decades, he has guided the group through a period of unprecedented change, a period that has seen the Tata Group change from being a highly respected Indian business into an organisation that is increasingly engaged with the wider world. In some ways, the change in the Tata Group over the last 20 years reflects the changes in the Indian economy.
Ratan Tata took over as leader from the much respected and much loved JRD Tata at a very important point. As Sumantra Ghoshal and Gita Piramal pointed out in their book Managing Radical Change, Tata had to some extent become a business group depending on its legacy. The Tata name was respected and trusted, but was it admired? As the Indian economy began its transformation towards greater market orientation, new names were beginning to emerge which seemed to represent the future of Indian business. Tata might have been consigned to its past.
Tata has changed all that. He did much to strengthen the internal relationships and create new harmony within the group, but that is in some ways the least of his accomplishments. His real legacy to the group has been twofold: The development of an international strategy and the creation of the Tata brand.
Before 1990, he once told me, we had a reputation but we did not have a brand. The distinction is an important one. Reputation is what other people think about you; brand is the image of yourself that you portray to other people. Tata knew that managing that brand was essential not just to the greater internal coordination and cohesiveness that the group needed, but to reassert the values trust, innovation, commitment to community and peoplethat had made Tata great in the first place; values that had come dangerously close to getting lost in the twilight years of JRDs leadership.
Establishing the brand meant not just changing what Tata does, although there has been a historic shift away from smokestack industries towards services such as telecom and consultancy, which are seen as being more in keeping with the needs of modern India. It also meant telling the Tata story in new ways, to new stakeholder groups. A notable example has been Tatas engagement with the youth