The tiny district of Namakkal in Tamil Nadu may not be familiar territory for most Indians staying north of the Vindhyas. But this is the small district in Tamil Nadu where Mr. Natarajan Chandrasekhar, currently CEO of TCS and the next Chairman of Tata Sons, was born. The journey of Chandra has been a meteoric rise through the Tata ranks. Becoming the Chairman of Tata Sons is special for a variety of reasons. In the last 150 years of its existence, Tata Sons has only had 6 chairmen. Chandra will be the 7th. Of the 6 chairmen of Tata Sons, four who held the longest tenures were Tatas; Jamshedji Tata, Dorabji Tata, JRD Tata and Ratan Tata. The 2 non-Tatas, Mr. Saklatvala and Mr. Mistry had relatively shorter tenures. So effectively Chandra will be only the third non-Tata and the first person outside the Parsi community to hold the coveted position of Chairman of Tata Sons when he takes charge on Feb 21st, 2017…
Why Chandra was the right man for the big job…
Chandra has been a career-TCS person since he joined the company back in 1987. It was only in 2009 that Chandra took over as the CEO of TCS, filling up the shoes of two larger-than-life predecessors’ viz. F C Kohli and S Ramadorai. Year 2009 was also a crucial year for the world markets as global business was just coming out of the worldwide recession caused by the sub-prime crisis. BFSI was going through a major churn and Indian software industry was at a major inflection point. Traditional IT spending from BFSI, Telecom and Oil was either flattening or reducing. Digital was emerging as the next big story and the focus was beginning to shift towards Analytics, social media, mobility and cloud. It is to the credit of Chandra that over the last 8 years, TCS not only widened its leadership over other large software companies but also managed the growth with best-in-class operating margins of over 26% and relatively lower levels of attrition. The ability to handle this paradigm shift was the first quality that made Chandra the right man for the job.
The Tata group today is more global than Indian with nearly 69% of its overall revenues coming from outside India. TCS already accounts for over 60% of the group’s revenues and the group’s market capitalization. The leadership role at TCS has given Chandra the best ringside view of how the global business environment was evolving. To position effectively in the global market in every product be it, software, steel, automobiles or chemicals requires a 360 degree view which Chandra was best positioned to provide.
Thirdly, in the entire Tata-Mistry episode, the importance of the chairman of Tata Sons being in sync with the Tata culture was sharply underscored. With nearly 3 decades in TCS, Chandra probably understands the nuances of the Tata culture much better than any other contender for the job. After all, having built the most profitable cash cow of Tata Sons the Tata way, Chandra was the right choice.
Lastly, age was on Chandra’s side. The board of Tata Sons realizes that at 53, Chandra still has another 15 good years ahead of him and that is required to give stability and continuity to strategy and planning at Tata Sons. Other contenders like Mr. Manwani were a good 10 years older and that is also one factor that has worked in favour of Chandra. It must also be said to the credit of the Tata Sons board that by choosing a non-Tata and a non-Parsi, they have made a deliberate and conscious shift away from tradition. From the point of professionalizing and ensuring continuity, this is the right move on the part of Tata Sons.
Big challenges ahead for Chandra…
There are 6 major challenges ahead for Chandra once he takes over at the helm of Tata Sons on February 21st…
To sum it up, managing a conglomerate with revenues in excess of $105 billion across every conceivable business will not be an easy task. But Ratan Tata was of similar age when he took over at the helm of Tata Sons. Over the next 20 years, the market cap of Tata group multiplied manifold. That could be a good and optimistic starting point for Chandra!
FOLLOW US ON