The Ratan Tata-Cyrus Mistry story began on a wrong note, albeit in a subconscious manner. They both felt that since they had worked together for years, they understood each other and the bonhomie would continue forever. But, human psychology works differently—it changes rapidly when one is given powers, and the other has to give up his erstwhile powers.
ROME wasn’t built in months. Nor was it destroyed in months. The same is the case with the spat between Ratan Tata, interim Chairman, Tata Group, and Cyrus Mistry, former Chairman. The story starts, ironically, when Ratan decided to search for his successor. The year: 2010. The five members of the selection committee included Ratan’s loyalists—NA Soonawala, RK Krishna Kumar, the UK-based Lord Bhattacharya, Shrin Bharucha, and, of course, Cyrus, whose family owns 18 per cent in Tata Sons, the group’s holding company.
Cut to November 23, 2011. After 18 meetings in search of a professional outsider to carry on the almost 150-year-old Tata legacy, the committee selected Cyrus, who was already an insider as Tata Sons’ director. He was actually an insider-outsider, possibly the worst combination for a successor of a $100-billion business empire. An outsider invariably comes prepared; he knows that as a professional and non-owner of a family-owned group, he can go thus far, and no more. An insider is invariably a loyalist and follower, who will look up to the owner; even better, he may be a part-owner himself and, hence, is part of the family.
Both an insider and outsider can turn rogue. They can develop or nurture their own ambitions, try to usurp the group, or develop an urge to leave a new legacy behind. However, the chances of these happening with an insider-outsider are larger. Being an insider, he will feel that he owns the empire. Being an outsider, he will wish to change things around and attempt to transform the group to prepare it for the future. An insider outsider has the best of both worlds, which can quickly shift to the worst of both. This is what happened to Cyrus.
This story is from the January 2017 edition of gfiles.
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This story is from the January 2017 edition of gfiles.
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