His sometimes low-key yet firm management style has worked wonders with TCS. Can he do the same, while cleaning up after the Mistry affair, with Tata Sons?
New Delhi: In 2008, shortly before TCS boss S. Ramadorai was set to step down, the buzz in Mumbai was that the ‘TCS’ acronym didn’t stand for ‘Tata Consultancy Services’. It stood, people outside and inside the company jokingly insisted, for ‘Take Chandra Seriously’.
Chandra, or N. Chandrasekaran, is, of course, the man of the hour. In 2009 he succeeded Ramadorai to become head of the Tata empire’s IT division and on Thursday, 20 years after he first joined the Tata Group, was appointed as the new chairman of holding firm Tata Sons.
Chandrasekaran’s appointment comes after a gruelling and publicly embarrassing four-month period for the Tata Group. In October, the previous chairman Cyrus Mistry was shunted out surprisingly, leading to a bitter public spat. Mistry’s statements after his ouster accused the Tata Group, once viewed as the paragon of corporate governance and old-fashioned business values, of making him a “lame-duck chairman”. The Tata Group, in return, slammed Mistry saying that his firing was due to a clash of “culture” and “ethos”.
If it’s culture and ethos that Ratan Tata is looking for, however, that may be defined, there are very few who will disagree that the most suitable candidate is Chandrasekharan. While he may be the first non-Parsi head of the Tata empire, he is the quintessential company man. Graduating from Trichy’s Regional Engineering College (now National Institute of Technology), his first job straight out of school was at TCS, which he joined in early 1987.
His early working years mirrored that of a classic TCS employee at the time. He started off at the company headquarters in Mumbai, then after a while he began touring the company’s global operations. After doing short stints in Stockholm, London and California, Chandrasekharan settled down in the US in 1993, where he built a new team from scratch.
Four years later, with experience in industries ranging from banking and telecom and markets as diverse as Australia and Eastern Europe, he returned home in 1997. For the next two years, he worked under Ramadorai as the CEO’s executive assistant. Company executives, and even Ramadorai, would later say that he was marked at the time, along with a handful of his peers, as future CEO material.
From 1999 onwards, it was a quick series of milestones: By 2005, he was the head of global sales and operations and in 2007 he was named to the company board and made chief operations officer.
Comparisons between Chandrasekaran and Mistry are inevitable; some valid and others less so. While Mistry’s association with the Tata Group has always been top-down, first as part of his family’s historical relationship with the conglomerate and then later as a board member of various Tata group companies, Chandrasekaran has simply known no other life.
Chandrasekharan’s life as a company man shows. While he prefers to drive a black Mercedes, a yellow Nano also occupies a place in his parking garage. Chandrasekaran’s background is also different from say, his contemporaries over at Infosys. Most of Infosys’ co-founders come from India’s IITs; Chandra from a NIT. Other stalwarts in India’s IT industry often dive into management books; Chandra on the other hand never attended management school nor does he reportedly ever read much of the classic 1990s MBA literature.
At NIT Trichy, Chandra at the time did his masters in computers application and not engineering, which was seen as a ‘lesser degree’. This lack of supposed pedigree, however, doesn’t bother him. “The person who hired me [at TCS] said ‘you are the test case. If you do well then we will hire more MCAs’,” Chandra told Forbes in a 2011 interview.
Unlike his two predecessors, S Ramadorai and FC Kohli, who were both towering and outspoken figures, Chandrasekaran is decidedly more low-key. When Ramadorai took Chandrasekharan and a group of other company executives to the Galapagos Islands in 2005 as part of a training exercise, Chandra reportedly left the trip early, telling his colleague, “I have seen what I wanted. Let’s go back to Ecuador”; after which Chandra and his team reportedly worked out a detailed plan to increase the company’s Latin America business.
The more popular parables concerning him reflect his quiet, unassuming yet determined manner of functioning: He has a great memory, he likes jogging, he likes reading fiction and he struggled in the early 2000s to start delegating more.
And yet, company officials and industry experts, in conversations, also speak of him aggressively pushing forward his perspective when needed. For instance, in 2014, the company, along with GE, opened up an all-women BPO centre in Saudi Arabia, which eventually gave the company a significant competitive advantage in bidding for projects across the Gulf region. Many within the company were initially opposed, worried over how it could affect relations with the government over there and in the community, but Chandrasekaran put his foot down.
The new Tata Sons chairman is also bluntly pragmatic at times, especially in the way he views the digital transformation of Indian IT. In the middle of an interview with this correspondent in 2013, he got up, switched off the voice recorder and stated flatly: “Okay, without any bullshit, here’s what’s really happening with our efforts to go after digital revenue…”
This is in sharp contrast perhaps to the current head of Infosys Vishal Sikka, who most would argue is positioned more in the future and less in the present. However, there are very few market experts or IT analysts who would disagree with Chandra’s management vision. Under his leadership, TCS has not only grown revenues about 24% annually, but it’s current market capitalisation stands at a whopping Rs 4.6 trillion.
At the same time, while in meetings Chandra is reportedly immensely data-driven, that approach hasn’t reflected in the way TCS has looked at the all-important SMAC (social media, analytics, cloud) segment that many IT companies say is the future of the industry. TCS has struggled to build a stronger consulting practice and seems reluctant (unlike Infosys or Wipro) to go out and simply acquire smaller firms for crucial competency such as automation, data analytics or design consulting.
What does this mean for Chandra’s success as Tata Sons chairman? For one, his experience has been largely limited to the sectors that India’s IT industry usually intersects with: banking, insurance, finance, retail and healthcare. Crucial future sectors for the Tata Group such as automobiles, steel or even defence are ones he is unlikely to be familiar with. And yet, experts say, this will not be a significant problem.
As chairman, it’s far more important to chart the future of the Tata Group’s massive businesses. In-depth domain expertise is obviously left to the heads of the various group companies. How much experience does he have in this regard; keeping in mind the significant restructuring that will be required at Tata? At TCS, he was in charge of breaking down the massive monolithic entity that Ramadorai left him into twenty business units that worked smoothly. His job as Tata Sons chairman will likely be the opposite.
This only leaves the elephant in the room, which is far more likely to determine the fate of Chandra’s tenure. How does he plan on cleaning up after the Mistry affair, restoring order to the board and managing his relationship with Ratan Tata and the all-important Tata Trusts? Other corporate problems such as the AirAsia India controversy, the Tata Nano affair or even the Tata Docomo issue apparently found their origins in this curious and disruptive backseat managing.
Will his career as a Tata man help him wade these waters better than Mistry? In most of his interviews, he attributes his success at TCS to the “enormous freedom” that was given to him. Will he enjoy that same freedom going forward? Time will tell.