To say that the appointment of 43-year-old Cyrus Mistry as deputy chairman of the Tata group, to succeed Mr Ratan Tata when he retires in December 2012, was startling, would be a colossal understatement. But it was a fitting finale to a novel process that began with panache and created much expectation, bewilderment and enthusiasm as it was something not tried before in the private sector, especially in a high-profile group like the Tatas.
It sparked off a guessing game that led to even betting on the successor being Mr Tata’s step-brother, Noel. Mr Tata’s decision to have his successor chosen a year before his retirement by a selection committee is novel in the business world, particularly since there was no obvious second-in-command in the group. It is something that the government should take note of as its selection of PSU chiefs falls way behind. While the Tatas have some of the best CEOs heading various companies there was still no one that Mr Tata seemed to have groomed for the slot he would eventually vacate. It is not known how many people were interviewed, or how the process actually worked, but the committee did meet 18 times and during this process decided that Mr Mistry could be one of the front-runners. The selection process was eagerly watched not only by India Inc. but by people abroad. The Tata group is probably the biggest Indian MNC. That Mr Mistry was finally selected and accepted by Mr Tata is now history. One can only guess at the factors that went in his favour during the grilling interview process that is said to have taken place. Age was definitely in his favour, apart from the fact that his family —Shapoorji Pallonji Mistry — is the largest single shareholder in this behemoth group. He also seems ideal to carry on the Tata ethos of governance and integrity, especially after the fallout of the 2G scam.
The challenge before Mr Mistry is awesome. He may have been a director in a number of Tata companies, but to deal with an over-`4-lakh crore group with nearly 100 companies in 80 countries across six continents requires tremendous managerial acumen apart from a personality that will take everyone along. The Tata companies abroad need immediate attention, particularly Corus. Most of all he would be dealing with listed companies. The Shapoorji group has just two listed companies that are nothing to write home about. Ultimately the hard rule in the financial world is performance and profit. Mr Mistry has the advantage of working under Mr Tata and learning the ropes for a year. That should be a great education.