Does the Tata Group still need TAS?

It would have been hard to imagine such sarcasm being directed at anyone from TAS just a few years ago. Established in 1956 by JRD Tata to create a leadership cadre for the Tata Group, it grew to become an elite entity within the Tata fold. Entry into the TAS programme was tough, akin to cracking the civil service examinations. Those who made it were groomed and put on the C suite track.

The leadership development programme gave these chosen candidates — 20-30 of them, depending on each year’s requirement—exposure across sectors, geographies and companies within the conglomerate. And opportunities aplenty. An entry on the Tata Group website sums up that approach perfectly: “At TAS, our aim is to create leaders who add to our strengths and grow along with the group... TAS is designed to help you fast-track your career and always #SettleForMore."

The list of TAS alumni who have gone to top roles in the group is long. Among them are R Mukundan, MD and CEO of Tata Chemicals, who joined the leadership programme in 1990, after completing an MBA from FMS, Delhi University. Harish Bhat, now a brand custodian for the business house, joined the Tata Group in 1987, as a TAS officer. Over the years, Bhat has held several top posts in the group. He is also the chairman of Tata Coffee and a director on the boards of several Tata companies.

Similarly, Ajoy Chawla, CEO of the jewellery division at Titan Company, who has spent more than 30 years at the group, joined as a TAS recruit in 1990. Masood Hussainy, head of aerostructures and aero-engines at Tata Advanced Systems, joined the conglomerate from TAS in 1999. Again, Zarir Langrana, an executive director, who heads the global chemicals business of Tata Chemicals, is a TAS officer who has been with the company for over 40 years.

Today, however, those who have known the group and have worked there for many years say TAS is a pale shadow of its former self and no longer churns out leaders like it used to. Simply put, the quest for specialists and lateral talent has reduced the relevance of the programme in the salt-to-software conglomerate.

A casual glance at the leadership ranks shows that many of its top leaders today did not emerge from the programme. The list of non-TAS stalwarts is long. It begins with group boss and Tata Sons chairman N Chandrasekaran, and includes Campbell Wilson, the CEO of Air India; K Krithivasan, CEO-designate of TCS; TV Narendran, MD and CEO of Tata Steel; Praveer Sinha, MD and CEO of The Tata Power Co.; Sunil D’Souza, MD and CEO of Tata Consumer Products; CK Venkataraman, MD of Titan; and Puneet Chhatwal, MD and CEO of Indian Hotels Company Ltd.

The TAS programme

Getting into the TAS programme remains just as hard today as it was earlier. Aspirants are selected from leading business schools. TAS is one of the top recruiters at many B-schools. Often, the compensation it offers is higher than the pay package offered by Tata Group companies on the same campus.

TAS also takes in talent through an in-house programme, which is open only to permanent employees of Tata Group companies and Tata joint venture companies. According to the eligibility criteria on the website, an aspiring candidate should have not more than six years’ total work experience after a bachelor’s degree. The candidate should also have spent at least two years in continuous service in the group on the permanent roll.

There is a third way of joining TAS. A few years ago, the conglomerate started a competition called the Tata Imagination Challenge, where students and Tata Group employees have to come up with “an idea for the future". Among other things, the winners get “accelerated entry into TAS", according to the group website.

TAS officers have to complete three business postings and one community stint during the course of their year-long training. They eventually get posted with a group company when their term ends. During their internship and secondments, they get to interact with CXOs of group firms, an opportunity not many get.

“We had dinner with JRD Tata, and Russi Mody (the late Tata Steel boss) played piano for us at a dinner at his place and then piloted us in a plane for a field visit. Thereafter, we could meet top leaders when we got posted in Tata Group firms. Our peers in other companies were roughing it out in their first jobs while we were interacting with the top leadership of the group," recalls Sonu Bhasin from the TAS batch of 1987. Today, she is an independent director and business author. Bhasin told Mint that when she was 32, she was “doing the work of a general manager in a mid-size Tata company" while her peers were still in middle-management profiles.

But those days are in the past. The Tata Group of today no longer depends on TAS for leaders.

Specialists or generalists?

TAS graduates were put into important roles and given suitable designations, especially where the right talent was unavailable. Over the past decade or more, however, the senior leadership of the Tata Group has shown a preference for bringing people in from outside," said Bharat Wakhlu, founder and president of The Wakhlu Advisory, and a former TAS executive. He worked with the conglomerate from 1985 to 2014.

Wakhlu has co-authored a book along with Bhasin and Mukund Rajan, entitled Tata’s Leadership Experiment: The Story of the Tata Administrative Service. Rajan is another TAS alumnus and was the former chief ethics officer at the Tata Group. He is now the chairperson of ECube Investment Advisors. Incidentally, he is a sibling of former RBI governor Raghuram Rajan, who also joined TAS as a management trainee but left after a short stint.

One of the key issues between Tata Group companies and TAS is the shift in the leadership profile towards specialists and sector experts rather than generalists, which TAS is known to produce. To a large extent, this is because of the diverse business interests of the group, and the need to have leaders who can move from role to role across sectors, when there is a need.

“Companies in the coming months and years will need a mix of specialists and generalists to create value for their chosen customers. While TAS produces generalists, believing that specialists alone will suffice is a myopic view," Wakhlu told Mint. While acquiring talented candidates is important, a newcomer will not understand the values of the Tata Group overnight, he added.

According to about a dozen Tata executives Mint spoke to, the push to get lateral talent in the middle and senior rungs is leading to a cultural clash. Senior officials in Tata Group’s retail, digital and traditional companies say the preference to hire from the industry is becoming stronger since industry experts can hit the ground running, whereas generalists may take some time to settle down.

Blue blood syndrome?

Thanks to coming through TAS, the leadership programme’s recruits always got plum postings and are afforded the opportunity to change companies every few years. Non-TAS personnel are not afforded such latitude and flexibility, even if they are top talent with a solid pedigree in terms of their education and work record.

“A TAS alumnus has the option of changing his company every few years. If they do not like a posting, they are given a transfer to another group company. Why should they be trained so that they become part of another firm’s future pipeline? Others do not get that option," said a senior human resources (HR) executive who earlier worked with the conglomerate.

“TAS alumni have a halo around them and assume that they are consultants and advisors to CXOs. This does not work — once someone is in a company, they have to work ground up," said a senior Tata Group retail company executive. His team has been asked to hire candidates beyond TAS, unless one is exceptional.

According to the CXO of an older Tata Group company, when TAS was established, it was “far sighted" and no other corporation thought on the same lines. However, he accepted that there was an “elite cadre" treatment. “Group firms are often thinning out in the middle order and this is why a leadership pipeline is needed now more than earlier. TAS cannot have the blue blood syndrome," the CXO added.

The former HR executive cited earlier said his Tata Group company got better results sending high-potential talent to external leadership programmes—they returned to boost the company’s productivity. “The TAS graduates get paid at least 30% more than their peers. The return on investment does not work out considering they may not even stay in the company. We would have been better off hiring from B-schools at a competitive market price," said the HR executive.

Tata Sons, the holding investment company of the group, did not respond to Mint’s queries.

How others do it

Other business houses also have their own leadership programmes. Aditya Birla Group Leadership Programs, started in 1996, have verticals such as HR, finance and engineering, where graduates from these specializations (with or without experience) are hired and then posted across the group and rotated from one company to another.

Rival Reliance Industries (RIL) established a Reliance Accelerated Leadership Program (RALP), a two-year leadership programme for experienced professionals between 27 and 35 years of age. Between 2011 and 2016, RIL had a Career Acceleration Program (CAP), which was aimed at helping employees move up in the business.

Bhasin, however, highlighted the “unique challenge" of the Tata Group, where unlike other business houses, the programme is spread keeping many businesses in mind. “The Tata Group companies and TAS have a unique challenge because the group is so diverse. Thus, while leadership programmes of firms like Hindustan Unilever can focus on different segments within the one main business, that’s not the case with TAS and the Tata Group," said Bhasin.

Need of the hour

Leadership programmes are often a retention measure to keep high-potential performers from changing loyalties. These programmes have trainers who are both CXOs from different group firms and consultants akin to guest faculty in colleges.

The CXO of the older Tata Group company, cited earlier, interacts with selected TAS candidates. “The mandatory work in rural areas and projects with Tata Trusts makes them (TAS candidates) very capable. However, there needs to be more interaction with the group firms," he said, noting this is a key area in which the programme lacks. “TAS needs more cross-pollination and more emphasis on how to bring the next lot of CEOs from TAS. There was a time when executive assistants (EAs) to CEOs were all from TAS. Now, some want more operational roles," he added.

Attrition is another trend among TAS graduates—instead of becoming a Tata employee for a long time, they want to use the TAS brand to propel their careers outside the conglomerate.

These concerns come at a time when the group needs a stronger leadership cadre, one armed with the skills of the future, ready to take on global roles. “If you take people from outside and do not focus on their development, on their growth, and on meeting their career aspirations, it can have adverse effects that might show up later. So, TAS needs more attention. And development," concluded Wakhlu.