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From the editor

T
he weather in Mumbai has been damp for months now; equally
dampening has been the volatility in the stock market, the rise in
inflation and the free fall of the rupee. In the chaos that characterises
the Indian marketplace, how do companies manage to stay strong? We
looked at one enterprise that has been resilient for 110 years now, Taj Hotels,
the Tata group’s oldest surviving brand, one that dates back to 1903.
Managing director Raymond Bickson and the team at Indian Hotels
tell us that keeping a brand resurgent and sustainable through the myriad
ups and downs of the business cycle involves some simple but solid
rules: keeping customers delighted, keeping the organisation nimble and
contemporary, keeping your people engaged and happy.
The Indian Hotels cover story is about growth in terms of footprint and
market penetration. It details how the hospitality pioneer’s small business
units are tackling operational efficiencies and how they have invested in
sustainability measures whose impact goes way beyond the corporate
ecosystem and deep into the community. Many lessons there on how to keep
a brand alive and vibrant while markets heave and hustle, change and evolve.
The community is the protagonist in our special report on the skills
development programme undertaken by the Tata group. This is an effort in
which several Tata companies have invested time and resources. The big
idea is to develop India’s young talent pool to meet the growing demand
for key skills in the organised sector. This is a win-win scenario for the
community and the corporate world.
Another touching community-focused endeavour is the Uttarakhand
narrative, which explains how the Tata group rallied around the call for
help when that state reeled under the onslaught of heavy rains, floods
and landslides. The Tata Council for Community Initiatives, the Tata Relief
Committee, Sir Ratan Tata Trust and individual Tata companies have not only
provided immediate help and medical aid, but have crafted a long-term plan
for rehabilitation and revival.
These aside, there is plenty else on offer in this issue — business
stories on Tata Communications, Tata Consultancy Services, Titan Company
and Tata Power Solar; an in-depth interview with Veermani Shankar,
managing director of Rallis; and the usual thought-provoking pieces on
strategy, intellectual property rights and the economy.
So, for a while, take your eyes off the meandering of the Sensex and
the rupee-dollar tango and look inside this issue.

Warm regards,

Christabelle Norohna
Contents VOL 51 | Issue 3 October 2013

Cover story

6 A century of
service, style
and substance
The story of how Indian
Hotels has kept the Taj
brand strong, viable and
sustainable in the face of
myriad challenges
— Cynthia Rodrigues, Gayatri
Kamath and Sujata Agrawal

36 Titan Company: 42 Tata Interactive


passion for precision Systems: where
— Vibha Rao defence is the key
— Sangeeta Menon
39 Tata Consultancy
Services: Click here 44 Tata Power Solar:
for efficiency A new dawn under
— Gayatri Kamath the sun
— Vibha Rao

Special report
In conversation The case for skill care gets a boost
A group-wide skills-building initiative is taking shape at the Tata group to
28 living out the make a larger national impact. A detailed report on the efforts of the eight
studied life: Tata companies involved in the project.
V Shankar speaks to — Sangeeta Menon
Nithin Rao
47 Overview of the skills building agenda

Business stories 51 Interview with S Ramadorai

33 Tata Communications: 53 Interview with Dr Mukund Rajan


in through the
digital door 55 Highlights of the skills-building initiatives of some Tata companies
— Nithin Rao
Editor
Christabelle Noronha
Email: chris@tata.com

Assistant editor
Sujata Agrawal

Editorial team
Anjali Mathur
Cynthia Rodrigues
Gayatri Kamath
Jai Madan
Philip Chacko

Photofeature Sangeeta Menon


Shilpa Sachdev
Shubha Madhukar
63 Titan company: creative high
— Vibha Rao
Contributors
Kiron Kasbekar
Nithin Rao
Community Vibha Rao
Marketing
80 Tata Relief Committee: Design
68 Tanishq: The glam
the tragedy and after Abraham K John
quotient Shilpa Naresh
— Cynthia Rodrigues
— Vibha Rao

Production
85 Sir Dorabji Tata Trust:
Mukund Moghe
trained to tackle life
— Jai Madan
Edited and created by

Strategy in association with


The Information Company
88 Tata Strategic Email: grouppublications@tata.com
Management Group: Website: www.tata.com
Making each CSR rupee
count contact
— K Raman and Manjula Sriram Tata Sons
Bombay House

Perspective 24, Homi Mody Street

Case study Mumbai 400 001


Phone: 91-22-6665 8282
71 F1 at the speed of light
— Srinivasa Addepalli 92 Tata Management
disclaimer
Training Centre:
All matter in Tata Review is
74 Getting India A winning strategy copyrighted. Material published
IPR ready — Rahul More in it can be reproduced with
— Subramaniam Vutha permission. To know more,
Book review please email the editor.
77 Can India avoid the
middle-income trap? 96 breakthrough story
— Govind Sankaranarayanan — Kiron Kasbekar
COVER STORY

A century of service,
style and substance
Indian Hotels opened its hospitable doors to the public 110 years ago.
Today its four brands — Taj Hotels Resorts and Palaces, Vivanta by Taj,
The Gateway and Ginger — are market leaders in India and are exploring
new frontiers in business and beyond. Cynthia Rodrigues, Gayatri
Kamath and Sujata Agrawal report on a leader and its evolution.

6 Tata Review n October 2013


COVER STORY

W
hen the Taj Falaknuma Palace
The Taj’s long and successful
in Hyderabad opened its doors
two years ago, it marked several run is thanks to its people, the
milestones. It underlined the evolution of the company, and
success of the coup that the Taj brand has staged the focus on providing quality.
when it acquired permission to adapt the Nizam Raymond Bickson, managing director, Indian Hotels
of Hyderabad’s residence as a hotel. It was the
culmination of a 10-year restoration effort that
today allows guests to experience the Nizam’s company has cast its acquisition net overseas,
love for luxurious living. And it was a gleaming picking up well-known properties like the Blue
new jewel in the crown of grand palaces that in Sydney and The Pierre in New York. Included
form the essence of the Taj brand. in this portfolio are the Taj properties in the
 The Taj Falaknuma Palace is one of the 122 United States, Britain, South Africa and the
hotels managed by Indian Hotels (IHCL), which Middle East, and the exotic resort destinations
was set up 110 years ago with the Taj Mahal of the Maldives and Langkawi, Malaysia.
Palace in Mumbai, a much-treasured heritage The assembly line of new hotels is now
structure that occupied the Mumbai skyline hitting top gear. IHCL has plans to open more
years before its famous sea-facing neighbour, the than 30 new properties in the next three to four
Gateway of India.  years. What’s driving this growth frenzy? Simply
IHCL is the Tata group’s oldest business, the put, it’s seemingly insatiable demand.
only surviving organisation set up by Founder India represents a huge growth opportunity
Jamsetji Tata himself. And the company’s biggest for the hospitality industry. The country’s
and oldest brand — the Taj — is stronger and inventory of 250,000 rooms is miniscule
more vibrant than ever. Along the way, IHCL compared with China’s 3 million and the 5
has grown into Asia’s largest hospitality business, million of United States. Also, there is the need to
with an international footprint that spans cater to travelling Indians, whose numbers have
Europe and America, Africa, the Middle East shot up from 4 million in 2003 to 15 million in
and Australia. 2012, and are expected to touch 50 million by
The company’s long-serving managing 2022. Those 50 million represent the pot of gold at
director, Raymond Bickson, says that the Taj the end of the hospitality rainbow. But, as always,
brand’s long and successful run is thanks to its the gilded rainbow is accompanied by clouds,
people, the evolution of the mother company as dark and otherwise, of all kinds.
a contemporary organisation, and the focus on
providing quality at all customer touch points. market door swings open
IHCL has evolved in many ways over recent For years the Indian domestic hotel sector
years, mostly in sync with the Indian economy had grown in isolation, with a handful of
and the needs of the modern-day traveller. Since hospitality chains — the Taj, Oberoi, Leela,
the 1970s, when the iconic Taj Mahal Palace in Ashok, Ambassador among them — laying
Mumbai was its only property, the company has claim to the organised market. When the
added more than a hundred hotels to the chain, doors of this market swung wide open, India
with half of these coming up in the last decade became a favoured destination for as many as 47
alone. Mr Bickson has a remarkable statistic international brands, ranging from the luxury
to share: “Over the last 10 years we have been Four Seasons to the budget Super 8.
launching new hotels at an average of one every The intense competition in the marketplace
eight weeks.” has led to IHCL evolving what Mr Bickson
Apart from dominating the domestic calls “a two-pronged strategy”. The company’s
landscape, IHCL has established its presence in most significant move was the creation of a new
select international locations. In recent years the brand architecture, where the single Taj brand

October 2013 n Tata Review 7


COVER STORY

and to build up our international presence


Gateway and Ginger ... do not significantly,” says Abhijit Mukherjee, executive
need the Taj endorsement; they director, hotel operations.
have the strength to stand alone. The coming months will see a slew of new
launches by the company. At least nine Vivantas,
Deepa Misra Harris, senior VP (sales and marketing),
Indian Hotels eight Gateways and one Taj hotel are slated to
throw open their doors in India. Vivanta by Taj
is especially worth watching here. “We have
was supplemented by new brands. In 2008, the an aggressive growth strategy,” says Veer Vijay
company started carving up its hotel portfolio Singh, the chief operating officer of the Vivanta
into four unique and distinct sub-brands that business unit. “The brand aims to have hotels
have clearly differentiated brand propositions across India and in international markets.”
across all price segments of the market. Gateway, too, has ambitious plans. “The
At the very top is the Taj Hotels Resorts and current emphasis for the Gateway brand is to
Palaces brand, a luxury offering that covers ultra grow in the domestic market, where the bulk of
premium hospitality experiences, ranging from opportunities exists in the newer micro-markets
heritage palaces to exotic safaris. Straddling the of metro cities and tier-II towns, and new
four- and five-star categories is the premium or leisure destinations dominated by unbranded
‘upper-upscale’ Vivanta by Taj. The three-star competition,” says the business unit’s chief
business traveller looking for quality comfort is operating officer, Prabhat Verma.
the target of the Gateway brand and the budget But the biggest growth will be in the Ginger
sector is occupied by the Ginger chain of hotels, chain, which will outrace the others with 14
the one-star offering from IHCL subsidiary new launches expected in the next few years.
Roots Corporation. The reason is simple: not including cost of land,
“Taj had to stand out as the luxury brand,” it’s far cheaper to roll out Ginger hotels, and
explains Deepa Misra Harris, senior vice this is where IHCL hopes to add the maximum
president (sales and marketing). “Vivanta by Taj number of rooms in the near future.
is an offering in the premium segment and that’s PK Mohankumar, managing director and
why the name is an extension of the Taj brand. chief executive, Roots Corporation, is upbeat
Gateway and Ginger are not luxury brands and about Ginger’s prospects: “We plan to increase
they do not need the Taj endorsement; they have to 80 hotels and 8,000 rooms,” he says. “Apart
the strength to stand alone.” from metros and smaller cities, we are looking
at high-transient destinations such as Goa, hill
increasing share of wallet stations and pilgrimage destinations.”
The move was crucial, as Mr Bickson explains, Clearly, a large part of IHCL’s domestic
to increase ‘share of wallet’. As a result of the dominance plan will be carried out by the
brand restructuring, Vivanta by Taj today has the Ginger and Gateway brands. Yet internationally
highest number of hotels under its banner. The it is the high-end Taj brand that is taking the big
next most widespread brand is Ginger, followed strides. “The expansion blueprint is to be present
by Gateway and the luxury Taj brand. The missing in key gateway cities of the world — such as
piece in the map is the two-star space, a segment Singapore, Melbourne, Shanghai, Paris, Rome,
IHCL is exploring. Madrid and London — occupy the Indian
The new architecture enables IHCL to Ocean rim and be present in leisure destinations
be more nimble and to maintain its market like Mauritius, Seychelles and the Caribbean,”
leadership position with each sub-brand says Yannick Poupon, chief operating officer,
mapping its growth plan. And that’s what is international operations, Taj Luxury Hotels.
happening on the ground. “We intend to remain The action is likely to be just as frenetic on
the dominant player in the domestic market, the domestic front. Many international chains

8 Tata Review n October 2013


COVER STORY

Indian Hotels in numbers


Taj Hotels Resorts and Palaces (luxury) Vivanta by Taj (upscale)

l No of hotels: 23 l No of hotels: 40
l No of rooms: 2,933 l No of rooms: 5,450
l Upcoming hotels in l Upcoming hotels in
the next two years: 1 the next two years: 9
l Average cost to set l Average cost to set
up a new room: up a new room
`10 million `8.5 million

the Gateway (mid-scale) Ginger (economy)


Ginger (economy

l No of hotels: 29 l No of hotels: 28
l No of rooms: 2,200 l No of rooms: 2,633
l Upcoming hotels in l Upcoming hotels in
the next two years: 8 the next two years: 14
l Average cost to set l Average cost to set
up a new room up a new room
`5 million `2 million

coming to India are focusing on the business with American Express in a loyalty programme.
traveller and setting up hotels in clusters such Similar loyalty tie-ups are in place with some 20
as the Bandra Kurla complex in Mumbai, airlines and one of the world’s leading cruise lines,
Noida in Delhi and similar areas in Hyderabad, Silversea Cruises. The company is also partnering
Bengaluru, Chennai and Pune. IHCL is looking other hotel chains in regions where it does not
at across-the-board growth; in Bengaluru and have a presence, such as the Okura Hotel in Japan
Delhi, for example, it has Taj, Vivanta, Gateway and the Victoria Jungfrau in Switzerland. Besides,
and Ginger hotels straddling all the price points. IHCL has beefed up its own loyalty programme,
the Taj Inner Circle, which pulls in 12 percent of
expanding with caution the company’s revenues.
The expansion spree is being orchestrated with Although growing its visibility and
a high degree of caution, though. IHCL has footprint has been a big factor in the evolution
burned fingers with high-value properties and of the company, IHCL has focused its business
is now consciously following a policy of asset- lens internally, with the emphasis on delivering
light growth. Instead of outright purchases, a hospitality product that stands out in a
it is increasingly looking at leased properties, crowded market. One of the key marketing
joint ventures and management contracts, pillars has been the creation of high-grade,
domestically as well as internationally. Six of clearly differentiated guest experiences.“The
the company’s seven new properties slated to Taj’s biggest trump cards have been its suite of
open in India this year will be operated through heritage palaces, such as the Taj Lake Palace in
management contracts instead of the traditional Udaipur, Umaid Bhawan in Jodhpur, Rambagh
ownership or investment model. Palace in Jaipur and Falaknuma in Hyderabad,
Supporting the growth programme is a which offer guests a genuine maharaja-styled
series of new sales and marketing initiatives. stay,” says Jyoti Narang, chief operating officer,
IHCL is using the alliances-and-partnerships India operations, Taj Luxury Hotels and Taj
route to grow its brand visibility. It has tied up Safaris. “The group is fortunate to have 14

October 2013 n Tata Review 9


COVER STORY

authentic palaces, ranging from small to grand,


which add immensely to the mystique and aura
Excellence to the fore of the Taj brand.”
After working to recreate the grand palace
In the hotel business, excellence experiences for its guests, IHCL is now focusing
means getting it right the first time, on other customised hospitality offerings. “We’re
every time. Vida D’Souza, director looking at creating similar unique experiences
(business excellence), explains why around the smaller palaces and some of the
Indian Hotels defines excellence forts,” says Ms Harris. It has already launched its
through customer touch points: luxury nature-and-wildlife experiences under
“Typically, a customer interacts with one of our the Taj Safari brand. Another new offering is the
employees 41 times in any given day. Every act of Jiva Spa, a unique-to-Taj experience that attracts
delighting the customer helps to institutionalise guests in search of wellness holidays.
the philosophy of excellence in the company. Our Hospitality is a people business and the
employees are brand ambassadors for the Taj.” Taj’s standard of service is so high that it has
No wonder then that IHCL has the best employee become the subject of several management case
engagement scores in the industry globally. studies. As Mr Bickson explains, technology can
IHCL’s commitment to excellence has been be used to improve efficiency and service, but in
proven by the company winning the JRD QV award the end it’s the personal touch that matters: “The
for 2012. The award recognises Tata companies relationship that our front-line staff forges with
that achieve high scores in the Tata quality our guests — be it first-timers who walk into the
framework called the Tata Business Excellence portals of the Taj or our longstanding customers
Model (TBEM). In 1995, when the quality movement — it is this genuinely positive attitude towards
began in Tata, Indian Hotels became one of the service that stays on with our guests, bringing
first Tata companies to join it. The quality exercise them back to the Taj, their home, time after time.”
was first undertaken individually by five hotels.
In 1996, the Taj Residency in Bengaluru (now 41 is the interactions count
rebranded as Vivanta by Taj) scored 411 points, A Taj internal study shows that on an average,
the highest score by any Tata company in its first a guest interacts with a member of the staff 41
attempt. The score highlighted the Taj’s processes times a day, starting with the wake-up call in
and brought to the fore one of its central tenets: the morning to the housekeeping, the front
the guest as the focus of all endeavours. In the office, room service and restaurant staff, to
years that followed, the individual small business the doorman in the lobby. “All these touch
units (SBUs) of IHCL (luxury, leisure and business) points and moments define your brand to that
started applying for the JRD QV assessment. customer,” says Mr Bickson. “This is the focus
“Business excellence became the of what we are all about. Each brand, in its own
responsibility of our general managers since the way, has to deliver that consistent service and
metrics, including employee satisfaction, revenues, message to the guest.” The company intensively
process efficiency and costs, are all data-driven,” tracks guest satisfaction scores and conducts
says Ms D’Souza. Since the guest is the focus external audits through mystery guests to ensure
of the business, the company sought customer that these standards are not diluted.
feedback as a means of learning. Needless to say, people training and
IHCL has now set the bar higher. Its next goal, engagement activities are a big investment for
project 700, is an attempt to be the industry leader. IHCL. Mr Mukherjee says that the organisation
Through its business excellence initiative, IHCL has one of the best reputations in the market
aims to be the hospitality partner of choice on the from the human resources perspective. He says,
global stage. ¨ “The industry typically has high attrition rates
(about 30 percent) but at IHCL it’s 18 percent.

10 Tata Review n October 2013


COVER STORY

The iconic Taj Mahal Palace in Mumbai remains the biggest revenue earner for Indian Hotels

We have been voted ‘best workplace’ by a Gallup for wastage. “We have to tread a fine line to
study for four consecutive years. We extend eliminate wastage without degrading the quality
several initiatives and programmes to ensure of our service and guest deliverables,” says
that our people are looked after.” Mr Mukherjee. “We talk to our staff and listen
IHCL has about 25,000 employees for its to their suggestions because they know best.”
14,000 rooms, but the number of people needed The company has also adopted internal
to service one room is obviously much higher programmes that drive business excellence,
at its luxury hotels than at a Ginger property. community development, environment
The reality of the hotel industry is that personal conservation, employee safety and health,
service delivery becomes critical in the luxury etc. Luxury with a purpose is now a central
segment and it is this segment that brings in the theme for IHCL, which explains why the Taj
serious money. brand, has been working to preserve many of
“Our biggest earner is still the flagship Taj India’s heritage structures. The company also
Mahal Palace in Mumbai,” says Mr Mukherjee. champions the cause of arts and artisans in each
In fact, the ‘big four’ — the Taj Mahal Palace of its locations to create a sustainable platform
and the Taj Land’s End in Mumbai, and the Taj for inclusive development.
Mansingh and Taj Palace in New Delhi — bring IHCL has set its targets clearly. In the
in the lion’s share of the company’s revenues. near term the company, having crossed the $1
That said, Vivanta by Taj, Gateway and Ginger billion mark in revenues in 2007, wants to touch
are faster-growing brands. $2 billion by 2017, with 25,000 rooms and 25
IHCL’s increasing footprint has led to a destinations. To do this it will have to become
healthy top line. For the past five years, the more agile and nimble, and be able to adapt
company has been focusing on improving its quickly to changes in a volatile market.
bottom line through energy efficiency initiatives. “When the market turns positive, we have
Mr Mukherjee explains that the drive is “not to be able to quickly make up for those lost
about cost cutting but reducing wastage”. revenues by looking at other ways of making our
Across the chain, hotels are bringing offering attractive to the guest,” says Mr Bickson.
down energy bills by turning off the lights in “Ultimately it is the loyalty of our guests that will
empty rooms and generally being conscious provide value to our brand, thus driving us into
of the need to minimise power consumption. the next century.” Therein lies the secret of an
High-value consumables such as imported food enduring brand — the single-minded focus on
items, butter and cheese are being scrutinised delivering quality service to the customer. ¨

October 2013 n Tata Review 11


COVER STORY

‘The loyalty of our guests


will drive and sustain us’
Raymond Bickson has been Indian Hotels is looking to grow
significantly over the next few years.
the managing director of What factors are driving this growth?
Indian Hotels for close to a Our goal is that our brands must be in the top
three in the markets where we are present. We
decade. In this interview with have a two-pronged approach to our growth
Sujata Agrawal and Cynthia strategy. The first is maintaining our domestic
leadership while addressing the challenges of the
Rodrigues, the consummate international competition coming into India.
hotelier speaks about his plans The second is taking the Taj brand to newer
markets outside India.
to make the Taj a bigger global We have been proactive on the domestic
brand, and his satisfaction in front. We restructured the brand architecture,
launching Vivanta by Taj and the Gateway
heading an organisation where brands. Since the launch of Ginger in 2003, we
have opened one hotel every eight weeks.
employees feel a sense of
In the last few years the Indian market has
pride and ownership. seen the entry of 47 international brands. To

12 Tata Review n October 2013


COVER STORY

compete with them we have looked at expansion There has been a lot of work done on
outside India in the key source markets of restructuring the Taj brand. How has
business. Another factor is that the number the brand architecture evolved?
of Indians travelling abroad has gone from 4 The Taj had grown organically for years. We
million in 2003 to 15 million in 2012, and is had a wide range of products, with a huge
expected to grow to 50 million by 2022. It is, discrepancy in the quality levels. From a mid-
therefore, important to unfurl the Taj flag in scale budget hotel to a palace, all were branded
markets abroad. as the mono brand Taj. With the new brand
In America we would like to be in Los architecture, we now have four brands: Taj
Angeles and, in Europe, in Paris. We also aim Hotels Resorts and Palaces (luxury); Vivanta by
to be present in Singapore and Thailand. In Taj Hotels and Resorts (upscale); The Gateway
terms of emerging markets, sub-Saharan Africa Hotels and Resorts (mid-scale) and Ginger
is crucial; we are looking at taking Vivanta by Hotels (economy).
Taj to at least 10-12 countries in Africa. We are This allows us to segment the market into
also interested in Myanmar; it has been a closed different product, service and price points. It
market for many years and is now generating also lets us add hotels in new segments and at
interest among travellers. different price points. So the rebranding strategy
will help us maintain market share and build
What is your expansion strategy? lifetime guests. It also puts us on an even playing
I think it will be a combination of acquiring field with the international brands that have
properties and executing management contracts. entered India.
We would like to be asset light and grow through We use various benchmarks to measure
management contracts. We want to focus brand perception and Vivanta by Taj, Gateway
our actual investments in a few markets, like and Ginger have been well accepted as brands in
Singapore. In China and similar destinations, we a short period of time.
would really like to grow asset light.
What is the common factor with the
What challenges does the Taj face in four brands?
the domestic market? The basis of welcoming someone is always the
Today India has 250,000 rooms. Compare that same; it doesn’t alter because your price point
to the 3 million rooms available in China and is different. So the ‘Taj warmth of hospitality’
the 5 million that the United States can boast — what we refer to as ‘Taj-ness’ — is always
of. While we plan to open more hotels, the the focus. Hospitality is primarily a people
industry is subject to the cyclical nature of the business; the customer intimacy that you build
business. The important aspect is our readiness is extremely important. You can use technology
to move with agility to reclaim lost ground, for efficiency and better service, but at the end of
in terms of increasing revenues, while at the the day what matters is the one-to-one personal
same time making the necessary changes to our touch and the relationships you are able to build
operations to serve guest categories that are with your guests.
dissimilar and dynamic.
Ultimately, the lifetime of our guest is the Could you tell us about some of the
most critical factor in our existence. The loyalty factors that negatively impact the
of that guest will drive the brand and sustain hospitality business?
us into the next century. We are a century- India is still one of the most exciting destinations
old hospitality brand in India and our service in the world and people want to visit it. I believe
is known for its Asian spirit of warmth and that the government and the tourism ministry
hospitality, which flows through and is very should work more closely with the private sector
much a part of the DNA of the Taj. to increase ‘ease on arrival’ and make India

October 2013 n Tata Review 13


COVER STORY

bar as far as hospitality is concerned. Now our


products are globally competitive and the service
and hospitality that we are able to provide in
India makes the destination very competitive
and attractive. It shows the world that India is
a market to be reckoned with and that Indian
players can compete on a global scale.
What’s changing is the use of technology.
Modern-day travellers need to be connected
24x7. We need to seamlessly incorporate
technology into the guest experience without
making it intimidating for the guest.

Has the luxury segment also


changed? What are trends here?
In this segment we need to enhance the scale
of luxury. In earlier days people stayed at hotels
to experience a lifestyle they probably did not
In earlier days people stayed at hotels to have at home. But guests now have access to
high-quality products in their homes, so we
experience a lifestyle they probably did have to keep raising the bar. Also, guests travel
not have at home. But guests now have to key cities around the world, so they are more
discerning, and they look for the same level of
access to high-quality products in their luxury everywhere.
homes, so we have to keep raising the bar. The things that have changed are room
sizes and the expenditure on bathrooms.
Luxury-room sizes in a metro city destination
accessible to more people. They also need to have become bigger than they were 10-20 years
work more on tax transparency. And there needs ago and resort destinations are probably double
to be a stronger connect between the centre that size, because guests stay longer at those
and states to boost travel and tourism. The destinations. These changes are reflected in the
government looking at the hospitality industry Taj hotels, too.
as an easy target for taxation is really putting us
at a disadvantage when compared with other What value does the portfolio of
destinations in this region. palaces add to the Taj brand?
We are engaging with the Ministry of The palaces are the essence of the Taj spirit and
Tourism through our World Travel and Tourism brand. The Taj has 14 authentic palaces, small
Council India Initiative, the Hotel Association of and large. They add to the mystique and the aura
India and the Confederation of Indian Industry of the brand. Our flagship hotel, the Taj Mahal
on these issues to ensure that the promise of Palace in Mumbai, is the symbol of what palaces
‘Incredible India’ is fulfilled. represent. India is a land of palaces and forts and
there is scope to add more to our portfolio.
How has the hospitality industry
changed in the last 10 years? You offer a suite at 51 Buckingham
Earlier we were mainly a market dominated by Gate that is designed by Jaguar...
domestic players. International players have That was an interesting project. The Tata group
opened up the market and made us aware of has two luxury brands: Taj and Jaguar. With the
our shortcomings. They have helped raise the success of the first Jaguar suite, we hope to offer

14 Tata Review n October 2013


COVER STORY

Set in the heart of Thimpu in Bhutan, the Taj Tashi is an example of the brand’s unique appeal

it in different destinations and to offer packages presence; global means the integration of
where the guest can stay at a Taj hotel and drive different cultures into an organisation. It is
a Jaguar or a Land Rover. We also have tie- the cross-pollination of cultures that makes
ups with lifestyle luxury brands such as Louis a company or a brand global; the ability to
Vuitton and Hermes. understand and appreciate a different culture
that guests are looking for, whether it’s taste in
Is it a challenge to find the right food, service or aesthetic appeal.
people to run a hotel? These are things we have to deliver in our
Finding the right people with the right attitude different markets. So, whatever market we are
is the most important part of being in the in, our Taj-ness will be reflected in our food, in
hospitality industry. The attitude of the person interiors, texture, artwork and in our service. All
that you hire can aid in enhancing the guest of that put together makes our Taj brand stand
experience. We can train people to be waiters or out anywhere in the world.
chefs, but we can’t train them to be nice.
If we want to maintain the culture and What has sustained Taj over the 110
spirit of the Taj, we need people who have this years of its existence?
genuine passion to ‘serve’ guests. The Taj-ness The Taj brand is the most visible brand of the
comes from our people. Our business does not Tata group; it is an Indian brand with a culture
close at 5:30pm; we have been open 24x7, 365 of service that is as good as or better than many
days a year, since 1903 and that will never stop. other hospitality companies. It is this pride that
The ethos of Taj-ness is built in through our has sustained it throughout its existence.
training programmes. We have a training model The success of the brand lies in the fact
that includes hotel orientation and a module we that it has been able to adapt, over time, to the
call ‘building bridges’, which talks about the Tata different needs of travellers. What will never
and Taj heritage: where we come from and why change is our relationship with our guest. That
we do things the way we do them. culture of serving our guests will sustain the
Being global does not mean just a physical brand for the next 100 years. ¨

October 2013 n Tata Review 15


COVER STORY

The Taj ... and more


About five years ago, the Indian Hotels (IHCL) decided to recast
its brand architecture and reorganise its portfolio of properties.
Where there was a single name — the Taj — there now are three
distinct brands, the Taj Hotels Resorts and Palaces, Vivanta by
Taj and The Gateway. Then there is Ginger, the budget hotel
chain launched by the company’s subsidiary, Roots Corporation
in 2004. Together these four brands now cover almost the entire
price spectrum in the market, making IHCL the biggest hospitality
enterprise in India, and in Asia.

16 Tata Review n October 2013


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Taj Luxury Hotels — India

T
he grandest brand in the Indian Hotels
(IHCL) showcase is Taj Hotels Resorts
The Taj signature experiences are
and Palaces, which offers high-grade crafted in such a manner that our
luxury experiences built on the promise guests get a holistic sense of the
of heritage and authenticity. “The portfolio has place and its history.
a mix of hotels that range from palaces to jungle
Jyoti Narang, COO, India operations
lodges to city hotels,” says Jyoti Narang, chief
operating officer, India operations, for Taj Luxury
Hotels and Taj Safaris. Taj Hotels has been each of its properties. “We consider ourselves to
divided into five big clusters. The most valuable be the custodians of this heritage,” says Deepa
is the cluster of grand palaces and iconic hotels: Misra Harris, senior vice president (sales and
the Taj Lake Palace in Udaipur, Umaid Bhawan marketing). IHCL invests both money and time
in Jodhpur, Rambagh Palace in Jaipur, the Taj in the authentic restoration of the properties.
Falaknuma Palace in Hyderabad, the Taj Mahal The Nizam’s royal guesthouse in Hyderabad, for
Palace in Mumbai and The Pierre in New York. example, took 10 years to open its doors as the
Here IHCL plays the heritage card, Taj Palace Falaknuma.
emphasising the history and provenance of “The Taj signature experiences are crafted
in such a manner that our guests get a holistic
sense of the place and its history,” says
Ms Narang. Guests are picked up in horse
Family touch carriages or antique cars and offered champagne
on arrival. There are heritage walks, bespoke
It was a rainy day when Ada and
dining experiences, royal high teas served by
her husband checked into the Taj
butlers, signature treatments at the spas, etc.
Bengal along with another couple.
The second cluster comprises the Taj
Hailing from Italy, the two couples
Safaris, luxurious jungle lodges that leave an
were in Kolkata to adopt children
from the Mother Teresa Missionaries
of Charity. Ada and her husband
adopted a boy and the other couple
adopted a baby girl. After three
days of visiting their children at
the centre, the couple brought the
children back to the hotel. Guest
relations managers Samarpita Nandi
and Anmol Ahluwalia helped the
new parents by providing children’s
cots, toys and chocolates. They
spent time with the couples, helping
them bridge cultural and language
gaps. When leaving the couples had
tears in their eyes as they hugged
the managers and thanked them for
the support and the special service.
Umaid Bhawan (Jodhpur) is one of the Taj’s luxury properties

October 2013 n Tata Review 17


COVER STORY

ultra-light ecological footprint. Cluster three the Taj Coromandel in Chennai, the Taj Bengal
comprises the smaller palaces operated by in Kolkata, 51 Buckingham Gate in London
IHCL: the Usha Kiran Palace in Gwalior, the Jai and the Taj Campton Place in San Francisco.
Mahal Palace in Jaipur and the Nadesar Palace The fifth cluster is reserved for luxury resort
in Varanasi. According to Ms Harris, IHCL is in properties, which run under the brand
the process of designing a new guest experience extension Taj Exotica. IHCL having exited
platform built around these palaces. its contracts at Mauritius and Seychelles, the
The big city hotels come in the company’s Exotica footprint is limited to the properties in
fourth cluster. This comprises names such as Goa and the Maldives. ¨

Taj Luxury Hotels – International

T
he Taj brand has been overseas since the
1980s, when its first international hotel
came up at Yemen (no longer part of the
chain), followed by two hotels in Britain.
The United States is IHCL’s biggest source
market and also the region where it has the
biggest footprint, with three hotels: The Pierre in
New York, Taj Boston and Taj Campton Place in
San Francisco.
“The United States is an essential market
for luxury hospitality,” says Yannick Poupon,
chief operating officer, international operations,
Taj Luxury Hotels. “To continue our momentum
there, we will soon establish our presence in Los
Angeles, Hawaii, Chicago and Washington, and
in Mexico, too.”
The Taj’s international hotels blend the
essence of the brand with its inherent Indian
ethos of service and heritage, adding local
culture and ambience. Says Mr Poupon: “We
create a distinct Taj customer experience and
infuse what we term ‘Taj-ness’ in our product
and in the style of our service.”
The ethos gets translated as brand The stunning Taj Exotica in the Maldives
experiences in the international hotels. There is a
presidential suite or a Tata suite in all hotels and new developments will have an Indian-themed
‘maharajah suite’.
We create a distinct Taj customer Meanwhile, IHCL has tied up with Jaguar
experience and infuse what we to create suites in its hotels that are built around
the luxury car’s memorabilia. Each international
term ‘Taj-ness’ in our product and
hotel will have, where possible, a signature
in the style of our service. Indian restaurant (such as the Bombay Brasserie
Yannick Poupon, COO, international operations brand). The luxury spa experience, branded as
Jiva Grande, will focus on the Indian wellness

18 Tata Review n October 2013


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offerings of Ayurveda and yoga. At the same


time, all the hotels try to support local art and
culture initiatives, an example being the recent Wardrobe malfunction
coming together of The Pierre and Parsons
The Kutsak bridal party was starting
College of Fashion (to showcase emerging
to assemble in the lobby of The
designers), and the Taj Cape Town’s tie up with
Pierre. It was almost time for the
Old Biscuit Mill, an old biscuit factory converted
wedding service, and one member
into a hub for art, craft and fashion.
of the party was a little anxious
Then there is the emphasis on local
because he had lost his pocket
environment norms. Most of the international
square. He asked Kevin, on duty at
hotels have EarthCheck silver certification. The
the lobby, if the hotel had an outlet
Taj Exotica in the Maldives runs a special coral
that sold accessories because there
regeneration programme, through which coral is
moved from areas of the lagoon (where they are was no time to go out and shop for
under threat) to new spaces where they can be it. Kevin, understanding the guest’s
monitored by the resident marine biologist. The predicament, headed quickly to the
programme helps preserve biodiversity while uniform room, where Katalin was
allowing guests to view the coral on snorkelling on duty. Katalin cut pocket squares
trips. The Taj has also set up its own water- from three different coloured fabrics
bottling plant (glass bottles), thus reducing the and pressed them so that, no matter
load from plastic bottles. which one the guest chose, it would
IHCL is pushing for changes in its internal be ready right away. The guest,
operations just as much as it’s driving growth. costume now complete, was very
The focus is on streamlining costs and reducing appreciative and so were the other
consumption. Payroll cost, for example, which is members of the wedding party.
the most significant in international operations,
is tightly controlled. “We operate with a room-
to-staff ratio of 1.42, which is considered efficient energy savings. The Taj Exotica in the Maldives
for the luxury category,” says Mr Poupon. has installed a unique hot water system that
The hotels track and reduce fuel uses three DG sets (diesel generator cooking
consumption year on year. For example, LED paths) that assist in heat recovery and reduce the
light retrofits have helped bring in substantial consumption of diesel. ¨

Vivanta by Taj

W
ith a brand name that is a takeoff on which included visual, verbal, application and
‘bon vivant’, it is to be expected that behavioural codes,” says Veer Vijay Singh, chief
Vivanta by Taj is the cool luxury operating officer of the Vivanta business unit. “In
brand. Vivanta differentiates itself a cluttered and segmented market, Vivanta offers
through its ‘sensorial’ model, that is, making sure a compelling and defined proposition.”
the guest experiences the hotel in a totally new “The brand follows a new design
way, right from the architecture of the property to and service philosophy; very edgy, very
the aromas used in the public spaces, the music contemporary,” says Deepa Misra Harris, senior
to the menu design and other offerings. VP (sales and marketing), Indian Hotels. Each
“The brand was introduced in 2010 with Vivanta property has a motif that is customised
a unique promise, persona and philosophy, for the site. At Coral Reef, Maldives, guests

October 2013 n Tata Review 19


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A healing touch for body and soul in Kerala’s backwaters


As Akho’s hands work their massaging magic on detox or de-stress packages. These holistic
tired muscles, the aroma of ayurveda oils infuse health holidays are also getting a lot of traction
the air and soothe the mind. The Vivanta by with our domestic guests.”
Taj’s Bekal resort is one of the latest spa-centric The spa is run by manager and ayurveda
resorts that the Taj brand is promoting. Located doctor Hemanth Kumar, who makes sure that the
about an hour from Mangalore airport, it sits Bekal spa experience delivers the best of health
serenely in a spot where the slow backwaters and wellness for every guest who checks in. The
of the Kappil River merge with the white foamy ayurveda oils are local, and others are imported
swirls of the Arabian Sea. from Australia; the facial products come from
The spa is the ninth Taj property in Kerala Britain; the pottery products are sourced from
and covers 27 acres of green lawns, gently Pondicherry; and the hand-combed, organic
swaying coconut palms, plenty of water bodies dyed linen is Indian. “Most of our therapists
and low-slung white buildings with touches belong to India’s Northeastern states; they have
of palm-frond décor that evoke the traditional a natural knack for it and are really good at their
Kerala houseboats. The backwaters of the job,” says Dr Kumar.
Kappil meander through gardens dotted with Guests who want the complete health
Indonesian statuary. A small bridge that spans package eat in a separate dining room where
the water takes guests to the Jiva Spa, located special health meals are served. For others,
across the river. the hotel offers a culinary experience steeped
At Taj Bekal, the 16,000 sq ft Jiva Spa is the in the food heritage of the region. Assistant
centre of the hospitality experience. “Wellness restaurant manager Saurabh Rana tempts guests
holidays are increasingly popular,” says Samir to experience a saadya meal, a typically lavish
Khanna, general manager of the hotel. “We are spread of Kerala food served on a green plantain
getting a lot of interest from international markets, leaf. With 30-40 different items to sample, starting
with guests coming to experience our relaxation, with local pickles and jaggery-infused ginger
slices to coconut-based vegetable curries, fried
fish and chicken sukka, the saadya meal is a
gourmet experience.
Guests can work off the excess by kayaking
in the Kappil River or playing beach volleyball in
the warm sands. The resort offers every facility for
a complete holiday; swimming pools and fitness
centre aside, guests can opt for day excursions
to Kerala’s famous backwater houseboats, trek
through organic farms, walk around the Bekal
Fort, or even accompany chef Ashok Pillai early in
the morning to buy fresh fish.
Bekal’s amazing location — right on the
beachfront — is due to the Kerala government’s
desire to promote tourism at selected beaches.
With its unique hospitality experience — which is
a fusion of contemporary and tradition — the Taj
Bekal showcases how Indian Hotels has evolved
as an enduring, sustaining brand even while
Wellness is the focus at the Taj Bekal resort staying true to its luxury lineage. ¨

20 Tata Review n October 2013


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can go big game fishing or feed the smaller In a cluttered and segmented
fish; there’s a shipwreck for divers to explore,
market, Vivanta by Taj offers
an uninhabited island to visit, or a trip in a
submarine to look at the coral close up. At the a compelling and defined
Vivanta in Coorg, the motif is built around the proposition.
180 acres of rainforest that surround the hotel. Veer Vijay Singh, COO, Vivanta business unit
At Kumarakom in Kerala, along with the local
cuisine, guests can watch women from the
community light a thousand lamps every night. is down and our hotels are using wind, solar
At the back end, the function is working and even geothermal energy as sources. People
to reduce operation costs by monitoring costs are being kept in line by having more
consumption of fuel and materials. “We are non-managers reporting to managers.” Vivanta
looking at alternative sourcing for high- already has an international presence, with
consumption items without compromising hotels in Maldives and Sri Lanka, and it now has
on quality,” says Mr Singh. “Electricity usage Africa in its sights. ¨

The Gateway

T
he Gateway business unit performs digital campaigns, and we use newer activation
a vital role for IHCL by stretching its opportunities with partners from airlines and
reach to price points that would not be travel companies,” says Mr Verma. “These
possible for a luxury brand. By doing result in generating immediate demand and
this it helps maintain the company’s asset-light share-shifts from the competition.”
strategy while expanding into key markets of The Gateway brand is already present in
India’s metros and smaller cities. “This is the South Asia through the Airport Garden Hotel
segment where growth opportunities currently in Colombo and IHCL has plans to increase the
exist and which will continue to fuel the brand’s international footprint. “The flexibility
domestic demand for branded hotel rooms,” says of the model makes it adaptable to any market
chief operating officer Prabhat Verma.
Mr Verma says that the Gateway brand has
been designed “keeping the modern nomad in
mind”. The service is crisp and hassle-free, the
quality is consistently high, and the welcome
as warm as the mother brand. The focus is on
creating sanctuaries that “refresh, refuel and
renew the modern-day traveller”. For example,
guests have the option of ‘active food’ menus and
in-room yoga.
Gateway uses a mix of short- and long-
term brand-building initiatives. The long-term,
or strategic, brand-building efforts cover mass
communications, brand activation and events,
social media, etc. The short-term initiatives
are aimed at improving occupancies in the
lean season. “We do high-visibility media
campaigns, search engine marketing and Gateway hotels are for the modern-day nomad

October 2013 n Tata Review 21


COVER STORY

This is the segment where growth


opportunities currently exist Peacocks on the lawn
and it will continue to fuel the
In the famous temple town of
domestic demand for hotel rooms.
Madurai, Gateway is known not just
Prabhat Verma, COO, Gateway business unit
for its quality and ambience, but
also the peacocks that parade on its
lawns. Guests often wake up to find
condition or consumer dynamic,” say Mr Verma.
them walking around outside their
Where Gateway is constantly innovating
is in streamlining operations and reducing rooms and some of the birds are so
its operation costs. For example, fruits and friendly that children can play with
vegetable constitute about 18 percent of total them. Another high point here is the
raw materials consumption. South Indian tiffin meal.
In all the new Gateway projects, the
kitchen layout has been redesigned to include
a central area where all raw vegetables are and cheese. In the buffets, especially, Gateway
received and prepared. The vegetables are sent has managed to cut wastage down from 20
to all the outlets as required. This allows better percent of total to just 5 percent.
monitoring by the chef, reduces wastage of Gateway conducts regular energy audits
unconsumed vegetables and helps preserve at its hotels. CFL bulbs have been installed in
better hygiene in the food preparation areas. all public areas, gardens, corridors and guest
Another change is that the all-day dining rooms. There are light sensors in the public
kitchen and the banquet kitchen are placed area, and devices such as dimmers and timers
next to each other. The manpower and support help cut down power usage.
is shared and space required becomes much Flowers are another big expense and
less. Food, which is a big cost item, is closely Gateway has changed the style of its flower
monitored to reduce wastage. There is strict arrangements to use a mix of real and
control on usage and inventory of high-value artificial flowers. The rooms have live bamboo
items such as oil, butter, meat, seafood, cream arrangements that remain fresh for months. ¨

Ginger

T
he Ginger brand is built around the
promise of ‘smart basics’, a design and
technology-led hospitality concept
that offers travellers all the important
facilities at affordable rates.
Ginger is India’s only branded budget chain
with a national footprint. Launched in 2004, it
has been steadily setting up new hotels, but of
late, the brand’s growth strategy has moved on to
the fast track.
Already 28-hotels strong, Roots
Corporation intends to increase its brand
Ginger is India’s only branded budget chain of hotels in India presence in metros, large cities and popular

22 Tata Review n October 2013


COVER STORY

holiday and pilgrimage spots. “The growth


Ginger is currently in the process
challenge is to identify family-run, unbranded
hotels in the micro market, which means of redesigning the product and its
cities, and on the high streets and in the new service offering with the help of
townships coming up in the country’s tier I international designers.
and tier II towns,” says the managing director PK Mohankumar, chief executive, Ginger
and chief executive of Roots Corporation, PK
Mohankumar. “Like our parent, IHCL, we
intend to increase our footprint through asset- the designated limit. “Ginger is all about the
light growth, with models like franchising, lean and mean structure and the smart way of
management contracts and ready shells.” managing business,” says Mr Mohankumar.
Since its inception, the brand has The company has outsourced several
continuously evolved in response to guest major back-end operations such as reservations,
feedback and market research studies. infotech support, revenue management, sales,
“Ginger is currently in the process of training and accounts payable.
redesigning the product and its service offering This is in addition to the restructuring
with the help of international designers,” says and revamping of outsourced services in
Mr Mohankumar. “We are looking at better housekeeping, engineering, food and beverages,
utilisation of space and a more modern and laundry and security. Mr Mohankumar explains,
fresh look, with cutting-edge design elements “This not only brings variability in costs but also
and technology that is cost effective and easy provides the platform for quick ramp up with
to execute.” new hotels.”
With a brand that advocates value for Brand Ginger is the first Indian hotel chain
money as its unique position statement, Roots to operate on a SAP platform for management
Corporation uses innovative initiatives to keep of human capital, travel and expenses,
the payroll, energy, and repairs and maintenance personnel administration and organisation
costs at each of its Ginger properties within management. It was primarily intended to bring
in optimal operational efficiencies and lower the
requirement of manpower.

Smart hospitality At Ginger, the procurement function plays


a significant role as roughly half of its hotel
The guests had made a mistake; operations are outsourced. The team has been
six single rooms had been booked able to negotiate great deals, resulting in major
instead of three double rooms. cost savings. Initiatives have also been taken to
The hotel was fully booked. Yet offer co-branded guest amenities to partially
something had to be done because offset material costs.
the group of guests consisted of Energy conservation is a big part of the
three senior citizens, one lady with cost-management programme. Ginger has had
an infant and another lady with two energy conservation agencies conduct pilot
six-year-old kids. Duty managers studies and the recommendations are deployed
Nitin and Praveen took the trouble in all its hotels. Energy costs are strictly
to convince some of the existing monitored and the hotels use solar panels,
residents to vacate their rooms and electric boilers and regular energy audits.
move into singles so that the families With a little tweaking, the Ginger brand
could stay together. All was well that could easily be taken overseas. An international
ended well for that large group of foray is on the cards for the future, but the focus
young and old. right now is to address the exploding demand in
the domestic market. ¨

October 2013 n Tata Review 23


COVER STORY

A net spread wide


The community, as much as the poor and marginalised, has
been the focus of Indian Hotels’ corporate social responsibility
programmes, which address an extensive variety of issues

T
he roots of Indian Hotels Company This was in keeping with the United Nations’
(IHCL), the oldest company in the Tata millennium development goals and IHCL’s
group, run deep. And these roots have own core competencies. “We were clear that
spread beyond business to touch the our efforts had to be measurable in terms of the
lives of people young and old, from different impact made on society,” says HN Shrinivas,
communities, cultures and backgrounds. senior vice president, human resources. “We had
IHCL’s corporate social responsibility to build bridges with the community.”
(CSR) agenda was formalised like never before One outcome of such thinking was the
in 2007, when the company decided on a theme Taj’s association with Pratham, a nonprofit,
— ‘building sustainable livelihoods’ — for all to launch a programme to build the skills
the initiatives that came under this umbrella. of unemployed youth. This was introduced

The Taj has introduced many vocational training courses that come under the hospitality canopy

24 Tata Review n October 2013


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in Khaultabad, a village on the outskirts of Our efforts had to be measurable


Aurangabad, Maharashtra, where Pratham had
in terms of the impact made on
a centre that trained local youth in vocational
skills. The Taj introduced courses in baking, society. We had to build bridges
restaurant services, housekeeping, etc. It set the with the community.
curriculum, trained the faculty and provided HN Shrinivas, senior vice president, human resources
infrastructure and on-the-job training.
The programme made a significant
difference to the lives of many village folks. “We Under the government’s integrated child
have absorbed 97 percent of the total number of development programme, midday meals were
students we have trained,” says Vasant Ayyappan, served to schoolchildren of the area. These meals
director, corporate sustainability. At the end were so insipid that the children would not eat
of the course, the students receive certification them and they ended up as fodder for cattle.
from the Taj under assessment criteria The government had allocated `5 per meal per
defined by the Institute of Hotel Management, child under the scheme. Mr Shrinivas says, “I
Aurangabad. In similar vein, the Taj has tied up went to our catering institute in Aurangabad
with 40 industrial training institutes, including and challenged some of our chefs and trainers to
an all-women centre in Channarayapatna, come up with nutritious meals for this amount.
outside Bengaluru. The biggest, in Lonavala, They did just that, with interesting recipes that
near Mumbai, has the potential to train up to used millets and maize, ingredients that were
4,000 youth in baking and cooking, besides inexpensive and readily available. And the dishes
salon treatments, spa therapy, restaurant services were delicious.”
and various hospitality-related trades. Additionally, people from the Taj trained
The model here is simple. “We train the the teachers and the cooks of primary health
centre heads to teach our courses,” says centres and childcare centres, numbering nearly
Mr Ayyappan, “and our own people lecture as 120 people, to cook nutritious food for kids
external faculty to enable students to get the and lactating mothers. Later, the company,
industry perspective.” About 10,000 people have with the help of faculty from the Tata Institute
been trained thus in the last four years. And of Social Sciences, tracked the success of the
the company is now looking to add to the list of programme over a period of a year. The results
trades it imparts training in. were heartening.
“We realised that there was improvement
Support to weavers on every parameter,” says Mr Shrinivas. “School
Besides training youth, the Taj has also been attendance improved, the concept of basic
supporting craftsmen and women. Traditional hygiene was imbibed by everyone and wastage of
weavers from Varanasi, for instance, craft the food was eliminated. The children were looking
sarees that serve as uniforms for front office and cheerful and healthy, a clear indication that the
housekeeping staff at all the Taj properties in effort had succeeded.” The company did not let
India (see box: Saree story: Lending a hand to the meagerness of the resource allocation get in
help weave a silky future). the way of its effort to make the project a success.
A child nutrition project undertaken, along The same level of dedication was on display
with participating partner, Bhavishya Alliance, in IHCL’s attempts to make its operations
in the Nandurbar district of Maharashtra sensitive to the environment. Earlier, each
in 2009-10 is another example of IHCL’s Taj hotel was doing its best to conserve
commitment to the community. The district resources through its own initiatives. A more
has a high incidence of child malnutrition and coherent approach led, in 2009-10, to IHCL
starvation deaths and interventions such as this launching a programme that would address
one are desperately required. the environmental issues confronting it in an

October 2013 n Tata Review 25


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Saree story: Lending a hand to help weave a silky future


Benarasi sarees have been cherished down the sold at Taj Khazana outlets in select Taj hotels.
centuries and treasured as invaluable heirlooms. In Sarai Mohana and other villages in and
Unfortunately, in the last few decades, the around Varanasi, where these weavers live, the
weavers who spin these gorgeous dreams in silk, Taj has been working on many fronts to improve
silver and gold have fallen on hard times. their lives. Nutrition programmes are regularly
The arrival of power looms and the conducted for children. Medical and eye camps
availability of synthetic Chinese textiles at cheap are held; here, weavers with weak eyesight are
rates, coupled with governmental apathy, had given spectacles, while those suffering from
made it difficult for the weaver community to cataract or glaucoma undergo surgeries.
survive. This was when the Taj stepped in. Families forced to sell their looms (some
RK Krishnakumar, then vice chairman of the even ended up using these as firewood) were
Indian Hotels, and his wife, Ratna, were moved given new ones and damaged looms were
by the plight of the weavers. Ms Krishnakumar repaired. The weavers were also given solar
was involved with Paramparik Karigar, a lamps to cope with the frequent power outages
group that works for the welfare of traditional that Varanasi is subject to, and water pumps
craftsman, and was well aware of their problems. were installed to ease the burden of the women.
Under her guidance, the Taj took up the cause. “We invited fashion designer Jay
As a first step, the Taj commissioned the Ramrakhiani to design the motifs for the sarees
weavers to weave their magic on silk sarees for and silk yarn for the sarees was sourced from
its front office and housekeeping staff at all its Bengaluru,” says Ms Krishnakumar. “Today, each
luxury and palace hotels in India. And exquisite saree yields the weavers an assured `2,300,
custom-made sarees began to be stocked and which is paid in full once the saree is delivered.
Barely a few years ago, each sari earned them
`200-300, a sum that they would get after
months of waiting, and in instalments.”
The Taj gives them the yarn dyed and coned,
ready for weaving along with the design, helping
them to stay debt-free. Each weaver makes
about three sarees each month. The sum of their
efforts creates about 1,000 sarees over a two-
year period.
The Taj has also taken up the responsibility
of educating the children of the weavers. “Our
only condition,” says Ms Krishnakumar, “was that
weaving should be a part of the curriculum. Strict
anti-child labour laws impose a fine on parents
who teach children the art. We didn’t want the art
form to go into a decline.”
In providing a viable source of income for the
weavers of Varanasi, the Taj initiative has performed
a vital service. “The greatest achievement of this
initiative is that it has restored the dignity and self-
respect of these people,” says Ms Krishnakumar.
“The looms are working again and their lives are
Taj staff adorn the work of the Varanasi weavers better than they have been in a long time.”

26 Tata Review n October 2013


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integrated manner. The programme came to be Our own people lecture as


known as Earth (an acronym for ‘environment,
external faculty to enable
awareness, and renewal at Taj Hotels) and
Mr Ayyappan headed the initiative. students to get the industry
The Taj also tied up with Earthcheck, the perspective.
globally reputed environment certification Vasant Ayyappan, director, corporate sustainability
programme for the travel and tourism
industry. Based on the ‘agenda 21 principles for
sustainable development, endorsed by 182 heads in responding to the needs of the victims of
of state at the United Nations’ Rio Earth Summit the terror attack at the iconic Taj Mahal Palace
in 1992, Earthcheck’s prescriptions are followed and other locations in Mumbai on the night of
by more than 1,000 hotel companies. November 26, 2008. The company set up the Taj
“Earthcheck employs third-party auditors Public Service Welfare Trust to help all those
to do on-site audits at every hotel in the Taj fold, affected by the attack.
regardless of the brand,” says Mr Ayyappan. In recent times, the trust has also helped
They audit the hotel and give us a report and a people rendered homeless in the landslide in
list of requirements. We then came up with an Leh-Ladakh, and established a community
action plan.” kitchen during the floods in Bihar. And it
is currently working with the Tata Relief
energy for change Committee in Uttarakhand.
The positives from such engagement have been Over the years IHCL has expended
many. Taj hotels in Chennai are using wind tremendous energy on social causes and the
energy, while those in Rajasthan are using solar needs of the disadvantaged. The introduction
energy. The last two years have seen the Taj’s of the ‘give back’ programme encouraged Taj
use of renewable energy increase by over 100 employees to devote their time and talents
percent. Thirty-three hotels do not discharge for a worthy cause. The company has selected
even a drop of water into the municipal nine areas in which employees can volunteer.
sewage, and there has been direct and indirect These include teaching in a municipal school,
reduction in energy consumption. Greenhouse beekeeping and rural tourism.
gas emissions and the numbers on suspended The Taj’s hospitality is legendary; its CSR
particulate matter have also come down. initiatives deserve equal recognition. ¨
Individual examples of interesting ideas
being translated into workable solutions abound.
The Gateway Hotel in Khajuraho has been
active in rainwater harvesting. Vivanta by Taj,
Kovalam, has been producing 40 cubic meter
of biogas per day since 2009. The digested
waste from the processing is used as manure in
the garden. Nineteen hotels have undertaken
composting of food and horticultural waste,
while two hotels have installed biogas plants.
The safety and the health of its employees
and guests are another top priority for the
company. A disparate approach to the triple
imperatives of safety, health and environment on
the part of IHCL’s properties will soon give way
to a holistic response. Many Indian Hotels employees devote their time to teach at
The company has also shown its nimbleness government-supported centres for women and children

October 2013 n Tata Review 27


in conversation

Living out the studied life


The unassuming and affable Veeramani Shankar, managing director and
chief executive of Rallis India, opens up on his student days, the value
system that has sustained him and his career with the Tata group.

28 Tata Review n October 2013


in conversation

Veeramani Shankar was a chartered As someone who simultaneously


accountant and a cost accountant studied for three professional
by the time he was 22, building on courses while still in college, what
the bachelor’s degree in commerce is your advice to youngsters today?
Life in the mid-1970s was different.
he had acquired from Calcutta
Distractions were few and one just focused on
University, where he stood third in the
academics. I do not think many from today’s
examination. Accomplishing so much
generation would be able to undergo the kind
so soon seems not to have been of drill I went through or the rigour I followed.
enough for Mr Shankar, who then On the flip side, we didn’t have the kind of
added a law degree and a company support available today: from the general
secretaryship to his academic ecosystem, the internet, coaching classes, etc. I
repertoire. did those courses without even having proper
Asked whether he was equally books, by studying 10-12 hours a day.
meritorious in school, the modest My advice to youngsters is that there is
Mr Shankar says he was “not a bad no shortcut to planning and commitment,
especially for courses such as chartered
student”. The affable and unassuming
accountancy. They should get more practical
chief of Rallis India says that his
training and spend time discussing issues
character was in part defined by his
with seniors.
“humble middle-class background”.
Studying in the Calcutta of the mid- What were your goals and dreams
1970s, when student unrest was when you began your professional
widespread and campuses were career? Have events panned out as
riven with political strife, Mr Shankar you expected?
managed to stay focused on his I trained as an accountant and dreamt of
studies. “I was in a college where making it big in the finance function. My
there were no student problems. journey has taken me through different roles
and functions, and I have now donned the
My classes would begin at 6am and
larger role of a business head. It has been a
by 9am I would be at work, pursuing
happy, challenging and fulfilling experience.
my chartered accountancy course at I’m fortunate to have worked with
an accounting firm.” Mr Shankar not enterprises that considered ethical standards
only completed the tough chartered and their code of conduct to be supreme. I’m
accountancy course at his first grateful to have been associated with such
attempt but also achieved a top all- companies all through my career, as it syncs
India ranking. with the background I come from. There is no
Mr Shankar started his career clash in the value systems and I get to sleep
with an Alcan subsidiary, Indian peacefully at night.
Aluminium Company, prior to joining
How do you view the changes that
Hindustan Lever in 1986. He would
have occurred in India over the
spend the next 18 years there
past three decades: from an era of
before coming to Tata, where he has shortages and restrictions to one of
served as a senior leader for almost a more liberalised regime?
a decade now. In this interview with When I began my career in finance, we used to
Nithin Rao, he touches upon the high have a machine called the ‘comptometer’, which
points of his life and his career. today you may only find in a museum. It used

October 2013 n Tata Review 29


in conversation

to be a major exercise to tally a trial balance advancements. The latest food security
and prepare a balance sheet. This machine provisions will also require productivity
helped us in adding and collating data, which improvements and drive good agri practices
we had to fill in manual ledgers. Today, life and infrastructure. In short, I think the best
is simpler as you don’t have to worry about times are yet to come for this business.
tallying and reconciling details. Yet in other The migration to urban areas is leading
ways, things are more complex, with more to a sharp increase in labour costs. This is
standards and norms to be followed. accentuated by schemes like the Mahatma
In the past there were many restrictions Gandhi National Rural Employment
on expansions and foreign exchange. But the Guarantee Act. But this also opens up
market-facing situation was easier because of opportunities for new solutions in weedicides
the limited options before the customer. The and farm mechanisation. Equally, we also need
regime now is more liberal, but the market is changes in our regulatory system so that there
tougher. The customer has plenty of choice can be aggregation of land, thus making it
and access to global brands and there is a lot conducive to deploying modern techniques.
more transparency. As a listed company we We cannot live with stagnant agricultural
face investors every quarter and come under production, given that demand for food is
the public gaze, with knowledgeable people rising. The prices of agricultural products
analysing our every move. are also shooting up, thanks to the demand-
supply mismatch. Take pulses, for instance.
You were with the Unilever group I remember paying `20 to `30 for a kilo of
for 18 years. Could you share your pulses just a few years ago. But now they cost
experience of that period? `80-`100. This is a stark example of how
I look back fondly at my association with the pulses production has stagnated in India, with
Unilever group. During this tenure I moved the result that we have to import them from
eight times, but the positive side was that it Canada and Australia. India’s requirements of
gave me exposure to different businesses, pulses will double over the next 10 to 15 years,
locations and people. I consider my big but there are no signs of a matching growth
break to be the Unilever corporate audit, in production. Our own study in the Tata
which exposed me to operations in about 20 group shows that by allowing some shifts in
countries. This stint was an eye-opener to all crop, farmers can grow more pulses. Through
aspects of the business, the value chain, team our own ‘grow more pulses’ initiative we have
cultures, etc. It gave me confidence to take on shown that farmers can improve productivity,
the responsibility of running a business. even doubling or tripling it.

You have been closely involved with What do you see as the future
the agricultural business since your for a company like yours, which
days with Unilever. How different concentrates its attention on the
is the business today from what it agricultural business?
was back then? I see good times ahead for Rallis. It has a
The major difference, as I see it, is that strong footprint in rural India and a deep
agriculture has assumed centre stage now with connection with farmers that has been built
the declining availability of land for food, feed, over a century. We have identified trends and
fibre and fuel. In India this sector is becoming opportunities and have begun the journey of
remunerative and farmers are willing to transforming the company into a complete
invest in and adopt new technologies. There agri-solutions provider.
are other sweeping trends such as labour Apart from the leading position we have
shortages, stricter norms and biotechnology in the crop-protection space, we are steadily

30 Tata Review n October 2013


in conversation

building our second pillar: a ‘non-pesticide’


portfolio that comprises business segments
such as seeds, plant-growth nutrients,
soil health, agri services and contract
manufacturing. This unique business model
has set a shining example in pulses through
the MoPu (more pulses) initiative, which
straddles the entire value chain. Rallis, at the
back end, guides farmers and grows pulses
while Tata Chemicals markets the I-Shakti
brand of pulses to retail consumers. This is
now well appreciated by all stakeholders,
including the government.

Genetically modified (GM) foods


have received a bad press in India.
From your perspective, what is the
best policy that the country can
follow in dealing with this issue?
GM foods have been available in many
I’m fortunate to have worked with
developed countries for a while now. To meet enterprises that considered ethical standards
growing needs, we do need modern technology.
and their code of conduct to be supreme.
At the same time, the processes for regulatory
and safety clearances should be robust. In my
view, the way forward is to not create hurdles expressed satisfaction with our solutions and
or delay the introduction of GM technologies, relationship efforts, our peers with our market
but to invest in effective and scientific processes practices and presence, it is gratifying to
so that these technologies can be introduced receive acknowledgement from investors, too.
expeditiously and in a safe manner. In a decade, our market capitalisation, which
had hit a low of just around `300 million has
You have been heading Rallis multiplied to the current `30 billion. The
since December 2005. What have company has gone from strength to strength
been the most critical challenges and a notable recognition was winning the
you have faced as a leader? JRD QV Award in 2011 for business excellence
I have seen Rallis go through phases (on the Tata Business Excellence Model
of turnaround, consolidation and now platform). This meant a lot to us because it was
growth. Each of these phases requires a weak processes and controls that had let us
different mindset and openness to change down previously. Above all, the morale of our
— challenging the status quo, continuously employees — as depicted by high employee
improving and recalibrating. I credit our engagement scores and our ranking as a ‘great
people for having the capability to achieve place to work’ — is satisfying.
all of this.
I think at one stage, when we had our What are the long-term objectives
worst-ever loss of `1.07 billion in 2003, of the company? What do you see
there was a sense of despair in the company. as the challenges for Rallis in the
With the group’s support, the journey since next five years?
then to be recognised by all stakeholders has We aim to enhance value for customers
been a rewarding one. While farmers have through the agri solutions we provide.

October 2013 n Tata Review 31


in conversation

V Shankar with his team at Rallis India receiving the JRD QV 2011 Award for business
excellence from the then Tata Sons Chairman Ratan Tata

A number of innovative initiatives are low profile. I tend to listen more than to speak.
progressing under our umbrella programme, Knowing its importance, I have tried to imbibe
Rallis Kisan Kutumba (RKK). We have a some good practices in both written and
million RKK-linked farmers and our goal oral communication, and am still learning. I
is to double this number and eventually am generally analytical and have a planned
connect directly or indirectly with more than approach to doing things. Impulsiveness is
10 million farmers. With many of the high- not for me. I tend to be quite focused in what
impact services we offer to farmers, there I am pursuing, though this trait can also come
needs to be an ongoing connect. in the way sometimes. I like to arrive at a
A challenge we need to address effectively consensus on most matters, but there are times
is the necessary skill building, both in terms I take a call, relying on my judgement.
of the workforce as well as information and
communication technology-led solutions. Who are your role models and
support systems in life?
What, in your opinion, are the In business, I admired Steve Jobs for being able
attributes of a good business to hear more than the voice of customer. He
leader? had the conviction to create new paradigms to
I believe that integrity is the core, both to delight customers while changing the industry
have and to demonstrate through action. The — and he did this time and again.
ability to inspire your team with a vision for In my personal life, my parents taught
the company is paramount, complemented me the values I live by, and so too my wife,
by robust communication skills. Strategising Padmini. A committed homemaker and
well and the tenacity to execute successfully qualified teacher, she trained in Carnatic
will, of course, determine the success of the music and Bharata Natyam. Padmini is my
enterprise. real strength, enabling me to take risks and
challenges in my career. Of my two children,
How would you define yourself as a Ajitesh is a chartered accountant and Radhika
person and as a professional? is pursuing her management studies (she is a
By nature, I am an intense person and have a dancer, too). ¨

32 Tata Review n October 2013


business

Tata Communications’ Singapore data centre

In through the digital door


The newly established growth ventures group of and cloud services. Content delivery
is an important business opportunity
Tata Communications aims to make a decisive for Tata Communications, given that
play in spheres such as digitisation of media, many of the old media traditions
are poised to collapse. Take House
video over the internet and cloud services of Cards. An American political
drama series on the lines of The West

R
angu Salgame was sitting Mr Salgame, the Princeton, New Wing or Britain’s Yes Prime Minister,
at home recently with Jersey-based chief executive officer it represents a new generation of
his family watching the of the growth ventures group at entertainment video.
political drama series, Tata Communications, points to For one, it has not been
House of Cards. In an illustration of the tremendous levels of disruption produced by an established TV
the current trend in entertainment happening in technology, especially production house. The first 13
consumption, the Salgames were in the field of entertainment video episodes of House of Cards, which
not watching television, but were on
their respective iPads, and not even
watching the same episode.
Everything digital will be cloud-based in
New media technologies the future... The market will explode over
have disrupted traditional ways the coming years.
of delivering and consuming Rangu Salgame, chief executive officer, growth ventures group,
media and it is this space that Tata Communications
Tata Communications is mining.

October 2013 n Tata Review 33


BUSINESS

premiered earlier this February, internet television and radio service providers and media professionals
were produced by Netflix, a app developed by the British icon, an integrated, end-to-end workflow
company that began operations in is premiering Car Share, a new method to move content files to
the late 1990s as a subscription- comedy featuring Peter Kay, by the cloud and transcode them
based digital distribution service uploading 40 hours of programming into broadcast-quality formats
but has since transformed itself into on its streaming iPlayer service, even ready for immediate delivery and
an on-demand, internet-streaming before the new series is broadcast on transmission globally. Viacom
media company. BBC One. 18, a joint venture between
Second, House of Cards was This is the content wave that Viacom Inc and India’s Network18
the first breakthrough achieved by Tata Communications intends to Group, has already selected Tata
the nonlinear television business. ride. The growth ventures group was Communications’ new content
Viewers could watch the episodes at set up by Mr Salgame after he joined transformation service to provide
their convenience, one at a time or all Tata Communications about a year high-definition content transcoding
13 together within the span of a day. ago. It comprises a small portfolio of and delivery via the cloud.
They could view it on mobile phones, high-growth businesses in markets
tablets, laptops, desktops or any undergoing transformation. These change as inevitable
device connected to the internet. include media services (media Explaining the significance of this
management, video connect and launch, Mr Salgame says digitisation
Flexibility first satellite broadcasting), services like of media is inevitable, as viewers
This flexibility shows up the cloud and also new ones, including (increasingly the young, who are
limitations of linear television, the healthcare, especially tele-radiology tech-savvy and want to watch
conventional television business (see box: Medical care through the programmes on their tablets and
where viewers can watch a scheduled cloud). handsets) demand that content from
programme only at a given time and In July 2013, Tata the past be brought alive on their
day and on a particular channel. In Communications launched the devices. Films and videos created in
other words, viewers get no say in world’s first cloud-based broadcast- the past are in formats that are not
terms of viewing choices. quality video transcoding and compatible with new devices.
Netflix is not the only player delivery service. The new service India, like the United States, is
in the new space. BBC iPlayer, the offers content creators, service a video-rich country, with several
decades of films (both Bollywood
and regional productions) and
television content being available.
Medical care through the cloud Many of the old movies or television
serials are available only on tape.
Cloud technologies come into play in the health sector as “Many broadcasters, studios
well and Tata Communications’ growth ventures business and content companies realise
is looking at developing its tele-medicine play. According to there is a huge amount of content
chief executive Rangu Salgame, the challenge in a country — films, soaps, sitcoms, news and
like India, with its fragmented health care sector, is how to get other entertainment — that is not
more done with less, how to connect hospitals with doctors accessible on the new devices,” says
and to ensure sharing of expertise. Mr Salgame. “These need to be
For now, Tata Communications’ foray into health care digitised and delivered through the
is focused on India. The company plans to come out with internet on to new devices.” Netflix,
offerings in the tele-radiology segment, supporting hospitals for instance, has digitised The West
with the movement of radiology data, later this year. Says Wing, enabling viewers of House of
Mr Salgame, “It is a big opportunity to help the health care Cards to also watch the older series.
industry become more effective.” The media and entertainment
business of Tata Communications,

34 Tata Review n October 2013


business

which was set up about four years


ago, helps transcode old films and
videos into modern formats and
deliver them through fibre, sky or
satellite. “One of our major offerings
is content transformation,” says Mr
Salgame. With the proliferation of
smartphones, tablets, laptops and
desktops, the demand for digitised
versions of old content is bound
to grow. “We are pioneers in this
segment (of media digitisation)
in India,” says Mr Salgame. “We
have learned a lot and built some
good capabilities. The right time to
capitalise is now.”
Maximum kind of media
More significant, Mr Salgame Digital Media Maximised (DMM) is the cornerstone of
says that the digitisation of media the media services business, a fast-growing unit of Tata
being witnessed is just the tip of the Communications that is now part of the growth ventures group.
iceberg. “Everything digital will be It enables customers to tap into enhanced creative reach and
cloud-based in the future: accessing profitability through services that drive efficient production,
an app on a tablet or a smartphone, management and distribution of digital media globally.
viewing content, backing an The unit helps its customers move ahead in the evolving
application or getting online, all of digital media economy, even while working across diverse
these will involve the cloud. The digital formats and developing delivery platforms. It provides a
market will explode over the coming suite of solutions that enable media management throughout
years.” the value chain, including creation, movement, workflow, asset
management, security, storage and re-purposing.
infrastructure vital By leveraging its media delivery infrastructure, comprising
With the cloud becoming widely media applications, network and managed services expertise,
used for communications services, DMM’s customers can take advantage of cost-effective
infrastructure becomes critical. premium content management and distribution solutions.
Mr Salgame says that many of Tata
Communications’ clients, among
them multinationals, international of the entertainment video and cloud tremendous opportunities for Tata
banks, manufacturing companies services businesses. And the road to Communications to emerge as a
and internet firms, are global and so this new paradigm has been paved significant player in these sectors.”
are their hosting requirements. over the last few years. The company is already in the
“We are well-positioned to According to Mr Salgame, most process of developing strategies for
meet their need for a global cloud of the technological disruptions the next five years. And while the
infrastructure,” explains Mr Salgame. began to occur over the last three disruptions will be played out over
“We offer and enable cloud-based to five years. But it is over the the next five years, their impact
services. We put the hardware in a last 12 to 18 months that these could last for 30 years, according
data centre and offer it in a secure two sectors have gained traction. to Mr Salgame. It’s a new era and
way to our customers.” “These two sectors are witnessing media digitisation is the order of the
All in all, these are exciting the biggest disruptions, which present day. ¨
times for Tata Communications, will change the entire technology
which is geared to cater to the needs industry,” he says. “And they present — Nithin Rao

October 2013 n Tata Review 35


BUSINESS

High-precision manufacturing is what the


division’s technicians are best known for

Passion for precision


The precision engineering division of Titan several innovative projects in the
last few years.
Company has risen from humble beginnings “Innovation is the central
to become a hothouse for innovation and the nervous system of the automation
business,” says R Vivekanandah,
crafting of cutting-edge products and solutions
business head, precision
engineering division. “We are

T
itan’s precision engineering Goa. Together these provide high- a business-to-business (B2B)
division is the company’s precision solutions to a range of engineering solutions provider
best kept secret. Established industries, among them automotive, and clients are always looking
in 1989 to build precision aerospace, medical and solar. for something new from us. Our
assembly machines for the watch Says Sridhar NP, the business engineers constantly look for new
division, it became an independent head of PECSA: “As Titan grew, ways of thinking and doing things
entity in 2004, when Titan decided a lot of initiatives were taken in to create value for our customers.”
to make the most of its engineering manufacturing to see how we At PECSA, innovation is
capabilities in various manufacturing could do more with what we had. always process driven; it is about
spheres. The division now has three We understood high-precision different material experiences,
state-of-the-art units: an automation manufacturing and not many cost reduction and increasing
solutions centre in Hosur, Tamil organisations had this capability. The efficiency. “We have to innovate
Nadu, the precision engineering precision engineering division grew to be competitive and relevant in
components and sub-assembly out of this specialised capability.” this business,” explains Mr Sridhar.
business (PECSA) in Bengaluru With 600 plus employees on its “We have cracked problems for
and Titan Time Products (TTPL) in rolls, the division has commissioned customers who themselves were not

36 Tata Review n October 2013


business

able to solve these problems. We Our assembly lines are among the best in
developed a highly complex chassis
the world. In the electrical industry and
for a French company in the defence
systems industry. In the process we aerospace, the top companies in the world
disproved their notion that complex are our customers.
products cannot be built in India.” R Vivekanandah, business head, precision engineering division
Engineers in the division are
encouraged to constantly upgrade
their knowledge and sent to trade way to circumvent the extremely assembly, seat belt assembly cum
shows across the world to get high import duty of the time. “The testing, and steering systems.
insights on what’s happening in automation business has built more PECSA was formed in 2003,
different industries. They regularly than 300 world-class machines for when Titan decided to leverage its
brainstorm to come up with the the watches division at Titan,” points core strength in manufacturing
most innovative solutions and out M Venkatesan, head, automation high-precision components. “The
are constantly upping the ante on business. “In 2004 we thought it was aerospace industry needed the
products, processes and technology. time to step out into the world and kind of capabilities we had,” says
sell our capabilities to others.” Mr Sridhar. “We started in a small
customers to the fore The initial target was the way and soon many multinational
Along with innovation, customer automobile industry and the first companies were our clients.”
service is a key differentiator at project — a robotic assembly line After a modest beginning
the precision engineering division. for an automobile company — was — making small components
Mr Vivekanandah says, “Our successfully completed the same year. for top companies like Hamilton
international network has been “Since then we have been growing in Sundstrand and Pratt & Whitney
built, to a large extent, by positive the automation market,” says — the unit began making complex
customer references. Every reputed Mr Venkatesan. “With more than components and sub-assemblies.
tier-I automotive player in the world 350 installations across the world PECSA follows the ‘build to print’
is our customer. In the electrical to date, we are considered the top business model, where the unit
industry and aerospace, the top specialist automation solutions makes components according to the
companies in the world are our provider in India.” drawing provided by the client. “We
customers.” Mr Vivekanandah The automation business, are slowly migrating up the value
believes that the division capability which is involved in building chain, from ‘build to print’ to ‘build
in automation technologies will be assembly lines, caters largely to the to spec’, where the client gives us the
helpful for any Titan business that automobile sector. It also meets parameters that the component has
is likely to emerge in the future. the needs of the medical, solar and to meet,” adds Mr Sridhar.
“Strategically, it is a fit for Titan’s electrical industries. The unit has
emerging business,” he adds. built assembly lines for 70 customers flying high
The only B2B unit in the Titan in India. “Our assembly lines are One of PECSA’s showcase projects is
stable, the precision engineering among the best in the world,” says the lube nozzle manufactured for the
division also caters to the needs Mr Vivekanandah. “In India, about UTC Group, leaders in the aerospace
of the company’s watches and 70 percent of the parts that go into a industry. Earlier, the nozzle was
jewellery divisions. “We have a car, of any brand, are manufactured built by brazing three individual
different working relationship. from an assembly line built by us.” machined pieces, a process that is
We don’t look at it as a selling Some of the automotive avoided in the aerospace industry
proposition; we are facilitating them assembly lines built by the unit are: due to the likely loss of material
to grow,” says Mr Vivekanandah. gear box assembly line, wiper motor integrity. “We told the client that we
The automation business started assembly, coolant system assembly, could build it through an integral
off by building machines for Titan’s clutch and brake systems, air construction,” says Mr Sridhar.
watch plant in 1989, mainly as a compressor assembly, vacuum pump “We tested it as per specifications

October 2013 n Tata Review 37


BUSINESS

and sent it out. They said your micro-electronics manufacturing “The ability to go beyond pure
product is giving a far greater flow services. Says Satish S, business head, PCB assembly to sub-assembly
than required. We went back to the electronics manufacturing services: and full system assembly is well
drawing board and could not find a “We have a comprehensive range of established here at TTPL,” says
single fault. Later, we realised that skills in the design and fabrication Mr Satish. “We have secured
the test bench they were using was of printed circuit boards (PCBs) and and fulfilled many high-profile
not according to specifications. hybrid micro-electronics.” contracts for the manufacture
We proved that our product was of critical systems in the
not only better in construction but Capabilities aplenty automotive, industrial controls and
in function, too. Now the product TTPL has enormous capabilities communication sectors.”
has qualified and we are beginning in the design and fabrication of TTPL aspires to emerge as a
production.” hybrids, including chip-on-boards, trusted partner for high-reliability
The third unit operating under sensors, optoelectronics, power electronics in sectors of strategic
the precision engineering division is and special projects. The unit importance. Its processes are aligned
TTPL, Titan’s Goa-based subsidiary. manufactures a wide range of sub- to automotive quality standards of
Started in 1992 as a joint venture assemblies, incorporating PCBs, TS 16949 and are driven by lean
with the Goa government, TTPL fabricated metal parts, machined manufacturing principles. The
specialises in turnkey electronics and metal parts and plastic mouldings. unit has demonstrated remarkable
quality and service while supplying
electronic assemblies to critical
applications such as shift-by-wire,
sensors for engine control, GPS-
based infotainment products,
and electromechanical speed and
positional sensors.
The precision engineering
division is looking at aggressive
growth in all the sectors that it works
in. “Five years on, we want to be a
`10 billion to `20 billion enterprise,”
says Mr Vivekanandah. Meanwhile,
the automation business is exploring
new avenues in modern storage
systems and warehouse automation
Innovation in automation along with medical devices and
solar energy equipment assembly
The automation business won the Tata InnoVista award two lines. “We want to scale the business
years ago for its novel diamond bagging automation. A unique up nearly 10 times in the next
process, it has revolutionised diamond bagging in the jewellery five years,” says Mr Sridhar. “We
division. “It was an extremely challenging project and a lot want to be a big player, one of the
of prototyping went into perfecting it,” says R Vivekanandah, biggest in the Tata group that is into
business head, precision engineering solutions. aerospace.”
The automation business also recently manufactured a Clear vision, ambitious growth
high-precision assembly machine for an American company. plans and high-end capabilities are
“Many automation companies in the US refused to work what the division is looking to bank
on this challenge due to its extreme complexity, yet we on to drive its growth. ¨
manufactured it to perfection,” says Mr Vivekanandah.
— Vibha Rao

38 Tata Review n October 2013


business

Click here for efficiency


Tata Consultancy Services’ e-governance solutions opening a new company, including
checking for free names, can be done
have made the ordinary citizen’s interactions with online through the MCA21 portal.
officialdom more transparent and less trying No queues, no paper.
In each of these instances,
e-governance is what has made life

A
s the deadline for filing for passport services online. This a whole lot easier for India’s citizens,
income tax returns figure takes on huge significance bringing them closer, digitally
loomed on July 30, 2013, considering that till 2012 there were speaking, to their government
some 600,000 Indians only 50 million passport holders and its army of officials. This
sat at their computers doing their in India. As thousands of citizens digital revolution has had an
bit as citizens for the Government received their new passports within a impact on the lives of common
of India’s coffers. The Ministry of few working days, the digital service Indian citizens, who are finding
Finance servers were hit by traffic got rave reviews. convenient solutions at URLs
peaks of 85,000 returns per hour And here’s another example of such as incometaxindiaefiling.gov.
but the system did not crash. At the improved efficiency of ‘official’ in, passportindia.gov.in and mca.
day’s end the government issued India. Setting up a new company in gov.in. All these e-governance
statements about the record number the country used to be an experience solutions have been powered by Tata
of tax returns that had been filed. that could stymie the most Consultancy Services (TCS).
The story with passports enterprising spirit, involving days of
follows a similar plot. Getting a queuing up, documents in hand, at Small but impactful
fresh passport has mostly been the Registrar of Companies, where IT solutions for governance is among
a nightmarish experience in bureaucrats would struggle to make TCS’s smaller business verticals, one
India, yet last year more than 11 sense of 45 million paper documents that contributes less than a tenth to
million Indians jumped on to filed with the Ministry of Corporate its revenues, yet this business has
the e-bandwagon and applied Affairs (MCA). Today all the steps for probably had the most significant
impact on the daily life of tens of
We wanted to change the way the millions of Indians.
The government solutions
government deals with citizens. The TCS
business at TCS was set up in
philosophy is that IT is a great enabler in 2007 to help resolve the challenges
addressing this challenge... faced by government institutions.
Tanmoy Chakrabarty, VP, government solutions unit, TCS “We wanted to change the way the
government deals with citizens,” says

October 2013 n Tata Review 39


BUSINESS

The e-governance solutions designed by TCS have had a significant impact on the everyday lives of Indian citizens

vice president Tanmoy Chakrabarty, Improving intra-government Odisha. It is also being used at the
who heads the unit. “The TCS efficiency implies making the actual Central Secretariat, the Central
philosophy is that IT is a great enabler operation of government decision- Vigilance Commission, the Ministry
in addressing this challenge and good making faster and more transparent. of Commerce and Industry and
governance is a desired outcome.” TCS has developed a framework two departments of the Ministry of
TCS set out to devise called DigiGov, an IT platform that Defence.
and develop platform-neutral, brings in complete transformation in The DigiGov rollout was easy
technology-neutral solutions for the daily functioning of government for TCS as it followed a framework-
government institutions at the by digitising all files and operations. oriented approach in designing
central, state and local body levels. “There are no paper files. All the platform. This meant it could
Today they have built up a successful files move electronically from be used for multiple clients with
portfolio of solutions that make office to office, thereby increasing minimum changes. “Our approach
citizen-government interactions transparency and reducing allows us to build a solution once
smoother and more transparent. discretion,” explains Mr Chakrabarty. and replicate often,” explains
TCS’s solutions are aimed at Mr Chakrabarty. “The time and
resolving three key challenges faced Advantages galore cost involved in subsequent rollouts
by government bodies: The advantages of digital files are becomes lower and lower, and best
Improving intra-government evident: The physical stacks of paper practices get incorporated at every
efficiency (a challenge that’s files that clutter government offices stage, making the platform robust.”
commonly vocalised as become redundant. Electronic files DigiGov is a solution that
‘Where’s the file?’). cannot be ‘lost’ and can, if necessary, makes government functioning
Improving service delivery be recreated. The work becomes more efficient, but TCS also
to citizens (in other words, person-neutral; if staff go on leave jumped into creating solutions
ensuring they do not have files can be reassigned easily. All at the interface level between
to ask questions like ‘Which operations are transparent and occur government and citizen, making it
counter do I go to next?’). in real time. easier for people to access services
Improving government The DigiGov platform, as it is such as paying electricity, water
financial management (also called, is now in use in 10 state and telephone bills, applying for
known as balancing the governments, including Maharashtra, birth, marriage or caste certificates,
accounts). Andhra Pradesh, Gujarat, Bihar and getting a state service bus ticket

40 Tata Review n October 2013


business

The third category of TCS’s the company awards and accolades.


e-governance solutions deals with MCA21, for instance, received
the financial side of government. Six the Prime Minister’s award for
states in India have adopted TCS’s Excellence in Public Administration.
Integrated Financial Management “We consider ourselves to be in
System, an online platform that the business of democratising
captures the working of the entire information and transforming
financial machinery of the state, governance,” says Mr Chakrabarty.
from allocation of funds to actual The e-governance business is,
dispersal at the local office. Each by nature, less profitable than private
voucher can be tracked and there is a sector engagements. But what TCS
monthly reconciliation of accounts, intends to do is leverage its basket
checked by an external auditor. of solutions to generate revenues
What is most impressive is that from other countries. “Most
the states’ chief ministers, finance Commonwealth countries have a
ministers and chief secretaries have similar government structure to
personalised dashboards on their India and our solutions will be easily
or amending a land entitlement machines projecting a real-time replicable,” says Mr Chakrabarty.
certificate. “We’ve created citizen fiscal picture of the state: how much “We are looking at Wales, Scotland
service delivery portals that offer money has come in till date, how and African nations such as Uganda,
more than 100 services across much was spent, resources available, Kenya and Zambia. Solutions
departments,” says Mr Chakrabarty. etc. The states with these IT-enabled developed in India are finding global
The portals — APonline, chief ministers include Andhra acceptability.”
Mahaonline and MPonline (all Pradesh, Assam, Bihar, West Bengal, TCS has a significant footprint
hosted on the ubiquitous gov.in Madhya Pradesh, Karnataka and in the British public sector, with a
URL) — have been running for Punjab. TCS has also implemented number of engagements involving
years. According to Mr Chakrabarty, solutions for VAT administration in the Home Office, the Department
while APonline, the first portal 15 states in India, which has helped of Works and Pensions and
to launch, took eight months to increase tax collections. local governments in Wales and
develop, MPonline took six months Scotland. Besides, it works with the
and the Maharashtra site took just Health care advantage Mississippi State Government in
two months to deploy. The company has worked with other the United States. The Government
The digital interface is state institutions in areas such as Solutions unit is chasing 50 percent
supported by kiosks spread across health care, policing and the public growth year-on-year and expects
the state, run by entrepreneurs, distribution system. In Tamil Nadu to derive at least half of its revenues
mostly educated youth, who and Gujarat, for instance, patients from overseas customers.
now represent the new ‘non- need just an ID number to access The e-governance solutions
bureaucratic’ face of the their medical records at any civil of TCS are connecting the citizen
government. To illustrate, MPonline hospital. In Andhra Pradesh, the to the state and ultimately helping
has 12,000 points-of-presence Aarogyasri scheme implementation improve the quality of life of every
(PoPs), employs 15,000 people has made best-in-class health Indian citizen. The success of these
and sees 3 million transactions a care accessible to millions of poor new platforms will, it is hoped,
month. Mahaonline, set up two citizens. Another showcase project is have a ripple effect, making the
years ago, has the widest reach with the Mahatma Gandhi National Rural state machinery move faster. The
27,000 PoPs. These portals bring the Employment Guarantee Act. government, ladies and gentlemen,
government to people’s doorsteps The impact of TCS’s many is at your service. Just click. ¨
and eliminate the “last-mile governance solutions has translated
connectivity” challenge. into tangible benefits and even won — Gayatri Kamath

October 2013 n Tata Review 41


BUSINESS

Where defence is the key


The large skills gap in cyber security is what Tata business: smart, savvy, cutting edge
and widely networked. The world
Interactive Systems has identified and is drawing wide web, however, comes with its
up plans for as it targets the safeguarding of own set of perils. Reports suggest
that the explosion of internet-based
under-threat companies and other institutions platforms have seen a corresponding
spurt in cybercrimes.

A
bout four years ago, Tata space — TIS has since spotted a According to the US
Interactive Systems (TIS) significant potential for business Government Accountability
began working on a project in the area of cyber security. And Office, the United States Company
to create a world-class why not? As the world becomes a Emergency Readiness Team (US-
online training programme on massive virtual marketplace where CERT) received almost 12,000
cyber security for the University businesses vie with each other to cybercrime reports in 2007; in 2012,
of Maryland University College become more knowledge- and this figure was four times higher.
(UMUC), Maryland USA. The team data-centric, a new definition seems That is alarming.
went on to create an award-winning to be emerging for the haves and
learning programme that was well the have-nots in this grand, web- technology and people
received by faculty and students alike enabled scheme of things: those “There’s a technology aspect to
and others at the institution. who have been hacked, and those the problem of cyber security and
Armed with that experience who have not been hacked (at least, a people aspect too,” says Rajesh
and learning — and backed by its not yet). Jumani, executive vice president,
own formidable reputation in the Blame it on the internet, the Asia Pacific and Middle East, TIS.
instructional design and training powerful enabler of contemporary “Companies acknowledge the

42 Tata Review n October 2013


business

technology part of the problem by


putting in place high-end systems More than 50 percent of security breaches
for compliance. Unfortunately, in companies are caused through
not many companies see how mistakes made by employees.
grave the threat from employees Rajesh Jumani, executive vice president, Asia Pacific and Middle East,
is, so they don’t do enough on the Tata Interactive Systems
people front. Interestingly, research
shows that more than 50 percent
of security breaches in companies learning and reinforcement. The friendly modules, using a mix of
are caused through mistakes made offering includes training needs, web-based training, scenario-based
by employees.” Simply put, a great consultancy, curriculum and gaming, quizzes, assessments,
deal of loss and anxiety can be portal design and development, interactive simulations and TIS’s
easily avoided if employees just and measurement of training proprietary ‘learning nuggets’,
know better. effectiveness. which pack information into easily-
With work spilling over from Although it is still early remembered bits. The modules
simple emails and transactions on days of the journey, TIS already are delivered across platforms and
laptops and desktops to smartphones has an impressive list of clients devices to ensure that learning
and other devices, unsuspecting across markets, both for its becomes relevant, application-
employees make their companies cyber security proposition as oriented, fun as well as accessible at
increasingly vulnerable to threats well as for information security: any point in time.
from attackers who are getting more Royal Mail UK, Mashreq Bank, For instance, TIS recently
innovative by the day. National Bank of Oman, Swiss created a mobile app for the World
“Companies end up losing a lot Re, Motorola, Credit Suisse, Bank. This is meant to be a one-stop
of capital because their employees University of Phoenix, Swiss Post, ready reckoner for cyber security
are not trained or because they are Schweizer Mobiliar and Abu Dhabi content, so that employees can
not at the right level of skills as far Commercial Bank, among others. quickly refer to updated information
as cyber security is concerned,” at any time from their phones or
says Preeti Jasnani, who heads critical for all tablets. Finally, as the TIS team
instructional design at TIS. “Insider “We are now rolling out the cyber points out, it’s not just the content
threats — where disgruntled security proposition globally,” says that matters — the key is to present
employees wilfully leak important Ishrat Shums, vice president and the information in formats that are
information — also constitute chief communication designer at engaging and effective.
a large part of the risk faced by TIS. “Our focus markets are in all With growing awareness —
companies.” Clearly, if there was the geographies that TIS is already in both within business enterprises
ever a time for companies to — Europe, India, Middle East, North and among consumers — about
buckle up and reinforce their cyber America, UK.” the security threats that imperil the
vigilance, it is now. She adds that the company virtual world, the company believes
To enable companies to meet sees its services being beneficial to that they have a big opportunity
this skills gap, TIS has created a potential clients across industry with their cyber security
comprehensive framework for verticals such as banking and proposition.
cyber security training that can financial services, telecom, “Most companies have
be mapped to, and customised health care and life sciences, experienced at least one security
for, specific requirements. The manufacturing, hospitality, logistics, breach so far, and it is only a matter
framework allows companies to airlines and transport, consumer of time before they start investing
choose from several modules, goods and retail, education and in adequate skills training for their
ranging from a one-time service government. The cyber security employees,” says Mr Jumani. ¨
to an extended partnership curriculum developed by TIS
where TIS offers sustained is delivered in extremely user- — Sangeeta Menon

October 2013 n Tata Review 43


business

A new dawn under the sun


A year has passed since BP’s
joint venture with Tata (Tata
BP Solar) ended and Tata
Power Solar Systems came
into being. Ajay Goel, the
chief executive of the new
enterprise, talks to Vibha
Rao about the solar energy
industry, the company’s new
business strategy and the
various challenges it faces.

Tell us about the Tata Power Solar


Systems journey since August 2012,
the time when it was recast.
We have transformed ourselves in many ways
to continue to stay on top of the fast-growing
solar energy market. We have reorganised the
company to sharpen our focus in each of the
three businesses we operate in: manufacturing,
projects and products. In each of these
businesses we have redesigned our processes and
approach to improve our customer centricity
and establish cost leadership in the marketplace.

Could you elaborate on the


company’s new business strategy?
On the manufacturing front, our focus is to
reestablish ourselves as a leading global player.

44 Tata Review n October 2013


business

This requires us to be cost competitive vis-a-vis The second series of products to be


the Chinese, and that is what we have achieved launched are LED-based solar home lighting
over the past year after a lot of hard work. We are solutions, which we think will be a game
also actively working to build our brand and our changer. Another new product is a consumer-
export channels outside India. oriented solar power pack that consists of
On the projects side, we want to lower batteries, solar panels and ‘intelligent power
the cost of solar energy in India and make it electronics’. The batteries are charged by sunlight
grid-competitive. We have built an ecosystem and the entire household can be run using solar
of financing partners who can offer rooftop power. It is a fully integrated solution and we are
solutions to our customers at a price that is working on an affordable version that people can
lower than what they are paying today. Many buy without any subsidy.
clients, including Tata companies, have found Our aim is to eliminate the dependence on
our solutions compelling. We want to help move subsidies and make solar products affordable to
the market, reduce the reliance on subsidies and more and more people.
provide the right quality at the right price.
On the products side, our strategy is to There are also some new projects...
bring the power of the sun to more people. A We are executing about 100MW of projects this
large number of Indians still do not have access year. The largest is for National Thermal Power
to reliable grid power, which is unfortunate. But Corporation [NTPC], at an extremely attractive
this is also a tremendous opportunity for us and
we are launching innovative products to make
the most of it.

What about your export strategy?


We have a 20-year history of strong exports,
under the BP Solar brand, to the United States
and European markets. After BP exited the
solar business, we have been working actively
to rebuild our export channels and establish the
Tata brand in these markets. Given our proven
track record and bankability, many customers
and distributors are coming back to us. However,
SunJeevini: The charge is on
with the overcapacity in the supply chain, we SunJeevini is a retrofit unit that allows conventional
want to be selective about how we grow our inverter batteries to be charged using free solar
exports. We are signing up with a handful of energy rather than expensive grid power. A zero
strategic partners who will buy our modules on maintenance unit, SunJeevini can provide up to
an on-going basis. three-and-a-half hours of additional power backup
in a day. With prices starting at an affordable
Could you tell us about the new `11,000, SunJeevini is designed to be scalable
products and solutions that Tata from 80 to 600 solar peak watts without any big
Power Solar Systems has launched? changes in the consumer’s existing system.
We are in the process of launching three new “SunJeevini is a uniquely innovative product
products in the subsidy-free market. One is that lets people charge their inverters using free
SunJeevini, a solar retrofit for people who solar power,” says Ajay Goel, Tata Power Solar
already have an inverter-based power backup Systems’ chief executive. “It is the perfect example
system. Consumers can charge the inverter’s of our commitment to Indian innovation and our
batteries with free solar energy rather than vision of enabling solar power everywhere.”
expensive grid power.

October 2013 n Tata Review 45


business

cost of less than $1 a watt, which is close to `60 growing demand, we are currently in the process
million per megawatt. We are also using our own of adding capacity and upgrading equipment in
India-manufactured modules, demonstrating our module manufacturing lines.
the value of our integrated solution offering. On the solar cell side, the business is highly
The project is being built to NTPC’s exacting capital intensive and the efficiency of the product
standards and we are working closely with its is driven by the type of equipment. While we
engineering and design teams. are competitive, we have not yet invested in
Furthermore, we are executing a 29MW the latest cutting-edge machines, given the
project in Maharashtra for Tata Power. This will overcapacity in the market. We continue to
not only bring affordable solar energy to the evaluate the situation closely and will make such
people of the state, but will also help Tata Power investments at the right time.
take the lead in meeting its ‘renewal purchase
obligations’ as the largest private independent Does the company have any
power producer in India. These are showcase technical alliances?
projects to highlight our competitiveness. We keep abreast of new technologies on a
Additionally, we are executing a series of smaller continuous basis and we have made investments
projects, ranging from 1 to 10MW. in some promising technologies. For instance,
we have invested in Flisom, a Switzerland-based
Manufacturing excellence has been company working on building flexible solar
one of the strengths of the company. modules; at the right time, we hope to integrate
Have there been any changes here its cost-effective products with our projects.
after the BP exit? We are also looking at other opportunities in
There are two parts to our manufacturing modules, trying to drive innovation in each one
business: capital-intensive solar cell of them. We have reduced the weight of our
manufacturing and labour-intensive solar structures by 30 percent, which translates into
module manufacturing. We are well established significant savings because of the lesser amount
as one of the most bankable tier 1 module of steel used. We are an end-to-end solution
manufacturers in the world. To meet the provider and strive to innovate around the whole
system, rather than just with components.

Where do you see Tata Power Solar


Systems five years down the line?
Five years is a long time in the solar energy
industry. Five years ago this industry, not
just in India but worldwide, was at a nascent
stage. Today there is a lot more interest in and
acceptance of solar-powered products all over
the world, including in India, where solar energy
is destined to become the mainstream source of
power generation.
Our vision is to be one of the top companies
in the world providing integrated solar solutions,
but our growth depends on where and how
the market expands. The solar energy market
continues to be in a state of flux and is a policy-
driven market in the short-term. We have a fairly
The company’s goal is to eliminate the dependence on ambitious vision, which we think is realistic
subsidies and make solar energy products more affordable given the potential of solar energy. ¨

46 Tata Review n October 2013


special report

The case for skill


care gets a boost
The scarcity of adequately skilled talent in India is the
concern that has prompted Tata companies to invest
resources, time and more in a group-wide skills-building
initiative that has the potential to benefit all stakeholders.
This special report details the Tata group’s skills-building
agenda, besides showcasing the skilling efforts undertaken
by a few Tata companies: Indian Hotels, Tata Advanced
Systems, Tata Chemicals, Tata Consultancy Services,
Tata Motors, Tata Power, Tata Projects and Titan Company.

By Sangeeta Menon

October 2013 n Tata Review 47


special report

Where the collective


strengthens the idea
The pan-Tata effort to enhance the skills quotient of those coming
of working age will help India secure its demographic dividend

T
o harness the potential of millions employees for specific jobs, not to mention
of Indian youth and give them an the rising costs of retraining employees. The
opportunity to build their destiny — government is understandably worried by the
that’s the nation-building idea taking situation, which is why it has set a target of
shape, and finding substance, at the Tata group. skilling 500 million people by 2022. The Tata
Tata companies, big and small, are group has taken on the task of shouldering some
collaborating on a group-wide, centrally- of that responsibility.
coordinated programme that will help scores of “It is a well-accepted fact at the government
Indian youth create livelihoods for themselves level, both at the centre and in the states, that
by acquiring industry-relevant and quality skills development is one of the highest national
vocational skills. The Tata skills building priorities if we are to meet the aspirations of
initiative aims to address the growing skills our people,” says S Ramadorai, vice chairman,
deficit in the country, which has become a Tata Consultancy Services (TCS), chairman of
national priority and a matter of concern, the National Skills Development Agency and
especially over recent years. the National Skills Development Corporation,
Two-thirds of India’s 1.2-billion population and an advisor to the prime minister on skills
is under 35 years old, making the country one of development.
the youngest, from a demographic perspective, Mr Ramadorai, the force behind the Tata
in the world. The economic benefit of having skills development initiative, says that, based on
such a large working age population is obvious. India’s demographic profile, the need for skilling
The bad news is that a significant number of this the country’s youth for employability, leading up
population is unskilled or underskilled. to employment, is fundamental, “if we are to reap
There are consequences here for everybody, the demographic dividend and keep social order.”
particularly Indian industry, which is faced with The skills-building agenda is not new to
a challenging shortage of adequately skilled Tata. For years individual Tata companies have

48 Tata Review n October 2013


special report

espoused the cause in various ways: through The benefits of a shared approach are
their captive training facilities, where they plenty. It will optimise utilisation of significant
trained people from the communities around skill assets for skills training that individual
their factories; through partnerships with Tata companies have built. Then there are the
nonprofits; and through collaborations with advantages of shared costing, shared targets and
government-run industrial training institutes shared learning, all of which will help achieve
(ITIs). The results have been good, too. the large scale that the group aspires for in the
What is new is the collaborative response skills-building space.
to the challenge at hand. Not satisfied with the
limited impact they have been making in the The business case
lives of the local community, Tata companies Anita Rajan, a member of Mr Ramadorai’s office
are now looking to make a bigger impact across and a part of the core team working on the
the country. That would mean scaling up their skills-building initiative, says there is a strong
activities manifold, which is best done as a business case for the project. “Companies need
collective force rather than individually. skilled labour and spend considerable money
Dr Mukund Rajan, chairman, Tata Council on skilling them,” she explains. “A group-wide
for Community Initiatives, who is leading skilling initiative will allow companies to
the group-wide initiative, explains the group’s share not just costs but also local community
collaborative approach: “We want to make intelligence. For example, Odisha, a state in
sure that in corporate social responsibility eastern India, has a large number of skilled
[CSR] there are a few initiatives where, if the filigree craftsmen — a knowledge and a
collective is greater than the sum of the parts, community that Tata Steel in Odisha has access
we must embrace those. We must try and create to, whereas Titan Company in Karnataka has a
a national impact. Most of our companies will huge requirement for skilled artisans, but it has
have something to contribute and it is not no connect with the community in Odisha. Tata
something removed from our core competency Steel can help facilitate this valuable exchange of
or belief system. The scale that the companies knowledge and skills.”
can create if they work together is larger than To facilitate such seamless exchange of
what any industrial house can achieve in India.” intelligence and information on the skills

Taj Centre of Excellence, Lonavala (Maharashtra): Such centres will be the hubs for skills-development training

October 2013 n Tata Review 49


special report

A Tata group-wide skilling initiative The plan is also to build in the targets for
another important Tata engagement: affirmative
will allow companies to share
action, or the programme for positive
not just costs but also local discrimination aimed at the scheduled caste and
community intelligence. scheduled tribe people of India.
Anita Rajan, vice chairman’s office, TCS A hub-and-spoke structure will ensure
that the skills-training opportunities are
accessible to more people from a larger spread
building programme across the group and also of communities. Whereas the spokes, or the
to institutionalise collaboration, a portal is being smaller training centres, will provide basic skills
set up with complete and updated information training in a range of vocations relevant to the
on the initiatives being undertaken, facilities local community and industry, the hubs will
available, contact people at each Tata company, be the centres of excellence, where candidates
and so on. will receive more advanced training, delivered
The group will also draw from the huge through sophisticated infrastructure. The hubs
knowledge that resides within the Tata trusts, will design the curriculum in line with ‘National
which have partnered non-government Occupational Standards’, train the trainers at
organisations (NGOs) in skills-building the spokes and also manage the certification for
initiatives across the country for several candidates enrolling in the courses at the hubs
years now. The trusts have for long nurtured and the spokes.
relationships with NGOs and local communities
in different parts of India. 8 Sectors; 25-30 skills
“With their pan-India presence, the trusts The plan is to launch the programme with
can bring in the experiences of different models three or four such centres of excellence in
(of skills building) to help move towards better place. The group will identify eight sectors and
delivery mechanisms and quality of training, 25-30 skills in which training will be provided.
thereby building the ecosystem and influencing The cost of delivering a typical three-month
robust policy development on skills,” says training programme will range from `3,000 to
Poornima Dore, programme officer, urban `10,000 per person, depending on the skill and
poverty and livelihoods, Sir Dorabji Tata the trade. While a significant portion of this
Trust and the Allied Trusts. “To the extent of investment will come from the CSR budgets of
commonality in terms of geography and target the companies, there is also an opportunity to
group, there are definite synergies which are offset some of these costs by availing benefits
possible with the group-wide initiative.” under various government programmes
The group envisages a multilayered, and schemes that offer reimbursements for
multidimensional response mechanism for providing training services.
the skills deficit problem facing India. A core Costs and other concerns notwithstanding,
group with representation from various Tata the group is committed to making a success
companies is working on creating a model that of the skills-building agenda. The core team is
combines the learning of all companies from putting the final touches to the strategy and the
their individual skills-building experience. rollout plan. As Dr Rajan says, “Mr Ramadorai
While the group will continue to follow the believes this is a make or break situation for the
three basic models mentioned earlier — use country. We have so many young people who
of captive centres, public-private partnerships can be skilled to become productive citizens. We
with ITIs, and NGO partnerships — the need to grab this opportunity. Focusing on skills
key difference will be in the sharing of these building can create a huge talent pool that can
facilities and increasing the combined capacity do for India what the IT industry has done for
for training several times over. the country in recent times.” ¨

50 Tata Review n October 2013


special report

‘If anyone can pull this off,


it is the Tata group’
Tata Consultancy Services
vice chairman S Ramadorai
has been a key inspiration for
the group’s skills-development
initiative. Here, the chairman
of the National Skills
Development Agency and the
National Skills Development
Corporation talks to Sangeeta
Menon about the importance
of the project.

How successful has the national


skills-development mission been in
achieving its initial goals?
It is a well-accepted fact at the government
level, both at the centre and in the states, that
skills development is one of the highest national
priorities if we are to meet the aspirations of
our people. Based on our demographic profile,
the need for skilling the youth for employability,
leading up to employment, is fundamental, if
we have to reap the demographic dividend and
keep social order. The operating structure of
the government was through the National Skills

October 2013 n Tata Review 51


special report

Vocational education has been a occupational standards by job roles. This is much
like creating a uniformly understood language
neglected subject in India. We need for qualifications.
a massive publicity campaign for the We want to start vocational training from
the secondary school system, from Standard
advocacy of vocational skills.
9 to 12, progressively leading to the industrial
training institutes [ITIs] and government
Development Council chaired by the prime polytechnics and the university system. We
minister and the National Skills Development have already established clear pathways from
Board, which was co-chaired by the deputy the vocational education system to the general
chairman of the Planning Commission and education system so that a student can take the
myself. Then there was the National Skills credits and go for a university degree or vice
Development Corporation [NSDC], a private- versa. We have started some successful pilots in
public partnership. Haryana, Assam and Karnataka. This will ensure
We have collapsed all these, with the both lateral and upward mobility.
exception of the NSDC, into a single agency
called the National Skills Development Agency, The Tata group has put in place a
which has been set up with the mandate to programme for skills development.
develop a strategy for skills development What are the challenges and
at the national level, identify new areas for opportunities there?
employability, advise on remodelling of The Tata programme is essentially consolidating
existing skills-development programmes run all the capacity we have either created or will
by various ministries, and promote greater use create as a nation-building exercise. We are
of information communications technology in looking at building scale and enhancing capacity
the area of skills development. Structurally we creation for outcomes. If 15-17 million youth
have consolidated everything such that only two graduate in a year, what does it mean to build
institutions will drive this programme from the capacity to skill them in the right way? The
government’s side. capacity creation involves leveraging all the
Another level of systems building we have physical infrastructure we have, be it ITIs,
to do is through information management from polytechnics, public-private partnerships or any
the labour market and transparent reporting other method.
on labour supply and demand, so that we can We are looking at creating and sharing
measure whether we are addressing demand with huge capacities, aligned to government needs
the relevant supply. and sectoral needs, and making this available for
the nation at large in a productive manner. We
What are the challenges faced by must break down our targets into short term and
the programme? long term, define the areas and sectors we want
Vocational education has been a neglected to be present in and the competencies we want
subject in India; every parent has been to build. We must have efforts like affirmative
conditioned into thinking that a paper degree action. We need to roll out and scale up quickly
is the route to success. We need a massive to deliver measurable results. This is where
publicity campaign for the advocacy of technology is critical and the Tata group has
vocational skills, informing youth and parents enough expertise here.
that doing something with your own hands is an It is always a challenge to bring so many
alternate route to fulfilling your aspirations. The stakeholders on board, but with the support of
government is doing a number of things, such the group and our chairman we will make this
as the National Skills Qualification Framework, happen. It is a very ambitious programme; if
which will map the levels of competency and the anyone can pull this off, it’s the Tata group. ¨

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‘The Tata group has always


believed in nation building’
Dr Mukund Rajan, chairman,
Tata Council for Community
Initiatives, speaks to Sangeeta
Menon on why Tata companies
are joining hands to address
the skills-building priority.

Tata companies have been involved


in skills-development initiatives of
their own. Why did the group feel
the need to take up this initiative
collectively?
One reason is the economic landscape that we
have in India today. We estimate that some 140
million young people will enter the workforce
over the next decade. The biggest concern is
whether these young people are going to have
the right skills. The industry finds that the people
coming into the workforce currently are not
always appropriately skilled; companies have to
invest a fair amount in retraining them.
If we don’t provide the right skill sets and
render people employable, then huge numbers
of unemployed young people could be on the
streets, in an environment where a fair amount
of affluence exists. So we run the risk of society
witnessing tensions. While it is a national issue,
it is also a need of the companies. One of the

October 2013 n Tata Review 53


special report

system. Many of our companies are already


doing these things, but the impact is often only
local. The scale that the companies can create
if they work together is larger than what any
industrial house can achieve in India.

How will the group reconcile the


nation-building intent with business
benefit?
From our perspective there is no profit motive.
But what will certainly help the companies is
that they can meet their own requirement for
skilled labour. They can also share their training
facilities with other corporate entities and the
government, involve their employees in this
initiative including as volunteers, and achieve a
sense of satisfaction for giving back to society.

With skills development becoming a


major agenda, what impact do you
anticipate on the group’s CSR efforts?
I don’t see any significant realignment of
activities. What we would probably see is
With some 140 million young people estimated to enter the a closer and more transparent link between
Indian workforce over the next decade, skills training is vital the CSR activity and the company’s core
business capability.
most serious shortages faced by companies is
that of the right labour force, with the right skills What challenges do you anticipate
to deliver projects on time, even in basic trades with this initiative?
such as plumbing, welding and carpentry. As we research the space, we are discovering
Mr Ramadorai has been a huge inspiration. new things. For instance, it is not enough to
He is the advisor to the prime minister on skills put up the necessary infrastructure for training;
development and a lot of our focus on why this driving traffic into those training centres
is important for our country has come from him. could be a challenge. Part of the problem lies
This group-wide activity was really triggered by a in poor communication and awareness. The
presentation he made to Group Chairman Cyrus government needs to create awareness about these
Mistry. The Chairman immediately felt this programmes, that they could lead to potential
resonated strongly with all that our group stands employment. That could encourage people to get
for, and it leverages very well the capabilities and enrolled, even travel long distances to get skilled.
expertise of our group companies. There are several incentives provided by the
We are approaching this collectively government to make these programmes attractive,
because we want to make sure that in corporate but tapping them in the right way is important.
social responsibility [CSR] we embrace a few This programme will be a huge learning for
initiatives where the collective is greater than us because we are trying to significantly multiply
the sum of the parts. We must create a national the capability we have created so far. But this is
impact. Most of our companies will have something we are committed to doing. It speaks
something to contribute and it is not something for the ethos of the group, which has always
removed from our core competency or belief believed in nation building. ¨

54 Tata Review n October 2013


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Indian Hotels company

A hospitable future
The Indian Hotels’ hospitality training centres offer skills-based
training to underprivileged youth, helping them find better jobs
and ensuring a brighter future for many

W
ith ‘enabling sustainable livelihoods’
as its corporate social responsibility
theme, the Indian Hotels (IHCL)
has provided skills training to India’s
underprivileged youth ever since 2009, when it
started its first hospitality training centre.
Set up in partnership with the nonprofit,
Pratham, the Khaultabad centre provides basic
training in hotel industry processes such as
food production, housekeeping and food and
beverage services to youth from the rural areas
of Maharashtra’s Aurangabad district. The 48th
batch of students has just completed training
from this centre. IHCL now runs 41 such skills IHCL has planned many new hospitality skills training centres
building centres and has trained more than
9,000 youth in this manner. Armed with basic up its first centre of excellence in hospitality,
employability skills and backed by the Taj name, at the industrial training institute in Lonavala,
97 percent of the students have found placement Maharashtra, with funding support from the
in different companies. World Bank and the state government.
Importantly, IHCL’s skills-building IHCL has partnered other Tata companies
programme focuses on many of the less to set up hospitality skills training centres, at
developed regions of India, including the Kolabera near Jamshedpur with Tata Steel, and at
Northeast, Jammu and Kashmir, and many Mithapur in Gujarat with Tata Chemicals. Plans
tribal belts. “We provide training to the local are afoot for another training centre, this one in
youth at our hotels in Srinagar, Chandigarh and Behrampur, Odisha, with Tata Steel.
Delhi,” says Vasant Ayyappan, director, corporate In the hub-and-spoke model envisaged
sustainability. “We have the highest number of by the Tata group, the Lonavala hub should be
candidates enrolling for the ‘hunar se rozgar’ able to train 5,000 people annually over the next
(skill-based employment) programme from four-five years. Over the next two years, IHCL
these places.” plans to set up more such hubs, in Mangalore
The company’s Jiva Spa offers a three- (Karnataka), Jabalpur (Madhya Pradesh) and
month training course in spa services to Guwahati (Assam) and other places.
candidates from marginalised sections, “The group-wide skills-building initiative
especially from the Northeast. A spa training is exciting because the scope is so large,” says
centre has been set up at Dimapur in Nagaland Mr Ayyappan. ‘If we have to make an impact
and work is on to establish another one (in in this country, it has to be through skills
Guwahati, Assam). In April 2013, IHCL set development.” ¨

October 2013 n Tata Review 55


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Tata Advanced Systems

Giving wings to aspirations


When faced with a shortage of skilled personnel, Tata Advanced
Systems set up its own internal training centre. This module can now
be replicated and customised to suit other industries and needs

W
hen Tata Advanced Systems people who have probably never seen an aircraft
(TASL), a company that up close before they enrolled in the course.
manufactures precision The key vocations that they receive training
components and structures for the in are aerostructures assembly and aerospace
extremely demanding aerospace and defence programming. Overall, the centre has trained
industries, was set up in 2009, it faced a serious more than 600 people thus far, and all of them
shortage of talent. Even the limited talent that are now employed with the company.
was available at the time in India was not of the “We are completely aligned with the skills-
quality the company desired. development initiative of the group; we have
So TASL did the next best thing: it decided been doing it because we have a business need,”
to seed the skill sets it required by setting up says Masood Hussainy, head of aerostructures
its own internal training centre. The company’s at the company. “The modules we have created
‘advanced craftsmanship centre’ has been can be easily replicated for the benefit of the
benchmarked with some of the best training overall community and for the creation of job
institutes of its kind worldwide. opportunities that go beyond our internal needs.
The centre’s structured training programme, We believe we have put together a robust model
lasting about nine months, creates world-class of skills enhancement that can have multi-fold
skilled mechanics out of fresh apprentices from applications, and this model is replicable on a
industrial training institutes. These are young large scale.” ¨

Sharpening aerospace skills — at TASL’s Advanced Craftsmanship Centre in Hyderabad

56 Tata Review n October 2013


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Tata Chemicals

Crafted to provide hope


With their vocational training courses and skills-building initiatives,
Tata Chemicals has enabled people from the poorest sections of
society to earn their own living through a variety of ways

W
ith a deep commitment to creating
sustainable livelihood options, Tata
Chemicals’ employability initiatives
seek to develop skills that fall into
three broad categories: those that address the
needs of the community or the region, those
that meet a business requirement, and skills that
reflect national growth aspirations.
The company’s rural BPO projects in
Mithapur in Gujarat and Babrala in Uttar
Pradesh, under the Uday Foundation, skills
rural youth for BPO work to meet the growing
need for trained staff. This has, in a small way,
also helped stem the migration to urban areas.
In Babrala, the Tata Chemicals Society for Rural
Development (TCSRD) tied up with Larsen &
Toubro (L&T) to train youth from neighbouring
villages to learn the skills required for various
aspects of the plant’s expansion. Some of them A Tata Chemicals workshop to promote handicrafts
have also found employment with L&T.
Other vocational training courses on offer Promoting handicraft skills has been
include masonry, fitting, welding, carpentry, another successful endeavour at Tata Chemicals.
mobile repairing, accounting, basic computers, Its famous Okhai model empowers local
desktop publishing and garment making. Tie- artisans, providing them with design, marketing
ups with L&T, the Indian Hotels Company, the and enterprise management support. Okhai
National Institute of Fashion Technology and is now a separate trust and an umbrella brand
others have helped bring in the right kind of under which all handicrafts and livelihood
expertise and industry intelligence. programmes of TCSRD are managed.
These non-farm livelihood courses, Working closely with local communities,
conducted around the company’s plants in the company is set to play a meaningful role
Babrala, Mithapur and Haldia (West Bengal), in the group-wide skills-building programme.
have so far trained 8,500 women and youth. “This will help us scale up in a big way,” says
Over the last five years, close to 6,000 rural Alka Talwar, head of corporate sustainability at
people have benefitted from the company’s Tata Chemicals. “It will also help Tata companies
farm-based livelihood initiatives, in pond learn from each other’s experience, besides
management, agricultural services, seed improving the quality, depth and reach of the
production, dairying, food processing, etc. group’s skills-building efforts.” ¨

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Tata Consultancy Services

Enabling a better future


Coming under the corporate social responsibility rubric, the
skills-creation programmes seeded and nurtured by Tata
Consultancy Services cover many different spheres

T
ata Consultancy Services (TCS) has infotech-enabled vocational courses. Since
included skills building within its inception, 117 students have been trained and 70
corporate social responsibility focus students have received job placements, of which
areas. The company’s skills-building 17 work with TCS.
initiatives span BPO training, partnerships with With its computer operator-cum-
industrial training institutes and train-the- programming assistant course, the company
trainer programmes, among others. conducts workshops for instructors at industrial
TCS’s BPO employability programme training institutes (68 instructors have been
reaches underprivileged rural youth in the states trained and certified in Kolkata, Bengaluru,
of West Bengal, Odisha, Maharashtra, Gujarat Mumbai and Lucknow). Its InsighT programme
and Tamil Nadu, providing free training in imparts technical as well as soft skills to students
English, corporate etiquette and computer skills. of class 12, and has trained close to 3,000
Since 2010, the company has trained 22,236 students in three years.
youngsters, of which 7,681 are from affirmative Through its ‘academic interface
action groups. More than 1,800 of the trainees programme’, TCS seeks to develop faculty for
are today TCS-BPO associates. academic institutes, improve the employability
Through the Udaan initiative, TCS partners of students and develop curricula as per industry
the National Skills Development Council to offer requirements. A total of 616 institutes in India
Kashmiri youth a 14 week-training programme and 288 institutes overseas have benefitted from
designed and developed by the TCS Foundation. these activities.
The course focuses on soft skills and BPO In collaboration with the Government
processes. Of the 97 candidates trained last of Karnataka’s Department of Information
year, 67 joined TCS. The company also offers Technology, TCS started India’s first rural IT
quiz in year 2000 to enhance awareness about
information technology. The quiz now covers the
states of Madhya Pradesh, Gujarat, Maharashtra,
Jharkhand and Rajasthan. Last year alone nearly
14.5 million students from more than 8,000
schools participated in the quiz.
“Assisting youth to become employable is
TCS’s impact through empowerment,” says
Dr Joy Deshmukh, global head, corporate social
responsibility. “The group-wide programme will
have a larger impact; the scale allows backward
and forward linkages. The different strengths of
Tata companies can be harnessed to collectively
A soft skills programme being conducted at a training centre work for the social good.” ¨

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Tata Motors

Driven by commitment
The skills-development initiatives at Tata Motors have translated
into business gains for the company, while also improving the
employability and income-earning capacities of beneficiaries

E
mployability is a key aspect of the
corporate social responsibility agenda
at Tata Motors (TML). From helping
farmers practice new methods of farming
to training women in handicrafts and imparting
basic vocational skills to youth, the company
engages with various groups to improve their
employability and income-generation capacity.
The TML skills-development programme
covers three broad areas:
Skills building in trades related to TML’s
business: motor vehicle mechanics, diesel
mechanics, drivers, etc. The company
sees a direct link here between the
community’s employability needs and its
own business requirements.
Skills building in other industrial Young students receiving skills training in motor mechanics
spheres: bar bending, scaffolding, the
retail trade, etc. programme trains close to 600 drivers annually.
Skills building in agriculture and allied The company also works with nonprofits
industries, such as dairy, poultry, and skills-development agencies like the
pisciculture and apiculture. Ramakrishna Mission and Pratham to provide
The company’s apprenticeship programme training to youth in other relevant trades, as
offers youth a chance to improve their technical mechanics, welders, electricians, carpenters,
and vocational skills, and some 7,000 people health workers, etc. Over 70 percent of youth
benefit from this programme every year. TML’s receiving training under TML’s various
partnership with 135 government-run industrial programmes find employment in the company.
training institutes across the country — 31 Armed with such experience, TML is now
under the public-private partnership model — looking to take an active role in the group-
can train nearly 10,000 youth every year. wide skills initiative. “Our skills-development
In August 2011, TML launched a driver initiatives are in line with the group’s focus,”
training programme to counter India’s poor says Vinod Kulkarni, deputy general manager,
record in road fatalities and create a trained corporate sustainability. “There is good scope
pool of people who can drive the company’s for cross-learning and mutually beneficial
commercial vehicles. TML currently runs eight partnership in the future. The challenge lies in
driver training schools and plans to start six developing synergies and platforms where we
more in the near future. The driver training can learn from one another.” ¨

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Tata Power

Independence is the elixir


Tata Power’s community development programmes are aimed
at inculcating a sense of self-worth in the underprivileged
communities being served, and in ensuring their self-reliance

L
ivelihood (samriddhi) and employability as call centre executives this year, many of them
(daksh) are the key words in Tata Power’s finding employment with TBSS at entry-level
community development lexicon. salaries of around `6,000 a month.
Through industrial training centres Another focus area for Tata Power is
(ITCs) at locations such as Mulshi (Maharashtra) micro-enterprise development through self-
and career development centres (CDCs) in help groups (SHGs), comprising predominantly
Odisha and Maithon (Jharkhand), the company women in urban and rural habitats. Around
provides skills-building opportunities for 200 SHGs have been formed, with 2,672 women
youth and women in various vocational trades, members, across four states in the country.
including nursing, call centre management and From inculcating saving habits to accounting
incense-stick making. The training incorporates and bookkeeping, these women are now
soft skills in communication and teamwork. demonstrating leadership capacity and also
Some 650 youth are currently being trained identifying new avenues of income generation,
at the company’s ITCs and CDCs; in the last receiving loans to initiate small businesses and
four years more than 1,200 have successfully earning respect within their families and society.
completed the training and found employment Tata Power also reaches out to other Tata
in various sectors. companies to seek and support initiatives.
Tata Power, along with Tata Business A skills-building initiative with Tata Steel in
Services (TBSS), has set up a rural BPO in Tiruldih (Jharkhand), focusing on vocational
Khopoli (Maharashtra) to enhance employability training for project-affected youth, demonstrates
of youth in the region and also to create a talent an inclination to engage with the local
pool for the future needs of the industry. More community in greenfield projects. Tata Power is
than 1,000 young men and women have trained also planning to strengthen the capacity of youth
in some aspects of its business, such as power
generation, transmission and distribution.
“Power is important for the growth of the
country, the community and of industry,” says
Avilash Dwivedi, head of community relations
with the company. “While Tata Power continues
with its business pursuit in challenging
circumstances, it also becomes imperative for
us, as a neighbour of choice, to ensure inclusive
growth and make citizens more prepared and
responsible towards nation building. This can
be accomplished through these skills-building
initiatives. Our journey to excel as a responsible
Tata Power’s career development centre in Maithon, Jharkhand organisation will continue.” ¨

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Tata Projects

The approach is integrated


Tata Projects has partnered government and private agencies to
formulate initiatives targeted at enhancing the livelihood-generating
capabilities of people from disadvantaged communities

T
ata Projects has played an active role
in the skills-building space since
2007, when it started engaging with
youth around its project sites and
regional offices, encouraging them to acquire
employability skills that could eventually
give them access to mainstream employment
opportunities. This has been done as part of its
corporate social responsibility agenda.
Through tie-ups with government-run
industrial training institutes (ITIs), private ITIs,
other training partners and the company’s own
training facilities, Tata Projects offers six-month
residential courses in vocations such as welding,
The courses run by Tata Projects provide on-the-job-training
bar bending, tower erection, plant maintenance
and construction supervision. belong to the disadvantaged scheduled castes
Candidates are recruited from the and scheduled tribes.
disadvantaged strata aged 17-25 years, with 25 Tata Projects also partners government
percent of the trainees coming from affirmative ITIs to enhance skills in the welding and fitter
action groups. The company also partners trades in Andhra Pradesh. The company now
nonprofits and other Tata companies such as plans to train 6,000 people every year in the
Tata Housing. skills required for tower erection and stringing,
The six-month accelerated programme in Nagpur (Maharashtra) and in Hyderabad
gives trainees the benefit of on-the-job training, (Andhra Pradesh).
provides a stipend during the training period as “In line with the group-wide skills initiative,
well as minimum employment for six months Tata Projects intends to play a bigger role in
post-training. So far, the programme has trained view of the experience gained over the years,”
more than 600 people, with an average of 90 says B Sudhakar, the company’s chief human
percent finding employment after completing resources officer. “We can integrate with other
the course. These courses are certified not only group companies in the skills-building sphere,
by the ITI but also by clients of Tata Projects besides leading the skills development hub in
and by the Government of India’s ‘modular Hyderabad. This is a great initiative which will
employable skills’ test. help in reducing the gap between the shortage
Tata Projects offers skills training, through of skills [in India] and industry requirements. It
its nonprofit partners, in areas such as mobile will also help group companies synergise with
repairs, fabrication, painting, plumbing and one another in skilling and placements. And will
basic computing. A majority of the beneficiaries help in nation building.” ¨

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Titan Company

Timed to seize the day


The advantages that accrue to those who have come through
Titan Company’s training courses seem a cut above anything
similar on offer, and that has been a boon for the Hosur region

T
he Titan Company began its skills- unit in Hosur, has so far skilled 117 apprentices,
development journey in 2005 with a with close to 100 percent employment rate.
three-year basic training course at its Last year, the company partnered a
watches division in Hosur in Tamil nonprofit to sponsor a Chennai-based vocational
Nadu. The course teaches fitting as a vocational training centre that trains rural youth — a
trade to youth recruited, after standard 10, from large number of them school dropouts from
backward rural schools in and around Hosur the scheduled caste and scheduled tribe
and Krishnagiri. Roughly 25 percent of the communities — in various industry-relevant
candidates belong to affirmative action groups. skills such as basic retailing and data entry. Titan
Besides exposure to industrial environment has also co-created a watch repair technician’s
and technology, the free course also provides course, where the company’s managers are
these youth with on-the-job-experience and engaged in teaching youth a skill that is directly
a stipend. Some 155 students have passed the linked to the company’s business. The plan now
course so far, with almost all of them finding is to scale up this initiative with three more
employment, quite a few with the Tata group, centres (in Bengaluru, Delhi and Hosur).
including with Titan. The average entry-level In a big leap forward for its skills-
compensation of these people is `200,000- development programme, Titan Company
250,000 a year. recently took over the management of a
Titan also offers a one-year jewellery and large government-run industrial training
precious metal worker course to economically institute in Salem, Tamil Nadu, with plans to
disadvantaged youth who have completed class support and create a centre of excellence and
8. The course, delivered by Titan’s own trained enhance employability skills. This institute has
staff at the company’s jewellery manufacturing approximately 35 percent students from the
affirmative action category.
“At Titan we are working towards creating
a larger skills-development initiative as part of
employability creation,” says Sridhar NE, the
company’s head of sustainability. “We will look
at not just scaling up but also creating industry-
specific trades and, perhaps, a skills academy
in the long run, which could be a hub in itself.
Being one of the largest Tata companies in South
India, it is natural that Titan plays a larger role
in the region to implement the group initiative,
enabling the hub-and-spoke model to get
institutionalised along with peer companies in
Students attend Titan’s training course in Hosur the South.” ¨

62 Tata Review n October 2013


PHOTOFEATURE

creative High
The Titan Company’s Innovation Centre, resting in splendid isolation within its
jewellery division in Hosur, is a beautifully designed space that exudes an aura
of sublime positivity. Being anything less than original and innovative seems
impossible in such an environment.

The centre has been likened to a temple where great ideas can blossom. It is a
symbol of the remarkable success Titan has achieved — in the watch industry,
with branded jewellery, in eyewear and a variety of fashion accessories, and as a
pioneering retailer — since it was established in 1984. Innovation has been the
reason for and the essence of Titan’s flourishing, and the centre reflects that ideal.

Text by Vibha Rao; photographs by BN Ramesh

October 2013 n Tata Review 63


PHOTOFEATURE

Inaugurated in November 2012 by Group Chairman Cyrus Mistry, the Titan Innovation Centre is a natural extension of the
company’s deep-rooted culture of innovation. It aims to inspire and excite, to enable and engage, and to facilitate learning
with a focus on results. The centre has two halls built in a standout tree-house style of architecture. Designed by the
projects team at Titan, the tree-house idea was zeroed in on after more than 10 different concepts were evaluated.
PHOTOFEATURE

The walkway that leads to the


centre’s halls is lined with pictures
of famous inventors and their
inventions, an achiever’s gallery
with pictures of great leaders and
their quotes, and Titan’s innovations.
At the end of the walkway is a little
gate. Anybody wishing to enter has
to answer three questions; the gate
opens only when the right answers
are provided.

The mandate for the


designers of the centre was
to create an ambience of
creativity where innovative
ideas could flow.

This has been achieved


by creating an ‘innovation
junction’, designed to look
like a railway station, with an
‘Inno Express’ at the entrance.
These features set the mood
for visitors to the centre.

October 2013 n Tata Review 65


PHOTOFEATURE

The first of the centre’s two halls is called the


Xerxes Desai Hall of Creativity (named after
Titan’s first managing director). Earmarked for
research and development, it has a library, a
study area and an exploration laboratory. The
hall also houses a prototyping centre, with a
3D printer where employees can make their
prototypes. There is a ‘challenges board’ where
people can post challenges for others to solve.
Employees can either come up with a solution
individually or volunteer to be a part of a team.

The second hall is called the Bhaskar Bhat


Hall of Tranquillity (that’s after Titan’s current
managing director). An island of calm, it invites
visitors to meditate and introspect while they
ponder new thoughts and ideas. The Hall of
Tranquillity provides stimulation to all five
human senses. Soothing sounds like birds
chirping and the waterfall and wind chimes
played here create an ambience of harmony.

66 Tata Review n October 2013


PHOTOFEATURE

Many Titan people and teams use the


Innovation Centre — to spark their imagination
or maybe just to meet. The Titan Innovation
Council organises its Innovation Bazaar and
Interweave events here. These are occasions
when innovation is celebrated and employees
can present and learn from creative ideas.

Recently, the eyewear team was able to come


up in quick time with a meaningful solution to
a particularly vexing problem. That’s routine at
the centre, an oasis of serenity as much as a
hothouse of ideas, one that pushes people to
think differently, to explore new frontiers.

October 2013 n Tata Review 67


Marketing

The glam quotient


A blend of conventional advertising and out-of- communication revolved around
the purity of gold and transparency
the-box digital campaigns, Tanishq’s 360-degree in transactions. As the brand grew,
marketing strategy has catapulted the brand to the communication strategy saw a
shift to affordability and accessibility.
the shining household name it is today With collections like Mia and Inara
that are aimed at young, working

A
confident young woman Says Deepika S Tewari, head of women with disposable incomes,
in the corporate world, marketing at this division of Titan the communication is now woven
the tender bond between Company: “The communication around the theme of independent
a brother and sister and mix varies from collection to women and their careers.
excitement about upcoming nuptials collection. For Mia, Inara and IVA “While we have different
— these are some of the emotions — collections that are targeted at advertisements for our sub-brands
captured by Tanishq’s television young women — we used television and collections, the common thread
advertisements. Targeted at the and digital marketing media is that our communication talks to
progressive Indian woman, the extensively as the target audience is the progressive, modern woman,”
jewellery brand’s communications familiar with these platforms. For says Ms Tewari.
are as inspiring as they are easy to collections targeted at smaller cities,
relate to. we use print and regional media to beyond the traditional
As one of the largest branded reach out to our audience.” For instance, Mia, Tanishq’s first
jewellery retailers in the country, Over the years, Tanishq’s brand sub-brand, is a new workwear
Tanishq uses an intelligent blend messaging has changed with the jewellery category that breaks
of different media platforms to times. When it was first launched the myth of gold jewellery being
drive its communication strategy. in the early 1990s, the brand suitable only for traditional
occasions. A young, outspoken and
While we have different advertisements stylish sub-brand, Mia is positioned
as trendy, lightweight, stylish and
for our sub-brands and collections, the
light on the pocket.
common thread is that our communication “With Mia, we want to be part
talks to the progressive, modern woman. of every working woman’s life and
Deepika S Tewari, head of marketing, Tanishq celebrate their work,” says Ms Tewari.
“The youth scene resonates with

68 Tata Review n October 2013


MARKETING

Tanishq’s brand communication


concentrates on affordability and
accessibility

music, so we have used youth-centric at the modern Indian woman, who jewellery, was extensively seen in the
jingles that they can connect to.” is seeking diamonds to suit all her Bollywood movie Race 2, actively
For Mia, Tanishq has also jewellery occasions,” explains promoted by the leading ladies of the
made extensive use of the digital Ms Tewari. “Like with Mia, we film. The collection is young, high
and mobile platforms. Mia’s separate have used television commercials on the glam quotient and extremely
mobile website, a first for any and the digital marketing medium vibrant, making it a perfect fit for a
Tanishq collection, is a nod to the extensively for Inara.” Bollywood launch.
current generation’s smartphone “The brand’s objective is to
fixation. Last year, a digital initiative right-cost glamour connect with the fashion-seeking
called ‘My Expression’ was launched, Inara’s communication revolves consumer; the diva who strives
inviting jewellery designs from around its glamour quotient and to be ahead of the curve,” says
customers. The initiative received its affordable price. “The collection Ms Tewari. “The film Race 2 helped
an overwhelming response, with is designed in such a way that the give our fashion stance a wide
more than 3,000 entries and 12 perceived value of the jewellery is platform, considering the mass
winning designs, which have been much higher than its actual price,” appeal that Bollywood has across
incorporated in the latest edition adds Ms Tewari. “We have kept the country.” With this cinematic
(Mia 3.0). the imagery for this collection as association, Tanishq has successfully
“Innovative products, very desirable.” To bring home the added another facet to the brand
communication messaging and glamour quotient, in-store fashion — fashion. “The linkup has been
consumer connect have been the shows with high-profile models useful for us. We do not associate
three pillars for the success of Mia,” were organised. with other brands if we do not see a
says Ms Tewari. As a leading lifestyle brand in mutual benefit.”
Tanishq’s latest offering, the the country, Tanishq has also tied Fashion bloggers and lifestyle
Inara collection, showcases exquisite up with lifestyle publications and magazines were roped in as part
diamonds set in tastefully crafted movie collaborations to create a of IVA’s digital communication
creations and is being offered at buzz. For instance the IVA collection, strategy. The marketing strategy
accessible prices. “Inara is targeted a glamorous line of fine fashion for the collection was a mix of

October 2013 n Tata Review 69


Marketing

like to gift Tanishq jewellery to their


relatives in India or purchase it for
Mamma Mia! An idea on the roll themselves,” says Ms Tewari.
“Customers from tier II and III cities
also browse and purchase online
as all the designs may not be
available at the Tanishq showroom
in their city.”
In recent times Tanishq has
built a large social media footprint.
With more than 500,000 fans on its
Facebook page, the brand leverages
its social media presence to connect
more substantially with customers.
“Social media is one of the most
important elements in our marketing
mechanism,” says Ms Tewari.
“It helps us have a two-way
To mark the launch of Mia in 2011, Tanishq came up with the
conversation with our customers.”
innovative concept of ‘Mia on wheels’. A luxury bus drove
Tanishq, through its digital
women to work from select locations across Bengaluru.
initiatives, has received important
Women could register online on Tanishq’s social media
consumer insights on the product
platform to be part of this unique idea. During the bus
and service front. Its online activities
journey, the women were offered a chance to try on jewellery
are not limited to collection launches
from the Mia collection. The women were also treated to
or offers but aim at offering something
multiple feel-good services like foot massages, fashion tips
extra and more meaningful. The
from established stylists and designers, makeover sessions
social media team at Tanishq works
and photo shoots — all within the bus. A perfect example
round the clock to acknowledge
of integrated marketing, Mia on wheels was a much talked-
customer suggestions, queries and
about launch pad for the collection.
complaints.
The digital medium has brought
the brand closer to the customer,
outdoor, television, digital and social with the consumer. “Our online sales taking the customer-brand
media, in-store events and cinema. are growing with increased internet relationship to a higher level. “With
Tanishq is a pioneer in penetration and mobile connectivity, more than 2,400 Twitter followers
introducing jewellery in the online but our customers still prefer to shop and 300,000 blog visitors, our social
space in India. It regularly showcases at our showrooms,” says Ms Tewari. media platforms have played a great
all its latest collections online and “Most of them are not comfortable role in the success of our launches,”
also displays the price of each piece buying expensive jewellery without says Ms Tewari.
of jewellery, a practice unheard of in trying it out.” Tanishq’s marketing campaigns
Indian gold jewellery retailing. “We have created a communication
have customers who visit the website online connect advantage that is hard to match. With
to browse for their favourite design In spite of that, the brand sells an its clear messaging that consumers
and then make the purchase at a average of `1 million worth of can easily relate to and enormous
store,” says Ms Tewari. jewellery every month on its website. digital presence, the brand has struck
Registering about 8,000 plus “We see a lot of browsing and marketing gold. ¨
visits per day, the Tanishq website purchases from our nonresident
is an important platform to connect Indian customers, many of whom — Vibha Rao

70 Tata Review n October 2013


PERSPECTIVE

Tata Communications provides high-speed


connectivity from each track to the
F1 headquarters in the United Kingdom

F1 at the speed of light


The association with Tata Communications gives Formula 1
supersonic speeds in connecting live to its millions of fans
around the world, says Srinivasa Addepalli

W
ith over 500 million people demand from Asian and other emerging
from Brazil to China and Spain market countries has significantly boosted
to South Africa glued to their revenues: for instance, Malaysia pays $67
TV sets for 20 weekends every million per race whereas Italy pays only $7
year, Formula 1® (or F1) is probably the million. Another third of the revenues come
‘most global’ sporting event ever. Not only from broadcasters around the world who pay
is F1’s viewership globally dispersed, its 20 for exclusive rights to broadcast the races to
races in twenty different countries across five their viewers. Brazil and China are the two
continents gives it a geographical spread like largest markets contributing nearly a quarter
no other sport. Little wonder that Formula of the total viewership.
One Management, the organisation that runs F1’s globality is also the source of the two
F1, has revenues over $1.5 billion and is valued major challenges it faces. Firstly, race locations
at $10 billion. are now thousands of miles away from each
In fact the secret to F1’s success — its other and increasingly in markets with
revenues have grown 7 percent per annum
since 2007 in spite of the recession and it has
a whopping 70-80 percent profit margin — is Srinivasa Addepalli is an independent
strategy consultant and visiting
its globality. A third of its revenues come from
faculty at IIM Ahmedabad. He was
host locations, ie, race organisers that vie to earlier the chief strategy officer at
bring the race to their country. Increased Tata Communications.

October 2013 n Tata Review 71


PERSPECTIVE

relatively poorer infrastructure. It is expensive on the track. Even the teams use information
and tiring to move the equipment and people from hundreds of sensors placed on the car
from race to race. The operating model had to to analyse and improve (often, in real time)
be updated to support the new geographic mix. performance.
Secondly, as F1 reaches newer audiences,
it is no longer a one-screen (TV) sport. At light speed
Younger F1 enthusiasts are analysing race Tata Communications increased the
information and live tweeting updates as bandwidth between the race location and
they track the progress on the television. the F1 headquarters by more than ten-fold
The audience engagement model had to be to 100 mbps. Faster connectivity meant that
modernised to reflect the changing media most of the planned technology and media
consumption behaviour. enhancements in the sport could be done
by engineers located in the UK rather than
High tech connectivity having to send them all to the 20 different race
It was in this context that F1 chose Tata venues. This gave F1 a super speed bump and
Communications as its official technology one service provider connecting them globally.
partner in a multi-year deal that also saw Tata Mr Baker said, “Commitment and reliability
Communications become an official sponsor is one of the key reasons why we chose Tata
of F1. James Allen, a veteran F1 commentator, Communications as our connectivity provider.
termed this ‘the deal that changes F1 forever’, Coupled with its global infrastructure
and Eddie Baker, the chief technical consultant and extensive contacts, we can now travel
to F1, called it ‘the most significant moment anywhere in the world and still expect the
for F1 since the advent of satellites’. same resilience and quality of connectivity.”
The innovative deal also provided Tata Nearly 70 million people visit the
Communications with category exclusive Formula1.com website every year from 188
designations as official connectivity provider countries and this number is growing. Many
of F1 and official web hosting and content of them use tablets and smartphones to get
delivery network of Formula1.com. Tata information about race schedules, driver
Communications provides high-speed statistics and video footage of previous races.
connectivity from each track to the F1 Demonstrating the growing importance of
headquarters in the UK along with the hosting this audience and the decline in TV audiences
and distribution of the Formula1.com website. (2012 viewership was 5 percent down from
One does not realise how technology 2011 and 17 percent below its all-time high in
intensive F1 is till you see a vehicle in action 2008), there is an expectation that F1 would
at a race. Not only do the cars demonstrate the consider live streaming its races online.
cutting edge in automotive engineering, the The all-important responsibility
entire design management and distribution of hosting the F1 website is with Tata
of the race requires a very sophisticated Communications. Not only does the
technology platform. For instance, F1 fans are infrastructure have to scale for millions
familiar with the drag reduction system (DRS) of simultaneous users every race weekend
that provides the cars an additional speed but the content also has to be distributed
boost of 10-12kmph to enable overtaking. globally across multiple devices and network
DRS gets activated in select zones within the connection speeds. Tata Communications’
track and only if the gap between the two cars data centres and content distribution network
(at that time) is one second or less. For such a (CDN) are expected to play a major role in
system to be operational, the F1 race control taking F1 to new audiences. As Colin Mann
requires live information about the location, wrote on the Advanced Television website,
speed and timing information from each car “F1 has a mass of footage that is not currently

72 Tata Review n October 2013


PERSPECTIVE

broadcast, as well as live, unused performance


data. Maximising the potential of the CDN
would enable F1 to transmit this content
directly on to the computer screen of a F1 fan
sitting at home.”

Enabling speed
The relationship with F1 is helping Tata
Communications win more business from the
large ecosystem of racing teams, broadcasters
and sponsors. MERCEDES AMG PETRONAS,
the No 3 team in 2012, chose Tata
Communications as its connectivity provider,
thereby gaining a 3X boost in the connectivity Forging a technology partnership — Bernie Ecclestone, CEO, Formula One
between each racetrack and their design Management with Tata Communications CEO Vinod Kumar
factory near London. On a race weekend,
several Mercedes engineers in the factory for advanced solution delivery. For a client
monitor and analyse real-time data from their that measures outcomes in the tenth of a
two cars and make changes, just as if they were second, nothing is too small and nothing can
a few metres away. Their supervisor told me, wait. Mr Winder added, “There is no slack in
only half-jokingly, “These guys’ families love the schedule. We are constantly pushing the
Tata Communications because they don’t need boundaries for F1.” In fact, one of the Tata
to travel the world for half the year!” Communications’ tag lines reads: If we can do
The teams as well as F1 management it for Formula 1, we can do it for anyone.
are constantly experimenting with new ideas, For F1, the technology supply deal is not
testing them in real time to either adopt them just about getting more bandwidth and hosting
or learn for future use. As technology partner, capacity. It is about understanding where the
Tata Communications has been expected to future of the business was headed — younger,
not only keep pace but also participate in the tech-savvy, globally dispersed audiences;
innovation process. Mr Baker points out, “It distant, emerging market race locations; and
traditionally takes around 30 days to install, a major pressure on cost — and taking steps
test, run and then dismantle a big MPLS in advance to continue to stay ahead. And to
circuit. A lot of planning and effort has gone enable this transformation journey, F1 chose
into condensing that to meet our time scales, Tata Communications.
with some events just one week apart.” As Bernie Ecclestone, the 82-year-old
CEO of Formula One Group, says, “We looked
On site support into the market to see who can provide the
Weekend after weekend, all of 2012 and now services we needed, and that’s why we chose
into 2013, the Tata Communications team Tata Communications. Out of all the people
has risen to the challenge. A dedicated onsite we researched, they gave us what we wanted.”
team is complemented by a cross-functional For Tata Communications, the journey
support team that works as one large virtual to transform one of the world’s most exciting
organisation. “Usually Tata Communications sports has just begun. As Vinod Kumar,
is the first team at the track in the weeks CEO of Tata Communications, sums it up,
leading up to the race. During live events, “Working with one of the world’s most highly
the onsite team is supported by the Tata technical and innovative organisations is an
Communications’ remote pit crew from all exciting opportunity to leverage our technology
functions,” said Mike Winder, vice president leadership and vision for emerging markets.” ¨

October 2013 n Tata Review 73


PERSPECTIVE

Getting India
IPR ready
As India grapples with the challenges of rolling out a national
strategy on intellectual property rights, Subramaniam Vutha
explains why the country’s technologists and managers should
ponder the potentially crucial role they have to play here

I
n an age where creativity and innovation markets because over 80 percent of patent
is driving every aspect of life, the role filings in India are by foreign companies and
of intellectual property rights (IPR) has such patents, when granted, could be used
assumed a greater significance, especially to impede Indian industry’s ‘freedom-to-
in the context of the growing globalisation in operate’ in domestic Indian markets. In any
business. IPR enables businesses to protect the event, holders of patents in India would be in
sovereignty of their trademark business ideas a position to impose costs on those who use
and helps them gain a competitive advantage. their patented technology — and this holds
Let us look at the different aspects of true even if such use is inadvertent. Too much
being IPR ready, in the form of answers to is at stake for Indian industry.
some important questions. Building up an IPR portfolio that could
be used to gain competitive advantage and to
Why is IPR readiness crucial for counter potential infringement claims from
India and Indian industry? third parties, takes considerable management
First, without IPR readiness, Indian industry time, effort, planning and strategising. If
would be hampered within domestic Indian Indian technologists and managers do not
apply their minds to this vital need, that
would expose their companies to significant
risks and potential costs even within Indian
domestic markets.
Subramaniam Vutha is an advocate and a consultant
Second, without IPR readiness, Indian
with the Tata group. He chairs the Intellectual
Property Strategy Committee at the Licensing industry would be at risk of losing the value
Executives Society International. of their innovations. Without IPR protection,

74 Tata Review n October 2013


PERSPECTIVE

Indian industry’s innovations could be Figure 1: Benefits of IPR readiness


easily copied by others resulting in loss of
competitive advantage. How else could a Competitive New revenue
business attain competitive advantage if it advantages: Product options: From
does not have some degree of protection for features patent licensing of
protected; innovations innovations and
its innovations? How else could a business
protected against technology; sale of
sustain its competitive advantage from its copying technology
innovations unless it identifies the various
ways in which IPR [namely patents, trade IPR
secrets, copyright, industrial designs, Readiness
trademarks and service marks] could be used
to protect such innovations from rivals who Risk mitigation: New business
Ensuring freedom- options:
may seek to imitate such innovations?
to-operate vis-a-vis Franchising, teaming,
Unless innovations result in sustained 3rd party patents; collaboration and
competitive advantage, the value of such retaliatory power from joint ventures
innovations is transient. own IPR portfolio leveraging IPR
Third, without IPR readiness Indian
industry would be at the risk of losing
new revenue and business options that IP foreign markets, the need to step up their IP-
assets provide. IPR serves as collateral for related capabilities is even more crucial. It is a
borrowings, as contributions to joint ventures common practice for companies with global
and collaborations and as value for equity plans to study the IPR portfolios of local
stakes. competitors before entering into
Global leaders in various technology new markets.
and business domains are now turning their This serves not merely to assess the
management attention and management skills risks of potential claims for IP infringement
to leveraging their powerful IP portfolios. by such local competitors but also to highlight
These are being used to generate new any potential advantages that that the new
revenues, and to raise productivity through entrant can leverage using its existing IP
re-use and re-purposing of innovative portfolio or new patent filings in the
tools, processes, techniques, frameworks, target market.
methodologies, product features, designs, Figure 1 depicts the benefits of IPR
drawings, code, scripts, software programs, readiness and the risks of being unprepared.
circuitry and the like.
But the important thing to bear in mind Why should IPR readiness matter to
is that these companies have assiduously technologists and managers?
planned, developed and enhanced their IP As prime movers in the development of
portfolios over many years. Some of them technology and innovations, technologists
have been at it for over 100 years. So their and managers are directly concerned with the
knowledge of, and experience in, developing business benefits of technology advancements
and deploying IP strategies, IP plans, IP
processes and IP licensing programmes are of
a very high order.
IPR serves as a set of handy tools to
Indian businesses will need to match such translate technology advancements and
IP-related capabilities in order to compete
innovations into business benefits. It can
in Indian markets with companies like these
that are already active in the same markets. lead to a competitive advantage.
For those Indian businesses that are seeking

October 2013 n Tata Review 75


PERSPECTIVE

Figure 2: Roles played by managers, technologists and lawyers

Generating /
Protecting IPR Leveraging IPR
harvesting IPR

IP lawyer / patent agent Technologist / manager


Technologist [usually a technologist with
patent qualifications]

IP lawyer /
Manager Technologist / manager
licensing professional

and innovations. Consider how IP assets are Without IPR in the form of patents,
generated, harvested, protected and leveraged. trade secrets, copyright, industrial designs
In each of these aspects, it is the technologist and trademarks, it would be very difficult,
and the manager who plays a primary role. if not impossible, to gain sustained business
Lawyers help protect and leverage IP advantage from technology advancements
assets, but it is the technologist and the and innovations. Figure 3 shows how certain
manager who play an important role in IPR elements provide the basis for sustained
generating / harvesting, protecting and business benefits.
leveraging IPR as shown in Figure 2.
How should a technologist or
How is IPR crucial in procuring manager go about getting his
sustained business benefits from business IPR ready?
technology advancements and Every technologist and manager should take
innovations? the time and effort to add an ‘IPR dimension’
IPR serves as a set of handy tools to translate to his or her knowledge base.
technology advancements and innovations In doing this, the technologist and
into business benefits. manager can consider the following options:
Enrol for and complete some basic IPR
Figure 3: Business benefits from IPR courses. For example, there are some
free-of-charges courses offered by the
Trade secrets World Intellectual Property Organisation
Patents at www.wipo.int.
Protect against
Protect innovative misappropriation of Think and read about the connections
features of products / valuable know-how, between IPR and innovations /technology
processes designs, drawings,
codes, manuals advancements.
Teach and write about the connections
between IPR and innovations /
Industrial technology advancements.
designs Interact regularly and frequently with
Trademarks /
Protect against service marks organisations like the Technology Law
copying of product Forum and the Licensing Executives
Protect against
designs and
counterfeiting Society [www.lesi.org and www.lesindia.
appealing external
aesthetic features org]. Invite professionals from these
forums and interact with them. ¨

76 Tata Review n October 2013


PERSPECTIVE

Can India avoid the


middle-income trap?
To combat the slowdown that has everyone worried, institutional
reform is the need of the hour in emerging economies such as
India, says Govind Sankaranarayanan of Tata Capital

T
he idea that companies and countries and there is a sense that these countries
can fall into a middle-income trap will find it somewhat difficult to avoid this
has been prevalent for some years. plateauing out of growth.
The US National Bureau of Economic It is worthwhile to understand why these
Research has predicted that countries find countries seem to have lost steam. For much
themselves squeezed into these traps at per of the past decade these countries have been
capita levels of about $16,000 a year. In the the beneficiaries of cheap capital, which in
case of the BRIC countries whose per capita turn has spurred investment and domestic
income stands at levels between $5,000 consumption. With the short-term adrenalin
and $11,000, there has been considerable that huge capital availability creates, there
deceleration in growth before reaching these was relatively little inducement for the kind
levels. Brazil grew by just 1 percent last year of fundamental structural reform that always
while Russia has barely grown in the first calls for discipline. Precisely because this
half of this year. The slowdown in emerging period of transition also tends to come with
markets does not now appear to be temporary high-growth, there are opportunities for

October 2013 n Tata Review 77


PERSPECTIVE

regulation capture which can disincentivise Manufacturing base


true reform. Therefore and to rephrase Already the path to succeed in manufacturing
Tolstoy’s famous first lines from Anna is strewn with more thorns than was the
Karenina, ‘unhappy economies have each case 20 years ago when China entered this
failed institutional reform in their own ways’. space. With the rich countries themselves
facing low growth and unemployment, even
The role of the state the most fervent supporters of free trade
In China and Russia the dominance of will not be able to succeed in avoiding some
government in business related decisions has degree of protectionism. We already see that
proven to be the cause for insufficient reform. computer maker Lenovo and furniture maker
In the case of the East European transition Ikea have moved manufacturing back to the
economies, the one-time inducement of entry USA. The recent cases of the expropriation of
into the European Union is no longer in play Spanish oil company YPF in Argentina and
and reforms have come to a halt. the controversial US decision to tax Chinese
In other countries, as Nouriel Roubini solar panels are only two of the more visible
points out, state capitalism based on the instances of the trade winds that flow against
nationalisation of resources has slowed down off-shored manufacturing.
the need for important private sector reform. A strong manufacturing base can also
Now, following the debt induced financial spill over into benefits in other areas. The
crisis, it seems more unlikely that we will see incentive to invest in classroom education
institutional reform in the future. For all the depends very much on the opportunities
above reasons there is a strong belief that the that it provides. If a country is strong in
tapering of growth in emerging economies is manufacturing, and there is a visibility of
a long run trend. stable manufacturing jobs, this can create a
The decline of manufacturing is another virtuous circle of investment in education
reason for the impermanence of growth in and the creation of a middle class who can in
these countries. Sustained growth requires turn persuade the political executive to make
nations to make steady enhancements in investments in the right areas.
their manufacturing base. With the exception
of China it is not clear whether many of the Silver linings
other emerging economies have dramatically With the winds blowing against economic
improved their industrial bases. reform and free trade, there is now a growing
Brazil has made itself highly dependent acceptance that some of the emerging
on commodity supplies to China. In the economies run the risk of becoming captive to
case of Russia, reliance on oil exports has the so-called ‘middle-income trap’.
somehow reduced the Soviet era focus on What could the slowing of other
manufacturing. In case these countries do emerging markets mean for India? First, in the
not quickly recapture the high ground in light of the challenging economic situation in
manufacturing, they may well find a window India, these changes elsewhere in the emerging
of growth could shut before they increase per world should be a call for introspection within
capita incomes. the Indian policy-making establishment.
It was believed during the go-go years
until 2007, that surging into the group of
Govind Sankaranarayanan has been with the Tata group more advanced economies was a right, to be
since 1993 when he joined as a TAS manager. He has exercised at the time of our choosing. These
held challenging positions across Tata companies expectations have been belied. However,
such as Tata Tea, Tetley and VSNL International. He is
currently the chief financial officer and chief operating even in this period of economic gloom, there
officer, corporate affairs at Tata Capital. are some silver linings. India is less reliant

78 Tata Review n October 2013


PERSPECTIVE

on external trade than some other countries


and hence its fragility to international trade
movements is generally less marked.
Second, a possible competitor, China
faces the twin challenges of high wages and
a lending bubble, both of which could erode
its manufacturing competitiveness. There is
some chance therefore that it could exit some
parts of the low value manufacturing space, in
the same way that Japan did in the 1960s. On
that occasion, Taiwan, South Korea and Hong
Kong took up the slack. There could be an
opportunity for India therein to capture some
markets in manufacturing, where China might
have lost its edge.
Thirdly, several commodity prices have
dropped by 10-15 percent in the recent past,
with potentially favourable implications for
some industries.
Finally, and at the risk of repeating a
common theme, India does have different
demographics, which still give it time to take
a breather after the great financial slowdown.
There is yet another chance for high growth, A strong manufacturing base can spill over into several benefits in
unlike in some other emerging economies. other areas and give rise to a virtuous circle of investment
To believe that the Indian economy is
immune to the conventional need for strong the area of land acquisition and incentives to
economic institutions and could somehow invest more across manufacturing industry.
sustain high levels of growth without these There can be reform to encourage greater
being in place is a bluff that has been called, participation and depth in the Indian bond
in the recent past. Furthermore the belief that markets, as also executive actions to undo
an economy can ceaselessly travel the road to the policy blockages in coal and iron ore
higher consumption without commensurate mining, solving vexatious power disputes,
investments in supply creation has been distinguishing cowboy infrastructure players
answered by the persistent inflation we face. from serious ones and supporting those in
Finally, in democracies, the result of the troubled times.
absence of well-run institutional responses to Speaking after the financial crisis, Ben
problems can sometimes be policy logjam, as Bernanke once commented that the reason for
we have seen since 2009. avoidance of another Depression is because
Therefore the exploitation of these economists now know the mistakes they made.
economic silver linings can happen only if In the same way, India now knows that policy
we take a combination of the right steps. As inaction can have a heavy price to pay.
Amartya Sen has argued, we need to match East Conversely, and on a positive note,
Asian and Chinese literacy rates, which have there is greater clarity of what needs to be
always been 20-25 percent higher than those in done to return the country to economic
India. This has enabled them to pursue the path stability. The ball is clearly in the court of the
of growth through manufacturing. Indian government to rediscover the path
There also need to be greater reforms in to growth. ¨

October 2013 n Tata Review 79


Community

The tragedy and after


The disaster was a lesson that nature
In the devastated Uttarakhand hills, the Tata effort
is too powerful to be trifled with.”
to provide immediate relief and help with long- Dr Malavika Chauhan,
executive director, Himmotthan
term rehabilitation has eased the suffering of many
Society, an Uttarakhand-based
associate organisation of SRTT, says,

H
eavy rains and landslides devastation. The disaster exacted “Almost all my team members were
are a regular feature in a heavy toll, with official figures out in the field. By the time we came
Uttarakhand, one of the pegged at 5,360 deaths and several to Almora, three of the connecting
most picturesque states of thousand missing persons, besides roads had been washed away. That is
India and home to one of Hinduism’s an inestimable quantum of loss of when we realised how bad it was.”
most popular pilgrimage circuits: land and other property. The toll was Dr Chauhan contacted
the ‘Char Dham Yatra to Kedarnath, higher because of the large numbers Mr Pandhi, who was also in
Badrinath, Yamunotri and Gangotri’. of tourists and pilgrims. Uttarakhand then, and apprised
However, in mid June 2013, Says Arun Pandhi, chief him of the situation. Mr Pandhi
when it rained for days on end and development officer, Sir Ratan Tata got in touch with Dr Mukund
showed no signs of letting up, it Trust (SRTT): “On the day of the Rajan, chairman, Tata Council for
became clear that this was going to flood itself, 12,000 people were Community Initiatives, and Sunil
be a disaster the like of which no either going up or coming down Bhaskaran, deputy vice president,
one had seen before. The series of from Kedarnath. The extreme corporate services, Tata Steel,
cloudbursts between June 15 and 17 precipitation led to rivers of a depth and vice chairman, Tata Relief
left behind a trail of destruction and of 4 to 5 feet rising up to 100 feet. Committee (TRC), among others.

80 Tata Review n October 2013


Community

A picturesque state turns into a valley of death


— images from the disaster in Uttarakhand, June 2013

“There was an immediate response,” members of TRC, the Delhi office of experience during this natural
says Dr Chauhan, “much more than Tata Steel and others. calamity.”
either of us had expected.” Group Chairman Cyrus P Mr Mistry called a review
Mistry also took a keen interest meeting on June 24. On June 26,
Responding to the call in the immediate relief measures Dr Rajan held a meeting in Dehradun
The need of the Uttarakhand people that were being planned. “Our with the local representatives of
galvanised the Tata group. Support relief and rehabilitation efforts in companies based in Uttarakhand,
came at a crucial time. “At that point, Uttarakhand should be consistent besides the TRC team. Talking about
no one was aware of the magnitude with the Tata tradition of relieving the Tata effort, Dr Rajan says, “The
of the disaster,” says Mr Pandhi. the distress of those in need and of manner in which Tata companies
“People had begun to arrive, looking making a supportive and sustainable have come forward with their
for their relatives. For three days contribution to a region,” he said. “I wholehearted support for the group’s
there was a virtual blackout with the would like to urge and encourage relief initiative in Uttarakhand has
breakdown in the communication every Tata company to give been tremendously inspiring. The
network.” Over the next few days, generously, be it through volunteer successful collaboration we have
it became clear that Kedarnath support or material support that undertaken with the Tata trusts in
had become a valley of death. would alleviate the suffering of this initiative has also been extremely
Elsewhere, the damage to property those people in Uttarakhand who encouraging. There are many
was greater, with entire villages and have gone through a harrowing worthwhile lessons we will draw from
infrastructure being washed away.
Learning about the severity
The manner in which Tata companies have
of the disaster, the Tata group’s
come forward with wholehearted support
volunteers swung into action. TRC
began to mobilise itself and prepared for the relief initiative in Uttarakhand has
to send its people to Uttarakhand. been tremendously inspiring.
On June 22, Dr Rajan reviewed the Dr Mukund Rajan, chairman, Tata Council for Community Initiatives
situation along with Mr Pandhi,

October 2013 n Tata Review 81


Community

The relief efforts and medical assistance reached more than 9,000 beneficiaries in 174 villages

this for the way in which our group drinking water had been polluted, Tata Motors’ deputy general
addresses future relief efforts.” 1,200 units of Tata Swach were manager, corporate sustainability,
Relief camps were set up in supplied by Tata Chemicals. sent vehicles with relief materials
Uttarkashi in coordination with the Materials that came in bulk were to Pithoragarh district from
district administration. “While the quickly unpacked and re-packed Pantnagar. Rajiv Kumar, honorary
army and air force were rescuing into relief packages. secretary, TRC, oversaw the
pilgrims, we decided to help out dispatch of relief packages in
in areas where the damage was Collaborative effort Rudraprayag and Uttarkashi and
equally severe but human casualties The storage and transportation personally trekked through many of
were fewer,” says Mr Pandhi. of packages was coordinated the affected villages.
“Himmotthan’s partner NGOs did in collaboration with the local But the going was not easy.
the initial recce. They informed us establishments of Tata Motors and Large stretches of road had been
of the needs, based on which we Titan Company. They were then completely destroyed, adding
prepared the packages. They also dispatched to various villages, based to the difficulty of reaching
coordinated with the distribution. on the demand received earlier from immediate relief to the affected
Their cooperation helped ensure Himmotthan’s NGO partners. At people. Bachendri Pal, the famed
last-mile connectivity.” the villages, the NGO partner would mountaineer who works with the
The Himmotthan and TRC assist in distributing the packages. Tata Steel Adventure Foundation,
teams quickly busied themselves in Signed acknowledgements were and her team trekked up to the most
preparing packages for immediate taken from the beneficiaries. distressed villages in Uttarkashi, the
relief. The packages included Tata Motors also took the ones that were inaccessible by road,
uncooked food, matchboxes, solar lead in providing relief packages carrying relief material.
lanterns, etc. Since sources of in Pithoragarh. Vinod Kulkarni, “I was amazed at the ease with
which everything fell into place,”
While the army and air force were says Dr Chauhan. “The distribution
of work was managed so well. Many
rescuing pilgrims, we decided to help
companies called with offers to send
out in areas where ... the human volunteers. The support of the Tata
casualties were fewer. group was like a huge tidal wave. The
Arun Pandhi, chief development officer, Sir Ratan Tata Trust Seema Suraksha Bal at Pithoragarh
also helped us with distribution.

82 Tata Review n October 2013


Community

We used their godown. Our many We need to look at how we can leverage
linkages came through for us,
technology to avoid another such disaster.
helping us reach several beneficiaries
across villages.” We are looking at a disaster management
The relief efforts and medical centre in every cluster of villages.
assistance of the group reached over Sourav Roy, programme leader, Tata Group Uttarakhand Programme
9,000 beneficiaries in 174 villages.
Tata companies contributed
from their resources and expertise. appointed programme director shape phases II and III of the relief
Tata employees offered a day’s salary while Sourav Roy was placed as the effort. “As part of phase II, we will
for the relief effort, and the collected programme leader in Uttarakhand. reconstruct community structures
sum was matched by the concerned Mr Mamgain has been an and schools,” adds Mr Roy. “Our
company. The companies offered active proponent in the field of aim is to redevelop infrastructure,
volunteers, supplied goods for the education following a distinguished which will be utilitarian, for the
relief packages and vehicles for career with the armed forces while community while tying into a larger
transportation. They also sent their Mr Roy is a TAS manager, from goal of multifaceted community
products in large numbers to be the batch of 2007, with a keen development. Rehabilitation of
included in the relief material. interest in development initiatives. displaced families before the onset of
Medical services were made They were supported in the initial winter will be a priority.”
available by companies that sent phase by Ashish Goyal, Rizina The medical camps conducted
in teams of doctors and sponsored Patrawala and Abhishek Goud, all earlier will give way to health
medicines. Some 4,000 people were TAS probationers from the batch interventions with wider impact.
treated through medical camps. of 2013. The programme team will This phase will see the upgradation
Companies also sent in beverages, be reaching out to companies for of primary health centres (PHCs)
bottled water, blankets, torches, etc. volunteers shortly, for the next phase with better equipment and
The donation of solar lanterns of rehabilitation work. the training of a few people as
was particularly welcomed by people paramedical personnel. Local
in places without electricity. At the Assessment Survey nurses and midwives will also
request of the Uttarakhand Power The Tata Institute of Social Sciences be trained as part of the skills
Corporation, Tata Power sent in (TISS) was commissioned to programme. Medical specialists
four teams to restore power lines in do a baseline needs assessment affiliated with Tata companies will
Uttarkashi, Ukhimath, Joshimath survey, covering 90 villages across be invited to offer their services
and Narainbagar. the affected districts, within a through the PHCs. There will also
With much of the immediate fortnight of the disaster. The survey be nutritionists to create awareness
relief underway, it was time to determined the immediate needs of about the right diet, etc.
consider the long-term rehabilitation the people and assessed the impact Subsequently, the programme
of the area. It was felt that a full-time of the disaster on key infrastructure. secretariat has also initiated
team stationed in Dehradun would “The TISS survey helped bridge a detailed household survey
be more capable of bringing the the key gap between information through TISS. This is focused
relief effort to fruition. This led to on the requirements and fulfilment on identifying the skills and
the establishment of the Tata Group of the requirements as part of the livelihoods requirements in the
Uttarakhand Programme, based out programme design,” says Mr Roy. region. Says Mr Roy: “The idea is
of a secretariat office in Dehradun, “Even the government is awaiting to get an understanding of people’s
to coordinate the relief exercise, results. This could be a benchmark requirements and map them out for
followed by the implementation of survey for all disasters.” group companies, or look out for
a coordinated Tata group disaster The outcomes of the survey and external vendors, where required.
response programme in the state. the extensive fieldwork undertaken Areas like agriculture and hospitality
Col (retd) Arun Mamgain was by the programme team have helped might be of interest to the people.”

October 2013 n Tata Review 83


Community

There was an immediate response. So the local community. “We will give
shelter for their livestock and a place
many companies called with offers to
to store their fodder. The design
send volunteers. The support of the Tata will be ecologically sustainable.” But
group was like a huge tidal wave. beyond these interventions, there are
Dr Malavika Chauhan, executive director, Himmotthan Society other issues which raise themselves.
Dr Chauhan speaks of the
many lives that have been lost and
Specific clusters have been identified with a rollout of the skills and of the counselling services that
for the skills development and livelihoods initiatives to enable might need to be offered to the
livelihood programmes. the complete rehabilitation of the survivors. “The government has
“A sustainable livelihood communities there. The process of offered the people compensation of
programme driven by micro land allotment and village selection `5 lakh per death in the family,” she
enterprises requires two to three has already been initiated with the says. “There are whole villages in
years to get stabilised,” says Mr Roy. administration at multiple levels. Kedarnath where all the men have
“That is why we are working with a died. Now the women have money
partner, Himmotthan, that is deeply the social equation in the bank but they don’t know
rooted in the region. The intent As the specific villages are identified, what to do with it.”
is to utilise Tata group’s resources the programme team will initiate The need for a disaster warning
towards a sustainable programme. dialogue with the community to system is also keenly felt. Sounding a
When the Uttarakhand programme ensure that all doubts are resolved prescient warning Mr Roy says,“We
finally withdraws, we should be and that the new construction is need to look at how we can leverage
able to hand over the baton either accepted by all. “There are social technology to avoid another such
to Himmotthan or to specific Tata aspects to it,” says Mr Roy. “We have disaster. We are looking at equipping
companies so as to carry forward to give them something that is in every cluster of villages with a
these initiatives.” keeping with what they are used to. disaster management centre that has
In phase III the Tata group We cannot disrupt the community. an advanced warning system.”
will look at adopting entire villages Nor do we want to create ill will.” The early and widespread
where damaged houses and other Dr Chauhan adds that the relief efforts in Uttarakhand are a
infrastructure will be rebuilt along building effort has to be sustained by tribute to the commitment of Tata
companies and the partnership
with Himmotthan and its partner
NGOs. It is as much a vindication of
Himmotthan’s methods of working
as of the diligence of the NGOs.
The next stages of the
Uttarakhand programme are being
planned with the aim of setting
up an initiative that may be the
benchmark for collaboration
between the corporate and
nonprofit sectors, with a common
development goal. For a disaster on
the scale of the Uttarakhand floods,
it’s obvious that more the helping
hands, the better. ¨

TRC members interact with the local community during the relief effort — Cynthia Rodrigues

84 Tata Review n October 2013


Community

Trained to tackle life


Supported by the Sir Dorabji Tata Trust, the Montfort the lives of thousands of farmer
families, leaving them without a
Integrated Educational Centre in Nagpur imparts
primary bread earner or alternate
vocational training and helps underprivileged youth sources of income. MIEC plays a
big role in offering succour and
enter the job market with the necessary skills
hope to the youth in the region
by preparing them for alternate

W
alk in with a dream, region in Maharashtra,” says employment opportunities.
walk out with a Poornima Dore, programme officer At the recommendation of
future — that’s the (urban poverty and livelihoods) SDTT, the centre has also agreed
bold promise of the at SDTT and the Allied Trusts. to enroll needy youth from nearby
Montfort Integrated Educational “MIEC is well aligned with the areas in Madhya Pradesh. “Most of
Centre (MIEC) in Nagpur, trust’s focus on skills and enterprise the students are referred to MIEC
Maharashtra, to the underprivileged development. So we decided that by our partner NGOs, with whom
youth of the region. this would be an important initiative we share a lot of goodwill and
The institute makes a big in the region.” rapport,” explains Brother Mathew K
difference in the community by The initial discussions on the Alexander, director at MIEC, Nagpur.
empowering youngsters through need for a targeted programme NGOs like Pradhan in Mandla
a six-month residential vocational resulted in a joint effort to identify (Madhya Pradesh), Karuna Sadhan
training course. More than 200 a suitable location in Nagpur in Sindhudurg (Maharashtra),
youngsters have already passed out and enable the organisation to the Nagpur Multipurpose Social
from the institute and are now doing set up MIEC with the requisite Service Centre and several other
well in their chosen careers. infrastructure and equipment for organisations send underprivileged
MIEC was started in 2011 skills training. youth to MIEC for training on a
in Nagpur with the support and The recent years of drought in regular basis. The centre offers basic
encouragement of the Sir Dorabji the Vidarbha region have affected courses in eight vocational areas
Tata Trust (SDTT), which helped
the organisation with a grant of Ninety percent of our students belong
`27 million for a period of three
to the farmer community. What we want
years starting from 2011. “SDTT
was looking to provide an alternate
is for them to stay in touch and know the
means of livelihood to the families basics of agriculture.
and children of farmers who had Brother Mathew K Alexander, director, MIEC, Nagpur
committed suicide in the Vidarbha

October 2013 n Tata Review 85


Community

Vocational courses in tailoring, beauty care, carpentry, welding, refrigeration and air-conditioning, and farming are
part of the education initiatives undertaken at the Montfort Integrated Educational Centre in Nagpur

at its seven-acre campus: tailoring, that the institute is in demand, Tata Consultancy Services has
beauty care, carpentry, welding, from both youngsters wanting to donated computers for the computer
refrigeration and air-conditioning join the job market and companies programme at the centre. All in all,
repair, motor mechanics, electrician looking to hire. MIEC has roped it is a win-win situation for all the
and farming. Students are enrolled in several companies as partners in stakeholders. The uniqueness of the
free of cost or at a nominal this initiative. Some of the capital initiative lies in the fact that it is a
fee (charged for the exam and costs for setting up the training labs collaborative effort.
certification). and equipment are borne by these MIEC’s doors are open to
At the end of the six-month companies. The alliances also help all those in need, especially the
course, most of the students sit MIEC secure job placement for all underprivileged, such as children
for the MES (modular employable their students. of sex workers and youth from
scheme) exam, which comes the scheduled caste and scheduled
under the purview of the National Corporate support tribe communities. Here they learn
Council for Vocational Training, a One such tie-up is with Mahindra & different trades and basic spoken
government certification. Mahindra, which has set up a motor English, and three hours a week of
For some trades, the students mechanics lab at MIEC through its computers, which is compulsory for
write exams under the Community Mahindra Navistar initiative. The all. They also engage in gardening
Development Scheme, which is a part company uses the lab to train new and agricultural activities for about
of the Human Resource Development recruits, and also hires many of the an hour and a half each week.
Scheme of the Government of India. youngsters in the MIEC-run motor “Ninety percent of our
Some students also write direct mechanics course. students belong to the farmer
exams, which are conducted by Corporate house Godrej is community. What we want is for
particular companies interested another big partner of MIEC. The them to stay in touch and know
in hiring people. All the students, organisation has put in the initial the basics of agriculture,” explains
however, are given the opportunity capital for the refrigerator and Brother Mathew. Through the year
to write one government-run air-conditioning repair course. It the institute celebrates different
examination, which helps them aim also provides kits for students who festivals, giving students a chance
for a better salary later. Little wonder complete the beautician course. to participate in cultural events like

86 Tata Review n October 2013


Community

dance programmes and singing


competitions. Time is set aside MIEC is well aligned with the trust’s focus
for them to engage in sports like on skills development. So this would be an
volleyball and kabbadi. All these important initiative in the region.
extracurricular activities help the Poornima Dore, programme officer, urban poverty and livelihoods,
youth build their confidence, do Sir Dorabji Tata Trust and the Allied Trusts
away with inhibitions and explore
their natural talents.
Take Avinash Sahare from keen to go out and support my at the institute. They inspire and
Amravati, one of the many family. Thanks to the intervention of motivate the students by serving
beneficiaries of MIEC, Nagpur. an NGO named Divya Sadan, I came as role models. The trainers also
He has secured a job with Hotel to MIEC Nagpur. It was a turning get regular inputs and training
Devaragam in Kerala and will always point in my life.” from experienced staff members of
be grateful to the institute. “MIEC another group organisation, Boys
has a very important place in my Marriage can wait Town Hyderabad (see box: Where
life,” he says. “MIEC’s brothers and Ms Pawar received training in beauty skills are for acquiring).
the staff have helped me shape my care and tailoring. It improved For students, MIEC extends a
dream. They taught me to work her confidence and enabled her to family-like atmosphere where they
hard, be disciplined, develop a recognise that she could change her feel at home. They share a warm
positive attitude, and also helped life. MIEC helped her get a job at and friendly rapport not only with
develop my personality. I could get Naturals Salon, Chennai. She says, Brother Mathew but also with other
a job and support my family for the “Now I feel confident. Only when I staff members, including Brother
marriage of my sister.” stand on my own feet will I think of Mondy, who is not just a counsellor
Another beneficiary, Saritha getting married.” to them but also a friend. Many
Pawar, who comes from the Pardhi Some of the promising students are unhappy to leave the
community of Amravati says, “In my alumni from MIEC and its sister institute at the end of the course.
community, most of the families are organisation, Montfort ITC MIEC plans to spread
economically backward, uneducated Ballarsha, have been encouraged awareness about the institute and
and suffer from poor health. I was to become trainers and teachers its benefits in the region. Focus will
be on encouraging women to learn
skills that will hold them in good
stead and help them augment their
Where skills are for acquiring family incomes. Brother Mathew
hopes that in the future the institute
Located in the heart of India at Nagpur, Maharashtra, will be able to become self-sufficient
Montfort Integrated Educational Centre (MIEC) was started by developing an income-generating
by the well-known educational group, Montfort Brothers of model, for instance, through the sale
St Gabriel Educational Society. Veterans in the area of of products such as tables and chairs
providing education, vocational training and life skills to from the carpentry class. The money
the youth of India, the Group runs several schools and thus earned, it is hoped, can help
educational establishments across India. Boys Town fund daily expenses.
Hyderabad and Montfort ITC Ballarsha are two such well- In the meantime, MIEC is
established skills development centres that have been working to fuel the individual
operational since 1955 and 1981 respectively, and have dreams of hundreds of youngsters
trained thousands of youngsters. Both of these now run as who walk in through its door hoping
self-sustaining centres and are considered to be innovative to secure a better future. ¨
and model institutions that impart quality skills training.
— Jai Madan

October 2013 n Tata Review 87


strategy

Making each CSR


rupee count
As the impending Companies’ Act 2013 comes into effect,
the character of the expenditure on CSR projects by companies
is expected to witness a significant transformation. Focusing
on five key aspects can vastly improve CSR effectiveness,
thereby delivering significant value for the community and
the organisation, say K Raman and Manjula Sriram of
Tata Strategic Management Group

T
he impending Companies Act 2013 `100 billion every year beginning FY14, ie a
requires Indian companies to spend four-fold increase over the `25 billion spent
2 percent of their profits on corporate on CSR in FY12. With such significant funds
social responsibility (CSR), making India being deployed, companies must seek to create a
among the first nations to have an act specifying sustainable impact for both the organisation and
social welfare spending. The act stipulates that society.
companies exceeding net worth of `5 billion or Traditionally, CSR was undertaken as
turnover of `10 billion or net profit of `50 million a form of charity or philanthropy. Today,
must spend 2 percent of their previous three years CSR initiatives fall under four key categories
average net profit towards CSR. based on the level of company involvement,
It is estimated that this legislation will type of benefits to the company (tangible /
lead to companies collectively spending over intangible) and alignment to the company’s core
competence.

K Raman has been with the Tata group for seven years. Categories of CSR
He heads the social sector practice at Tata Strategic Charity: It refers to the support offered by
Management Group, which has also been supporting
companies in the form of voluntary donations
the development of a collective CSR agenda for the
Tata group. He was also instrumental in formulating a or monetary support to a worthy cause. It
strategic roadmap for the National CSR Hub. includes minimal employee involvement

88 Tata Review n October 2013


strategy

and limited engagement with beneficiaries.


Manjula Sriram is project leader at Tata Strategic
The donation is generally channelled by the
Management Group. A post graduate degree
receiving entity towards supporting on-going holder in business administration from IIM
social programmes. Calcutta, she has over six years of industry
experience. She has led multiple consulting
engagements in the social sector domain.
Philanthropic CSR: Philanthropic CSR implies
deeper involvement of companies and generally
allows for higher interaction with beneficiaries. Tata Consultancy Services, which started
Depending on the nature of activities, an initiative to address illiteracy through
philanthropic CSR can be classified as tactical information technology. Adopting a computer
and strategic. based functional learning approach, TCS
Tactical philanthropy is characterised by leveraged its core competence in software
small scale, disjoint initiatives spread across development to develop a literacy module
beneficiaries, creating a small impact in which empowers beneficiaries by enabling
multiple places. Strategic philanthropy focuses them to read within 40-45 hours of learning,
on a few ‘big ideas’ and aligning company’s compared to the traditional 200 hours of
resources and capabilities towards these ideas. instruction. TCS provides the module free
An example of strategic philanthropy of cost to social organisations, trains the
is Aditya Birla Group’s ‘model village’ teachers on the use of the module and donates
programme that works on creating self-reliant computers on a need basis. Over 120,000
model villages in the areas around their people have been made literate already through
manufacturing units. Each year, an over- over 250 centres across India.
arching theme is adopted across the villages Philanthropic CSR initiatives are primarily
to address a key need, for example, in FY14, it designed to benefit the community. However,
is villages where there is no open defecation in the long term the companies are also
practised and education of the girl child. The rewarded in the form of a ‘license to operate’
group collectively impacts 3,000 villages across and significant goodwill among the community
the country. and customers.
For a services company, a strategic
approach to philanthropy centres around Joint value creation: Joint value creation
utilising its own competence to address focuses on embedding social considerations
a critical social need. A case in point is in the business processes of a company rather

Tata Consultancy Services’ computer based functional learning


Dissemination
Key features Impact Recognition
methodology

Software developed TCS trains the Programme is Asian Corporate


using multimedia teacher, provides active in more than Social
features the software and 250 centres across Responsibility (CSR)
donates computers the states of Andhra Award, 2003
Material from Pradesh, Tamil
National Literacy No large scale Golden Peacock
Nadu, Maharashtra
Mission (NLM) infrastructure, Global Award 2007
and West Bengal
adopted batches of 10-15 for CSR
students Over 120, 000
Available in nine people have been CBFL recommended
languages (Telugu, Partnerships with for deployment as a
local governments made literate till
Tamil, Hindi, date National Mission in
Marathi, Bengali, and NGOs 11th Five Year Plan
Gujarati, Oriya, Also implemented
Kannada, Urdu) in South Africa

October 2013 n Tata Review 89


strategy

than considering CSR as an add-on activity. involves addressing social concerns through
Responsible sourcing, vocational training, new business models / products that cater to
creating self-help groups for rural distribution the needs of the population at the base of the
of products are possible avenues of joint pyramid. This may involve acquiring new skills
value creation. and competencies to create disruptive solutions
The Taj group creates joint value through to social concerns, with a potential for long
its sensitive vendor tie-ups. Guests who walk range economic gains.
into Taj properties will see the staff wearing General Electric’s low-cost medical
beautifully designed silk sarees, which are equipment for developing countries is a good
part of a unique initiative that supports the example. Tata Swach is another low-cost
renowned traditional silk weavers of Varanasi, innovation that addresses a critical social need
Uttar Pradesh — a dying tradition impacted of the larger part of the pyramid.
by rising costs and changing consumer While charity and philanthropy are
preferences. focused solely on community benefits, and
By providing design and material inputs not necessarily linked to business, joint value
to 40 weavers of Sarai Mohana village and creation and inclusive business models integrate
procuring from them, the Taj group not only business with CSR to make socially relevant
supports their livelihood but also helps them contributions. Most companies have a portfolio
to create sarees that are contemporary and of CSR initiatives across the four categories.
marketable to other potential customers. In However, the share of each category
FY13, the group supported over 170 such depends upon the overarching philosophy of
vulnerable vendors. the company. Irrespective of the composition
of the portfolio, it is critical for organisations
Inclusive business models: Arguably the most to ensure the effectiveness of their CSR
evolved form of CSR is the concept of creating investments in order to create a meaningful
inclusive business models. This approach impact.

Levers for improving CSR


Structured
effectiveness
Meaningful
implementation outcomes In order to maximise the effectiveness of CSR
Implementing in Using meaningful activities, companies must focus on five key
project mode with indicators to
clearly defined measure outcome aspects:
objectives, timelines, / impact instead of Few ‘big ideas’: Companies must
resources and impact measuring monetary
assessment process contribution
identify their CSR activities with one
3 4 or a few ‘big ideas’ and then undertake
Leveraging Improving large scale initiatives aligned to them,
partnerships csr Sustainable rather than spreading the CSR funds
Developing a partner 5 programmes
2 effectiveness and efforts too thin across a large
network of NGOs, Empowering
government agencies beneficiaries rather number of initiatives or geographies.
and corporate 1 than creating
foundations for effective dependence on the
Such an approach brings focus and
implementation Few ‘big ideas’ company / initiative helps create a larger impact and better
Focusing on one
or two major
visibility for the project. For example,
programmes / focus the Bharti group has chosen elementary
areas rather than
education as its primary focus area. All
spreading funds too
thin across multiple group companies collaborate with the
small initiatives Bharti Foundation and work jointly
in the field of education, making it a
prominent theme across the group.

90 Tata Review n October 2013


strategy

Leveraging partnerships: The various Meaningful measurement parameters


entities operating in the CSR ecosystem
have their own strengths. While the Typical
government has large funding available Activity measurement Impact indicator
parameter
for social projects, social organisations
have the required reach among the Employment
Vocational skill Number of
intended beneficiaries and are more generated
development people trained
aware of grassroots challenges. At (% placed)
the same time, several corporate
Number of Improvement
foundations and trusts have funds Primary
students in assessment
available that they wish to utilise on education
supported scores
large programmes addressing a critical
need. It is critical for any company Number of
to effectively leverage partnership households Reduction in
options to create a wide-spread impact. Preventing
provided the incidence
In the absence of capable partners, water-borne
access to of water-borne
companies may even need to create diseases
clean drinking diseases
a partner network by encouraging water
local entrepreneurship and mobilising
local resources to undertake social
programmes. the percentage of these students that
Structured implementation: A project- can actually read and write proficiently
based approach with prior planning (see table: Meaningful measurement
and budgeting of resources, both parameters).
financial and human, provides Sustainable programmes: CSR initiatives
focus and direction to any initiative. should be designed such that after
Companies need to chart out a clear a pre-defined period they become
roadmap in advance, along with key self-sustaining. Communities should
milestones to be achieved. They must be treated not just as beneficiaries but
also have the required oversight and partners in the development process.
governance mechanisms. Companies Tata Steel has used self-help-groups
wanting to undertake voluntary (SHGs) as a mechanism for creating
disclosures need to factor the reporting sustainable livelihoods for women from
aspect into their roadmap. Where marginalised communities. This enables
relevant, a handover strategy to them to participate in family decision-
stakeholders that brings the initiative making, gain access to grassroots’
to a logical conclusion should also be democratic institutions as well as boost
part of the structured implementation their economic self-reliance.
roadmap. It is estimated that the Companies Act
Meaningful outcomes: Companies will bring over 8,000 companies in its ambit.
need to make a shift from measuring The ability of companies to create long term
superficial parameters, such as social and economic impact is dependent on
amount spent on CSR or number of being guided by a clear and effective approach
beneficiaries reached, to measuring to CSR.
meaningful indicators of impact. For By carefully choosing their CSR portfolio
example, it is easy for a company to and applying the critical levers for effectiveness,
support the education of 500 children, companies can ensure they create a substantial
but the true measure of impact will be impact from every CSR rupee spent. ¨

October 2013 n Tata Review 91


case study

A winning strategy
Rahul More from the Tata Management Training Centre, explains
how creating an innovative ecosystem will pave the way to long-
term sustainability of the growing Tata group conglomerate

D
uring one of his visits to the Tata Business leaders must understand how to build
Management Training Centre (TMTC), and play their innovation ecosystem. The best
Group Chairman Cyrus P Mistry companies such as Google (Android), General
addressed a few major challenges while Motors, Skoda, Volkswagen, Amul, DRDO, etc,
envisaging a future for the Tata group. How are increasingly focusing on building innovative
can we continuously adapt to the changing stable ecosystems to achieve competitive
business environment? How can we build advantage. What really matters most in creating
systems, processes, people, and culture to and sustaining innovation is building and
respond to such changes at multiple levels to strengthening interdependent links amongst all
ultimately create an institution? How can we the ecosystem players.
build a global organisation based on global Innovation ecosystem, as defined by
talent, collaborative formats, areas of excellence, leading researcher Russell Martha, refers to
information systems and capability to manage the inter-organisational, regulatory, economic,
technology /innovation? environmental, and technological systems
As he put forward these important questions through which a milieu conducive to business
in front of all the stakeholders, Mr Mistry laid growth is catalysed, sustained, and supported.
special emphasis on creating a ‘strategy’ and Value is co-created through effective linkages,
‘cross company / external collaboration platforms’ collaborative formats, global talent management,
across the Tata group to create value and deliver complementary innovation assets and coalitions /
innovation at work. Organisations need to networks that emerge from a shared vision of the
develop strategic thinking ability to exploit desired transformations.
innovation platforms to create stable ecosystems. In emerging economies, specifically in the
manufacturing industry, firms have adapted
low cost models, collaboration and mergers and
Rahul More works as a practice consultant in the acquisition mode to raise productivity and gain
innovation and strategy area at the Tata Management competitiveness. These models have been tested
Training Centre. His role involves strengthening strategic
across industries over a period of time. However,
thinking, organisational innovation culture, processes,
R&D effectiveness, operational excellence and recent global currency fluctuations mean that
innovation ecosystem. such low cost models are unsustainable.

92 Tata Review n October 2013


case study

Exploring interdependence capacity, technological, operational excellence


The concept of an innovation ecosystem is taken / manufacturing, marketing and strategic
from nature; scientists discovered an inter- planning capability of firm which has a
dependence between entities where they shared strong influence on performance and growth.
energy and nutrition towards the common Simultaneously, competitive advantage can be
objective of survival. Realising that some aspects gained by strategic choices about winning by
of natural ecosystems could be mimicked in the leveraging these innovation capabilities. It is one
business environment, social scientists developed of the major factors for the enhancement of a
the concept of a ‘business ecosystem’. firm’s performance and it is unlikely to find all
While several similarities may be observed these capabilities in the same firm. It is also an
between a natural ecosystem and a business integrated set of choices that uniquely positions
ecosystem, the one significant difference is the the firm in its industry so as to create sustainable
presence of a dominant entity, which in a sense competitive advantage and superior value
is the catalyst for the creation of a business relative to the competition.
ecosystem. But this entity tends to control the As defined by Lafley AG and Martin RL,
ecosystem and, sometimes, is the single largest in their book Playing to Win, strategy is the
beneficiary of the value generated by the system. answer to five interrelated questions: What is
This sets into motion a ripple effect within the your winning aspiration? The purpose of your
ecosystem by neglecting practical limitations of enterprise, its motivating aspiration. Where
small players in the ecosystem. This may lead to will you play? A playing field where you can
value leakage within the system and affect the achieve that aspiration. How will you win? The
performance of dominant entity. way you will win on the chosen playing field.
At this stage, it might be useful to examine What capabilities must be in place? The set and
other forms of business collaborations and configuration of capabilities required to win in
interactions with respect to value creation and the chosen way. What management systems are
sharing, for example, supply chain and value required? The systems and measures that enable
chain. It might be feasible to create separate the capabilities and support the choices.
entities or independent platforms that might
be able to deliver significant value. This leads Horizontal and vertical
to creation of specialised providers of products competencies
and services. And this is a pre-requisite to the The innovation capabilities and strategic
formation of a business ecosystem. choices by a firm within an ecosystem to have
a systemic view is its horizontal competency;
building a strategy vertical competencies are those that will provide
Ecosystem management is not just about plotting deep domain expertise to achieve competitive
the network of partners and stakeholders relevant advantage and better firm performance. Usually,
to the innovation. It’s about designing and there are two types of firms in the ecosystem,
executing a complex systems strategy so that ones which are developing the needed ecosystem
the innovation success with key partners sets in (mostly dominant firms), and those that are
motion a chain of success that is transmitted to strongly integrating in the ecosystem through
the other partners within the ecosystem, for the innovation capabilities and effective strategies.
ultimate benefit of the ecosystem as a whole. Competitive advantages have been acquired
Innovation capability facilitates an by firms within the ecosystem by having
innovative organisational culture characteristic systemic effect and linkages, not just horizontal
of internal promotional activities, and and vertical linkages that reflect in their supply
capabilities of understanding and responding chain and value chain. Thus, in order to have
appropriately to the external environment. deep domain expertise, firms need to nurture
It comprises capabilities like absorptive competencies and expand their reach in market

October 2013 n Tata Review 93


case study

/ geographic experience, industry experience, renewal. The performance wheel is a source of


areas of excellence, and business functions. The power and acceleration to achieve performance
managers / executives within the ecosystem excellence with efficiency and effectiveness.
can assess effectiveness of innovation capability It also creates the value to all stakeholders
building and firm performance with the help of including customers, partners, suppliers and
this model and can formulate winning strategies. shareholders (see Figure 1).
In order to achieve sustainable growth The Tata companies are best at operating
and competitive advantage within the this back wheel to achieve results. Due to
innovative ecosystem, firms need to develop emphasis on performance, managers usually lack
innovation strategy to enhance innovation firm the experience of operating the front wheel. It is
performance. Thus strategy formulation and important to have a perfect alignment between
execution becomes iterative in the dynamic these two wheels within the ecosystem to survive
business environment. and create sustainable competitive advantage.
Companies should strive to figure out
Designing a winning company where to play and where not to play, which is
within the ecosystem a necessary step towards building coherent
Designing a winning company revolves around strategies. While designing the winning
effective alignment between your strategy company, you cannot just shift people around
and organisational design to gain consistent and expect to change the way they work. You
advantage. The company should have a clear have to look at the other mechanisms that
and differentiated way of creating value for influence the way people make decisions, their
its customers with well-defined innovation attitudes and innovation culture within the
capabilities and respective strategic choices. organisation. When a company fails to execute
The value creation charter of an its strategy, the first thing managers often think
organisation resets on two wheels, ie, the back to do is restructure. But research shows that
wheel represents the performance wheel and fundamentals of good execution start with
the front wheel represents the innovation clarifying decision rights and making sure
wheel. Your innovation wheel suggests your information flows in the required direction.
organisational capacity to sense opportunity If this is in place, the correct structure and
and the road ahead to ride on your core motivators often become obvious.
competencies. It is the most important source For the Tata group, which has emerged as
for gaining dynamic capabilities and strategic one of the most prominent global power houses
of India, the ultimate challenge is to develop and
sustain the group as a ‘global organisation’ and
Figure 1: Value creation charter
drive growth based on continuous innovation.
Organisational design
(Firm strategy, structure, processes,
Strategic leadership One of the solutions we are proposing is to
(Values, beliefs, skills
capabilities and culture)
and behaviours) build and leverage innovation ecosystems at
various levels and across Tata companies for
future global challenges. The model explains
Direction
and clarity the strong interface mechanism as a strategy
Value creation about the
charter of organisation future
platform between the Tata board and the
respective company. This platform provides
Performance
Innovation
wheel
wheel flexibility to have control over the bigger picture
ENVIRONMENT of the company as well as over the granular
Source of power and Alignment requires
acceleration for operational strategic thinking to achieve details towards strategy foresight, strategy
excellence, efficiency, sustainable competitive Builds dynamic
effectiveness along with all advantage capabilities and implementation and strategic risk involved.
develops competency
stakeholders management
for strategic renewal
The innovation excellence practices and their
output and integration with business strategy

94 Tata Review n October 2013


case study

can be judged effectively by such mechanisms.


This active interface mechanism will help the Figure 2: Proposed innovation ecosystem
board to manage corporate strategy effectively for Tata group companies
and understand non-linear growth in dynamic
Corporate
business environment and challenges. strategy

Cross
Innovation ecosystem for the Finance and
company
human Tata board
Tata group resources collaboration
Strategy platform
The model (Figure 2) displays interaction of platform
corporate strategy with the playing field — Sector / domain Tata company Linkages and
knowledge global talent
markets. Normally, companies build innovation expertise R&D or reach
service
capabilities to support existing business, change operations
Suppliers and
rules of rivalry and create new business as companies in University /
well as markets. The most important question complementary
Innovations and
specialised
business institutions
is — Where do we play? As the vision is to Value
global R&D
network Markets
create a value to all stakeholders, Tata group’s creation
(Where do
and areas of
corporate strategy has to constantly engage excellence
Tata Sons and Indian policy framework
we play)

with value creation practices and identify areas


of excellence. It also indicates a need for the
development of a ‘cross-company collaboration knowledge value and managerial systems. Also,
platform’, where multiple business ecosystems this internal and external knowledge integration
can be managed effectively and innovatively. within the proposed innovation ecosystem
This will certainly provide strength to our develops a foundation for continuous innovation
InnoCluster initiative and provide unique / experimentation and independent problem
opportunities to compete as well as co-operate. solving. Accordingly processes and systems can
The proposed interface mechanism be defined to create a unique innovation culture
through a strategic platform and cross-company in the organisation.
collaboration platform are a top-down approach, Another important element of the
which explains the strategic intent of the group. ecosystem is to build relationship with
The bottoms-up approach has to be equally suppliers and companies in complementary
effective and strong in terms of achieving goals. businesses, and allow them to build their value
The respective Tata companies have integrated independently. Moreover, by identifying and
R&D wings or service operations and client base leveraging complimentary assets within the Tata
(depending on business sector) and provide group and outside, innovations can become a
R&D / innovation strategy or service excellence. growth engine.
These departments have to expand their horizon Finally, to mitigate strategic risk, the group
to have effective global R&D networks and needs to focus on developing two important
global talent reach. They have to strengthen their skills like managing interdependence skills
company’s absorptive capacity by exploiting and integration skills. Interdependence
external sources of innovation and interactions skills comprise coordination, collaboration /
with domain knowledge expertise. So, inter-firm networking, delivery and leadership skills which
linkages and networks become an important enables bringing together various stakeholders
element to bring all actors together within the to achieve a common goal. Whereas integration
ecosystem and offers various systems as well as skills comprise contracting, negotiation,
channels to deal with uncertain technology and innovation and intellectual property management
market environment. skills to deliver value. Hence this proposed
This practice can really create a unique innovation ecosystem model will help to create
knowledge creation platform by creating a shared and sustain an innovative global organisation. ¨

October 2013 n Tata Review 95


book review

Breakthrough story
H
alf a century ago, you would have domestic dominance to worldwide leadership.
been laughed out of the room if you Marketing experts Kumar and Steenkamp
suggested that a company from South met two decades ago and have since then
Korea, China or India could make it collaborated on research, teaching and
big globally. But the times, they are a-changing. consulting projects related to global strategy,
Nobody blinks an eyelid any more when marketing and branding. They bring their
Chinese energy companies get listed among the considerable knowledge and experience to
biggest enterprises in the world, Tata and Aditya bear on the task of examining the creation and
Birla group companies acquire rivals bigger than most effective implementation of a strategic
themselves in the UK or America, or Brazil’s route to success. In the process they identify
Embraer faces off with American mammoth problems that companies will face and suggest
Boeing and European giant Airbus to win huge how they can overcome them. Their analysis
aerospace contracts worldwide. and propositions are supported by a bagful of
It’s not a flash in the pan; but, as some case studies, including on HTC, Tata Motors,
developing world companies have Samsung, Lenovo, Pearl River
found out, going global is easier Piano, Havaianas and Corona.
said than done. In their book Not only can the book serve
Brand Breakout: How emerging as a guide for emerging market
market brands will go global, companies, it can show Western
Nirmalya Kumar and Jan-Benedict companies where and how their
Steenkamp attempt to more next challenges will emerge. So,
than just explain the success of next, expect a book by these
emerging market brands. They try authors, or by another guru on
to spell out a cutting-edge plan how Western companies can
for emerging market brands to counter the emerging market
succeed in world markets. multinationals.
Title: Brand Breakout: How
emerging market brands
THE ROAD TO SUCCESS will go global GLOBAL SUCCESS
Brand Breakout outlines eight Authors: Nirmalya Kumar STORIES
strategies, including the Asian and Jan-Benedict The chaebols in Korea gained
EM Steenkamp
tortoise route, from B2B to immensely from government
Publisher: Palgrave
B2C, brand acquisition, and Macmillan, 2013 policies and cheap funds just
leveraging cultural resources Pages: 256 as the Japanese keiretsu gained
that will catapult brands from from their finance capital

96 Tata Review n October 2013


book review

relationships much earlier, and the Chinese of government involvement. They discuss the
companies are reaping the advantage of direct success of the UAE’s Emirates Airlines as well as
and indirect government support. Such support the failure of Malaysia’s Proton car project.
is not an Asian phenomenon; governments Also, it might be worth examining why
in Washington DC have rushed to the aid of the new Chinese multinationals have greater
American companies time and again — from industry focus compared to their eastern
imposing heavy import duties on automobile counterparts, which have had their fingers in
and steel imports many decades ago to loading many pies, much as Indian business groups
the dice against offshoring a la Barack Obama. do. One of the lessons the authors suggest for
This angle is interesting because few would-be MNCs from the developing world:
business books, especially those with a “The many success stories of Chinese firms and
marketing focus, pay attention to government entrepreneurs are of those who have aggressively
policies. The authors of Brand Breakout devote pursued excellence in manufacturing and
an entire chapter to the ‘national champions product engineering. Given constant price
route’, which leverages strong support from the pressure, the leaders of these companies manage
state. After referring to how previous success with an engineering and financial mindset
stories (Airbus, Michelin, Hyundai, NEC, that relentlessly emphasises productivity and
Samsung, Singapore Airlines, Volkswagen and efficiency. Low cost is their raison d’être.”
LG) started as ‘national champions’, the authors
proceed to discuss the rationale for this route, LESSONS TO LEARN
including industrial policy imperatives, the Aspiring multinationals in countries like
strategic trade rationale and national security India may well note the bit about relentless
compulsions. There are limits to such policies, emphasis on productivity and efficiency.
the authors point out, and suggest several These factors are closely linked with factors
possible ways in which to mitigate the negatives like wages and currency rates. Chinese

Positive campaigning route: Overcoming


Eight ways to brand nirvana negatives associated with the country of
To explain how brands go global, Nirmalya origin through marketing (Ospop, Roewe,
Kumar and Jan-Benedict E M Steenkamp have Shanghai Vive…)
listed eight different pathways that brands (not Cultural resource route: Leveraging
companies) can take to break into the global cultural myths to build and grow the brand
marketplace. (Herborist, Shanghai Tang, Havaianas…)
Diaspora route: Following migrants and /
Here they are: or tourists who have experienced the
Asian tortoise route: Migrating to higher product in the home market (Mandarin
quality and brand premiums after Oriental hotels, Reliance MediaWorks,
establishing a successful low-cost offering Corona beer…)
(Haier, Pearl River Piano, Wanli…)
Natural resource route: Branding natural
Business to consumer route: Migrating resources tied to a particular geographical
from B2B into B2C (ASD, Galanz, Huawei, location (Café de Columbia, Natura…)
Mahindra, HTC…)
National champion route: Leveraging
Brand acquisition route: Buying Western strong state support to establish and grow
global brands (Geely and Volvo, Lenovo and a global brand (China Mobile, Embraer,
IBM, Tata Motors and Jaguar Land Rover…) Emirates Airlines…)

October 2013 n Tata Review 97


book review

margins, there is the question of integrity of


EXCERPTS: financial statements.
Hurdles to overcome on the road to Hurdle 3: Move from imitation to innovation
global brands: The highly hierarchical and family-controlled
culture that dominates many emerging market
Hurdle 1: Improve transparency
firms is not always conducive to innovation and
Many Chinese firms lack transparency …
branding.
an important item on the Chinese corporate
manifesto for the future must be to open the Hurdle 4: Accept management diversity and
ownership structure up to scrutiny. a global mindset
Building a global brand in today’s world with
Hurdle 2: Enhance profitability and integrity
distributed economic power requires managing
of financial statements
across many countries … companies from Brazil,
Many large Chinese firms seem to operate on
India and South Africa have some advantage on
lower profit margins … beyond the low profit
this front.

companies have gained from a low exchange of financial statements, move from imitation to
rate of the yuan and from low wages. With innovation, and accept management diversity
rapid development, Chinese wages have and a global mindset. I wish they had gone into
shot up, and global companies are looking at a little more depth here. But maybe that’s the
setting up shop in lower-wage countries, as subject of another book!
textile companies, for example, are beginning
to do in Bangladesh, Cambodia and Vietnam. BONDING OVER BUSINESS
In line with this trend, the authors say, The book is excellent, must-read material for
“While China has been manufacturing for the managers, and for would-be managers slogging
world over the past three decades, the world it out in business schools.
will manufacture for China over the next three.” A few words about the authors may be
So where will industry move next? Things apt here. Nirmalya Kumar is professor of
may not move in a straight line. The authors marketing and co-director of the Aditya Birla
admit that this process is “a work in progress India Centre at the London Business School.
… The story of the emerging markets is a His research has been widely published in
relatively young one and could still be derailed.” journals such as the Harvard Business Review
Will Coca-Cola eventually acquire Huiyan, and Journal of Marketing Research, and he has
which has a more than 50 percent share of the published six books.
branded 100 percent fruit juice market (though Jan-Benedict EM Steenkamp is the
its previous attempts to take over the Chinese C Knox Massey distinguished professor
company were blocked by Chinese regulators), of marketing and marketing area chair at
or will the Chinese company beat the American the Kenan-Flagler Business School at the
multinational at its own game? Huiyan already University of North Carolina. He has consulted
exports concentrate and puree to over 30 companies such as Procter & Gamble, Kraft,
countries. and Johnson & Johnson on branding and
In their attempt to provide practical advice, strategy, and has written for the Harvard
the authors have included an appendix titled Business Review, The Wall Street Journal, and
‘Hurdles to overcome on the road to global Financial Times, among others. ¨
brands’. Their suggestions here — improve
transparency, enhance profitability and integrity — Kiron Kasbekar

98 Tata Review n October 2013

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