Ratan Tata’s Doubts About Cyrus Mistry’s Leadership: Insights From a New Book

Ratan Tata’s Doubts About Cyrus Mistry’s Leadership: By the end of Cyrus Mistry’s first year as his apprentice, Ratan Tata had started questioning whether Cyrus Mistry was the right person to be the chairman designate of Tata Sons, according to a recently published biography ‘Ratan Tata: A Life’ by Thomas Mathew. The book says Tata suffered more from the decision to sack Mistry as chairman in October 2016 than Mistry did. The book claims Ratan Tata had started having doubts about Mistry even before Mistry took over fully.

Mistry was appointed in 2011 after a global search by a selection committee with Ratan Tata’s full endorsement, despite some reservations from other senior members of the group. For a year he was chairman designate before he took over as chairman after Tata’s retirement in December 2012.

Also Read: Cyrus Poonawalla: Pune’s Richest Man With a Net Worth of ₹2,04,300 Crore

When he approved Mistry’s selection, Tata made two conditions. He asked Cyrus Mistry, then managing director of Shapoorji Pallonji Group, to sever all ties with his former company to ensure a clean break. And Mistry would go through a year of “parallel running” alongside Tata to get practical experience of running the Tata Group, as detailed in the book which is based on interviews with Tata, his family and colleagues.

The author says while Tata was impressed by Mistry during board meetings, he started having doubts after seeing some of Mistry’s “sharp interventions”. Tata wondered if it was wise to appoint someone whose values might clash with the Tata values.

The book quotes Tata as saying Mistry could spot strategic pitfalls but was unsure if Mistry would use those skills for Tata Sons or for the Tata values.

Tata later regretted not being able to evaluate Mistry fully, some critics say he brought it upon himself by stepping out of the selection committee.

Also Read: PM Modi on ‘Digital Arrest’: Addressing the Atmosphere of Fear and Concerns

Mistry took over as chairman on December 28, 2012 and was sacked on October 24, 2016 when the Tata Trusts lost faith in him leading to a messy fallout with boardroom battles and legal tussles.

The book quotes Nitin Nohria, former dean of Harvard Business School, as saying Mistry’s removal was one of the most painful decisions for Tata. Venu Srinivasan, director of Tata Sons, says the decision took a toll on Tata, made him act against his principles.

According to the book, Tata wished that Mistry "should have been more dignified and graciously resigned after it became clear that he had lost the confidence of the directors".

"Even for me, firing him this way was not our style of doing things. Our lawyers said that if it is not a surgical strike, he would go to the court and litigations would follow," it said quoting Tata.

Also Read: Stampede at Bandra Station: Diwali Rush Leads to Chaos, 9 Injured