Celebrating Ratan Tata: The courage to fail, the wisdom to lead

Wishing everyone a very happy Dussehra and plenty of joyous celebrations in the ongoing festive season. This week, along with the usual festive fervour of Navratri, was also a sad one on a different account, as we lost one of India’s most iconic business leaders -Padma Bhushan Shri Ratan Tata.

Words and numbers never do justice to the real achievements of any great leader, leave alone a businessman of Ratan Tata’s stature. However, the fact that he took the Tata Group from an annual turnover of around US$ 4 billion to over US$ 100 billion during his tenure, can just arouse your curiousity significantly. The Tata group, which was already one of India’s most respected business conglomerates, expanded its global footprint and stamped its credentials in sectors as diverse as steel, automobiles, FMCG, IT and hospitality under his leadership.

We often find ourselves enamored with the triumphs in a story, overlooking the winding journey filled with its fair share of ups and downs. A truly remarkable individual is shaped not only by their victories but also by their missteps. Ratan Tata, in particular, embraced the lessons that come with mistakes, showcasing a boldness that defines great leadership.

Way back in 1983 when he was discussing the future of the group with his predecessor Shri JRD Tata, Ratan was talking about restructuring the group to capitalise on global opportunities. This was rare for an established business group in India during those days, when the priority was to resist and lobby against foreign competition.

Isn’t it too remarkable a coincidence that Ratan Tata’s appointment as Tata Group Chairman in 1991 coincided with the year of India’s economic liberalisation?

A key part of his expansion strategy was a bold and no holds barred acquisition spree. It began with the acquisition of Tetley by Tata Tea in 2000, after which the group went on to acquire as many as 36 companies in 9 years. The most popular of these were Corus Steel and Jaguar Land Rover. It was truly a time for the ‘global Indian takeover’ led by its most celebrated conglomerate.

As liberalisation made business progressively easier, domestic markets were maturing, motivating Indian companies to look outward for growth opportunities. They saw global acquisitions as a potent strategy to explore and penetrate new markets. Additionally, Indian companies were becoming more competitive, driven by lower costs, growing managerial expertise, and the development of global-scale production capabilities. They were even able to access cheaper capital, thanks to the availability of global finance, and had gathered a strong appetite for risk.

The Corus Group, a British-Dutch steel company, was acquired by Tata Steel in 2007 at US$ 13 billion under Ratan Tata, the largest acquisition by an Indian company at that time. It took Tata Steel to the rank of the 5th largest steel maker globally. More importantly, it gave the company, which was traditionally a low-cost steel producer, access to best-in-class manufacturing technology, high end markets in Europe and advanced production capabilities.

JLR on the other hand, was a struggling automotive company under Ford Motors, but Tata Motors saw huge potential in reviving its heritage brands – namely Jaguar and Land Rover.

It’s a story Indians would love to recite again and again as a matter of national pride. Around 9 years before the JLR acquisition, Ratan Tata had met with Ford Motors Chairman Bill Ford and his team in Detroit. He was looking to sell Tata Motors’ passenger car business to the Ford. However, the meeting did not apparently go well, and the talks failed.

At that time, Bill Ford in fact had said, “You are doing us a great favour by purchasing JLR!”

Tata Motors was more recognised for economy cars in particular India’s first indigenously designed passenger automobile - the Tata Indica. Well in that patriotic fervour, I had a Tata Indica too at one point of time! That was in itself a great leap for a truck making company made under Ratan Tata’s leadership. JLR provided Tata Motors with access to the luxury market as well as high end design/technology capabilities. Nevertheless, it would take significant business acumen and investments to turn the brands around.

Corus proved a disaster, given that the global financial crisis hit just a year later. Steel demand plummeted globally as a result, and Europe itself was hit hard by the recession. Moreover, Tata Steel had taken significant debt for this acquisition and found itself in a difficult position. Cheaper Chinese steel also distorted the European market and high energy and labour costs made the acquisition unviable. Eventually it was declared a grand failure, and has been termed by former Tata Steel MD JJ Irani as an “aspirational mistake”.

But ?JLR, on the other hand was a success. The deal was not overvalued considering the brand equity of Jaguar and Land Rover. ?And both the brands and the business saw a turnaround post the Tata acquisition.

The third major strategic decision that I cannot ignore discussing is the Tata Nano, perhaps the closest to Ratan Tata’s heart. And it was quite a noble idea, meant for the lakhs of families who used to ride on scooters in India (and still do), often with children sandwiched between parents and also braving all kinds of road conditions. The project seemed to show bad vibes from the beginning, when its production in Bengal was stopped.

While the project was shifted later to Sanand Gujarat, the Nano had lost a lot of precious time between its announcement and eventual reach out to the market. As a business writer early on, I had a huge problem with the positioning of ‘cheapest car’. Yes, marketing works on superlatives, but in my view, India had started becoming aspirational and would rather buy a higher end bike for a lakh rather than the cheapest car.

He later admitted on the Nano failure, “It became termed as the cheapest car by the public and, I am sorry to say, by ourselves, not by me, but the company when it was marketing. I think it was unfortunate.” He believed the car should have been marketed as an affordable, all-weather vehicle for two-wheeler owners, rather than emphasizing on its low price.

For people of India, a car was not just a symbol of utility, but also of social stature. Then they also had significant concerns about the safety of the product, and some early issues impacted sales. Moreover, Tata Motors had to increase the price of the Nano over time as input costs rose. All in all, even the Tata brand, and all the hype could not save the Nano.

There are countless grand successes that define the legacy of Ratan Tata—the visionary business leader who transformed the Tata Group into a global powerhouse. Yet, as we reflect on his life and the immense tributes pouring in, I choose to focus on something even more profound—his willingness to embrace mistakes. Why? Because true greatness lies in taking bold, decisive actions, even when the outcome is uncertain.

Ratan Tata was a game-changer in the truest sense. His decisions—whether it was the acquisition of Corus, Jaguar Land Rover, or the launch of the Nano—were never driven by fear of failure, but by an unwavering belief in the potential of Indian businesses to compete on a global stage. Under his leadership, the Tata Group grew into a multinational conglomerate, but more than that, he redefined what Indian businesses could aspire to be. His bold moves shattered boundaries, opening doors for India Inc. and inspiring a generation of entrepreneurs to think globally.

But his impact goes beyond corporate boardrooms. Ratan Tata's mentorship and investments in Indian startups were a testament to his belief in the future of India’s entrepreneurial spirit. He lent not just his capital, but his wisdom, to help nurture young innovators, giving them the confidence to take risks and dream big. He showed that mistakes are not the opposite of success but rather stepping stones toward it.

As a business leader, Tata’s character illustrates a rare combination of empathy, determination, and visionary leadership that could drive a nation. This was perhaps most evidently visible post the devastating 2008 Mumbai terrorist attacks. “In the immediate aftermath of the 2008 Mumbai attacks, I met him while staying at the iconic Taj Hotel. In that moment of national crisis, the titan stood tall and became the embodiment of the Indian spirit, to rebuild and emerge stronger as a nation,” said actor Kamal Haasan in a post on X, in a tribute to Ratan Tata.

In every decision, whether celebrated or questioned, Ratan Tata illuminated a path for Indian entrepreneurs—demonstrating that courage, vision, and resilience are the true hallmarks of leadership. His legacy is not just in the empires he built, but in the dreams that he has enabled for generations to come.

Aspirational mistakes do happen, but they should not be the death of aspirations. Rest in peace Sir!

Article authored with inputs from ChatGPT