In conversation with Mr. Cyrus Mistry
By Rachita Sharma and Shobhit Shubhankar
An Irish businessman of Indian origin, Cyrus Mistry was the chairman of Tata group between 2012 and 2016. In 1991, as a young London Business School graduate, Cyrus Mistry joined his family business, the Shapoorji Pallonji Group with a turnover of $20 million. Today, the SP Group has expanded to become the second largest engineering and construction group in India with revenues of nearly $4.2 billion in 2016. He was visiting the institute recently as part of a speaker series.
India would be a growth market for the next 20–25 years. So, what are the areas that would gain focus in the next few years?
In my opinion, the areas that are gaining importance are Data Analysis, Defense, Smart Cities, Financial Services and new marketing techniques. Technology in education and healthcare are also two areas where I see huge potential.
How does Tata, an elephant, combat the cheetahs?
Sustainability and customer-centricity are the two major themes that we have always wanted the group to look at. We have always focused on becoming more customer-centric and more sustainable. We also looked at the new kinds of organizational structures that would be required to achieve these objectives because lack of agility in the organizational structures can pose a huge disadvantage. That is also why Tata Motors started looking at de-layering.
What was your strategy at Tata Motors?
The automotive business is a lot about product design and comfort. If you look at the passenger car business, you will see that no IRR can make it sustainable. Therefore, it was important that we took a long-term approach. We were also able to spot opportunities for larger growth in the international business and managed to grow substantially in the international market. I feel that we didn’t invest enough in Commercial Vehicles but it is great that we kept a close eye on the Electric Vehicles. With the battery prices dropping and regulatory changes coming in, EV will enter the mainstream. We can expect a new wave of miniaturization and cost reduction by 2021 that will boost the EVs. With EVs, you are basically disrupting the full supply chains. Focus is moving from traditional to new suppliers and this will lead to many structural changes.
What are your views on Public-Private Partnerships in India? What needs to be changed?
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PPP is an extremely interesting model. I was involved in the first batch of power projects in Tamil Nadu in 1996. In those days, banks did not have project-based funding. Only after these projects, banks started understanding it and they loosened their strings. But what happened during these projects was that the risk ended up from being on government to being on promoters and they did not understand the risk well enough. In my belief, it is important to sensitize the banking system to how the PPPs work. It is also important to look at the infrastructure which is currently not adequate in India. The governments need to resolve this first.
What are some of the ethos or personal values that run in Tata group?
Curiosity and continuous learning. You should always keep looking at new ways in which you can learn. Even when you get out of this course, you need to be true to yourself and you should keep yourself asking if you are learning constantly. There are only so many things you can control about the ecosystem but you need to focus on the things that are in your control. By nature, I am an introvert. But now, I have to go and stand on stages and speak. You need to keep learning throughout your life.
How would you describe your decision-making style — intuition based or data based?
You need a combination of both. While breadth of thinking is important, what is even more important is to have depth and detail. I feel that depth is missing these days. You should be able to make decisions that could stand for 20 years. So just looking at spreadsheets might not be enough, you need to think through them deeply. Sometimes you get stuck in risk assessment and focus too much on it. Instead you should focus on risk management. Having depth helps you in reaching there.
What would you have done differently at Tata?
There are many things that I could have done differently. But the one thing I am happy about is that I am still comfortable with all the decisions that I made. Some of them played out right, some did not. But I am okay with each one of them.
What are some of the books that influenced you the most?
No particular book. I have never read fiction after school. I try and read a diverse set of books- management, science, technology, psychology. To make sure that Tata group was future ready, I preferred spending time with the young leadership that had joined. How do you unwind? I enjoy working a lot and I love what I do. Therefore, I don’t need to unwind really. I do photography but I am not very good at it. I spend time with my family.
What would be your advice to IIMA students?
The world is your oyster. If you have a passion for something, then you should go for it. But don’t get into something just because it is a fad or because it is cool. Do it because you are passionate about it. And focus on learning as much as you can from whatever you choose to do. Keep looking at ways in which you can keep learning throughout your life.
