Mistry, the Tatas, and meerkats: when giants falter

It’s a species of mongoose native to the Kalahari desert in Africa. They are also the protagonists in an allegorical tale by management guru John Kotter and collaborator Holger Rathgeber.

Absolutely. Kotter and Rathgeber recently authored That’s Not How We Do It Here! A Story About How Organisations Rise, Fall — and Can Rise Again . As the name suggests, it’s about organisational dynamics, explained through the parable of a colony of meerkats. But beyond that, it’s about adaptability of large organisations, and particularly the importance of fusing inspirational, direction-establishing leadership with meticulous — even if boring — management systems.

Leadership and management are complementary, but not the same. While the former is needed to provide the creative spark, the latter, which is often derided as bureaucratic, is needed to streamline processes and avoid chaos, particularly in complex systems, in a fast-changing business environment. That sort of seems to explain a lot about the current mess at the Tatas.

From all accounts, Mistry appears to have fallen foul of the ‘That’s not how we do things here’ culture at the Tata empire. Other things being equal (and we admittedly don’t have adequate official information on the circumstances in which he was eased out), that points to an excessive preoccupation with how things are being done rather than why. It also reveals a heightened sensitivity to preserving and protecting a Tata legacy, without adequate consideration of the fact that institutional legacy can sometimes be a heavy burden.

Any honest appraisal of the Tata empire’s current problems ought to acknowledge that most of its troubles — in the steel, automobile and telecom verticals — are legacy issues that pre-date Mistry’s helmsmanship. There’s another worrying sign here.

That directors on the board of Tata Sons, including independent directors (many of whom are men and women of good standing) have been unable or unwilling to speak out against the institutional failings that underlie the current crisis. Some of the overseas acquisitions of the Tatas in recent decades, and the valuations at which they were made, manifest poor business wisdom in a group that has an embarrassment of leadership riches across the verticals. Business consultant Jim Collins, author of Good to Great and Built to Last , too has things to say on the subject in his 2009 book How the Mighty Fall: And Why Some Companies Never Give In .

Collins identified five stages of decline in a company/business empire, and although the Tata empire doubtless has formidable strengths, some of these markers that Collins flags seem to be reflected in some early stage in the goings-on at the House of Tata. “We anticipated that most companies fall from greatness because they become complacent,” write Collins. “(But) over-reaching much better explains how the once-invincible self-destruct.” Among the other risks he flags are “hubris born of success” and “denial of risk and peril”.

Plenty. The colony of meerkats learns, after much hardship, that the optimal solution for organisations, particularly those that have reached a critical scale of operations, is to have a hierarchical structure driving a plan to get today’s work done exceptionally well and a sizeable degree of freedom within a network structure guided by a clear directional vision. The Tatas could do worse than abide by that wisdom.

A weekly column that helps you ask the right questions