Tata Group - Creating Value with Values

Today’s Brew is for Tata Group
Brew date: 29th July
Type: Served Hot, to be Consumed a.s.a.p.

Transforming Tata Group – Moving from a Group of Global Companies to a Global Group with Purpose, Values, Vision and Actions.

The Brew relishes the opportunity to feature the Tata Group in its collection, more so because it feels the dire need of improvisations in Group’s strategy & business models, and the timing to pen this could not have been more apt, a year after the group outlined its vision 2025, and more importantly, on the day which marks 111th birth anniversary of JRD.

When Elephants move, their walk is surprisingly silent and unassuming, however when they charge, the scale of impact is huge, the purpose of this brew is to bring a realization to the group calling for transformational actions at group level and for its constituents, heralding itself in the new era of globalization, consumerism, growth, expansion and impact.

The Brew has observed that a lot of Tata growth has been due to its market expansion strategy, along with being competitive, though this trajectory is successful to orbit group to a Global Group, however the game changes with the tag and acknowledgement of being a Global Enterprise, and hence the Group now requires new sets of rules, frameworks and parameters to succeed further. This Brew attempts to outline these and ironing the vulnerabilities of missing the high potential – high growth opportunities where it has been a lot more vulnerable in recent times.

Infact, The Brew believes that the group is one of the only few, which is poised with high advantage and opportunity to spread its wings to emerging markets, the developed and developing ones with an opportunity for higher unlocking of value creation.

The Brew as well recommends Tata Group to explore The Brew Framework for Enterprises, with respect to its macro – capabilities of Innovation, Value Creation, Value Enhancement and Purpose to chart out its next growth story.

To understand the business model of Tata Group, check out the following links:
        a)     www.tata.com

The Brew will analyse Tata Group on the following parameters:
a) Business Analysis

1)    Need for a Global Purpose, Direction & Contribution to Impact:
When Tata group announced its Vision 2025, of catering to 25% of the world's population, the result of which it will be amongst the 25 most admired corporate and employer brands globally, with a market capitalization comparable to the 25 most valuable companies in the world, it was after a long time since the times JN Tata (the visionary founder of the group who laid the blueprint, in elements and soul of the Tata group), that the group set out a direction for itself and its companies to undertake new and higher adventures of corporate expeditions.

Until now, the lack of direction was a major hindrance to define the framework of growth, contribution and progress, however it will still be inept considering the group has not set itself a Purpose to devote itself to. The direction defines the scale of its achievement and efforts, however the Purpose shall manifest the very existence of Tata, to be evident in its every action, ideology and philosophy. A Global Purpose will help the group to understand its existence, in culmination to its endeavors, heritage, values and as well be a testimony to endure its manifestation in face of adversities and challenges.

More importantly, having a purpose as well instinctively sets out the plan for vision, action, and results (and as well integrations of markets, industry, offerings) for the group and its companies allowing it to be more proactive, pioneering and more responsible to create the path to its fulfillment, improving its Contribution to Impact ratio to the ecosystem and society.

The Brew urges the group to establish a Consumer Centric Purpose of existence, which will trigger and drive, all the endeavors of group and its companies over a continuum of time.

2)    The need for playing active role by the Group:
The Brew believes that Group ideally needs to play a very active role to leverage its competences for its companies (Refer point 5 for understanding on competence), promote the collective agility of its firms, leading with proactive (being proactive is the dire need and essence for Tata’s progress & growth) business solutions with respect to its companies and to the fulfillment of its purpose.
Playing an active role as well does not compensate for the autonomy and    decision making abilities of the individual firms, rather it encourages more of it but with harmony, completeness and coherency at all ends, Group to Company (s), and Company (s) to Company (s).

The Brew envisages the following roles the group needs to play to increase the collective agility and leverage its competences to its firms:
a) Aligned with its Purpose, the group needs to have a strategy mapped to value creation and markets with the cluster forms of Startup Organisations, Competence based Orgs, Innovation/Disruption based Orgs or Growth firms (which leverage on the Group’s competence). Every category has their inherent traits and expectations due to its nature from the Group and fellow firms to be leveraged effectively leading to the sustainable businesses.

b) Portfolio based Businesses:
Designing the new Performance Framework for group, where every company seeks on the either of the roles they want to achieve in limited time spans: a) Profitability Leadership, b) Innovator or disruptor leadership, c) Revenue leadership, d) Strategic or a Competitive advantage.
 Every company has to play roles in at least 2 of the above parameters to contribute competitively and enable fellow firms and group to strengthen the competence and advantage.

3)    Improvising the Measurement Metrics & Frameworks:
While The Tata Business Excellence Model (TBEM), the core and the recipe of the group’s maturity framework has played a comprehensive role to develop its metrics of progress and success, the shortcomings of its gets realized post a firm attains a leadership role or in highly uncertain externalities where multiple factors impact the business model.  There does exist a need to either improvise the framework, or choose alternate measures (depending on the portfolios and clusters) of progress & success.

Basis of TBEM Model:
a) Works great in the Static or Predictable markets, where the Certainty of Factors contributing to effectiveness and efficacy are known.
b) Does not account the different types of innovations, and hence misses out on Key Trends, System Level Innovation undercurrents which will surprise and shock the markets.
c) Its an efficiency, effectiveness, robustness and alignment tool, it wont be able to ascertain the future trajectory of the trends or disruptions, hence wont be able to quantify risk, effectively nullifying the proactive or pioneering innovation
d) It’s a benchmarking tool at a Company level & not at industry level, effectively tells you the gap between done and best done, it does not convey what should be done?

4)    Competence of Scale, Innovation (& Reverse Innovation), Collective Agility, Consolidation & Diversification should reflect in its strategy as well
The Group, as per The Brew’s understanding is not realizing its Competence effectively and hence not helping it to be leveraged by its firms and endeavors.
Though every firm is required to have it’s own strategy, building and realizing the Group competence of scale, innovation, collective agility, consol. & diver. will help the firms to scale quickly with minimal efforts for each firm (which they otherwise have to undertake independently, delaying the organic growth).
The Brew proposes 3 structural and systemic transformations, which will help develop these competences along with the strategy to reflect these to effect.
a) To have 2 centralized funds, Innovation fund and Scale Up fund across the Group (contributed in equal measures by firm and group) for the firms to promote and contribute to the innovation and speedy scale up efforts in a centralized manner strategically mapping it to Group’s strategy and as well syncing with the Firm’s trajectory.  Infact, by having a core committed fund, the businesses have a more focused approach on driving sustainable businesses, along with sharing of risks and to promote its culmination to all the firms.
b) Along with the centralized effort, The Brew proposes that the Group should have clusters of firms on Consolidate, Collaborate and Standalone with respect to overall value chain of Innovate and Scale Ups (Value Creation and Value Enhancement). While the Group keeps supporting all the firms on standalone basis for their endeavors, it as well charts out roles of firms on where to and how to synergize amongst themselves and the same being enabled by the Group.
c) There is as well a need for a Centralized Task Force, Leadership pipeline and Strategy office which will actively support, and enable activities at various cross-levels of Group, Companies and Clusters.

5)    Group Strategy and Startup Organisations, New Business Model, Business Model Innovations:
While The Brew recommends the group to play on its competence (innovation, scale, collective agility, consolidation & diversification) using them selectively with existing businesses while figuring the relevant strategy leading to the fulfillment of the purpose.
An equal need is felt for the group to trigger new business with the proactive identification of value gaps and business opportunities. In this process,, the Group, with respect to the purpose fulfillment, apart from supporting the existing businesses is as well responsible and accountable to enable Startup Organisations (where the Consumers, Markets and Business Models are established by industry) – Part of Existing Organisations which will function as startup which will be extended the leverage of Scale, Innovation, Agility, Cons. & Diver.  platform and Task force resources by the Group.

For the New Business Model (where the Consumer Need is felt, paving way for Business Opportunity) – The Group will enable all the Competences sans Scale to test the markets and then with Scale-ups and Competence to leverage the proof of concepts.

For Business Model Innovations (where the Consumers and markets exists, but Business model needs innovation to unlock further value), the group will enable with Task force along with entire platform of Competence.

6)    Lead Variables (Competence + Innovation + Design + Consumer Centricness Value Chain) led Strategy = Sustainable Business & Profits from different markets.
Along with focus on purpose, strategy, new and existing businesses, The Tata Group will have to keep in mind the recipe for Sustainable Businesses, and keep enabling its firms with its elements of success. Precisely, it will have to enable and effect, and making its success, more process oriented along with the pursuing the path to excellence and fulfillment.

7)    Ambition, Risk, Values, Contribution to Progress measured on 4 P’s (Profits, People, Pervasiveness and Pioneerability):
As the Tata Group seeks new frontiers and explores new horizons, it will have to showcase a higher set of ambition, risk, values and a resolve to purposefully and meaningfully contribute to the progress manifested (and not driven) by its metrics of profits, people, pervasiveness and Pioneerability.

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