"Hello,
friends!" "Take any aspect of
your life," you fill find some Tata
company brand or the other. "You
might travel in cars, Tata Motors manufacture a wide range of them," "You might take a flight," Tatas own the Vistara Airlines and Air India
as well. "You might stay at
hotels," Tatas own the Taj Hotels. "You definitely wear clothes," Tatas have a fashion brand Westside. "For your jewellery needs, Tata's
Tanishq caters to you." "For
the tea you drink, Tata Tea." "Even
the salt that goes into your food, Tata Salt." "In addition to it, Tata Steel," "Tata Power, Tata Consultancy
Services," "you wouldn't
believe this friends,"
there are more than 100 companies in the Tata Group. So it's no surprise that "currently, Tata is India's one of the
most famous and successful companies."
But do you know that this company didn't turn into a giant overnight? It took them 200 years. "That's right, 200 years!" "In today's Blog, friends, come let's" get to know the interesting story about
India's oldest business family. The
secrets of the Tatas. """The
Tata Group has pioneered multiple industries in India" "and remains a market leader in most of
it.""" """Because
of Tatas who introduced a number of firsts," "the first 8-hour day," "the first leave with
pay.""" """I
would prefer to live with the knowledge that I have of" "upholding the values that we
have,"
"that we've tried to uphold through these years," "rather than say that I have grown it
three times the rate it has."" "
"Friends, our story begins in the year 1822." Exactly 200 years ago. "A boy was born in a village in Gujarat,
to the family of Parsi priests. " Nusserwanji
Tata. He was a restless soul even as a
child. He wanted to do something great. "It's said that he was the only person
in his village," who strongly felt
the need to move out of the village and do something great. "He believed it to be his destiny," "so when he was 20 years old," he left his village and moved to Mumbai. And tried to set up a new business. "Still today, many young people do
this," "the move from villages
to the cities to build a new future,"
but the difference was that he
had a wife and a child. Back then child
marriages were very common. He had become
a father when he was about 17 or 18 years old.
He moved to Mumbai with his family.
He was attracted to the cotton trade there. "And soon, he was running a cotton
export business." "The revenue
from the business," he ensured that
it was spent on his son's education.
He wanted no compromise in it. He provided his son Jamsetji with the best
education of the time. Back then it
meant an education in English. Nusserwanji's
cotton trading business took off really well.
"Later when Jamsetji reached adulthood," "and finished his education," his father decided to send him to Hong Kong
for business expansion. "Today, it
might seem very common," "businessmen
sending their children abroad for business expansions," "but friends, do remember, this was in
1859." Air travel wouldn't be
invented for 55 more years. "Back
then, it was a long and arduous journey by ship." "In 1859, when Jamsetji was 20 years
old," his father sent him on the
mission to set up an office in Hong
Kong. "Interestingly, Jamsetji
wasn't alone either." He was
married and had a child. It was not an
easy decision. To uproot the family and
shift to another country. And try to set
up business there. But Jamsetji was very
ambitious. This led him to immense
success. "In his life of 65
years," Jamsetji worked on 3
continents. Started numerous cotton
mills in India. "Additionally, he
laid the foundation for the construction of India's first steel factory," and launched India's first 5-star hotel. It was the first hotel in India to have
electricity. To be fully electrified. Can you guess which hotel it was? Pause the Blog and think for 2 seconds. The correct answer is Mumbai's Taj Hotel.
"To date, it is among the most prestigious hotels in
India." "In 1904, when
Jamsetji Tata passed away," he left
behind a legacy that remains unmatched
even now. And I'm not saying this from
strictly a business point of view. Building
a profitable business has become quite common nowadays. You will find many such businesses that work for profits. But Jamstji set a tremendous legacy of
principles and ethics as well. Let's see
some examples to understand this. "In
1874, Jamsetji set up his first cotton mill factory in Nagpur." This was his first experience of moving beyond
cotton trading and entering the cotton
production business. "When you
start a new business, you encounter new problems." "He saw that the labourers working in
this cotton mill in Nagpur," were
very lazy. They would make up reasons
for being absent. They wouldn't come to
work.
A 100% attendance of
the workers and labourers working at this mill
had never happened. What would a
superior do in such a situation? Threaten
the workers with the termination of employment due to absenteeism. "Reprimand the workers," But his actions were contrary to common
practices. He assumed that there would
be some reason for the laziness of the labourers. "Since he wanted to motivate them," he wanted to look for a long-term humane
solution. So he set up a General
Provident Fund for them. "To ensure
that even after retirement," these
labourers keep getting a pension. "Additionally,
he started an insurance scheme," "in
case any worker met with an accident,"
the medical costs related to the accident were to be borne by the
company. "Not only this, he started
Family Days," "Sports
Days," so that the workers could
bring their families "and form a
stronger bond among each other," to
foster a sense of community. "These
might be quite common in today's world,"
but keep in mind the era this was being done in. "In the rest of the world, during the
1800s," the working conditions used
to be terrible. I talked about it in
detail in the Blog on communism and
capitalism. The link will be in the
description so that you can watch it
later. "Astoundingly, he was
bearing these expenses out of his funds."
"Then in 1861, the American Civil War began." "Indirectly, this was good news for
Jamsetji's business." "Earlier,
England used to import most of its cotton raw material from America," "but due to the Civil War," the supply was discontinued.
Jamsetji utilised
this opportunity and doubled the rates
of cotton supplied by him. Because
England had no other option but to import cotton from India. "During this time, he set up his office
in London and worked from there." He
raked in huge profits for the next four years.
"But after 4 years," "the
American Civil War ended," and the
supplies from America resumed. This had
an adverse impact on Tata's business. and
it started making losses. Investors
started harrowing him for returns on their investment. But Jamsetji remained steadfast. He promised to ensure that all investors
would get their returns. And simply
asked for some time. "Investors
looked at his honesty," and
permitted him to continue working. But
the investors said that Jamsetji's monthly salary would be a meagre £20 only. Even though he was the owner of the company. "It was quite insulting for him," working in the company he owns as a fixed
salaried employee. But he remained
undeterred. It goes to show Jamsetji's
dedication to his business. "Do you
know what, friends," his father was
the same. "When Nusserwanji's
cotton business wasn't doing well,"
"and the investors were asking for their money back," he had sold his mansion to pay the investors. "In both cases, the decisions proved
successful." "Nusserwanji and
Jamsetji both could protect their businesses," and their reputations. "This teaches us that if we have the
passion, dedication, and skills," then
the chances of your success grow manifold.
"Today, software engineering and data science," are among the highest-paid jobs in the world. Many of Jamsetji's dreams were revolutionary
for his time.
Setting up a hydroelectric power plant. Establishing world-class education
institutions in India. "Setting up
a steel plant," Building a 5-star
hotel which can be enjoyed by people irrespective of their race. Racism was quite rampant back then. "During his lifetime, he could build the
hotel." "But the other 3 dream
projects," "before his death,
work on them had already started." "Later,
his son Dorabji Tata ensured that" the
rest of his dreams would become a reality.
"By 1910, Tata's steel plant was built." And they had started steel production. "Around this time, World War I
began." The British Empire required
a lot of steel then. So Tata Steel
became the largest steel supplier in the country. Tata's steel was used to make the British tanks. As well as for the weapons and the railway
tracks. "In fact, a famous
statement" by a British politician
during WWI holds that """Tata
Steel saved us.""" "Because
the quality of their steel was so good,"
"that even when bombs were dropped on these tanks," they weren't able to penetrate these tanks. "Following this, the name Tata Steel
gained even more popularity." "After
the end of WWI," Tata Steel had
built a very strong reputation in Great Britain. "By 1914, the Tata group had become so
huge that" it encompassed 14
different companies.
But it was just the beginning. Dorabji Tata oversaw the activities of the
Tatas till 1938. "After that, a
distant cousin," Jahangir Ratan
Tata took over the reins of the company.
We know him as JRD Tata. Another
passionate young man with big dreams. JRD
Tata grew up in France. He was a
licensed pilot there. His passion for
flying is widely known. "And so he
set up India's first airline, the Tata Air Lines." Later renamed Air India. "Air India has an elaborate and
interesting story," I explained
that in detail in the Blog on Air India. The link will be in the description below. The story till now was taking place before
the Independence. India gained Independence
in 1947. Socialism was the norm then. "Our freedom fighters like Gandhi," "Bhagat Singh, Swami Vivekanand," all believed in socialist principles. "So quite obviously, when the country
won Independence," Jawaharlal
Nehru's economic policies were socialist as well. He decided to nationalise the major
businesses and institutions in the country. They would be under government control. "This is seen as a positive decision
given the circumstances," "as
I discussed in the Blog on
Socialism," "but for the
Tatas, this was bad news." The Tata
Air Lines was nationalised as well. JRD
Tata was heartbroken by the news. "But
right from its inception, the Tatas believed that" "business is not only for profits," it is for nation-building as well. "After the nationalisation, the Nehru
government offered JRD Tata" "a
position to lead Air India," that
was gladly accepted by JRD Tata. "This
is why during the 1970s-1980s," Air
India was considered to be one of the most prestigious airlines in the world. "Apart from this, JRD expanded the
business in many other sectors." "In
1945," the very first Tata Motors
product was made. Locomotive engines to
be run on tracks. "In 1968, the
Tata Consultancy Services (TCS) was founded," providing electronic data processing
services.
"Today, TCS is the second-largest employer in the
country." Following the Indian
Railways. "Additionally, Cancer
Research and Treatment Center," "their Salt business," "Electronics manufacturing," JRD Tata remained the Chairperson of the
Tatas for 52 years. "During his
tenure," there were 95 companies in
the Tata group. "In 1969," the Monopolies and Restrictive Trade
Practices Act was passed. The Tata group
was the most affected by this law. The
government aimed to ensure that no company could grow so big that it creates a monopoly in every sector. "Despite such rules being passed," "under JRD Tata's supervision, the Tata
Group continued to grow." How? "With the growing number of subsidiaries
under the Tata Group," he diluted
the ownership of Tata Sons in the companies.
"By doing so, the new companies weren't considered
monopolies." "But over the
course of many years," this
approach proved wrong for the business "when
other people started handling Tata's businesses," it couldn't be successful always. "For example their electronics arm,
Nelco," "used to manufacture
radios," "By 1971, the market
share of Nelco had fallen to 2%." Where
it used to be at 20% once. "If we
talk about Nelco specifically," Jamsetji
Tata's grandson was called to bring
Nelco back on track. This was none other
than Mr Ratan Tata. "He was working for the family business
since 1962," "but in
1971," Nelco was assigned to him. "Ratan Tata decided to stop
manufacturing radios,"
and wanted to invest in new technologies to revive Nelco. Such as satellite communications. "Within 3 years, the business turned
around." "By 1975," Nelco's market share was back at 20%. "Unfortunately, during this time, the
Emergency was declared," causing
adverse impact on Nelco's business yet again.
"Eventually, it had to be shut down because of this." "But do you know what," the cotton mill set up in Nagpur by Jamsetji
Tata has a similar story. "Ratan
Tata was given the responsibility to revive it," but this mission failed short of being
successful by a hairbreadth. "But
by this point," the senior
management had taken notice of Ratan
Tata's capabilities. "This is why
in 1991," "he was announced as
the successor of JRD Tata," and he
became the chairperson of the Tata group.
"1991 was the year when India's Finance Minister Dr Manmohan
Singh," announced the
liberalisation of India. Opening of the
Indian market to the rest of the world. "Suddenly,
India let go of the socialist model"
and started moving towards a Capitalist model. It's said that it was the only way to protect
India's economy. "From Tata Group's
perspective," "seeing it play
out, Ratan Tata " decided to do the
exact opposite of what JRD Tata had done.
He started raising Tata Sons' ownership
in all Tata Group subsidiaries.
This was done so that
the Tata group companies could not be taken over by any international
companies. This decision proved
immensely successful. "Not only
could the Tata Group survive this period,"
but the Tata Group started acquiring foreign companies. The Tetley Tea company in England was acquired by the Tata Group for $12
billion. "Europe's steel giant
Corus," was acquired by the Tata
Group. "In another interesting
instance, the Jaguar Land Rover company,"
"a car manufacturing company in UK," was in the talks of being sold off. The workers of this company wanted that Tata Group to take over the
company. Jaguar Land Rover had received
offers from 3-4 companies. "Among
those prospective acquirers, Tata Group was chosen by the workers. " This was a luxury brand but it didn't mean that Tata overlooked its
grassroots-level customers. In November
2003 it's said that Ratan Tata saw a
family travelling on a scooter. Four
people were squeezed into a scooter. And
it was raining. They were barely
managing. "Five years later, Ratan
Tata launched the Nano Car." "While
launching it, he told a story." The
Tata Group believes that the core philosophy of their business is Social Upliftment. They wanted to give the lower middle class
the chance to own a car. "Only
₹100,000." World's cheapest car. It's another thing that the marketing
strategy of this car was terrible.
"They marketed it as the most affordable car," "its price of ₹100,000," they didn't consider people's perception to
this fact. Who would want to buy this
car? "If someone bought this
car," wouldn't they be considered
cheap people? For buying the cheapest
car. This was a marketing flaw. But Tatas never focused much on branding
strategies. You can see this based on
the fact that "the Tatas set up
many institutions and businesses," which
weren't named after the Tatas. Such as
the Indian Institute of Science. The
cotton mill in Nagpur that I told you about.
It was named the Empress Mill. It
was named so to commemorate the coronation of Queen Victoria. The brand Taj Hotel. Tatas aren't named in it. "The city of Jamshedpur," "named after Jamsetji Tata," "wasn't named so by the Tatas," "rather, the British Viceroy of India at
the time," gave the city its name. This was the exciting story of the Tata
Group. The link to download Scaler will
be in the description below. You can
click here to watch the blog on Air
India. "In it, I tell the story of
Air India in the same interesting way."
Let's meet in the next blog Thank
you very much!