The problem with being Ratan Tata

The biggest issue for brand Ratan Tata is not whether he has an answer to the questions that are being asked regarding the Radia tapes, rather it is the fact that there is at all a question, says Santosh Desai

ON THE face of it, Brand Ratan Tata is a very difficult brand to sully. Built on the back of India’s most-trusted business brand, Ratan Tata has come to represent all that is right with the world of business. The cries of ‘Ratan Tata for Prime Minister’ that some sections of the population lapse into every time they are upset with our system of governance might be the wishful thinking of a politically naïve group, but the fact that a business leader is seen to be fit to handle the onerous responsibilities of leading the country is certainly a testament to the high regard in which Mr Tata is held. Which is why the events of the last few days following the publication of the Radia tapes become extremely significant for they threaten to potentially derail one of India’s most iconic brands.

If we think of brands as stories about products, services or people that buyers believe in, then the Tata brand has been through a series of narratives. In its early life, it offered a powerful counterpoint to the prevailing culture of traditional Indian business. It sought to show us that enlightened business was not a contradiction in terms as it successfully reconciled diverse, often conflicting, interests. The Tatas showed us how it was possible to reconcile profit with compassion, marry the needs of the business with those of its employees and directly benefit communities in which it carried out its business. The idea of business as a righteous enterprise based on a concern for goals cherished by society at large was at the heart of the Tata ethos.

The Tata brand story went into less exalted territory in the 1980s where plagued by its own internal problems and left behind by a new wave of aggressive Indian entrepreneurs who worked the system to their advantage, Tata began to look like a fading aristocrat hanging on to a sense of past glory. Its adherence to its values began to look like an excuse for its sluggish performance and the dominance of a few satraps that showed greater interest in their own fiefdoms than in the larger brand did not help its cause.

Ratan Tata’s great triumph was to impart velocity to the venerable and inject ambition in the amiable. In the last decade, brand Tata has again reconciled the notions of probity and aggression, ambition and compassion, a feat which is remarkable considering the times we live in. Ratan Tata’s low-key style and understated persona has added considerably to the aura that has come to surround him. The Tata brand in general and that of Ratan Tata in particular has helped the group tide over situations which would have damaged others much more significantly.

The Singur issue is particularly significant because here for much of the country, the Tatas were presumptively in the right because of the reputation the group and its leader enjoyed. The importance of the Radia tapes and its messy aftermath cannot be overstated precisely because of what it might potentially damage.

FOR any other business brand, the current controversy is challenging, but unlikely to be particularly damaging. Even in this instance, there are other business houses involved, and arguably there is greater evidence of the role they have tried to play in managing the system, but it is noteworthy that their actions have received virtually no comment. For the others, behaviour of this kind is not vastly out of line with people’s expectations about them. The problem, in the case of the Tatas, is that they have so much more to lose. Belief in the Tata brand borders on superstition, and while in ordinary circumstances, it safeguards the brand against being seen negatively when things go wrong, in this case what is at stake is that fundamental belief itself.

What we are seeing here is the possibility of Tata as a business house with its own commercial interests coming unglued from Tata as a brand that is owned by society at large. Ratan Tata is acting as a business leader should in a crisis — he is leading from the front and tackling questions head-on and that is perhaps the best way of looking after the group’s business interests. But for the Ratan Tata brand, which stands for an almost ascetic belief in doing the right thing, and which is seen by people at large as one of the few sources of hope in a rotten system, the damage is potentially a very significant one. The separation of these two dimensions of the Tata brand — the business and the human — creates two very different imperatives for Ratan Tata. The Tata business operates in the real world with its share of influence peddling and deal-making while the Tata brand lives in a moral fantasy where righteousness and straightforwardness are still valued and pay dividends. In one world, without engaging in lobbying and various ways of managing the government, success is impossible while in the other, any act of associating with murkiness becomes a blot on a spotless reputation.

The absolute nature of faith in the Tata brand and in Ratan Tata himself makes any engagement with dodgy issues, even if it is by way of spirited refutation, damaging for the brand. For the Tata business, Ratan Tata’s detailed defence in his reply to Rajeev Chadrashekhar may have been the appropriate move, but for the brand it mires him further in a controversy that can only muddy his reputation regardless of what is defence is.

The more Ratan Tata engages with this question, the less it matters what he says. For the biggest issue for brand Ratan Tata is not that whether he has an answer to the questions that are being asked, it is the fact that there is at all a question. That is a problem unique to him for we hold very few other business leaders in such high esteem. But it is a problem nevertheless.

The Economic Times, Monday 13th December 2010