They’re Good People

 

Can the Good Guys Prosper?

When Ratan Tata, former Chairman of Tata Sons died at the age of 86 on 9 October 2024, it felt like someone personally important had left the stage. I never met Mr. Tata but I had the privilege of interacting with Tata Brand on several occasions, including doing a very small PR job for them back in 2019, when I helped to get some coverage for Tata Crucible, a quiz event that Tata Sons organized in Singapore.

Given that I’ve had several interactions with the Tata Brand, I thought I’d try and see what it was that made them so special. I mean, Tata is undoubtedly a behemoth by any standards. Back when Mr. Ratan Tata was at the helm, the group was valued at around US$400 billion, which the Indian media took great pleasure in pointing out, larger than the GDP of Pakistan, India’s perpetual rival in just about everything (Or as one Indian executive said “Partner in Destructive Competition.”)

https://www.indiatvnews.com/business/news/tata-group-valuation-bigger-than-pakistan-economy-1-million-employees-2024-10-10-956462

 

 Tata is not just big. Its dominant. Go to India and you’ll find that the Tata name is on just about everything. However, Tata isn’t just an “Indian” brand. It’s an international brand, that owns other world-famous brands like “Jaguar Land Rover.” This dominance and out word presence of Tata has made the Indian brand that outsiders want to deal with and the one that everyone wants to work for.

However, these are things you could probably say about any company. What makes the Tata particularly unique is the fact that, as far as corporate entities are concerned, they known as the “good guys.” No other firm in India has the reputation that Tata has. The entire commercial organization is known for being “good.” Let’s look at the great American philanthropist of the last two decades, who have given away billions to causes. All of them, started out as ruthless businessmen before they became good guys. Bill Gates for example was known as ruthless monopoliser in the IT space before he became the world’s nicest guy.

Despite the economic dominance of the Tata Companies, Ratan Tata was never on anyone’s rich list. In fact, nobody in the Tata family is (this is not to say that they’re living normal middle-class lives). The nearest rival to the Tata Group is the Reliance Industries, which has made its chairman, Mukesh Ambani, one of the richest men in the world with a net worth of some US$107 billion. Mr. Ambani is known for being the owner of the world’s most expensive private house and host of the most expensive weddings.

So, whilst Tata and Reliance are around the same size, how is it that the family behind Reliance has acquired so much wealth whilst the Tata’s avoided the “wealth” of the Ambani’s? Well, if you look at the amount the Tata’s have given away, its around US$102 billion, which is nearly the same as Mukesh Ambani’s net worth:

https://www.hindustantimes.com/trending/meet-the-indian-man-who-outshines-mukesh-ambani-ratan-tata-and-azim-premji-as-the-world-s-biggest-donor-101728634899611.html

 

So, are the Tata’s more inclined to being nice when compared to everyone else? Well, the answer may lie in the fact that even if there was a Tata who wanted to be a greedy little p****, he’d (they usually are), the corporate structure of the Tata Group is ultimately controlled by a charitable trust. Tata Trust controls some 66 percent of the Tata Group.

Tata Trust, works on delivering a number of philanthropic services to India and the wider world:

https://www.tatatrusts.org/about-tatatrusts

 

 Ratan Tata was not the perfect businessman. As his obituary in the Financial Times points out, his sacking of his successor, Cyrus Mistry caused the group to suffer from unwanted publicity and when he stepped down, a lot of the business seemed to lack a certain focus. The majority of revenue of Tata Sons came from Tata Consultancy Services (TCS), the largest of the Indian IT outsourcing companies.

https://www.ft.com/content/5a405ffe-e9ef-4ebf-9203-ce2283f6d203

 

 He did, however, play a role in putting Tata on the map and was known for being a humble man, despite his clout. Nobody begrudged a businessman getting a state funeral and nobody questions whether Tata is creating wealth.

In a way, the closest comparison is Bertelsmann in Germany, which dominates the German and European media market. The majority of shares are owned by private foundations and charitable trust. Bertelsman has revenues of around 20 billion Euros a year.

In a way, the most interesting thing for the world, will be for companies like Tata and Bertelsman to become case studies of how companies can be “good” and “prosperous.” They’ve made the relationship between non-profit foundations and businesses work. Ultimately, the world becomes a better place when companies prosper by doing good.