Ratan Tata on how empathy played a huge role in overcoming challenges

Every business has its share of highs and lows, but the most crucial aspect is how does one overcome the odds.

Ratan Tata, Chairman of Tata Trusts, in a virtual YourStory Leadership Talk interview, recalled the tough times he faced when Tata Motors acquired Jaguar Land Rover (JLR) in the UK way back in 2008.

It was very unlikely during that time that an Indian automobile company like Tata Motors could acquire a prestigious but struggling business like Jaguar Land Rover, and there was lot of apprehension, fear, and even dollops of cynicism.

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The previous owner, Ford Motors, was running the business for eight years, but did not see much success.

“In Coventry, where the plant was located, there were rumours that we were going to close down the factory and convert it into a tandoori chicken restaurant,” said Ratan Tata, in a exclusive conversation with YourStory Media Founder and CEO Shradha Sharma, while speaking about one of the toughest challenges he faced in his over two-decade long corporate career, and how he overcame it.

The odds were certainly stacked against Tata Motors, with restive employees who were uncertain about the future; the UK government, with the exception of the then Prime Minister Gordon Brown, was not supportive; and there was downturn in the European economy.

As Ratan Tata described, “The ministers said it was an Indian company and Indian banks problem.” Though they remarked the jobs to be saved were British.

The acquisition amount, around $2.8 billion, was certainly large during that time, which meant Tata Motors had to raise a lot of debt. In such an environment, Ratan Tata candidly admitted, “I knew what we had bought and whether we could pull ourselves a way out.”

Mr. Tata reached out to the employees and held a town hall meeting, where all their concerns were addressed in a transparent manner.

Addressing the employees, Ratan Tata had said: “I really do not know what we will do, but I can assure you we do not wish to close down. We should work shoulder-to-shoulder and revive the two brands and the glory they had at one stage.”

This approach worked wonders for JLR, where they could bring about a turnaround for the company in terms of profit, sales, and the introduction of new products.

Speaking on the role he played, Ratan Tata said, “I registered confidence in the people.”

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Ratan Tata also recalled another major challenge he faced after he took over as the chairman of Tata Group. There was a major strike at the Tata Motors plant, which turned violent, with workers beaten up and managers stabbed.

“I stayed for four days at the plant to say that we are together. We overcame the strike and started to work again,” he said.

This empathetic approach paid rich dividends not just for Mr. Tata, but also for Tata Motors as there were labour union agreements coming up and payment of bonus to the workers. The management was not in favour of such payments, but Ratan Tata was insistent on paying the bonus as the workers stood with them.

Fortunately, the workers voluntarily decided not to take the bonus. “This was a psychological turnaround on the back of a rather dangerous situation,” Ratan Tata said.