Tata Steel and Tata Motors may be hogging all the limelight in recent months, but there's another group company which deserves to be celebrated as well. Tata Chemicals' splendid turnaround and global leadership is astounding. Here's an excerpt of a chat between Homi Khusrokhan, MD, Tata Chemicals, and Sangeeta Mansur on the sidelines of a recent Tata Group's workout on ‘sustainable value creation'
Briefly, how would you describe the Tata Chemicals' turnaround story?
In 1999, soda ash prices were really low and profits were under strain. There were too many people in the organization, costs were high, and we were not competitive globally. To add to it, imports were coming in from China . And there were no profits in Soda ash which was our bread and butter at that time. We showed loss one quarter and then decided to put in our efforts at increasing our operational efficiencies.
Our turnaround came about in three waves. The first one was called Action 500 which focused on initiating the turnaround from red to black. The second was called Manthan which came with its relentless focus on costs and efficiencies. The third one was Udaan which was not about costs but about value. It was a logical shift of focus from cost to value. To achieve this transition the company changed the entire management around 2000 and a completely new team succeeded in turning around the company.
And where have the three waves brought Tata Chemicals today?
As a result of that we are the second largest soda ash company in the world today. We've done two major acquisitions in the last two and a half years. Today we have presence Netherlands , Kenya , US and India . We are a different company today, profitable and growing.
How do you describe your leadership style? You joined Tata Chemicals when it was in the process of turning around. How did you manage this transition?
I see a leader's most important role is being that of a facilitator of high performance. I would like to think of my style as being approachable, humane and caring. I would also want the work environment of a company that I head to be open, informal and enjoyable. I believe that people produce the best results when they enjoy what they are doing and work with bosses who give them the freedom to operate.
Tata Chemicals had already turned around when I joined, thanks to my predecessor Prasad Menon who really had to weather the toughest period. I joined Tata Chemicals in 2004 from Tata Tea. I had joined Tata Tea after retiring from Glaxo after being there for 29 years. I joined the Board of Tata Chemicals to steer new growth opportunities including the setting up of an Innovation Centre.
Although I came from an MNC background, having worked for 29 years with a large pharma company, I really did not find it difficult to manage the transition. The value systems of the two organisations, particularly high ethical standards and the good governance practices I found in the Tata Group helped. As an individual, I consciously focused myself on seeking out similarities rather than complaining about differences . That also helped.
Where does criticism come from for Tata Chemicals, and why?
Considering that we're a very large producer of soda ash, criticism has naturally come our way. We have done a lot and have attended to issues of the environment. I wish we had been more environmentally conscious and kept the coastline absolutely clean. Even now, our waste water is channeled into open waters because of some court case that have been going on since the eighties! We could have put in pipes but we had to wait for the court order! So, there are things which we could have done. And there are things which we've done and are doing. We're not starting our project in Tanzania because of protests by bird lovers who are pointing out at a possible threat to flamingoes who come to nest around the place.
How does sustainability fit into the growth story/prospects of Tata Chemicals?
To put our Sustainability strategy in very simple words, we won't do anything that's not sustainable. For example, we grew with our acquisitions- at Viomi a nd Kenya ; but for both these acquisitions in soda ash, we picked up locations which have natural soda ash-which is more sustainable than chemically produced soda ash. And our new products are all about sustainability.
So, the new products are in the area of bio fuels?
Sure. Biofuels is something that will make a huge difference. Our Innovation centre is working on new technologies and new products. We're also looking at a workable way of making bio-ethanol from agricultural waste. In fact, every R&D in the world is trying to seek this Holy Grail. It doesn't need food but only agricultural waste-like wood chips, biogas etc. If one cracks this, we no more have to worry about using food crops. But of course, we start with the conventional way of using food crops and keep the R&D going paralelly. When we crack cellulose conversion using enzymes, the whole picture will change.
What's your view on Sustainability in the Tata group as a whole?
It comes very naturally here. It's not something that's forced. It's a part of the value system and hence is at the core. It's true we haven't moved quickly on greenhouse gases, but we'll catch up. There's a very serious commitment to do so.
We hear about some of the soft measures taken up recently at Tata Chemicals like Lights off at 6.30 pm and no working on Saturdays without special permission. How did they come about?
They came from the people themselves! Last year was declared the year of the people and we discussed how to make Tata Chemicals a better and a fun place to work at and how to make people happy. And people came up with all these ideas and we put them to practice. Yes, we have lights down at 6.30pm so that people go home in the evenings for a better balance in life; we've said no emailing colleagues on Fridays; and senior managers regularly go into a chat room to chat with several younger mangers on various issues. Best work comes from happy people and we want happy people here
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