Natarajan Chandrasekaran, chairman of the board of Tata Sons, discussed how businesses should serve the community, the four areas companies must confront to be resilient, and the parallels of marathon running and leadership in a wide-ranging conversation with Cornell President Martha E. Pollack Oct. 16 in Gates Hall.
As Cornell’s 37th Robert S. Hatfield Fellow in Economic Education, Chandrasekaran engaged in a Q&A session with Pollack on topics related to the theme: “Leadership in the 21st Century: Tata Heritage and Future.”
In her introduction, Pollack noted that Tata Sons holds more than 100 Tata operating companies, boasts annual aggregate revenues of more than $100 billion and employs more than 700,000 people around the world.
Pollack began by asking about Tata Sons’ philosophy of “stakeholder capitalism,” as opposed to “shareholder capitalism.”
“From the very beginning our founder basically said the very purpose of a business is to serve the community; what comes from the community has to go back to the community multiple times over,” Chandrasekaran said. In a business sense, community includes not only stakeholders, he said, but also the community where a company operates, employees and customers.
Pollack pointed out Tata’s diverse portfolio, which includes everything from “teas to cars to IT,” and asked how Chandrasekaran leads the group while also allowing “each component to blossom” and creating a culture that emphasizes community.
Chandrasekaran said within Tata Sons, there is a brand agreement of basic governance that applies to codes of conduct and ethics standards that are “common for all companies,” where there are ethics officers for the group as a whole (to hold those at the top responsible) as well as for individual companies. “So we try to ensure that everybody maintains the standard,” he said.
He credited the codification of these governance policies to Ratan N. Tata ’59, B.Arch. ’62, former chairman of Tata Sons.
Chandrasekaran – an avid distance runner who has completed marathons in London, New York, Boston, Chicago, Berlin and Tokyo – sees parallels between running and leadership, in that both require a kind of fitness, which is physical in the case of running, and fiscal for organizations. Also, he recognizes that both running a marathon and running a large organization include tens of thousands of people who are also engaged in the race, he said.
His just-released book, “Bridgital Nation: Solving Technology's People Problem,” co-written with Roopa Purushothaman, Tata Sons chief economist, argues that if cutting-edge technologies such as artificial intelligence and machine learning “can be deliberately deployed, [they] can make a significant impact in terms of solving the biggest problems of mankind and in the process create jobs.”
Using India as an example, Chandrasekaran said that its major problems can be boiled down to lack of access to basic infrastructure and services, and a large population in need of jobs.
“My idea was that … if you can build technology and solve the access problem in such a way it creates jobs, both ends meet,” he said.
One challenge Tata Sons is concerned about is environmental sustainability. “The sustainability problem is real,” Chandrasekaran said, but pro-sustainability politicians overpromise how quickly goals can be attained.
“My worry is that this transition has to be planned, otherwise we’ll end up wasting a lot of resources,” he said, adding that Tata Sons’ oil company is working on how to transition to renewables, its car company is researching electric vehicles, and its steel company is investigating more efficient, cleaner technologies.
Pollack also asked how a multinational company like Tata Sons builds a “resilient organization” with the challenges of “geopolitical volatility … in a time of such rapid and disruptive change.”
“This geopolitical environment that we see is the new normal,” Chandrasekaran said.
In the physical world, the big issues will be tariffs and immigration, and in the digital world, the issues revolve around data localization and data privacy, he said.
“Whatever we do in building our companies, transforming our companies, we have got to confront these four” areas, he said, with business models that take those issues into consideration.
The Hatfield Fellows Program is the university’s highest platform for the exchange of ideas between the academic and corporate communities.