Ninad Karpe, partner 100X.VC introduced R. Mukundan on 20 minutes Live on his YouTube channel. R Mukundan is the managing director and CEO of Tata Chemicals Ltd. He is an engineer from IIT, Roorkee, and alumnus of the Harvard Business School. He joined Tata administrative services in 1990 after the completion of his MBA from FMS, Delhi. During his 30 years career period with the Tata Group, he has worked across the chemical, automotive, and hospitality sectors of the group.
As per the format, Mukund will be speaking for 10 minutes, and then there will be a Q&A round for the remaining 10 minutes.
R Mukundan :
His discussion focused on the following three points:
- How do we face disruption?
- What has TATA Group done during this pandemic time?
- What is the shape and structure of recovery?
Mukundan opened the session by thanking Ninad and all the listeners. He wished everyone safe and sound health.
How do we face disruption?
Present pandemic times are one of the most difficult times witnessed in the history of mankind. And, R Mukundan suggested that he has followed three principles for the same. These three principles apply to human beings, companies, and everyone else.
He invited people to watch a YouTube video series called “Into the Storm” which is featured at Channel News Asia. He specifically mentioned about three videos which are of 2-minute duration. One video of Lego, one video of Nintendo, and one video of Fuji films. And these videos have helped him to handle these crisis hours quite diligently.
The first principle is to face reality. This is applicable for a company, individuals, as well as organisations. If the reality is faced and handled wisely, then the road ahead becomes easier. The same is being discussed in the Lego video too.
The second principle is to listen and learn. Organizations and individuals who are open to feedback and self-disclosure are always the ones racing ahead. He also stressed on identifying the weak signals. The video of Nintendo is a lesson about listening and learning.
Lastly, defining purpose and value is the most important thing. The purpose is the reason for our existence and values justify our actions — the Fuji film video highlights this part.
What has TATA Group done during this pandemic time?
The focus was to think broadly.
R Mukundan stressed that thinking about ecosystems and stakeholders was his top priority. Coming out of this pandemic as an ecosystem is the only sustainable solution. Also, shifting to digital was the biggest breakthrough, and credit for this goes to all the employees.
Employees’ well being has also emerged as one of the biggest trackers. In case someone is unwell, then they are tracked quite severely. Unfortunately, they lost one employee during this time. They witnessed 50 infection cases during these times, but they came out well out of this.
The third element is asset management. He highlighted the Vishakhapatnam case. Since employees are not in full force at this time, thus, asset care and asset operations become quite important. Also, logistics was another major focus at this time. Switching to railways was a big step because only railways were operating during these crisis hours. And lastly, a major decision was taken about finances. Credit lines were fixed. Some CAPEX was deferred whereas some of it was accelerated. The fixed cost was eliminated as much as possible, and it was ascertained that the burden should be minimized on stakeholders.
Lastly, he spoke about their community efforts. They distributed dry rations. They have also given disinfectant sanitizers. They set up a 100-bed hospital at their community school as well.
What is the shape and structure of recovery?
R Mukundan said that there is no specific shape or structure of recovery. But, after a closer look at the market, it can be categorized into these major heads.
- Safe business – This comprises the essentials and rural category. Here the demand will not go down. Even if it does, it will recover fast.
- Businesses that need support – They will recover over time. They are challenged businesses like housing, personal transport, etc.
Revamped business models - This will undergo a major change. For example - restaurants, hotels, airlines, who have to now come up with a different business model.
Accordingly, Mr. Mukundan, TATA team has categorized all their businesses into three categories -
- Stable businesses.
- Business houses, which are on the verge of erosion because of demand patterns. They are going to be stable in the long run.
- Businesses that are undergoing deep demand erosion. They will bounce back in a different way.
Q & A
R Mukundan said that there is no such one business model. It completely depends on the business type. If it’s essential to supply or falls under the rural category, then the business has expansion scope. But if the business model is digital space, then it’s time to change the business model.
R Mukundan said that some essentials could never be compromised like food and safety. Entertainment might have taken different shapes, but it is still there. People are holding money right now, and thus, as and when the economy stabilizes, things will get back to normal as per the customer demand.
R Mukundan appreciated GOI. He said that transportation is much faster right now. Every part of the Government is quite responsive during these crisis hours. And the private sector must support them as much as possible during this pandemic time.
Businesses will get back to the new normal. For instance, employees’ attendance at the office is going to take a hybrid form. Some employees can continue to WFH permanently, whereas some are needed to be at the office. So, how businesses operate is completely up to them.
R Mukundan is of the view that MSMEs need to go back to their trusted customers. Big business houses like TATAs cannot operate without them. And thus, providing some credit help is appreciable at this time.
People must be led with compassion and empathy. Also, offering job security is one of the most important things, and the focus is on the new sustainable model to maintain the standard.
Dependence on one source was always a problem. And thus, the future will be on localization and more and more focus on regional resources that are closer to home.
A number of big players who are interested in this will definitely put money in. It will completely depend on the customers’ demand and Government policies.
Rapid Fire –
30% pay cut for CEO.
Work from anywhere.
Chase cash flow.
Choose to spend time with employees.
TATA has always preferred wise cuts or taking a break and joining back.
Chasing a dream.
Cooking food is really therapeutic. But, out of the above two, he chose reading books.
Meet Satya Nadella and learn and understand his thought process and his priorities.
R Mukundan closed this video by advising everyone to take care of the health of their employees and themselves. And then take care of the business. View the business from a different angle and take this pandemic as something which brings positive change in the business.
Finally, Ninad Karpe thanked R Mukundan and the viewers who tuned in to the channel
