Why do some brands last for 150 years, as the Tata group has, while some others flounder and fold up within a few years? Harish Bhat, Brand Custodian, Tata Sons, posed this question to the students of SPJIMR, and participants of the BLoC Boardroom Challenge, at the B-school’s premises in Mumbai on Saturday, in his address on the longevity of brands.
As Bhat went on to explain, the secret sauce behind the longevity of the Tata brand, which is now in its 150th year, is that the Tata group has always placed the community at the core of its brand values and, secondly, the pioneering spirit it has displayed right through its history.
Building a brand
The Tata group, he said, today has ₹650,000 crore in revenues, a market cap of more than $150 billion, 7 lakh employees in 150 countries, 4 lakh shareholders; and its revenues constitute over 5 per cent of the country’s GDP. Tata is the most valuable brand in India. The group would not have grown so big and diverse and lasted for so long if it wasn’t for the trust that all stakeholders, including the community, have placed in it. “However, trust has to be earned, it cannot be demanded,” Bhat pointed out.
He explained that Jamsetji Tata, the founder of the Tata group, was a visionary far ahead of his time. He wanted the community to be at the centre of what a corporation does. With this philosophy in mind, the Tata Charitable Trusts were created. These trusts own 66 per cent of the equity of Tata Sons, the parent company which, in turn, owns stakes in various Tata group companies. With this significant equity stake in Tata Sons, 66 per cent of all dividends from Tata Sons, goes to the Tata Charitable Trusts, which use these funds for community work around the country.
The Trusts undertake over 1,000 projects in more than 170 districts of the country and have established some of the country’s finest medical and educational Institutions. “If a corporation or a brand has to survive and flourish for 150 years and more, it has to live in harmony with the community; it has to give back to the community which nurtures it, which is what the Tatas constantly strive to do,” elaborated Bhat.
Pioneers and taking risks
He then dwelt on the other aspect of the longevity of the Tata brand, the pioneering spirit displayed by its founder, by other Chairmen of the Tata Group and their leadership teams. Way back in the 1890s, Jamsetji Tata pioneered steel making in India, by initiating the establishment of Tata Steel near the forests of eastern India, because he believed the nation required steel for its infrastructure and progress. Today, Tata Steel is among the world’s finest steel-makers and has broken new ground through several ventures over the decades.
Similarly, more than 40 years later, in 1932, JRD Tata felt aviation was important for the growth of the country and so he established India’s first commercial airline, which initially carried air mail. This airline went on to become the national carrier, Air India. Establishing an airline in those circumstances was both pioneering and very risky as well, Bhat said. But, he added, pioneers are known for their risk-taking capability, and their ability to chart their own course.
More than 50 years later, in the 1990s, when Ratan Tata became chairman of the group, he was keen that India should make its own indigenously-developed car, and not merely import cars, because automobiles were an important symbol of national development, and were also a large contributor to the economy. This led to the design and manufacture of the Tata Indica, India’s first domestically developed car, at Tata Motors, Pune. He scouted the world over for technology, and for a manufacturing plant, which he eventually found in Australia and moved to India. The birth of the Tata Indica saw an auto ancillary eco-system spring up and this has benefited the entire auto industry in the country, Bhat explained.
Giving back
“These three stories, spanning more than a century, illustrate how the Tata Group has pioneered with purpose, bearing in mind what the nation needs. These initiatives also kept the brand vibrant and relevant to every passing era. Being a pioneer can be risky, but it can also create immense wealth and employment for the community,” he said.
The essential purpose of the group has, however, remained the same for 150 years — the community is the very purpose of its existence. If brands have to live long, they need a steadfast sense of purpose, they need to be powerfully relevant to their times, and have to be in harmony with their community.
Harish Bhat’s talk preceded the Mumbai semi-final of the BLoC Boardroom challenge, which was the seventh and last of the semi-finals of this year’s edition of the Challenge.