Embrace innovation, think long: Top wealth-building lessons from Ratan Tata
Source: Business Standard
FILE PHOTO: Ratan Tata, chairman emeritus of Tata Sons, attends an event where he was inducted into the 2015 Automotive Hall of Fame in Detroit, Michigan July 23, 2015. (Photo: Reuters)
Tata Sons’ Chairman Emeritus Ratan Tata was not just known for his business acumen and philanthropy, but also for his start-up investments. Tata invested in 40 new-age Indian startups across sectors, which include eyewear brand Lenskart, baby products brand Firstcry, services platform Urban Company, and business-to-business marketplace Moglix.
His journey in building the Tata Group into a global conglomerate offers valuable financial and wealth generation tips. Here’s what we can learn from him:
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1. Invest in Long-Term Goals
Tip: Focus on investments that promise long-term growth instead of seeking immediate returns.
Example: Tata’s vision for the Tata Nano—a low-cost car aimed at making vehicle ownership accessible to the masses—illustrates his commitment to long-term goals. Despite initial challenges, the Tata Nano aimed to create a new market segment, emphasizing that patience can yield significant rewards.
Ratan Tata emphasized the importance of long-term thinking in business. Instead of focusing solely on short-term gains, he invested in businesses with potential for sustainable growth. For example, his decision to acquire the Jaguar Land Rover business in 2008, despite its financial challenges, shows his long-term vision and strategic thinking.
2. Diversify Your Investments
Tip: Avoid putting all your eggs in one basket by diversifying your portfolio.
Example: The Tata Group operates in various sectors, including steel, automobiles, IT, and hospitality. This diversification helps mitigate risks and ensures steady revenue streams, even when one sector faces challenges.
3. Strategic Acquisitions: Tata Group’s success was fueled by strategic acquisitions that complemented its existing businesses and expanded its market reach. From 2000 onwards, Tata Group witnessed a series of high-profile acquisitions under Ratan Tata’s leadership. Among them were international companies such as Tetley, Corus, Jaguar Land Rover, and Daewoo. These strategic acquisitions enhanced the global footprint of the Tata Group, making it a prominent player in international markets.
4. Embrace Innovation
Tip: Stay ahead of the curve by embracing new technologies and innovative ideas.
Example: Under Tata’s leadership, Tata Consultancy Services (TCS) became a pioneer in the IT services sector. Their focus on innovation allowed them to grow rapidly and meet the evolving needs of businesses. Investments in research and development led to the development of groundbreaking products and services, such as the Tata Nano, the world’s cheapest car.
5. Focus on Quality and Integrity
Tip: Build a reputation for quality and ethical practices.
Example: The Tata brand is synonymous with quality and trust. Ratan Tata’s insistence on ethical business practices has established a loyal customer base, which is crucial for long-term success.
6. Invest in People
Tip: Recognize that your team is your greatest asset.
Example: Tata’s focus on employee welfare and development is evident in initiatives like the Tata Business Excellence Model, which emphasizes continuous learning and improvement among employees.
7. Be Resilient and Adaptable
Tip: Be prepared to adapt to changing market conditions.
Example: Tata’s response to economic downturns, such as the global financial crisis, involved restructuring and focusing on core strengths, demonstrating resilience in tough times.
8. Engage in Philanthropy
Tip: Generating wealth should also involve giving back to society.
Example: Ratan Tata has been actively involved in numerous charitable initiatives, reinforcing the importance of social responsibility and philanthropy in business.One of the largest charitable organizations in India, Tata Trusts has consistently supported projects that benefit education, healthcare, and rural development. His philosophy was clear: the success of a company is intrinsically linked to the welfare of society.Tata Trusts have funded scholarships for students and supported sustainable living projects across India. Ratan Tata donated Rs 500 crore to fight the COVID-19 pandemic.
9. Continuous Learning
Tip: Keep learning and evolving.
Example: Tata emphasizes the importance of education and skill development, regularly advocating for lifelong learning as a key to success.
First Published: Oct 10 2024 | 11:20 AM IST
