Organisations, like marathon runners, can't perform if not fit: N Chandrasekaran

Fitness comes first, performance comes next, be that in running a marathon or running a business, Tata Sons Chairman N Chandrasekaran said on Thursday at an event in Mumbai, urging companies to look at the left side of the balance sheet before looking to the right which is the profit & loss statement.

"An organisation has to be fit in multiple dimensions.  I always say look at the left side of the accounting statement before looking at the right side or the P&L. If you don't have the structures in places, the team in place, it doesn't work. You can get away by having some short-term performance, but it won't be consistent," he said at the Ascent Conclave 2022 themed 'Thriving on Change'.

The lifelong Tata employee, Chandra, as he is popularly known, rose from being an intern at TCS in 1987 to become the software services exporter’s youngest CEO in 2009 and eventually the Chairman of the more than 150-year-old salt-to-software conglomerate in 2017 after the unceremonious ouster of the now-late Cyrus Mistry.

The Padma Shree awardee has been reappointed as Tata Sons Chairman for another five years in February this year as the conglomerate continues its efforts on its e-commerce super app Tata Neu, and the transformation of Air India, the ailing national carrier which it recently acquired.

Speaking at a keynote session titled 'Leading Through Disruption', he continued that he truly believes every business is a cash-flow business. "If you don't have sight of cash flow at some point in time, it's over. It's important to walk up the P&L as much as you walk down the P&L. Many times, people start with the revenue."

Apart from chairing the board of Tata Sons, which is the holding company and promoter of more than 100 Tata operating companies with aggregate annual revenues of more than US $100 billion, Chandra also chairs the boards of several group operating companies, including Tata Steel, Tata Motors, Tata Power, and Tata Consultancy Services (TCS).

He also spoke about the importance of running your own race by putting it into the right context and not get distracted by how fast others were running.

"It's easy to get carried away in the first few kilometres by looking at people running faster, and your heart rate goes for a toss, your rhythm goes for a toss. Often marathoners will tell you they missed their time because they went very fast," he said. He added also that companies need to know their balance sheet and their real strength and capability to set the pace of the race they want to run.   

"For example, if I have an M&A plan but I've not built the capability for it, it's going to very hard post the acquisition," he said.

He recounted a personal experience which proved to him the importance of sustained effort and training, yet another parallel between running a marathon and running a business.

After running a couple of half marathons and full marathons every year since he took up running in 2007, he couldn't do one during the two pandemic years. Concerned that he may not be able to do another 30km run again, he signed up for marathon in Reykjavik, Iceland, after the pandemic waned.

But training for it in Mumbai's May-July months where the city sees it worst weather meant that he couldn't train well for the race. Yet, it ended up being his best race and one he thoroughly enjoyed. 

"I started to wonder how this happened.  I have been training over a sustained period over the last 15 years. So, my legs have muscle memory of a lot of miles, and they came to effect at the right time. Whether in business or running, it doesn't matter how successful you are or how much experience you have, there are moments when you go through self-doubt. In those moments, it's very critical to stay the course," he said.

He concluded by saying that he sees 2-3 exciting decades of ahead of India because if disruptions in supply chain, energy transitions and because of geopolitical factors working in favour of the country.  "We are a nation with tremendous talent. It's fair to say it's going to India's decade and India's few decades. If there is a time when people can dream very big and have a chance of achieving it, it's one of those moments."