Metallurgist of Business Administration

Interview with Mr. B. Muthuraman, Former Chairman, Tata International Ltd and Former Vice Chairman, Tata Steel Limited.

Mr. B Muthuraman, an outstanding industrialist, is an alumnus of IIT Madras. He joined Tata Steel in 1966 and made it into truly a global company with the acquisition of Corus in 2007. He is responsible for bringing Indian companies on the global map. He was the Chairman of the Board of Governors of IIT, Kharagpur and was also the President of the CII and President of Indian Institute of Metals. India honoured him with the Padma Bhushan in 2012. He also received the Distinguished Alumnus Award from IIT Madras in 1997, “CEO of the Year Award” from Business Standard in 2005 and Lifetime Achievement Award by XLRI, Jamshedpur.

Could you tell us about your experience in IITM as a student? You were part of just the third batch of students graduating from the institute.

It was actually a great experience. Before coming to IIT I was in Madras Christian College (MCC), where I did Pre-University and also one year of B.Sc. before I wrote the IIT entrance exam and came here. MCC is a very liberal institute – very open, transparent, and gives a lot of opportunities for students to learn. IITM is also similar to that. We had some outstanding professors, including a few German professors. The workshops were great. I don’t think any other IIT in India matches IITM with respect to workshops and the practical aspect of learning. The food was great in those years, I don’t know how it is now. We were in the Krishna hostel, and we had a wonderful batch – a really cosmopolitan batch, with lots of people from other parts of India, so we got to meet people from other parts of India. It was a great life.

What was the influence of EGR sir (Prof. EG Ramachandran) on your life?

EGR is one of the best. The best professor I have ever listened to or heard or experienced. He used to teach us a course called Advanced Techniques in Metallurgy. I normally take lots of copious notes, but in EGR’s lectures, my entire notes for the whole year consisted of only 10 pages. Everything went right into one’s brain. He was not an ordinary teacher; he was a teacher who was able to put his thoughts into your mind. His English was impeccable. When he corrected your paper he not only corrected metallurgy but he also corrected your English. And he used to speak so nice and soft, and in a very persuasive manner. He must be one of the best lecturers ever anywhere.

“EGR was not an ordinary teacher; he was a teacher who was able to put his thoughts into your mind”

On a lighter note, how were your cricket matches with EGR sir during the faculty vs students matches?

EGR used to play as the opener on the teacher’s side, while I was the opening batsman on the students’ side. There are times when the teachers have won the matches. It’s not that we won all the time. They had a couple of very good players. The Registrar at that time was R Natarajan, who was a very good batsman. He used to call me Simpson because I used to stand in the slips and take catches. And Bobby Simpson was a famous slip catcher for Australia. We had great fun playing against the teachers.

How were your initial days at Tata Steel?

The initial days were actually tough, very tough, because Tata Steel is a huge organization. That time it had some 70 to 80 thousand people. We were wondering how we will move up the ladder of this organization. It looked like you will not even be heard or seen or noticed. So then initially there was worry and concern about how we were going to go to senior positions in the organization. But then soon I realized that it was a very transparent and open company where anybody could experiment. People are helpful. They are good leaders who will observe you, see you and coach you. So only the initial periods were tough.

How was your association with Dr. JJ Irani sir?

He was my mentor. He was an outstanding leader. I have got a very high regard for him. He was a very tough leader. He was very fair, he had lots of credibility, and he was an absolute doyen in the steel industry, known both in India and abroad. He taught me a lot of things, most importantly he taught me how to be decisive, how to take decisions, how to be passionate about the job – these are some of the things I learned from him.

In life at some point of time we lead some small teams. From my experience, I feel that sometimes we need to be hard on the team, it will be required if someone is not working, so how do you deal with this as a leader?

You have to be tough. You see, when you are tough with somebody, and if he knows you are a fair person, the toughness that you demonstrate on him will go down well. But suppose he feels that you are not a fair person, it won’t go down well. So the fundamental quality required for you to be able to implement what you want to is that you have to be fair and you have to seem to be fair. And if you have got credibility too, you can be tough on people. And they will take it.

“A leader must have credibility, empathy for people and must be seen above petty squabbles and petty things.”

At some point of time, you may be ordering your colleagues or superiors, so how was that experience, how was this professional relationship?

As long as people respect you, you can get things done. If people don’t respect you, you can’t get anything done. That’s the most important thing. A leader must have credibility, empathy for people and must be seen above petty squabbles and petty things. If he can establish that credibility, then he can command people, whether he is a senior or a junior. There are many people who have been senior to me in my company, who have reported to me in the company when I became the Managing Director. They would accept you if you are a people person. If you care for people and empathise with them, if you are fair and have credibility, then they will accept. If you don’t then they won’t accept you. In fact the handling of people is one of the most important aspects of a leader.

You are an engineer at core, and you have also got a management degree. So how far does management help a person in an organisation?

Management opens up your avenues. It opens your mind. You study engineering, which is to do with the causes and effects and technology in science and so on and so forth, which is important. Up to a certain level, the fundamental knowledge of engineering which you will impart to your job is extremely important. Later on in your life, management is important. When it is to do with finance or marketing or people management and leadership, management is important in the later part of life. So management education is important but skills don’t come only from education. Management skills come a lot more through personal experiences.

What makes one a visionary? What makes one see, have targets for the future and achieve them in a sustainable manner?

Everybody must have a vision. I always tell this story from Alice in Wonderland. Alice gets lost in the woods and she doesn’t know which road to take. And she looks up at a tree and finds a Cheshire cat sitting there. So she asks the cat where she should go and which road she should take. The cat asks the question back to her saying where do you want to go. Alice says she doesn’t know. And the cat replies saying that if you don’t know where you want to go then it doesn’t matter which road you take. So before you take a road, you have to know where you want to go. If you want to go to Delhi, you can’t get on a train that goes to Bangalore. You have to get on a train that goes to Delhi. So vision is the goal that you want to achieve. Everybody must have a goal at all points of time in one’s career. Without a clear and detailed vision, you’ll not be able to achieve anything. This is fundamental to man’s progress and journey.

These visionary statements, either for the organisation or for the individual can be of two types, one can be quantitative, like I want to achieve this particular goal or this target. Another can be the qualitative one, like changing the work culture, or the way one works. So what way should one proceed?

I’m not talking about vision statement. Vision statement is a simple thing, like I want to become the best customer centric organization in the world, I want to become the lowest cost producer of steel in the world, or I want to be the maker of the best car in the world, you can have that kind of statement. But only that is not vision. Vision has got more characteristics. It must be comprehensive and detailed. That means how you are going to achieve it, and the detailed process below that. If you want to say you want to make the best car in the world, how are you going to achieve it? You will design, you will do branding, you will engineer and so on. Then it must be shared and understood. You have to share it with your employees, or co-create it with all the employees, and it must be understood by all employees. If only you know in the board room that you have created a vision, it will not get done in the company. Every single employee of the company has to embrace it. And it is the power of those 30 to 40 thousand people of the company that makes the vision possible. If you have decided and if you pass instructions saying that this is my vision, please go and achieve it, it will not happen. And vision must be stretched. If you are running 100m in 20s, which is in any case more than twice the world record, and you set your vision at 18s, it is not great. But if you set your vision at 12s, it is great. Then after you reach your 12s, you will set yourself the next target at 11s or 10s. So vision has got these characteristics. We had a vision in 2002 that the Union President and I announced. It was a simple vision that said we will become an EVA (Economic Value Added) positive company. We wanted that because of the fact that Tata steel had never been EVA positive for maybe 85 years of its existence. But below that we had a number of things. The vision architecture – what would you do to achieve it. Then you will put teams to each of the things to achieve it. So there is an organised and minutely managed effort in each of these areas. Only then can you achieve that vision. By simply having a statement, you will not be able to achieve that vision.

How does one do crisis management? Especially after the 1991 McKinsey report. It would have been a shock.

It was a shock to the organisation. That time my boss was Dr. Irani who was just taking over. He was an outstanding leader. He actually shared that report with everybody in the organisation and he was open and transparent. He said let’s work. He created a buzz in the organization. He created a sense of urgency, some motivation in the organisation. That’s how we did many of the things that we did during the 90’s. And by 2000 we became not only a company that survived but also ready to conquer, ready to get up and run.

“Steel is not old fashioned. Steel is beautiful.”

Coming to steel, most people think steel is a bit old fashioned. So what are the research aspects with respect to steel?

Steel is not old fashioned. Steel is beautiful. The best buildings in the world not made of concrete. They are made of steel and glass. There are lots of new products in steel. For example if you take a car, till about 25-30 years ago when we had the Ambassador, the body weight was one tonne. Today the body weight of a Maruti car is about 300 kg. How was this possible? This has been possible because of research and development in steel. Today’s cars have more fatigue resistance, more corrosion resistance, have longer life, are lighter and consume less fuel. So there is a lot of research and there is a lot of challenge in making steel. There are a lot of challenges in the processing of steel and the usage of steel also. In fact some of these things are the ones that need to be told to youngsters for the steel industry to attract them.

In steel industry, economically and energy wise, the whole process is very intensive. What steps should one take for the optimization of this process?

Steel industry has done a lot of work in reducing the energy consumption. For example, the current energy consumption is about 5-6 Gcal per tonne of steel. If you look back, say 15 years ago, it used to be almost 10 Gcal per tonne. So you need to do a number of things to make the process efficient. You need to use better coal, improve the productivity, make sure that the gangue material or impurities are removed prior to bringing into the furnace, make sure that the heat is not lost, and make sure the water is re-circulated, and not thrown away. So a number of actions can be taken and have been taken by the steel industry. The effort to reduce energy consumption is a continuous process and it has been done very well.

In the steel melting shop, the basic oxygen furnace (BOF), that was something that they started in 1950’s and it improved the efficiency by around 20 times. So were there any such path breaking discoveries and inventions in steel in the last 50 years?

In the steel industry, technological changes don’t happen every year or two or even every five years, unlike say the computer industry or the telephone industry. For example the BOF came as you correctly said in the 50’s. Continuous casting came around that time a little bit later. Before that, it was bloom casting. Thin slab casting came around the 80s. Now people are trying to develop thin strip casting. But when you see the blast furnace, it remains the blast furnace, what it was even a hundred years ago. Nobody will be able to replace the blast furnace in terms of its productivity, cost and many other factors. But the reason why nobody has been able to find an alternative process better than blast furnace is because the blast furnace itself has improved itself over the years. Today’s blast furnaces are very different from the blast furnaces of fifty years ago. They are much more energy efficient and much more productive, they can tolerate raw materials better, they are much larger, all these positives were not there 50 years ago. They were possible because of improvements that have happened in the industry. But it is true that steel industry doesn’t see technological changes as fast as some of the other modern industries.

Thinking of the Deming Prize, initially in 2003 you invited them to audit. The response was negative. So how did you take this during that time?

It was a great effort by the company, the people of the company. We went around and motivated the people of the company. We told them that this is what the guys from Deming have told us, that you people are not ready, so let’s do some more work. And at that time actually we thought we were ready. And I was confident that the guys from Deming would say yes, you are ready for a Deming audit or a Deming Prize. They actually came and told us that look you guys are not ready. So we did some more work. And you know communication in a company is very important, including with the lowest level worker. You know, the workers have got a tremendous amount of innovative capability. You have to bring that innovative capability forth. So we did all that for 3 to 4 years. And then the guys from Deming when they looked at us again they said yes, you have done some work and we will audit you.

“The workers have got a tremendous amount of innovative capability. You have to bring that innovative capability forth.”

Getting a Deming Prize is one thing and again sustaining it to get the Deming Grand Prize is another. How could you bring about this sustained motivation?

Yes, we got the award in 2012. It was a great feeling, a fantastic feeling. Coming to sustained motivation, well, that’s the job of a leader. The most important job of a leader is to keep the energy levels of people from sagging. You should keep giving newer and newer challenges. Say for example a person is running a 100 m race at 20 seconds and then you ask him to run at 15 seconds, his rhythm will change, he will start doing different things. If you ask him to run at 12 seconds, he will probably engage a consultant, change his food habits. You ask him to run at 10 seconds, it will be entirely different. The same job of running 100 m looks very different at 20 seconds and at 10 seconds. You have to do different kinds of things. It is very similar in an organisation. We keep giving small doses of urgency. Keep setting aspirational targets. And help them aspire and help them achieve. That’s the way you motivate in an organisation.

In any organisation, there are people who are very passionate, they want to do something. At the same time, there are many with an attitude like “What is in it for me if I do it?” So how do you motivate them?

Yes we try to motivate them. If you can’t motivate them you have to ask them to go. But you will try to motivate them. It is good to have 100% of the people motivated and passionate. Often this is not the case. You have to be sure that you have the right people in the bus. If you have got some wrong people in the bus you have to make them get off.

Apart from being a leader one should also breed leadership, build leaders. And it was observed in your company that it is not just experience that matters, because you ended up firing a few people with a lot of experience and you demoted some of them. So how can one leader breed leadership and as a company how can that be achieved?

Leaderships get developed through a variety of processes. For example, by making people stretch their minds. That’s a leadership training process. Suppose you are doing a job in one hour. And I as the boss tell you to do it in half an hour. That will actually make you think. And will make you discuss with people, will make you organize your teams. And that is a leadership process. And teamwork is a leadership development process. Putting you in a completely unknown job, let’s say you are a metallurgist and I ask you to go and do something else that has nothing to do with metallurgy. That will actually stretch the mind. At some point of time in your life, you will have to handle things that you don’t know. A managing director doesn’t know everything. But he has to find a way to get things done. If you are handling only the things that you know, then you are at a level where you are not a leader yet. For you to become a leader, you have to experience this. You have to give opportunities to people like that. If you do that, you’ll see leadership development. That’s the way to do it.

On one side a person can become a leader, and on the other, he could become an expert in that particular division. What do you think about this from a company’s perspective?

It’s not a trade off. Even if you are an expert in that area, even if you are an atomic energy scientist, you are required to become a leader to achieve. It is seldom one man achieves everything. Even for a scientific expert, even for a researcher, he has to be a leader too. Leadership qualities are required at all levels. Finally, people leadership is different. People leadership is where you’ll be able to handle people, manage people, lead people, and requires a higher order of leadership. But otherwise the leadership dimension of a right-brained approach is required even for a scientific expert or researcher.

How has your experience been after retiring from Tata Steel?

It has been nice. I am enjoying my retired life. I’m not as busy as I used to be. And I’m now finding great joy in other things. For example, I meet students, I go to colleges, I go to schools, and I deliver convocation speeches. I am involved with IIT in some way or the other and I’m involved with some of the management schools of India. I like talking to students and I am happy to be a part of students’ lives in terms of coaching, teaching and so on and so forth. That’s what I do nowadays.

“In life there is nothing that can beat good, hard, honest work. That’s what will take you through.”

How can one have work-life balance?

I know work-life balance is important but I don’t think I had a good work-life balance. In my case, the balance was brought by my wife. I did all the work and she did the balancing part. But it is necessary for people, which is why I always talk about the left-brained and the right-brained approach to life. The right brain is always the balancing factor. And if you have that, whether it is sports or golf or yoga or music, some of these things which are right-brained will give you good balance. I don’t think I for a long time had a good balance. As said I have a wife who took care of the right-brained part of it and I took care of the work part of it.

Finally any advice you would like to give to the students.

The only advice that I would like to give to students is that in life there is nothing that can beat good, hard, honest work. That’s what will take you through. Secondly, become a more balanced person. Don’t be a left-brained person, which is what most engineers and scientists are. Even for an engineer to succeed in engineering profession, or a scientist to succeed in the science profession, he needs to be a more balanced person. Not simply a left-brained person.