T.V. Narendran, CEO & MD, Tata Steel: Anticipate changes, be prepared

(Excerpts from the keynote address by T.V. Narendran, CEO & Managing Director, Tata Steel at the Dhanam Business Summit and Award Nite 2024)

When we talk about uncertain times and change, there’s often a belief that each generation thinks it’s facing the toughest challenges. Historically, this is somewhat true. For instance, if you take a person from 1875 and place them in 1950, they would encounter revolutionary changes: electricity, railways, airplanes, automobiles, and two World Wars. This person would witness a profound transformation in the world.

In contrast, a person moving from 1950 to 2025 would experience incremental advancements. While new technologies like the internet and smartphones would emerge, the fundamental changes, such as the development of computers, were already in motion by 1950. Thus, although change is constant, the rate and nature of change have evolved, particularly with our interconnected world.

Our increased interconnectedness

Today, physical and digital connectivity has intensified. Historically, J.N. Tata travelled extensively by ship, taking months to understand global trends and bring them to India. Today, such travel is much faster, and our interconnectedness means that issues like COVID-19 spread globally in a matter of weeks. This rapid connectivity has both positive and negative implications: while it allows for swift communication and coordination, it also means problems can spread quickly.

The technology-driven interconnectedness requires us to be available around the clock. In organizations like Tata Steel, with operations and stakeholders worldwide, the ability to respond swiftly to issues is crucial. The luxury of time is significantly reduced; issues must be addressed almost instantaneously.

Economic and regulatory interdependence

Economically, global supply chains have become more complex. Events like the Fukushima disaster, Thailand floods, and the COVID-19 pandemic have shown how disruptions in one region can affect global manufacturing and supply chains. Similarly, financial interconnections mean that economic policies in one country, such as the US Federal Reserve's interest rate decisions, impact global markets.

Regulatory environments, such as Europe’s carbon border adjustment mechanism and the US Inflation Reduction Act, also affect global trade and investment strategies. For instance, these regulations could influence decisions on where to invest in green technologies or set up manufacturing facilities.

Responding to uncertainty

To manage uncertainty, organizations and individuals need to adapt both short-term and long-term strategies. Short-term agility involves responding quickly to emerging issues, as demonstrated by Tata Steel’s proactive measures during the COVID-19 pandemic. Long-term success relies on anticipating changes and preparing for them.

For example, top athletes seem unhurried because they anticipate and react faster than their competitors. Similarly, organizations should strive to be better prepared for potential disruptions. Being proactive rather than reactive allows for a more balanced and effective response to changes.

Key areas of change

1.     Sustainability: Climate change and sustainability are becoming central issues. Extreme weather events and shifting policies are creating both challenges and opportunities. Organizations must plan for sustainability, adapting to new regulations and capitalizing on green investments.

2.     Technology: Rapid technological advancements, such as AI, are transforming industries and blurring boundaries. Organizations need to continuously learn and adapt to these changes, staying ahead of competitors.

3.     Inequality: Rising inequality is influencing political and economic landscapes globally. This shift impacts trade, technology regulations, and more. Leaders must address the implications of inequality on their strategies and operations.

4.     Emergence of Africa: Africa’s population growth presents significant opportunities. As the continent's population expands, understanding and engaging with Africa will become increasingly important for global business strategies.

Effective leadership in uncertain times

As leaders, balancing firefighting with long-term planning is essential. Spending excessive time on immediate issues may indicate deeper organizational problems, such as inadequate processes or delegation. Leaders should focus on understanding and preparing for significant changes, ensuring their organizations are future-ready.

Execution involves translating strategies into actionable plans, with appropriate resources and team support. Leaders must ensure that their organizations are prepared to respond effectively to emerging trends and opportunities.

Taking stakeholders along through change is crucial. Effective communication, managing expectations, and fostering a culture of openness are vital. Ensuring that change becomes ingrained in the organization's culture requires persistence and commitment.

Finally, listening is a fundamental leadership skill. Creating a culture where feedback, including bad news, travels swiftly can significantly enhance organizational resilience. Leaders must engage with various stakeholders, from employees to shareholders, to understand their perspectives and address their concerns.

Conclusion

In summary, navigating uncertain times requires a combination of agility, foresight, and effective leadership. By understanding emerging trends, preparing for changes, executing strategies, and engaging stakeholders, we can better manage uncertainty and position ourselves for success.