Sending world into a tizzy, Chairman N Chandrasekaran had routine day

Mumbai: While the news of N Chandrasekaran's decision to leave Tata Sons sent the group and India's business circles into a tizzy and made headlines around the world on Wednesday morning, it was a remarkably usual day for the 63-year-old executive, who has crafted, over a four-decade career at Tata group, one of the most storied career trajectories in India's corporate history.

On Tuesday night, he attended a farewell dinner for former State Bank of India chairman OP Bhatt and Hanne Birgitte Sorensen, who were both retiring as independent directors on the Tata Motors board, where Chandrasekaran is non-executive chairman.

Chandrasekaran is understood to have first informed his family of his decision to step off the Tata Sons board on completion of his term, before communicating the development more widely within the group, people familiar with the developments said. He began the work day as he would any other - meeting TCS management on routine business matters.

Executives Shocked by Exit; Future in Focus

This included chief executive K Krithivasan and COO Aarthi Subramanian.

He then walked back to his fourth floor office at Bombay House, from where he sent his resignation to the Tata Sons board.

Krithivasan and Subramanian would later tell colleagues - who asked them if they had known - that they were just as shocked as everyone else.

There was no drama or ceremony. Chandrasekaran went on to attend a board meeting of Tata Motors' commercial vehicle business and, later, had lunch with the management. "He laughed and joked with us and we had no inkling of what was to follow," said a top executive who met the chairman ahead of the board meeting in the morning. "We are shocked."

As the word spread, CEOs and senior executives around the group absorbed the gravity of the development, and what the future might hold for their own career trajectories. Over the last decade, as group chairman, Chandrasekaran has handpicked, mentored, or otherwise played a role in the careers of several CEOs, board members and senior executives at group companies. All of them now have to negotiate a new and as yet unknown power structure that will replace the familiar one.

The first acknowledgement of the significance of the day from Chandrasekaran came at around 3.30 pm, when he made an impromptu appearance at the Starbucks (a group business) outlet inside Bombay House and called for a brief town hall with around 200 employees.

Employees from Tata Sons, Tata Steel, Tata Motors and other group companies gathered around him. In a short, five-minute interaction, Chandrasekaran sought to reassure employees and asked them not to get distracted by the speculation and gossip surrounding developments at the group. "Don't believe what you read on social media," he said.

The organisation, he told them, was bigger than any individual.

Stay focused on the work, he said, urging employees not to get carried away by the chatter around developments at the group leadership level. Chandrasekaran reminded them that Tata group is built by its people. It is the employees who make the organisation, and Tata remains a revered name, he said.

The brief interaction was met with sustained applause, with several employees visibly emotional and some teary-eyed, people who were in the gathering said.

While the outgoing chairman has said he will serve till completion of his term early next year, that's not entirely certain. If the AGM does take place on August 18, and if he's not reappointed director, his tenure as chairman will also end abruptly.

Chandrasekaran has also indicated that he intends to devote much of the next six months to Tata Digital and Air India, two businesses that remain key priorities for the group. He is expected to attend town halls at both companies over the next couple of days, officials said.

Highly placed officials told ET that Chandrasekaran also spoke to Air India's recently appointed chief executive and managing director Tewolde Gebremariam to apprise him of the development and reassure him that he would continue to work closely with him on the airline over the next six months. "Gebremariam is understood to have been shocked by the development and was unaware of the matter until he was informed by Chandra," an official said.

Chandrasekaran is understood to believe that most of the group's older businesses - including Tata Power, IHCL, Tata Consumer, Tata Motors and Tata Steel - are now on a stronger footing after several years of transformation. These companies are increasingly capable of managing their businesses efficiently and do not require the level of intervention and support they needed when he took charge as Tata Sons chairman, officials said.

He is also seen to have made it clear internally that he is willing to step down as chairman of the listed Tata companies once suitable successors are identified.

Wednesday was also marked by a series of conversations between Chandrasekaran and Tata Sons directors, with several calling him to discuss the development. Tata Trusts chairman Noel Tata, however, is understood not to have been among the callers.

Chandrasekaran's resignation letter refers, without naming, to Tata's opposition to his reappointment. That's unlikely to have eased already stressed ties.

At around 5.30 pm, Chandrasekaran left Bombay House for home - a departure in keeping with his more recent work routine and the relatively early hours he had adopted.

For a chairman whose tenure at the helm has been marked by transformation, expansion and, at times, intense scrutiny, it was a characteristically low-key way of addressing employees on what could be a consequential day for the group.

In the end, in the corridors of Bombay House, his telling message from the five-minute town hall lingered - the Tata institution will always be larger than the person occupying its highest office.