Tata #2: The Almost Died Company

It was the mid-80’s. India was still under the License Raj.  The joint MD of Tata Steel told JRD Tata that if they didn’t renovate the plant totally:

“You and I will be standing outside the gate selling tickets to people to come and see the steel museum.”

Things looked that dire for Tata Steel, writes Shashank Shah in The Tata Group.

 

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Though the Tata companies are all separate entities, they are a group with a common Chairman. In 1994, Ratan Tata instituted the JRD Quality Value (QV) award – it would go to the Tata company that scored the most in the internationally recognized Baldridge National Quality Programme methodology.

 

The first year, the average score across 12 group companies was 215. Out of 1,000. Nobody got the prize – they were all too low:

“The benchmark for winning the (Baldridge) award was 600 points.”

It was a crushing moment to realize how poorly they rated on global scales.

 

Six more years passed. Still no company could hit 600. Some of the CEO’s suggested to Ratan Tata that the award be given to the highest scorer and that the 600 point criteria be ignored. Ratan Tata refused:

“The group should adhere to world-class benchmarks.”

Gradually, several group companies began to breach the 600 point mark.

 

Tata Steel has won the award the most times till date.

 

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As India liberalized, the Tatas knew their benchmarks needed to be globally accepted ones. Both to compete internationally as well as to stave off foreign companies coming to India.

 

Tata Steel decided to try for the Deming Prize, the one “revered like the Nobel Prize in the world of quality”. They went to Japan to find a consultant. After a check of the plants in India, they were told it would take around 3 years to reach a level where they could apply for the Deming Prize. By 2008, Tata Steel was ready to challenge for the prize.

 

And they won:

“It was the first integrated steel company in the world to have won the award.”

The Managing Director and the president of the Tata Workers union(!) were sent to Tokyo to receive the award – it was a collective effort, after all.

“It was possibly the best gift the company could give itself on completing 100 years as India’s leading steel maker.”

 

~~

 

Winning the Deming made Tata Steel even more ambitious. They wanted to take a stab at the Deming Grand Prize. The bar was very high. Only companies that had won the Deming were eligible. One could apply only 3 (or more) years after winning the Deming. What made it so hard?

“The focus of evaluation under the Deming Grand Prize was on significant process improvements since winning the Deming Prize.”

 

In 2012, Tata Steel won the Deming Grand Prize. The first integrated steel player to win the prize:

“Tata Steel’s journey began from existential crisis and culminated by attaining the zenith of quality.”

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