JJ Irani, the Tata group faithful who led the march of Indian steel 

File image of Jamshed J Irani (Photo Source: Tata Steel)

Jamshed J Irani, who passed away in his retirement home in Jamshedpur at the age of 86, was the perfect company man who came back from a stint in Britain to join Tata Steel (then Tata Iron and Steel Company) in 1968. He stayed on for the next 33 years, steering the company through tumultuous times both within and without.

When he took over as managing director of the flagship of the Tata Group in 1992, it was the battleground of a fierce struggle for control between Ratan Tata, named Group Chairman the previous year by JRD Tata, and the feisty Russi Mody, who had been the all-powerful czar used to running the company like his personal fief.

Mody saw Irani as a rival to the throne and a man whose loyalties lay with Tata. The Tata Steel of the day was a vast, lumbering giant whose return on capital was abysmal but whose clout in the Tata group was such that Mody, who had been running it for the previous 20 years, believed he was the leading contender to replace the aging JRD when he hung up his big boots.

Irani, initially a minor player in this boardroom battle, emerged from the shadows to first steer clear of Mody’s pervasive influence and then lead the company up the more difficult path to financial redemption.

More than a match

It wasn’t easy. Forced out after losing the power struggle to Ratan Tata, Mody kept his acolyte Aditya Kashyap, along with other trusted lieutenants, in the company’s hierarchy to keep the struggle simmering.

Irani, a PhD in metallurgy and a former JN Tata scholar, may have given the impression he wasn’t up to the cut and thrust of corporate politics. But as it turned out he was more than a match even for the wily Mody.

It helped that he had the backing of the young Ratan Tata keen to wrest back control over the group’s key firms. In April 1992, the Tata Sons board passed a resolution requiring all those who had turned 75 to retire as company chairmen. With that one move, Tata eliminated the challenge of heavyweights like Darbari Seth, Nani Palkhivala and, of course, Russi Mody.

Transforming Tata Steel

But if Tata’s job was done, Irani’s was just beginning. The reforms of 1991 had forced Indian companies to face fresh competition even as they geared up for newer market openings. Tata Steel was then a grossly overstaffed, highly bureaucratic company where decision-making was slow and technology outdated. It was also one of the most high-cost producers of steel in the world and its productivity levels were a tenth of what they were at the best companies abroad.

Under Irani, it underwent a transformation as he cut the bloated workforce, modernised processes, flattened structures by cutting middle management and moved up the value chain in terms of products. Over the next decade Tata Steel reduced costs and also improved quality to global standards. In all of this, Irani took a personal initiative to address small groups of workers to convince them about the virtues of the separation scheme the company had initiated.

By the time his term came to a close in 2001, Tata Steel had shed nearly half the number of employees it had in 1991. The losses of 1992 had been forgotten and the company was now throwing up enough cash to embolden Ratan Tata just six years later to make an audacious multi-billion dollar bid for Corus.

Technologist by training, temperament 

Irani is widely acknowledged as the turnaround artist who pulled back one of India’s most pedigreed companies from the brink of disaster.

By training and temperament, he was a technologist. Not surprisingly among the many accolades he bagged were the “Platinum Medal” given in 1988 by the Indian Institute of Metals, and the “Twelfth Willy Korf Steel Vision Award” from World Steel Dynamics and American Metal Market.

Today, India is ranked the world's second-largest producer of crude steel and a major player in the global sweepstakes. The foundations of this achievement were laid by JJ Irani through the 1990s.