Noel Tata has inherited the power. Now he must decide how to use it

The debate over who should replace Natarajan Chandrasekaran as chairman of Tata Sons Pvt. Ltd. is becoming a national guessing game. Names have been floated, credentials weighed, and the options dissected.

But the succession issue obscures a more consequential question: What does Noel Tata want to do with the Tata Group, now that he has inherited the power to shape its direction?

That’s far more important than the choice of Chandrasekaran’s successor since that choice won’t resolve the accumulated unanswered questions: how much more capital should go into Air India and Tata Digital; what should happen to Tata Sons’ listing status; and how should the relationship with Shapoorji Pallonji Group be managed?

Noel Tata is now the person who has to confront these issues head on. Two years have passed since he became chairman of Tata Trusts in October 2024, following the death of Ratan Tata. That’s long enough to have found his feet but also long enough to have lost some time.

The transition was always bound to be complicated. Differences within Tata Trusts spilled over into Tata Sons and much dirty linen was washed in public. Noel Tata, by temperament and reputation, does not seek confrontation. But circumstances demand a strategic shift in his behaviour.

That is why the Chandrasekaran episode matters. The Tata Trusts had backed a third term for him. Yet, when Tata Sons discussed his reappointment, Noel Tata raised objections. The matter was deferred and Chandrasekaran subsequently decided not to seek another term. While Noel Tata was right to ask hard questions, it might have been better to tell Chandrasekaran plainly that he could finish his second term, but the group needed a new chairman next. Instead, the disagreement dragged on and became a farce. Once again, the Tata Group looked as if it lacked an institutional process to handle such situations.

This is the paradox Noel Tata has inherited.

Family inheritors do not receive neatly tied legacies. They inherit accumulated strengths, but also unresolved tensions. Noel Tata has inherited much to be proud of: India’s strongest corporate brand; a dynamic portfolio spanning Tata Consultancy Services, Tata Motors, Jaguar Land Rover, Titan, Tata Steel, Tata Power, Trent and Indian Hotels; and new ambitions in aviation, electronics, semiconductors, energy and digital businesses. He has also inherited a professional management culture and an ownership structure in which charitable trusts control the bulk of Tata Sons.

But those strengths come bundled with internal contradictions. The group has listed companies whose shareholders expect commercial accountability, but an unlisted holding company controlled by charitable trusts. It prizes decentralisation, but periodically major decisions emanate from the centre.

When he took over, Ratan Tata understood that the Tata institution needed to be cleansed before he could shape it to his vision. One of his first acts was to get rid of the powerful satraps who operated more or less autonomously and with impunity. Having broken that old order, he was able to make bold bets, including acquisitions of Tetley, Corus and Jaguar Land Rover, that propelled the Tata Group into the modern, globalised world. Some of these bets worked spectacularly while others didn’t, but all of them were decisive. Crucially, he also placed his handpicked men in key positions. While the Cyrus Mistry experiment went wrong, Chandrasekaran did deliver, notwithstanding some mixed results in his second term.

That is part of Ratan Tata’s inheritance for Noel Tata: not merely the things that worked, but the willingness to make consequential decisions.

It’s what marked the best years of Chandra too. In getting rid of Tata’s consumer mobile business, he showed that sometimes brutality in business is a strategic necessity. Noel Tata will need that same willingness to make the hard calls even if they anger a few. His track record suggests his business instincts are sharp. At Trent, he helped transform a modest retail operation into a formidable business. Yet, his style was understated, patient and operationally disciplined.

Those are valuable qualities. But there is a time for being understated and patient and listening to everyone, and a time to say the buck stops with me. At 69, he is roughly the same age as Mukesh Ambani and a few years older than Gautam Adani. Both have spent years leading from the front, personally embodying their groups’ strategies and making enormous bets without looking over their shoulder. Noel Tata does not need to become either of them. But he does need to now come out of the shadows of his predecessors.

US General George S. Patton once said: “Wars are not won by fighting battles; wars are won by choosing battles.” Noel Tata has inherited the authority to choose Tata’s next battles. His real test is whether he has the resolve to fight them and win them.