Secret Diary 2019

Ishaat Hussain Secret Diary - Part 2 | Tata Sons

Secret Diary of Ishaat Hussain — Part 2

Faisal Magray

Back in India, I joined Imperial Chemical Industries Group at its CAFI (Chemicals and Fibres of India) unit in Mumbai as a financial accountant, which also involved a lot of administrative work. As a frontline manager, my job entailed working and managing dozens of unionised staff and it was a great experience in people management.

In the UK, at my audit firm, Wood & Company, I had learnt a lot from one of the senior partners, Norman Civval. He taught me how to handle complicated situations and he was a fine example of tactfulness. Before one dives into strategy and other exotic disciplines of management, one has to learn how to handle people. Incidentally, when I went for an advanced management programme at the Harvard Business School, based on my aptitude and personality test, I was told that I fitted the bill of a diplomat more than that of an accountant. Even when I was leaving St Stephen’s, my guide Balbir Singh said, “Ishaat, yeh accountancy mediocre cheez hai, try the foreign services, you are cut out for it.”

A few years later, I was transferred to Calcutta. It was a challenging job, where I was working with the finance director, making notes and papers that had to be sent to London, seeking and collating data from the five group companies. While I met some fantastic and intellectually first-rate people, I could sense that the organisation was fast turning into a self-serving bureaucracy. It’s a phenomenon that we are seeing now in General Electric, which was once an iconic conglomerate.

I moved out of ICI in 1981, after I realised that the company was in terminal decline. One of my former bosses, Nicky Roy, had joined Indian Oxygen, whose chairman was Russi Mody. He told me that Russi was looking for youngsters to transform Tata Iron and Steel (TISCO). “Meet the guy, but I must tell you, he’s quite a maverick,” he warned me lightly. I was asked to be at Russi’s office by 2.30 pm sharp. When I entered his room, he asked, “What have you come for?” I replied, “Nicky wanted me to meet you…” He said, “Oh yeah, but why are you wearing a suit and tie. Take off your jacket and tie. Come sit.” It wasn’t an interview but a long conversation that went on till 5.30 pm! We spoke about everything under the sun. I learnt that he knew my father-in-law very well. He didn’t ask me about my academic credentials or work, but spoke about cricket, and even arcane things like where we would like to be buried after dying! By 5.30 pm, I knew the job was mine. As we drew to a close, Russi said, “Okay, you have taken a lot of my time, and I have two job offers for you. One is to be the number two man in the accounts department of TISCO and the other is the financial director of Indian Tube Company.”

I went back home ecstatic. I was 32 then, and clear that taking over as the finance director’s job was much better than being number two in the accounts department in Jamshedpur. Two weeks later I went to Russi’s office, on a hot April afternoon, when he was chatting with two ladies, one of them being Sharmila Tagore. Instead of asking me to wait, he said, “Come, join us.” The four of us chatted for an hour, after which Russi said, “Okay, girls please go out, I have to talk to this young man!” After they had left, he turned to me and said, “Obviously you are interested aren’t you, and I also know what you want… the director’s job, isn’t it?” I was sheepish, but before I could say anything, he went on, “All you young fellas want to be on the board like a director. That’s good.”

Without skipping a beat, he said that I’d have to meet the managing director of the company, since operationally, I’d report to him even though Russi was the chairman. After I got on board, Russi told me that he was planning to merge India Tube with TISCO, and added, “If you prove yourself, I will make you the finance director of TISCO in seven years.”


Working with Russi was like a crash course in management without going to B-School. He taught me that any decision that a management makes has to be seen in the context of the persons it will affect. “Be humane” was his underlying philosophy, and that approach became my guiding principle whenever I had to deal with situations, particularly those, which involved letting people go. In the ensuing years, I oversaw about five closures, involving over 5,000 workers, but in each case, the closures were made with minimum dislocation or strikes.

My years with Russi could be a book by itself, as so many instances are etched in my mind. Most seemed quirky, at first, but turned out to be great people-management tools. He had a great sense of humour and knew how to diffuse a tense situation. In 1982, there was a recession in the steel industry and it had hit TISCO as well. A good percentage of TISCO’s hot-rolled coils would be sent to Indian Tube for rolling into tubes. At one point, it accounted for 10% of TISCO’s turnover. But during that period, Indian Tube, too, was seeing a slowdown and, hence, was cutting back on production. As a result, we weren’t taking any steel from TISCO. Since steel is such a business that you’ve got to keep producing, this situation was problematic. So, Russi convened a meeting where we were told that we had to lift supplies whether we liked it or not. Being the finance director, I argued that in that case, we needed credit. Aditya Kashyap, who used to be executive assistant to Russi, said that Bombay House wouldn’t like that. Russi by this stage was terribly agitated and as tempers rose, he suddenly turned to the MD and said, “How long have you been working for me?” “Far too long,” replied Ramesh Bhasin. “So, when I am in a bad mood, what cools me down?” he asked. A flustered Ramesh replied, “Food…” Then Russi said, “So, where’s the food? Get me those lovely nimkis and vadas urgently.” Suddenly the tense atmosphere transformed and all of us started talking about other things.

Russi took the same approach with trade unions as well — things would hit the ceiling, and then suddenly with his wit and smile, he would calm everything down.

One instance was when TISCO had taken over the bearings division of Metal Box at Kharagpur, which was later merged with the company. A year later, after I became the director of accounts, I informed Russi that we were losing money in the bearings business, and very soon Bombay House was going to start asking questions. “Please have a meeting and pull up the people responsible for this,” I advised Russi. He agreed to the idea. I was expecting some fireworks, instead Russi began the meeting by asking the general manager of the division: “Ghosh, how are you? I haven’t seen you for a long time, how are things at Kharagpur?” He replied, “Sir, things are not too good.” Instead of dwelling on that, Russi asked him about his family, the welfare of his colleague and of the workers. Ghosh told him that the living conditions were not too great. Russi turned to me and said, “Ishaat, we have to construct proper living quarters.” Then he went on to ask Ghosh why things weren’t great at the division, and when he referred to the challenges, Russi seemed to agree, “Yeah I know it is tough, but see what can be done. Okay, thanks a lot.” That was the end of the meeting, in 15 minutes flat!

After they left, looking at my flummoxed expression, Russi said, “Young man, I have uprooted these people from their cushy jobs at TISCO. I have not met them in a year, and you think I will come into this meeting and start blasting them? I had to know what was going on.” That thoughtfulness even in a challenging business situation was a big lesson for me, and an eye opener about how one should conduct oneself. Though in the follow up meetings he did get Ghosh and his team to pull up their socks, it never got personal. I believe people skills cannot be taught, as it has to come from the heart.

Russi believed in on-the-job training. He would take young trainees as EAs who would sit in all his meetings, including the confidential ones. They would follow the discussions, take notes, and most importantly, observe how meetings should be conducted. This was invaluable experience for a youngster and gave Russi a chance to assess the trainees’ potential. Many successful Tata executives, including Sujit Gupta, who was the head of Delhi office of the Tatas, and KC Mehra, who rose to become the deputy MD of Tata Steel and later the MD of Forbes Gokak, came through this route and were jokingly called members of the Mody Administrative Service (MAS)!

Call it fate, but as it turned out, Indian Tube, eventually, got merged with Tata Steel, and guess what, I became the number two man in the accounts department of steel — a position he had first offered me! Such instances in my life have led me to believe that no matter how hard you try, it’s all destined.

Though I lived in Calcutta, every Monday I would travel to Jamshedpur, and at 36, I was the number two there. I would return home on Friday evenings. Interestingly, my boss, RS Kashyap, was a 57-year-old gentleman, who was nice to me but was a typical old school accountant, who kept everything to himself. He would never share his work or delegate. That left me with a lot of time and I used this opportunity to re-educate myself in finance, taxation and law.

It was also the time when Russi was on an acquisition spree. My boss had no interest in all that, and so, I became the de-facto finance director of these three companies Kumardhubi Engineering Works, Davy Ashmore India and Metal Box (bearings division). I was able to apply all the knowledge I had been brushing up on to this new role that I found myself in. However, nine months after I had moved to Tata Steel, unfortunately my boss suffered a heart attack and took premature retirement, and I became director of accounts in 1984 with 2,200 people under my command. It was an over-whelming experience.


The job specifications of the director of accounts at Jamshedpur, right up to the beginning of the 21st century, was one of the most complex jobs to hold in the country, in its size and scope. Apart from accounting at the steel plant, it covered the accounting for mining operations and power plants, accounting for the town of Jamshedpur and finally, for the hospital. Each is a specialisation in itself, in addition, all despatches of steel were the responsibility of the DOA as all the weighbridges came under him! Finally, the time offices in Jamshedpur, which recorded the attendance of workers, reported to the DOA as well. All this was at a time when there was little computerisation. Six months into the job, I told Russi and Jamshed Irani that in the absence of transformational computerisation, the present system was in danger of an imminent collapse. A decision was taken to junk the Burroughs 6800 mainframe, which had become obsolete and was to be replaced by a powerful new IBM computer. Over the years, Tata Steel has developed an outstanding digital spine. I understand that the head of accounts no longer carries the responsibility of the weighbridges and time keeping. Nevertheless, I have no doubt that his job continues to be a challenging one. It bears mentioning here that despite an archaic system, Jamshedpur would submit its accounts to head office in Mumbai by third week of the month. I recollect JRD pulling my leg by telling me that his friend David Rockefeller received his financial statements of the Chase Manhattan Bank within five days of the closing of the month. I wished JRD had lived to see the day when Jamshedpur accounts reached Bombay within five working days of the month as they do now.

I need to mention here that computerisation led to a very substantial downsizing of the accounts department. Again, chance played a role here. Many of the office-bearers of the Tata Workers’ Union came from Arrah district and were aware of my family’s credentials. They felt that I was one of them and were proud of my position as the director of accounts. They used to tell me, “Saaheb aap toh hamare hi hain, aap se kya jhagda karna.” They gave me unstinted support in reducing the manpower, but of course, this was only possible because of the overall cordial relations between the management and unions.


This is part two of a three-part series. You can read part one here and part three here.


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