Embracing the Principles of Mutual Respect

An Interview with Rakesh Sarna, Managing Director and Chief Executive Offi cer, Taj & Palaces

EDITORS’ NOTE Rakesh Sarna as- I strongly feel, and I remind my our culture and our past, which is helping us de- sumed his current post in September colleagues every day, that we have to fi ne our future. of 2014. Prior to this, he held various work hard to earn the right to be the We are committed to embrace the princi- leadership roles with Hotels guardians of Jamsetji’s (founder) legacy. ples of mutual respect. We’re going to make that Corporation including Chief He defi ned a purpose for our existence. the agent of change – we’re not going to talk Operating Officer - International He created something in 1868, and es- about organizational structures, compensa- from June 2007 until his appoint- tablished the purpose of the company. tion, and brand standards and brand position- ment as Group President - Americas They have lived that purpose from day ing. We’re going to speak about how to use this in October 2012. In addition, dur- one. I get goosebumps when I think weapon called mutual respect and rally 31,000 ing this time, Sarna was responsi- about that man’s vision. people to do the right thing. ble for co-authoring the brand It has been 147 years and every- People ask me what to do, and I say, I attributes of Andaz (Hyatt’s bou- one who has been the guardian of don’t know – do the right thing. tique brand) and leading the Rakesh Sarna Tata has taken this House of Tata from Some people say they don’t have enough launch of this new brand. strength to strength. Mr. , for direction, but they do – just do the right thing. instance, not only made Tata a global brand but I could tell them what I would do, but I’m not COMPANY BRIEF Established in 1901, The Taj he made it a respectable global brand – not be- going to – they need to fi nd their own way by Group of Hotels (tajhotels.com) is one of Asia’s cause of the products but because of who he is. doing the right thing. largest group of hotels, comprising 118 hotels in The Tatas have done well, which is a I wouldn’t have done it this way 10 years 63 locations across India with an additional 15 karma thing. They have done so much good ago. I don’t want to just be known for EBITDA international hotels in the Maldives, Malaysia, that they keep getting good people. They got growth, and a balance sheet and the pipeline. U.K., U.S., Bhutan, Sri Lanka, Africa, and the . He took over at the age of 44. At My biggest focus is on human capital right now Middle East. From world-renowned landmarks that age, I didn’t have one-tenth the sense he because we have a defi cit in that one area, to modern business hotels, idyllic beach resorts has, and he’s now managing , a mas- which will take a lot more work than signing to authentic Grand Palaces, each Taj of- sive global conglomerate. up a few hotels and fi xing the debt. fers an unrivalled fusion of warm Indian hospi- IHCL is the parent company of Taj. It’s a In the hotels, that is where the action is. tality, world-class service, and modern luxury. public company so it’s not all Tata – Tata is the My destiny is in the hands of the people on For over a century, The Taj Mahal Palace, main promoter but the fact that the Tata hand the ground – those that serve guests, make their , the iconic fl agship, has set a bench- is above our head gives us so much comfort, beds, and clean their bathrooms. They are the mark for fi ne living with exquisite refi nement, respect, and prestige on the global stage. ones that breathe life into our brands. inventiveness, and warmth. The Taj Group of I must also never forget what our early What I can do is defi ne where we ought to Hotels is part of the , India’s premier leaders of Taj did for this company – they took be. I don’t know that I’m always right, which is business house. this from a homegrown to a globally admired why we need a team working together. brand. What excited you about leading Taj and When you took what made you feel the timing was right? on this role, how I spent 35 years with Hyatt, which has an important was it to amazing culture. I’m a community college convey your mes- graduate – Hyatt taught me everything I know. sage and did your They nurtured me, and treated me fairly and people understand with dignity. it and quickly come The idea of leaving them was an alien onboard? concept, so when I was approached, the fi rst I would like to reaction was “forget it.” Then, I warmed up to think so because we the idea, because it was Tata – that was the didn’t change for the pull, because of their values. The brand Taj has sake of changing. something to do with it, but if the brand Taj There is a lot more was owned by another company, I would not that is good at Taj have done it. than is not. Lastly, there was an underlying aspiration to While I would head a global brand – Taj’s nobility was hard to like to take credit, I resist. As a young boy growing up, I was awed by find that many of the charm and glamour of Taj, hotels that my fam- the solutions I am ily and I could not afford to go to – we couldn’t finding for today’s even afford to have a coffee at a Taj. problems come from 110 LEADERS POSTED WITH PERMISSION. COPYRIGHT © 2016 LEADERS MAGAZINE, INC. VOLUME 39, NUMBER 1 I went from a very egalitarian society We started defi ning everything where people were willing to say what they around that. We said, it’s sexy to be felt to a society where people are hesitant to in New York, San Francisco, and disagree. Now I ask people, why do you agree Cape Town, but we ought to be in with me? It’s a very interesting thing for me. I Bangkok, Hong Kong, Abu Dubai, want them to argue with me. I tell them I’m not and Moscow, where our guests are. so smart – please help me. This helped defi ne our development My top team does that about 50 percent of strategy. the time. They now argue with me, but they still In the human capital area, we come to see me one on one. However, that’s said that if we want to live by better than not disagreeing at all. We’re having Jamsetji’s values, if we can do one- a lot of fun even though we have been deal- tenth of what Ratan Tata has done, ing with an unfriendly economic climate since the least we need to do is talk about 2009. Our fi nancial health needs work so we’re gender diversity, mutual respect, focused on that. work/life balance, paying people We put together a strategic plan that de- properly, medical insurance, and re- fi nes success. We told people to take a week to tirement benefi ts. So we’re working refl ect and make sure that this plan was their on those things, like the quality of fi nal answer. I was delighted when one person food in staff dining rooms, focusing came and asked to see me on a Sunday, when on the comfort of a doorman stand- I would be more relaxed. This person totally ing in 44 degrees Celsius heat, etc. disagreed with me and explained why. I had We have to remedy that. It’s about to go to the offi ce on Monday, get the whole what our people feel and how they team together, and say I was wrong. But I’m are able to get on with life. glad this person came up with the courage to I’m struggling with this because speak with me. we don’t have unlimited money given Now we have defi ned success. My job is to the shape of our balance sheet. We give them the resources, but my most important increased the number of days off per job is to get out of their way, which is what month and we gave everybody holi- we’re doing. Not everything is working out but day plans, but that’s just the tip of more is working out than I thought would. the iceberg. Is it important that those you hire have In the first six months I was that cultural fi t? there, our people were interacting – Teaching the business is the easy part. I there were 100 anonymous letters per just want decent human beings, even if they month. It’s now down to 10 letters a don’t have the right skillset. We need natural month and many more come with a The Taj Mahal Palace in Mumbai (opposite page); views from the Taj Lake Palace, leaders and I’ve found that, given the right skill name. Everybody has my e-mail ad- (above) exposure, people are very smart. dress – I want to hear from them. A good leader must work on building other The development pipeline is another fo- that has approved our strategic plans. We people’s self-esteem, because if one can do that, cus. India is going to see the opening of 357 have made some interesting left turns in our they will get a lot out of their workers. But we hotels from 2015 to 2017. We have a new and financial calibration that have worked. On also have to give good feedback. energized development team. We gave them the the human capital side, we have made some We learn every day. India is blessed with resources and authority, and got out of their compensation decisions at a time when we some great talent and people are very resilient. way, and they are doing wonders. We are work- can ill afford to, but we did them because we It’s a tough environment to live in, and they ing on fi nding a better balance between real must do the right thing. We’re nowhere near want to succeed. Our people are very proud to estate investments and management contracts. fi nished, but people are fi red up and looking be part of the Taj family, and even prouder to be Another goal is to build a healthy balance to us to keep the momentum. part of the for the values they have. sheet. We have some debt to deal with. We I’m so optimistic. I strongly feel India’s These are things one normally fi nds on posters, are restructuring our international subsidiaries, time has come. The Indian economy is showing but in the Tata family, everyone works hard on liv- we are looking at recycling our assets to fuel signs of great improvement. Seven years ago, ing by those values. Yet, they are focused on the growth, and we are working with our GMs to India had fewer four- and fi ve-star hotel rooms economic health. A Tata veteran stated it perfectly improve margins and, because of the downturn than Manhattan, and that has changed. in saying, “we need to create value to be able to in the economy and some of the heavy debt in There is 71 percent literacy in India and continue to live our values.” This captures the es- our balance sheet, we have not been able to we have to fi x it. We can’t just look to the gov- sence of all that is so holistic and so noble. keep our hotels as up-to-date as we would like. ernment. We have to ask ourselves what we’re On the business side, is it more about In the meantime, the likes of Hyatt, Hilton, doing about it – and no one does that better enhancing and tweaking existing proper- Marriott, and are coming in with than the Tata family. ties or about bringing on new properties? brand new hotels. We have one secret weapon – You appear very calm. Do you ever I merely assess where we are and then, which is our people. show strong emotion? together, we’ll defi ne where we ought to be. Is it hard to be patient sometimes when The best of us lose our cool. The one thing We tried to ask ourselves, who are we? Let’s you see your company with hidden gems I learned at Hyatt was the impact that values defi ne ourselves. I asked 10 people and got 12 out there still waiting to be unleashed? can have on an organization. We always prac- answers. We fi nally asked, who do we want to I have become more patient because when ticed them but they were never articulated until be? The biggest hotel company, the smallest ho- I see people seriously trying, then I realize, later on. Coming from India, it touched me in tel company, the boutique hotel company? Here they’re doing their best and that maybe things more ways than one. I wish I could live those we are blessed with the Taj name, so with that, take longer. values every day. It’s not easy. what should we be? I have to keep working at it because The choice was to go to India and be abra- The team, after many deliberations, came there is much to be done. I take solace in how sive or candid and I realized that none of that up with a very simple sentence that we want much we have been able to do in very little might work. If I were to appeal to their good to be “a group of globally reputable hotels that time. We have restructured the organization sense and values, by the principle of mutual seek their inspiration from the aura of Indian and redone the brand architecture. We have respect, there might be a better chance, so that’s nobility.” defi ned a vision with a very supportive board what we’ve done.• VOLUME 39, NUMBER 1 POSTED WITH PERMISSION. COPYRIGHT © 2016 LEADERS MAGAZINE, INC. LEADERS 111