Roads to Resilience

Leadership & governance

The sign of a great company’s capability is great bench strength – its second team is as good as its first team. As a result of the company’s values, recruitment policy, frameworks, formal training programmes, and executives dedicating time to coaching and mentoring the next generation of leaders, the teams at Jaguar Land Rover have become a lot stronger over time and are increasingly less dependent on particular individuals. For the company’s executives, this means that they can afford to work closely with the board and external stakeholders, such as investors and suppliers – their direct reports can be relied upon to take care of business. Similarly, it means they can walk the shop floor, understand situations from the perspective of those who have to deal with business challenges on a daily basis, and update people on developments in other parts of the company. However, the relationship between executive leaders and others in the company goes beyond top-down involvement, communication and providing the context for outcomes and expectations. Every executive has an open – door policy and managers throughout the company have direct access to them. For a company with currently 25,000 employees, that is remarkable. As a result, when the executive committee members and Top-150 leaders meet biannually to formally review existing and new risks, the effectiveness of current controls, as well as actions for improvement as part of the company’s Enterprise Risk Management exercise, which is now an integral part of the Strategic Business Plan, they are intimately familiar with the situation faced. Tata Motors’ philosophy is very much ‘arm’s length’. However, Tata is a very ethical company and they take the proper running of their companies seriously. Board members and non-executive directors are therefore highly experienced individuals, who come from the various parts of the Tata Group, which also helps to share best practice internally. The board will provide support when required, but wants to be kept informed. Further, it celebrates success but will enforce changes at the top if performance does not live up to expectations. Following the takeover by Tata Motors in 2008, there was a clear understanding within Jaguar Land Rover that the business had to change dramatically and quickly. Although some outside the company believed that Jaguar Land Rover would be the next British automotive brand to disappear from the market, there can be no doubt that the company achieved something remarkable in only four years. For example, in the 2011/12 financial year, revenue was £13.512 billion, which is almost 100% up in comparison with 2007/8. In 2012, Jaguar Land Rover sold 358,000 vehicles, which is 43% more than four years ago. Further, the company recruited 9,000 new people in the last two years, and is expanding its manufacturing footprint globally, including in India and in China through its joint venture with Chery Automobile. Given Jaguar Land Rover’s i) relatively limited means to fund costly research and development initiatives, ii) dependency on suppliers’ ability to support production growth in challenging financial and economic conditions, and, with the company’s plants working at or near full capacity, iii) limited ability to reallocate people from one plant to support another in overcoming particular Summary

129

Roads to Resilience: Building dynamic approaches to risk to achieve future success