Will this McKinsey Alumni turn fortunes for Tata Digital?
A note on Naveen Tahilyani being brought from Tata AIA at the helm of Tata Group's Neu venture struggling to stand on its feet.
Situation at present:
Tata Neu, Tata Digital’s super app and one of India’s oldest business conglomerate’s newest venture has been a laggard ever since its launch. It has failed to impress its consumers. It was built to house most of the consumer-facing brands of Tata Group. It was launched during Tata IPL 2022.
Since then, it has faced various problems:
Top talent and executive exodus
Cultural clashes (startup vs TCS)
Tech glitches
Decline in user activity
Now, to fix this mess, they brought in Naveen Tahilyani, former CEO and MD of Tata AIA, and senior partner at McKinsey.
Tata Digital has been facing a cultural clash between two major groups: TCS veterans who come with a service mindset and Start-up or new-age business entrepreneurs who come with a hustling mindset.
Presently, they don’t have a Chief Technology Officer. Imagine that for a new-age tech company. That’s not all, there’s a communication gap as well between the service and hustle culture people. That was visible in tech glitches and poor UI.
App downloads slowed down, to one-third of what was downloaded in 2022. Although there’s a ray of hope, user activity has increased despite a fall in app downloads.
Amidst all this chaos, Naveen Tahilyani’s entry has sparked optimism among the employees, top brass of the group, and industry watchers.
The Glorious Past:
Naveen Tahilyani has earned the admiration of the top brass of the Tata Group. He has turned around Tata AIA, which was a laggard in the insurance space for over 15 years.
When he joined Tata AIA from McKinsey in 2015, Tata AIA was 19th in the private player insurance space, and from there he took it to the top 6. Quite an achievement from someone who hasn’t been associated with the group previously.
The other issue with Tata Digital was the clash of cultures, as discussed previously. Naveen Tahilyani is considered neutral, given he isn’t too old in Tata Group and not too new. On top of that, having consulting and McKinsey genes do make him accustomed to hustle. He does bring a fresh perspective.
Now, Tahilyani has also been appreciated for tackling power struggles too. You see, Tata AIA is a joint venture (JV) between Tata Group and Hong Kong-based AIA. Now, when the government hiked the FDI limit, AIA upped its stake to 49% from 26%. Tahilyani tackled the power dynamics well as per insiders.
Another plus point is that Naveen comes from a consumer-facing business, while TCS veterans were more experienced with B2B.
“Pratik Pal (Tahilyani’s predecessor) came in from TCS – where he was mainly in a B2B enterprise-facing role. Whereas, Naveen comes in from Tata AIA Life Insurance and he has a deep understanding of data and consumer behavior. Especially, given that insurance is a push product, he has a better nuance of B2C,” a senior executive at Tata Digital said.
Road ahead: Strategy for revival
Among the key areas of focus of Naveen Tahilyani would be:
Cost control and operational efficiencies are among the top priorities. Also, to get multiple brands to work in harmony.
Building bundled experiences for consumers of Tata Neu through different brands under Tata Digital and Tata Group. Imagine you’re planning a dream destination wedding, then they’ll have hotel bookings, flight bookings, gifting, clothing, jewelry, etc.
Omnichannel push wherein for example a consumer can locate a Starbucks or a Titan store through the app. At present, only the Croma website has this feature.
Given that Tahilyani comes from a financial services background and also has an understanding of consumer behavior and data, financial services will be a big push.
In a recent email to his employees during the appointment and revamp of the leadership team, he wrote: “We will have to work on a few aspects to win the hearts and mind of our customers --fine tune the loyalty programme, invest in and leverage data for offers, find a better way to convey our proposition to the customers, improve customer experience while creating new value propositions, and use financial services smartly to enhance customers stickiness. We will have to be razor sharp about our priorities and execute our strategic initiatives with rigour and discipline,”
Conclusion
Tahilyani has been hand-picked by N Chandrasekaran. He has been touted to be the fittest for this job given his track record. He surely has a lot of work to do. Executing an app for one of India’s oldest business empires and getting most of their consumer-facing businesses together is an audacious task. But hopefully, he’ll be able to pull this off given his glorious past.
Tata Neu was also launched on the ONDC platform of the Government. Over there they launched food delivery in various cities. The company has been looking at external fundraising as an option and for that reason, growth along with profitability is a priority.
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Source: MoneyControl, ET, The Arc, Business Standard,