In conversation with Xerxes Desai

ELI5 / TLDR

Xerxes Desai built Titan — India’s first proper watch brand — from nothing, inside a 1980s licence-raj economy that had reserved watchmaking for the public sector. He did it by hiring teenagers from rural Tamil Nadu schools, training them from scratch, paying them well on principle, and running the place as a “learning organisation” where mistakes were allowed and nobody pretended to have all the answers. Later he got pulled into city planning — New Bombay, the National Commission on Urbanisation — and spent the rest of his life arguing that India’s real crisis isn’t ideas, it’s people who can implement them, and that managing the 500 million people about to move into Indian cities is the most important thing happening in the country.

The Full Story

A career inside the Tata machine

Desai gives the short version of a long career: apprentice positions in the Tata group, then the Taj, where he helped turn “one and a quarter hotels into a chain” — building the Taj Intercontinental, rebuilding the old wing, expanding into Jaipur, Goa, Chennai, Hyderabad. A stint at CIDCO on the New Bombay project. Then Tata Press, the group’s printing and publishing arm. And it was inside Tata Press, oddly, that Titan was conceived and incubated.

“I reckon that my claim to fame really lies in what I did in Titan.”

Building a watch company the government didn’t want built

This is the licence raj, before liberalisation. The watch industry had been reserved for the public sector and small-scale units — there was “no room for us large business houses.” So Titan could only happen through a joint venture with a government company, in this case the Tamil Nadu state. Desai is dry about it: they’d have preferred to go it alone.

Two challenges dwarfed the rest. First, getting government approval — that took years. Second, finding a technical partner, because the rules said you had to manufacture the movement yourself, and nobody in India made movements except HMT (who’d licensed the knowhow from Citizen). They eventually landed Français-Bosch, more or less the last option standing.

The actual product: a culture

The interesting part isn’t the watches. It’s how Desai chose to build the workforce. He deliberately wanted a culture unlike the Tata companies he’d worked in. He wanted minds that hadn’t been “walked by” — his phrasing — by a previous employer. So instead of hiring experienced people, Titan went to schools across the Dharmapuri district around Hosur, talked to teachers and students, ran aptitude and attitude tests, and picked roughly three out of every hundred interviewed.

The new hires were 15, 16, 17 years old. The training went well past how to make a watch:

“We had to teach them not only how to make watches… how to live, how to get along with the other sex, how to meet their obligations to their families.”

The attitude tests had texture: an assembly worker did not need a questioning mind, but someone working alone on a machine or in a lab did. Pay was a matter of principle — Desai wanted Titan to be the best paymaster in Hosur, and says flatly: “I do not believe in the capitalist theory of exploitation.” The payoff he’s proudest of: about 95% of employees who joined after the tenth standard went on to earn university degrees and diplomas through distance education.

A learning organisation, mistakes included

The phrase he keeps returning to is “learning organisation.” Passion was expected, but informed passion — “it had to have a strong intellectual, cerebral, rational basis.” You couldn’t push a decision because you liked it that way; you needed an argument. People arriving from the public sector were terrified of making mistakes, and Desai’s whole project was to disarm that fear:

“If you don’t make mistakes you’ll never learn… mistakes will be made, hopefully not too many and not the same again and again.”

Two ingredients, he says, are non-negotiable for a great organisation: pride (the organisation has to succeed for the individual to succeed) and excitement (about doing things differently, not just well). What kills this in most Indian institutions, public or private, is a fear factor plus the fiction that leaders have all the answers. Titan told every new employee the opposite: “We don’t have all the answers. We’ve got only problems, and we want you to solve them.” Titan also ran a township, a school for employees’ children, and assimilated close to 200 people with vision, speech or hearing impairments — one of whom was the father of the school’s first top-ranked tenth-standard student.

From watches to cities

The thread out of Titan is New Bombay. Desai is honest that he “knew nothing about urbanisation” — he knew project management, and that’s what he was brought in for. But managing a whole city, juggling transport one hour and education the next and health the hour after, was a revelation after the “highly specialised businesses” he’d lived in. He’s blunt that he benefited more than New Bombay did.

The case for New Bombay he lays out cleanly: Bombay had lopsided development — jobs crammed south, population pushed north, brutal commutes, people literally falling off train compartments and dying. Deteriorating infrastructure, the hard limits of an island city. Building across the harbour broke the island constraint and escaped the Bombay Municipal Corporation, an eastward push into Maharashtra rather than north into Gujarat.

Why the plan stalled

The clash with government is told through two small scenes. Bureaucrats would write notes like “it is not known whether the chief engineer has looked at this” — a polite way of saying he hadn’t. Desai’s reaction: if you don’t know, go ask him. And the lesson from managing director J.B. de Souza, who stopped Desai mid-pitch as he reeled off ten arguments for a minister: he only needed the one point that would convince the man, not the whole logical case. “She’s looking for what will appeal to him.”

New Bombay was meant to be a counter-magnet to Bombay, but the chief minister kept developing his own magnet at Nariman Point. Lack of awareness, lack of money, no realisation of how important the project was. Then on the national stage: Rajiv Gandhi (who, Desai notes, is the reason Titan got cleared at all) set up the National Commission on Urbanisation under Charles Correa, with Mahesh Buch as vice-chairman and Desai a member. They produced a report “of religious size” — and Desai doubts a single person read it cover to cover. Then Rajiv’s assassination, the foreign-currency crisis, liberalisation, globalisation. Urbanisation simply fell off the list of things the country was paying attention to.

The pitch for IIHS

By the time of this conversation, Desai is vice-chairperson of the Indian Institute for Human Settlements, and the argument is urgent. If India is to grow at 8–10% GDP, urbanisation is the corollary — the urban population, then around 350 million, is expected to swell by another 500 million over 50 years. Manage that badly and it’s catastrophic, because cities are “the cradles of civilisation and culture” (even advances in agriculture, he notes, are city-based).

He’s clear-eyed about the failure pattern, including in his beloved Bangalore — “the intellectual capital of India,” as he once told a former World Bank chairman. The mistake, made by both private and government sectors, was creating jobs without creating places to live, schools, hospitals. He contrasts this with old JRD Tata, who planned cities alongside industries:

“That’s where we went terribly wrong — terribly wrong, unforgivably wrong.”

India’s chronic problem, he says, is not a shortage of ideas but a shortage of people who implement them. IIHS exists to produce both: trained professionals who can manage the transformation, and enough informed citizens who understand what needs doing. The change he wants is “equitable” and “sustainable” — for everybody, not just a few.

Key Takeaways

Titan was built inside the licence raj, which had reserved watchmaking for the public sector — it only existed via a forced joint venture with the Tamil Nadu government, and only got cleared after Rajiv Gandhi came to power.
The competitive edge wasn’t manufacturing — it was a deliberately engineered culture. Hire raw teenagers from rural schools, screen for attitude not just aptitude, train them in life as much as in watches, pay them the best wage in town as a matter of principle.
“Learning organisation” in practice meant: passion must be informed by rational argument; mistakes are tuition, not crime; and leaders openly admit they don’t have the answers.
Two non-negotiables for a great organisation: pride (org success = individual success) and excitement (do things differently, not just well). What kills both: a fear factor and the pretence of omniscient leadership.
Desai crossed from brand-building into city-planning almost by accident — project-management skills transferred; domain knowledge he learned on the job.
The political lesson from J.B. de Souza: a decision-maker doesn’t want your ten best arguments, he wants the single one that appeals to him.
India’s urbanisation is, in his telling, the country’s single most important and least-tracked economic activity — 500 million more urban residents over 50 years, badly managed so far because jobs were created without the cities to house them.
The recurring diagnosis: India is rich in ideas, poor in implementers. Institutions like IIHS exist to fix the second half.

Claude’s Take

This is a quietly excellent founder interview, partly because Desai isn’t performing. He’s an old man in 2016 looking back, dry and unsentimental, and the result is more useful than most polished startup talks. The Titan story is the gem: the insight that the moat was the culture and the people, not the movement or the design, is exactly the thing most operators say and almost none actually build — and Desai built it by recruiting illiterate-to-tenth-standard teenagers and turning 95% of them into degree-holders. That’s a concrete, falsifiable claim, not a slogan.

The interview loses some altitude in the back half. The urbanisation material is sincere and his diagnosis (ideas vs implementers; jobs without cities) is sharp, but it’s also an institutional pitch for IIHS, and it shows — it gets a little conference-keynote toward the end. The transcript itself is rough (auto-captions mangle names: “Français-Bosch,” “Mahesh Buch,” “J.B. de Souza”), so treat specifics as approximate.

What keeps it above a 6: the man actually did the things he’s describing, twice — built a category-defining consumer brand from inside a hostile regulatory regime, and helped draft India’s first serious urbanisation framework. The “don’t pretend to have the answers” management philosophy is genuinely well-articulated and rarer in practice than it sounds. A 7 — high signal on brand-building and leadership, softer on the urban-policy stretch.