The message is clear, the timing couldn’t be more appropriate, getting the right things done in difficult times calls for a different kind of leadership, a different set of strategy. It is because the rules have changed. Global economy no longer favors a revenue growth strategy; profitability and cash-efficiency are now the keys to survival. “Leadership in the Era of Economic Uncertainty” is as current as a business book can get. As mentioned in the book, liquidity crisis in September 2008 has brought down a few US Investment Banks; by November, our world economy has entered into recession or a slowdown in growth for some countries. Ram Charan – a world-renowned adviser to business leaders and corporate boards – makes it loud and clear that unless the business leaders do the right things, they would well be joining the list of Richard Fuld of Lehman Brothers, James Cayne of Bear Stearns, Daniel Mudd of Fannie Mae, Richard Syron of Freddie Mac, Martin Sullivan of AIG, Ken Thompson of Wachovia, Alan Fishman of Washington Mutual, and Fred Goodwin of the Royal Bank of Scotland.
“Leadership” is primarily targeted to the CEO, CFO, COO, Business Segment Managers, the Board of Directors, and their supporting offices. It also touches onto other key supporting units such as Research & Development, Public Relations & Investor Relations, Human Resources, Information Technology, Supply Chain, and General Counsel. Starting with the CEO role, Ram Charan has authoritatively stressed the importance of cash efficiency, the intensified real time management mandate, the decisive confidence that a CEO must exhibit, amongst other essential leadership traits that he has highlighted in his book.
For the Sales and Marketing people at the front lines, what should the new organizational structure be? How should the new set of key performance indicators be like in this downturn? Which customers to drop? How to protect brand reputation?
For the CFO, in this toxic environment, being called to step up as a leader of the organization, what are the things that need to be done? Do people outside the CFO office understand the effects and impact of a shortage of liquidity and how their decisions can affect liquidity? Are the real time metrics of cash flow, cash generation, cash collection, cash usage, and etc. ready at hand? Can the budgeting process become a streamline exercise that only takes a few days?
For the COO, what is the lowest cash break even point that is achievable? How to get there? For the R&D, how to make the best use of resources? For the Supply Chain, how not to compromise cash flow and customer service? For the HR, what are the considerations for head count reduction? What about compensation, succession and talent planning, and training? For the Board of Directors, what kind of guidance shall be given during hard times?
According to Ram Charan, for those companies that survive this economic uncertainty, they will emerge smaller, fewer customers, sell fewer products, fewer suppliers, few layer of management. However, the process will be simpler and more efficient and the company will become stronger. “Leadership” is concise (138 pages) and after working in the consulting and corporate environment for more than a decade, I believe that it is of beneficial to the business leaders and their supporting officers as well as the internal and external advisers to the business. Even for those who have just started their career, this is a good book to give the readers an overview on the key components of an organization and the role each component plays. I wish I had read such a book when I was much younger.
Publisher: McGraw-Hill; 1 edition (December 22, 2008)
ISBN-10: 0071626166
ISBN-13: 978-0071626163
External Link: Ram Charan
3 replies on “Leadership in the Era of Economic Uncertainty by Ram Charan – Loud and Clear, Concise Yet Actionable”
This sounds like a book for me. But I think in times of crisis, my mentality will be to cut the fat and horde the cash. Cash flow, ultimately decides the fate of a company.
Darkspore – True true … but beyond motherhood statements such as cut cost, hold cash, it is always the questions of how and what that most executives cannot answer. I am sure all know about that mentality. But how many can actually survive and come out much stronger than their competitors?
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