Management guru Ram Charan talks about the new rules for getting the right things done in difficult times in his new book.
By Zafar Anjum
24 Mar 2009
“The economic peace of the past generation is over,” says management guru Ram Charan in his new book, Leadership in the Era of Economic Uncertainty (McGraw Hill). “We’re in a war for survival, beset by fear, uncertainty, and doubt.”
The book is addressed to business leaders who face the difficult challenge of managing their companies in a global economic downturn. “Management challenges don’t come any bigger than this,” he says in the first chapter of the book. “It’s not just your business or industry that is in a downturn; the entire global economic system has been wounded.”
With a dramatic opening, Ram Charan starts the book with the unfolding of the global financial crisis from the perspective of DuPont CEO Chad Holliday who was visiting a major a customer in Japan. Like a case study, the entire chapter discusses how Holliday sets on to tackle the financial crisis in his company.
In 138 pages, the book is divided into nine chapters, each dealing with various aspects of leadership challenges thrown up by situations of economic downturn. These chapters deal with issues of leadership at the CEO, CFO and board of directors level as well as those of sales and marketing, financial controls, operations, R&D, supply chain management and staff functions.
For example, one of the most important questions is about credit and its scant availability (in the current scenario of credit crunch) for companies. “Credit is the oil of the economic engine, and credit ultimately is a creation of confidence,” writes Ram Charan. “Until all players are confident about the intentions and strengths of the others, there can only be stagnation.”
Charan’s advice to CEOs and business leaders, in this environment, is to conserve cash. “Your focus must shift from the income statement to the balance sheet,” he says. Protecting cash flow is the most important challenge almost all companies face today whether they realise it or not.”
The whole book has been written with such succinct and clear-cut suggestions that speak volumes about the author’s seasoned wisdom and foresight. In a highly accessible manner, Ram Charan provides practical advice to protect cash flow vigilantly, use ground intelligence to survive the storm and position your business to thrive in the aftermath, develop a better understanding of your customers, and use cost-cutting strategically, among others. The book illustrates how leaders at DuPont, Hanesbrands, Wipro and other companies use the author’s techniques.
The book is short in length but deep in knowledge. “Roll up your sleeves and put the tools and ideas to work right away,” he advises. “Adjust your mindset, gather your people and tackle the problems squarely.”
If you are in a leadership role and not very sure about how to move forward in the face of tough challenges posed by recessionary trends, here’s the right book for you.
Leadership in the Era of Economic Uncertainty by Ram Charan, McGraw Hill: 2009; 138 pages; price not mentioned.
Zafar Anjum is the online editor of MIS Asia portal.
