‘If you have to downsize, do it humanely’

‘If you have to downsize, do it humanely’
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First Published: Wed, Feb 18 2009. 09 28 PM IST

 Crisis leadership: Ram Charan at the launch of his latest book.
Crisis leadership: Ram Charan at the launch of his latest book.
Updated: Wed, Feb 18 2009. 09 28 PM IST
Mumbai: These are uncertain times, and anyone who has at least some of the answers to questions that keep chief executive officers (CEOs), economists, senior executives, even junior employees awake at night is guaranteed to attract an audience.
Crisis leadership: Ram Charan at the launch of his latest book.
At the Kemps Corner, Mumbai branch of retail book chain Crossword, Ram Charan, management guru, author and business adviser to a few Fortune 500 companies and a few Indian companies, and a close associate of Jack Welch, is due to arrive to discuss and launch his book, Leadership in the Era of Economic Uncertainty: The New Roles for Getting the Right Things Done in Difficult Times.
Charan has coached many of the world’s most successful CEOs. For 35 years, he has worked behind the scenes at companies such as General Electric Co., KLM, Bank of America, DuPont, Novartis, EMC, Home Depot and Verizon. Charan is the first Indian to teach in Harvard Business School and helped train the first batch of teachers at the Indian Institute of Management, Ahmedabad. And Mukesh Ambani, chairman and managing director of Reliance Industries Ltd swears by Charan’s books such as Execution (co-authored with Larry Bossidy).
Earlier this week at Crossword, however, Charan is unusually late and an old man waiting to hear him is hopping mad.
The book’s long title (Leadership...) hides the fact that it is actually a small one that many businessmen may be tempted to scan for the magic words that can probably enable them to skirt the difficult days that lie ahead for their businesses.
The old man glares at this correspondent, who is seated behind as other seats have already been taken. “For the life of me, I don’t know why we are waiting for this man (Charan). He’s going to talk on management, but cannot keep even the basic tenet of business (punctuality),” he snarls.
From the glass window, one can see a looming traffic snarl on the road abutting the bookstore and also on the Kemps corner flyover—a common occurrence around this time. “Only we Indians will tolerate this nonsense,” the old man rants. Then Charan makes his appearance, takes the stage, and charms the audience, including the old man, with his sharp mind.
The audience is eclectic—a mix of students, lecturers, even an adviser to companies, who confesses that he has made money out of Charan’s books.
“That is flattering,” says Charan. Charan is from Uttar Pradesh, and his initial years were spent in an ancestral joint family where opportunities were few. He says he was among the lucky few who were groomed by schoolteachers whose “dedication and sacrifices” were unbelievable.
Charan, now based in the US, spends most of his time travelling, and is a prodigious writer of management books.
“I see around the globe, that this crisis was not created by countries or industries. It emanated from the US. It happened largely because of paying no attention to the financial system. It is the first time in the human history, that the financial system has gone out of control, especially in the Western world. It is still out of control, as I stand in front of you, people are trying to figure out how to control it,” he says.
Still, Charan has kind words for the Indian financial system. “Ask anyone in the US who’s in charge of the economy in US, they will look at each other; in India, it is the Reserve Bank of India; in the US it is not the Federal Reserve.”
Charan is an old-fashioned man and doesn’t use jargon. Nor, he says, does he use PowerPoint, the visual aid of choice among consultants. His tips are almost homilies: “Keep your balance sheet healthy. The key is to manage cash. I tell the CEOs of the largest companies that the largest number of businessmen and businesswomen in this world are the street vendors. They have no formal school education, but they understand cash.”
“If you have to downsize, do it humanely.” And “there is nothing more strong than human mind”.
In his school-going days, Charan says he used to help his family manage a shoe shop. “I am absolutely sure that what I learnt in my shoe shop is no different than what a CEO would learn running a large company. There were pairs of shoes that never got sold, where prices had to be lowered and there were monsoon seasons when no shoes were sold. Look at the street vendor. By evening, he knows exactly when to lower rates for bananas. His pulse is on the customer and the inventory that he carries.”
Leaders, says Charan, have to inspire other people.
And companies, he adds, have to manage for cash.
Charan started writing in his late 50s. The old man who was angry admits sheepishly that Charan’s talk was well worth the wait.
And he now wants to write a book.
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First Published: Wed, Feb 18 2009. 09 28 PM IST