For over 30 years, Ram Charan has been a consultant with some of the most successful corporate names in the world—GE, Verizon, Novartis, DuPont and many Fortune 500 companies. It’s hardly surprising then that the thesis of his new book is gleaned from his interactions with the top business leaders of the world. In Know-How: The 8 Skills That Separate People Who Perform from Those Who Don’t(Charan co-authored the best-selling Execution earlier), he presents a framework that professionals can use for optimum results and a theory of leadership that students of business and management can learn.
Charan starts out by laying down the key attributes of leaders who know what they are doing and are willing to build long-term intrinsic values in their chosen field, while hitting short-term targets. The eight abilities or “know-hows” are: 1) to position (or re-position) the business by finding the central idea that meets customer demands and makes money; 2) to pinpoint external change by detecting patterns ahead of others; 3) to lead the social system of the business by getting the right people together with the right behaviours; 4) to judge people by finding their best talents based on facts and observations and thus fit them with the right job; 5) to mould a team by getting highly competent people to submerge their egos and work together; 6) to develop goals by balancing what the business can become with what it can realistically achieve; 7) to set laser-sharp priorities by defining the specific tasks that align resources, actions and energy to accomplish goals; and 8) to deal with forces beyond the market by creatively responding to societal pressures that significantly impact the business.
Charan says that the ability to master these “know-hows” will enable a leader to diagnose any situation and take appropriate action, but he stresses that they work only in conjunction with personal traits such as ambition, drive, tenacity, self-confidence, psychological openness, realism and appetite for learning. In this context, he talks about a broad cognitive bandwidth (to take in a broad range of input and see the big picture) and the ability to reframe (to see things from different perspectives).
It is a book that combines action and thought, doing and being and places good business leadership on a foundation of profit and loss, resource allocation, productivity and customer satisfaction, while constantly emphasizing the human aspect behind all the number-crunching. Leadership (or more broadly, management) is an intangible that investors and analysts attempt to value, and Charan quite effortlessly justifies in this book why all great leaders ultimately have to take the subjective stand.
Chetan Parikh is the director of Jeetay Investments Pvt. Ltd, Mumbai. Email your feedback to email@example.com