“Ram Charan [consults] for the largest and most powerful companies . . . even more than his dedication; it’s his insights that have won him the ear of hundreds of top managers. . . . What Charan loves to do is to solve business problems. With his plainspoken Socratic approach, he helps demolish organizational silos or persuade entrenched executives to change their points of view. . . . Companies seek him out for his ‘wise man’ approach rather than choosing a consultant with a narrow specialty.”
—Fast Company
I had last night, the opportunity to scrutinize his latest book: Know how. I have taken some notes therein which would be handy to entrepreneurs, in search of leadership skills, and who are reading me.
The Eight Know-Hows
Here is a breakdown of the eight know-hows:
1. Positioning and Repositioning: Finding a central
Idea for business that meets customer demands and that
makes money.
2. Pinpointing External Change: Detecting patterns
in a complex world to put the business on the offensive.
3. Leading the Social System: Getting the right people
together with the right behaviors and the right information
to make better, faster decisions and achieve business
results.
4. Judging People: Calibrating people based on their
actions, decisions and behaviors, and matching them to
the non-negotiables of the job.
5. Molding a Team: Getting highly competent, highego
leaders to coordinate seamlessly.
6. Setting Goals: Determining the set of goals that
balances what the business can become with what it can
realistically achieve.
7. Setting Laser-Sharp Priorities: Defining the path
and aligning resources, actions and energy to accomplish
the goals.
8. Dealing With Forces Beyond the Market:
Anticipating and responding to societal pressures you
don’t control but that can affect your business.
Command of the eight know-hows enables you to
diagnose any situation and take appropriate action, lifting
you out of your comfort zone of expertise by developing
skills that prepare you to do what the situation
requires, not just what you’ve traditionally been good at.
Personal Traits and the
Know-Hows
The following are the personal traits that can help
or interfere with the know-hows:
✓ Ambition — to accomplish something noteworthy
BUT NOT win at all costs.
✓ Drive and Tenacity — to search, persist and
follow through BUT NOT hold on too long.
✓ Self-Confidence — to overcome the fear of
failure, fear of response or the need to be liked and
use power judiciously BUT NOT become arrogant
and narcissistic.
✓ Psychological Openness — to be receptive
to new and different ideas AND NOT shut other
people down.
✓ Realism — to see what can actually be accomplished
AND NOT gloss over problems or assume
the worst.
✓ Appetite for Learning — to continue to grow
and improve the know-hows AND NOT repeat the
same mistakes.
Detecting Patterns in the
Complex World
Here are seven simple questions that can help you
sort through and detect patterns in the complex
world around you:
1. What is happening in the world today? The
most significant trends affecting business transcend
company and industry.
2. What part of my frame of reference has
worked for me? What hasn’t worked for me? The
construction of your own frame of reference based
on previous experience is a large part of learning to
detect changes in external patterns.
3. What does it mean for anyone? The newspaper
industry is undergoing vast changes as a result
of the Internet and Google.
4. What does it mean for us? Once you have the
big picture, you can begin to examine what it means
for your own company’s strategies. That’s what
General Electric’s CEO Jeff Immelt did when he
decided to meld several of GE’s businesses into the
infrastructure business to sell items such as energy
equipment and services, railroad locomotives and
aircraft items — all necessary ingredients in rapidly
growing economies.
5. What would have to happen? Apple’s invention
of the iPod would have been considerably less successful
had it not created iTunes, the online source
of downloadable music.
6. What do we have to do to play a role? GE’s
decision to market its infrastructure products in
emerging markets required it to reorganize those
businesses in a way that recognized the difference
between selling a power plant to an American utility
and selling that same power plant to a foreign
government.
7. What do we do next?
In the nutshell, the role of the entrepreneur is thus: Diagnosing, Designing and Leading.
I thoroughly enjoyed my reading and would recommend you to read Ram Charan for his insights. As is often the case, knowing something is only good enough…Applying the knowledge is more important.