Do you know Ram Charan?

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


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


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


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.


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