Dear Friends Business associates and colleagues till now I have published 2 book synopsis on this website. And both the formats were different. My 1st book review got lots of good feedback while my 2nd book review format received connect with few people. Hence this time I am going to combine the 2 formats (Pure book review and connection with examples from my life). Looking forward to feedback from all of you.
After one-minute manager meets the monkey, Leadership wisdom book synopsis, today I am sharing a book synopsis of another book “ What your CEO wants you to know.” By Ram Charan.
Book starts with shocking comparison of Ram Charan comparing Jack Welch to a vegetable vendor and says both of the people follow the same cycle of Anticipating Demand; Deciding on Pricing; Adjusting the Pricing to clear Inventory; Generating Cash; Watching Competition; In case of slump, cuts Pricing; Rearranging the display and yells louder (communicating); Depending upon sale adjusting the assortment of products(Product mix); Makes enough money to payback borrowers and whatever is left out becomes his Profit margin; creating value for his stake holders to add Customer. Only difference is scale of operations and people management.
In first chapter author explains different simple terms as… Cash Generation; Return on Assets; ROA; ROI; ROE; coining a new word which means velocity of business. Finality giving a simple universal law of business… Return = Margin X Velocity. Finally, bringing attention to the point that Customer focus is, on knowing how well you know your customers and their preferences and cautioning you what matters is customers trust which keeps you in business.
Ram Charan also gives you a dossier with list of pointers to understand your company better. This leads the leader to have clarity amongst complexity that people / situations in business world possess. This clarity gives leader an opportunity to focus at not more than 5 business priorities to focus on. Ram Charan further drives the point to get attention of leaders to focus on wealth creation rather than making money and gives some tips through examples.
Once fundamental basics of business is dealt with then the focus shifts on growing people and those who need to have aptitude in growing people by matching skills with business needs and giving them stretch goals to expand their skill sets. Finally, towards the concluding next step, which is making groups decisive, giving some examples of how it was done.
In Final chapter Ram Charan requests leaders to focus on execution giving a 5 step approach.
Final appeal to readers is that you don’t have to be a CEO to follow the practices that are mentioned in the book. You can be a product team lead or a departmental lead but by thinking like a CEO for the responsibility you are given, you can add value to the organisation you are in.
Over all it is a very good book which I request all to read. It is in an easy to follow format and explained in very simple and lucid format.
After reading this book about 15 years back I took the initiative of following only 3 principals from this for my product line primarily Top line; Margins & Velocity increased the contribution of my product to 40% of total sales for the company, generating 39% Gross margins and having an inventory turn for an industrial product to 5.2. While doing this & listening to my customers directed me to get my team to focus on new product sales (which are less than 5 years since launch) which increased to about 40% total product sales.
Would encourage you to similarly look for picking up any one of the tips that touches and inspires you and go ahead with perfect implementation of whatever you have picked up to take your department to the next level as acting like a CEO of the area of your influence.