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Friday, April 17, 2009

Leading in an Uncertain post

Below is the 6th and FINAL post of my review of Ram Charan’s important new book: Leadership in the Era of Economic Uncertainty,McGraw Hill, 2009. ~Please pass it along to colleagues who could benefit from this information.

1. Operations: Charan argues: “Operations is the heart of any company….where the work gets done. Some important areas he hits in this chapter are as follows: Achieving the Lowest Cash Breakeven Point, Rethink Capital Expenditures, Simplify Your Product Lines, Outsource Where Possible, Manage Inventories, and Special Needs for Service Companies.

2. Research Development: Charan says this about R&D (and refocusing innovation), “ Research and Development holds the key to the future for many companies….” Some important areas he covers in this section: Rethink the R&D Budget, Rebalance Research Priorities, Make the Best Use of Resources, Confront Obsolescence, and Tighten Links to Sales and Marketing.

3. Staff Functions: Charan discusses how the new uncertain economic environment is faced by other important staff functions, such as, human resources (focus on head count, compensation, succession and threat planning, training and morale); public relations (focus on internal, external and investor relations—sending clear, accurate, transparent messages); general counsel (focus on contracts, investor relations, and workforce reduction without backlash); Information Technology (reprioritization, utility-based projects, support CEO and CFO).

4. The Board: Last is the governing body of the company—the Board of Directors. Boards are responsible to shareholders for ensuring the financial stability of the company. Boards hire and fire the CEO, make sure the company is on track, and in the end govern, not manage. Charan ends his book form what he calls “The View form the Top.” In this section, he addresses the following: Approving the Targets, Watching Risk, Guarding Shareholder Interests, Adjusting Compensation, Gauging Management’s Psychology, Ensuring the Right Leadership, Sharing What You Know, and Planning CEO Succession.

This book is well worth reading and buying copies for every senior level executive and board member….then having a discussion after everyone has read it.

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