Ram Charan on the power of uncertainty


“The issue facing business leaders in 2015,” says Professor Ram Charan, “is not how to cope with change. It is about how to anticipate changes coming down the track, understand their implications before competitors, and utilise them to improve your market position and profitability.”

Born in India but now unremittingly global, Charan specialises in giving personal advice to CEOs. Fortune magazine dubbed him “the most influential consultant alive”. For years he led such a hotel-based life that he had no home at all. He has now bought an apartment in Dallas, but still lives out of a suitcase.

He has worked with leaders at GE, News Corporation, P&G (Procter & Gamble) and Wipro. But he sees himself as a practical adviser rather than a big-picture theoriser, asking shrewd questions about the specifics of his clients’ businesses. Not for nothing did he write a best-selling book, Execution, about “getting things done”. While many consultancy businesses slid after the global financial crisis, Charan stayed heavily booked helping clients deal with the downturn.

A world of uncertainty

Charan first learned about business working in the family shoe shop in a small town in northern India. He studied engineering in India and Australia before doing an MBA and PhD at Harvard. He taught at Harvard Business School and Northwestern University, then moved into consulting. His most recent book, The Attacker’s Advantage: Turning uncertainty into breakthrough opportunities follows Leadership in the Era of Economic Uncertainty and – perhaps his most famous release – Execution: The discipline of getting things done, with Larry Bossidy.

Charan sees The Attacker’s Advantage as a departure from his previous work. Up to now, he says, much management thinking has been about how to do better what you have always done. But, he says, this isn’t enough in a hyper-competitive, big data world.

“Many people in business see uncertainty as something to fear, but it is not,” he told INTHEBLACK during a recent visit to Australia. “You can discover possibilities for creating something new and immensely valuable. The more you practise the skills to deal with it – and it should be seen as a set of skills – the more self-confidence you will develop and the better prepared you will be to lead. Taking control of uncertainty is the fundamental leadership challenge of our time.”

Charan does not speak from an arm’s-length perspective. He has provided advice to hundreds of business leaders. Although now in the US, he understands both Western economies and what is happening in developing countries.

While uncertainty has always existed, Charan says what is new is the level of structural uncertainty, which can explode existing market spaces and put whole industries at risk. It demands new skills for anticipating events.

Rise of the maths houses

A critical area of change, says Charan, is the advance of mathematical tools – algorithms – and their related sophisticated software. They can deconstruct huge amounts of information, and predict patterns and changes in everything from consumer behaviour to the maintenance requirements of machinery.

“Companies that have the new mathematical capabilities – I called them maths houses – possess a huge advantage,” Charan says. “Google, Facebook and Amazon were created as mathematical corporations, communicating with their customers through mathematical systems. The US is leading this field, with China next and then India.”

This new mindset for success involves what Charan calls “perceptual acuity” – a 360-degree view of the world. Changes of government, new moves by regulatory authorities and technological shifts all have an impact. Changes in one area can quickly migrate to others, so corporate leaders need to recognise announcements that strike a public chord.

Mindset

Charan acknowledges that developing an “attacking” mindset isn’t easy. It requires moving with speed even when some variables are still uncertain. It can also mean letting go of skills that may have been a significant part of how you see yourself.

He suggests this useful test for executives – ask yourself, at least four times a year: What new developments can I take advantage of to create a new need or give the customer a more compelling experience? What is out there that I need to know about?

“Yes, it takes courage,” he says. “Going into new territory is always a bit scary. But this is the environment we live in now: a globalised economy that moves so fast that incremental change and ‘business as usual’ is not an option. The question that every CEO and senior manager has to ask of themselves is: am I in tune with the wider external environment? If you can’t honestly say you are, then you have to start to find a way there.”

Ram Charan is speaking at the AHRI National Convention in August. Early bird registration closes 29 May.

This is an edited version. The full version of this article was originally published in the May 2015 issue of INTHEBLACK magazine.

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adrian totolos
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adrian totolos

I note that:

Procrastantion.. indecision leads to failure. As the US Marine Corps say, “Failure is not in our Creed.”

BAU notes little or no development. Change is constant. We must evolve and change mindsets.

A belief or feeling that is contrary to current society 40 years ago may now be the norm today.

A CEO that doesn’t know his or her customers needs to get out know the customer through Business Intel and open doors. The issue for all FP organisations is MONEY IN. Business conservation and plugging holes comes second.

Kind regards,

Adrian Totolos.
Business Analyst.

More on HRM

Ram Charan on the power of uncertainty


“The issue facing business leaders in 2015,” says Professor Ram Charan, “is not how to cope with change. It is about how to anticipate changes coming down the track, understand their implications before competitors, and utilise them to improve your market position and profitability.”

Born in India but now unremittingly global, Charan specialises in giving personal advice to CEOs. Fortune magazine dubbed him “the most influential consultant alive”. For years he led such a hotel-based life that he had no home at all. He has now bought an apartment in Dallas, but still lives out of a suitcase.

He has worked with leaders at GE, News Corporation, P&G (Procter & Gamble) and Wipro. But he sees himself as a practical adviser rather than a big-picture theoriser, asking shrewd questions about the specifics of his clients’ businesses. Not for nothing did he write a best-selling book, Execution, about “getting things done”. While many consultancy businesses slid after the global financial crisis, Charan stayed heavily booked helping clients deal with the downturn.

A world of uncertainty

Charan first learned about business working in the family shoe shop in a small town in northern India. He studied engineering in India and Australia before doing an MBA and PhD at Harvard. He taught at Harvard Business School and Northwestern University, then moved into consulting. His most recent book, The Attacker’s Advantage: Turning uncertainty into breakthrough opportunities follows Leadership in the Era of Economic Uncertainty and – perhaps his most famous release – Execution: The discipline of getting things done, with Larry Bossidy.

Charan sees The Attacker’s Advantage as a departure from his previous work. Up to now, he says, much management thinking has been about how to do better what you have always done. But, he says, this isn’t enough in a hyper-competitive, big data world.

“Many people in business see uncertainty as something to fear, but it is not,” he told INTHEBLACK during a recent visit to Australia. “You can discover possibilities for creating something new and immensely valuable. The more you practise the skills to deal with it – and it should be seen as a set of skills – the more self-confidence you will develop and the better prepared you will be to lead. Taking control of uncertainty is the fundamental leadership challenge of our time.”

Charan does not speak from an arm’s-length perspective. He has provided advice to hundreds of business leaders. Although now in the US, he understands both Western economies and what is happening in developing countries.

While uncertainty has always existed, Charan says what is new is the level of structural uncertainty, which can explode existing market spaces and put whole industries at risk. It demands new skills for anticipating events.

Rise of the maths houses

A critical area of change, says Charan, is the advance of mathematical tools – algorithms – and their related sophisticated software. They can deconstruct huge amounts of information, and predict patterns and changes in everything from consumer behaviour to the maintenance requirements of machinery.

“Companies that have the new mathematical capabilities – I called them maths houses – possess a huge advantage,” Charan says. “Google, Facebook and Amazon were created as mathematical corporations, communicating with their customers through mathematical systems. The US is leading this field, with China next and then India.”

This new mindset for success involves what Charan calls “perceptual acuity” – a 360-degree view of the world. Changes of government, new moves by regulatory authorities and technological shifts all have an impact. Changes in one area can quickly migrate to others, so corporate leaders need to recognise announcements that strike a public chord.

Mindset

Charan acknowledges that developing an “attacking” mindset isn’t easy. It requires moving with speed even when some variables are still uncertain. It can also mean letting go of skills that may have been a significant part of how you see yourself.

He suggests this useful test for executives – ask yourself, at least four times a year: What new developments can I take advantage of to create a new need or give the customer a more compelling experience? What is out there that I need to know about?

“Yes, it takes courage,” he says. “Going into new territory is always a bit scary. But this is the environment we live in now: a globalised economy that moves so fast that incremental change and ‘business as usual’ is not an option. The question that every CEO and senior manager has to ask of themselves is: am I in tune with the wider external environment? If you can’t honestly say you are, then you have to start to find a way there.”

Ram Charan is speaking at the AHRI National Convention in August. Early bird registration closes 29 May.

This is an edited version. The full version of this article was originally published in the May 2015 issue of INTHEBLACK magazine.

1
Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
adrian totolos
Guest
adrian totolos

I note that:

Procrastantion.. indecision leads to failure. As the US Marine Corps say, “Failure is not in our Creed.”

BAU notes little or no development. Change is constant. We must evolve and change mindsets.

A belief or feeling that is contrary to current society 40 years ago may now be the norm today.

A CEO that doesn’t know his or her customers needs to get out know the customer through Business Intel and open doors. The issue for all FP organisations is MONEY IN. Business conservation and plugging holes comes second.

Kind regards,

Adrian Totolos.
Business Analyst.

More on HRM