What the CEO Wants You to Know …

What the CEO Wants You to Know: Using Your Business Acumen to Understand How Your Company Really Works

Ram Charan learned about business from his family's shoe shop in India before attending Harvard Business School and going on to advise senior executives in companies large and small.

His experiences taught him that universal laws apply "whether you sell fruit from a stand or are running a Fortune 500 company," and that the business acumen that comes from understanding these basics can be applied throughout any operation.

"What the CEO Wants You to Know" is Charan's primer on this point, which he illustrates with explanations filtered through the eyes of street venders and other small shopkeepers.

One, for example, involves a woman in Managua, Nicaragua, who sells clothing from a small cart and beats the oppressive interest rates on her loans and the puny profit margins on her goods with a skillfully selected inventory that is quickly and repeatedly turned over.

Whether it's a corner merchant or a giant manufacturing concern, Charan notes, "the faster the velocity, the higher the return."

Relating such thinking to cash generation, customer satisfaction, and other essentials, he describes the universal principles that help all companies make money.

"What your CEO wants you to know is how these fundamentals of business work in your company," he writes before embarking on a very lucid explanation that can be quickly absorbed and put into practice.

--"Howard Rothman"

What the CEO Wants You to Know

Acknowledgments
Contents
Preface
Part I: Business Acumen the Universal Language of Business
- What Jack Welch and Street Vendors Share: The Essence of Business Thinking
  - Remember Your Roots
  - The Street Vendor's Skill
  - Learning From the Street Vendor
- Every Business Is the Same Inside: Cutting Through to Cash, Margin, Velocity, Growth, and Customers
  - Cash Generation
    - Everybody Counts
  - Return on Assets
    - Making Margin Meaningful
    - R-O-What
    - Making Velocity Meaningful
  - Growth
    - If You've Heard of Shareholder Value
    - Growing the Right Way
  - Customers
- Understanding Your Company's Total Business: How The Pieces Come Together
Part II: Business Acumen in the Real World
- The World Has Complexity, Leaders Provide Clarity: Figuring Out Business Priorities
  - From Complexity to Simplicity
- Wealth Is More Than Making Money: Seeing the Business Like an Investor
  - Where the P-E Multiple Comes From
  - Managing the P-E Multiple
  - GE's Track Record
  - Ford's Efforts to Boost Its P-E Multiple
Part III: Getting Things Done
- Growing People Takes Courage: Making Matches, Fixing Mismatches
  - The Right People in the Right Jobs
  - Dealing With Mismatches
  - Coaching
    - Coaching on the Business Side
    - Coaching on Behavior
- Making Groups Decisive: Designing Social Operating Mechanisms
  - Wal-Mart's Social Operating Mechanism
  - Designing Social Operating Mechanisms
- What to Do and How to Do It: A Ceo With an Edge in Execution
Part IV: Your Personal Agenda
- Your Part in the Big Picture: Rekindling the Spirit of the Lemonade Stand
  - Assess the Total Business
  - Cut Through Complexity
  - Provide Focus
  - Help People Expand Their Abilities and Synchronize Their Work Efforts
  - Be a Leader
About the Author

“The greatest danger in times of turbulence is not turbulence; it is to act with yesterday’s logic”. — Peter Drucker

The shift from manual workers who do as they are being told — either by the task or by the boss — to knowledge workers who have to manage themselves ↓ profoundly challenges social structure …

“Managing Oneself is a REVOLUTION in human affairs.” … “It also requires an almost 180-degree change in the knowledge workers’ thoughts and actions from what most of us—even of the younger generation—still take for granted as the way to think and the way to act.” …

… “Managing Oneself is based on the very opposite realities: Workers are likely to outlive organizations (and therefore, employers can’t be depended on for designing your life), and the knowledge worker has mobility.” ← in a context

These pages are attention directing tools for navigating a world moving toward unimagined futures.

It’s up to you to figure out what to harvest and calendarize
— working something out in time (1915, 1940, 1970 … 2040 … the outer limit of your concern) — nobody is going to do it for you.

It may be a step forward to actively reject something (rather than just passively ignoring) and then figure out a coping plan for what you’ve rejected.

Your future is between your ears and our future is between our collective ears — it can’t be otherwise. A site exploration starting point

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