My one lesson from what the CEO wants you to know

Previously I reviewed the book, What the CEO wants you to know, by Ram Charan. You can read that review here. A habit I am building is picking one key lesson from every book I go through. If you notice I didn’t write, “every book I read”, because I don’t have to read every book, but I can learn from them, even if that means curating just one key lesson.

From What the CEO wants you to know, the key lesson for me was the importance of having the right people, with the right skills, in the right jobs and supporting them through coaching. Any team manager that recruits somebody and finds they are not the right match for the job and so is underperforming should move promptly to remedy the situation.

I also learnt about the importance of coaching. When I talk about coaching here, I don’t mean formal planned coaching, but the day to day support that managers can give their team members through direct, honest and candid feedback and developmental support.

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Book Review – What the CEO wants you to know

What your CEOWhat the CEO wants you to know is a book written in 2001 (an updated version was published in 2017, but this is a review of the older one), but it’s by no means dated. Written by Ram Charan, an adviser to senior executives and former teacher at Harvard and Northeastern universities in the USA, this book may have old illustrations, but the principles are timeless.

The main focus of the book is explaining what great CEOs do which have been summarised by the author as:

  • Understand the basic building blocks of a business and use them to figure out how your company makes money and operates as a total business.
  • Decide what to do, despite the flutter of day-to-day business and the complexity of the real world.

This is not a big book, it has just 137 pages of reading content written in simple-to-understand and engaging language. What I particular like about this book are the short stories Ram drops in to illustrate some of the principles he’s teaching. The book has nine chapters split across four parts. I have written very brief descriptions of what’s in each chapter below.

Part 1 – The universal language of business

Chapter one – What Jack Welch and street vendors share: The essence of business thinking – The title of this chapter says it all. What do CEOs and street vendors have in common? Apart from the scale of the venture, Ram asserts that the basics of business are similar. They need finance to build or buy their products, they need to sell, make profit and market their products.

Chapter two – every business is the same inside: Cutting through to cash, margin, velocity, growth and customers – A core aspect of business is discussed here, and it’s the act of money making. Three aspects of money making covered are:

  1. Cash generation: This is about answering questions such as, does the business generate enough cash? What are the sources of cash generation? How is the cash being used? According to Ram, a business person who can’t answer these questions will fail in their business.
  2. Return on assets: Assets are what is invested in a business and these can range from money to more physical assets like land. A successful business must be able to generate a reasonable return from the assets. For instance, a person who gets a loan to start their business has to not only generate enough returns to cover the loan repayments, but also make a profit
  3. Growth: This is about the growth of a business. A business that isn’t growing will be overtaken by competitors and may eventually fold up.

Chapter three – Understanding your company’s total business – How the pieces come together – Here Ram emphasizes how important it is for all individual components of a business  to come together to facilitate business success. The business components that need to come together are, cash generation, margin, velocity, return on assets, growth and customers.

Part 2 – Business acumen in the real world

Chapter four –  The world has complexity, leaders provide clarity – figuring out business priorities: The premise of this chapter is that CEOs use the same business sense as street vendors to cut through business complexity to deliver outcomes. According to Ram:

They use their business acumen to determine clear, specific priorities, or action items, that make money in the real world and create wealth for stockholders and owners.

He uses a number of examples from Ford, Apple, GM and Kmart to illustrate this principle.

Chapter five – wealth is more than making money – Seeing the business like an investor:  This chapter focuses mainly on the importance of  the price-earning or PE ratio. Ram writes about what it is, where it came from, how to manage it and how to boost it. He uses some real examples to illustrate this.

Part three – Getting things done

Chapter six – Growing people takes courage – Making matches, fixing mismatches: This is my favourite part of the book as it’s about developing people. The emphasis is on getting things done through others which is a crucial aspect of good leadership. Here’s a quote from the book on the subject:

Personality alone is not what makes a company deliver. It takes insight into how the organization really works and how to link people’s actions and decisions to the right priorities. 

According to Ram, this requires the right people to be in the right jobs and when people are placed into jobs they are not fit for, dealing with the mismatch promptly. The latter part of the chapter focuses on business and behavioural coaching.

Chapter seven – Making groups decisive – designing social operating mechanisms : The term “social operating mechanisms” used by Ram in this chapter sounds very technical, but it refers to a system of coordinating the efforts of all individual staff so they work for the good of the organisation as a whole. That is what this chapter is about and an example from Walmart and the late Sam Walton is used to illustrate how it may work in practice. Some more information on how to design social operating mechanisms is also provided.

Chapter eight – What to do and how to do itA CEO with an edge in execution: Having an edge in execution or successfully executing business priorities requires a number of factors coming together and according to Ram:

An edge in business execution comes from having the right people in jobs, synchronising their efforts and releasing  and channelling their energy toward the right set of business priorities

Ram also expresses that while business acumen into the organisation helps a leader to select the right priorities, insight into the organisation and people is necessary to get energy aligned for the purpose of successfully executing the priorities. Ram again uses an example from a former CEO of a company called EDS to explain this concept.

Part four – Your personal agenda

Chapter nine – Your part in the big picture – Rekindling the spirit of the lemonade stand:

This is the last chapter in the book and it’s really a review of what was covered in the previous eight chapters. It also contains some key questions to answer around assessing the total business and cutting through complexity.

The one lesson for me

A habit I am developing is to curate one lesson from each book I go through. My lesson  from this book is from chapter six, growing people takes courage. It’s around the difference between business coaching and behavioural coaching. To be honest I wasn’t aware there was a difference between the two. In my next post I will write a brief summary about my learning on that topic.

Book Review – Delegating Work

Delegating work

Another book in the Harvard Business Press Pocket Mentor series, this one focuses on helping managers to delegate work more effectively. The aim of this book is to show managers how to:

  • Identify tasks to delegate
  • Assign tasks and monitor their progress
  • Handle any problems with delegated tasks

Written by Thomas L Brown, this book has just 77 pages and is split into two main sections. One with the main content titled, Delegating Work: the basics, and a second section with extra tips and tools on the subject.

The first section is further divided into five topics, each of which I have reviewed briefly below.

What is delegating?

Here you will read some useful information on what delegating is. The purpose of delegating, benefits of delegating and concerns managers have about delegating are discussed. You will also learn about the difference between empowerment and delegating. Here are two nuggets for you: Continue reading

Book Review – Fostering Creativity

Fostering creativityThis is another book in the Harvard Pocket Mentor series, titled Fostering Creativity and written by Dorothy Leonard, a professor at Harvard Business school. Among other lessons this book aims to help us understand how to:

  • Identify opportunities for innovative solutions
  • Develop an environment conducive to creativity
  • Move a team from brainstorming to project execution

This book has just 78 pages and the content, which is really useful, is split into two main sections, the reading content titled Fostering Creativity: The Basics and a section with extra tools titled , Tips and Tools. I review both sections very briefly below.

Fostering Creativity: The Basics

 This section has five topical areas.

What is creativity?

This is a good start for a book on creativity as the author takes the time to define what creativity is. Here’s the definition used:

A process of developing and expressing novel ideas that are likely to be useful.

This is contrasted with innovation defined as:

The embodiment, combination, and / or synthesis of knowledge in original, relevant, valued new products, processes, or services.

Personally I found this definition on innovation to be unclear. But then author does clarify that innovation is the end process of creativity. Continue reading

Book Review – Pocket Mentor: Managing Time

Managing TimeThis book was written by Melissa Raffoni, who is the founder of Professional Skills Alliance. As is the case with the pocket mentor series , there are no chapters and the content is split across a number of topical sections, each of which I have briefly reviewed below. This book has just 92 pages of content which include the main topics and a separate section with tips and tools that I have also reviewed below.

Following are the topics and a brief review of each one.

 

Section 1 – How to leverage your time: asses and plan

This section contain three sub-topics.

How to look at the big picture

Two questions are answered here which are:

  • What’s the value of leveraging your time?
  • Why do we do what we do?

Also the importance of looking strategically at the big picture is discussed. Time leveraging is described as spending time wisely on activities that move you closer to your goals and is differentiated from managing time which are the day to day processes used to leverage time. The first step in leveraging time is to define one’s priorities and added to that is to be clear about why you do what you do. Answering questions such as, are you using your time to accomplish what you want? Are you simply running in place?, can help with this. Continue reading