Book Review: Know How by Ram Charan

I recently got to read Ram Charan's Know-How. I have a very high regard for Ram Charan as a business mind. He is a quintessential CEO's consultant. That is what a consultant dreams of becoming. So for someone like him to come up with his wisdom in such a candid way is amazing.

In this book he has tried to distill the wisdom he gained through all these years of consulting and advising the top executives. I very rarely agree with the 'leadership' type of books, but this is one book I agree with.

Very early in his book, he makes an interesting distinction - of those who look Leader Material and those that are Good Leaders! Good Leaders have certain 'Know-Hows' of how to run a business that those who have the charm of leaders have no idea of. I have also observed that the swashbuckling type guys at the helm are generally hollow. The ones who really succeed are the ones who are quiet and with a vision. Ram points out a certain characteristic of synthesizing various information and data sets into a consistent thought and framework that can be used for a decision as the key distinguisher of a good leader. I agree! There is so much knowledge that is bombarded on our brains that it is not important to 'collect' all of that or just understand it... but the critical piece is to take action!

The 8 main skills Ram talks about are:

1. Positioning the Business to make Money
2. Connecting the Dots by Pinpointing and taking Action on Emerging Patterns of External Change
3. Getting People to Work Together by Managing the Social System of your Business
4. Judging, Selecting and Developing Leaders
5. Molding a Team of Leaders
6. Determining and Setting the Right Goals
7. Setting Laser-Sharp Dominant Priorities
8. Dealing with Forces Beyond the Market

The beauty of this book is that Ram has put for us the very essence of running a business in very simple terms. Here is an example:

In its essence, to exist over time, every business - from Fortune 500 to a small proprietorship in your local community - has to sell something, make a profit, have more cash coming in than going out and earn more than the cost of other people's money (the bank's or shareholders') to be in business. The money making elements of revenue growth, margin, velocity (use of capital per dollar of revenue), cash, and return on invested capital are universally the same for every business, of any type, anywhere in the world.

Such books are classics that you will need to refer to again and again! A must read.