I just finished reading ‘Leadership In the Era of Economic Uncertainty’ by Ram Charan and I found it a very practical guide for senior executives during the downturn we are currently facing. It provides useful advice and gives a down to earth approach and shows how being prepared, facing reality and communicating clearly with your team and suppliers your current situation and approach. Ram Charan also does a very good job at showing what priorities need to change in this context and how it affects every key parts (and roles) of the business. I feel that he doesn’t overplay the downturn and the ‘worst thing since the 1930s’ panic angle that journalists seem to be relishing and but he also avoids the cliché this is a great opportunity for everyone. He is realistic when he says that most companies will face negative growth and need to prepare for keeping focus on cash and coming through what could be a prolonged situation (one to three years in his estimates).
His advice his summarized in the amazon editorial review page:
- Protect cash flow vigilantly, even daily, and use cash more efficiently
- Use ground intelligence to survive the storm and position your business to thrive in the aftermath
- Develop a better understanding of your customers
- Reevaluate your pricing strategy and capital expenditures.
- Use cost cutting strategically
All of these are explained in a clear and concise way and give concerned executives a framework in which to approach the recession and plan ahead.
Perhaps insufficient attention is paid to the opportunities that this environment creates for corporations, such as making much needed changes to the communication approach and rethinking certain aspects of the corporate structure that have been shielded from changes by the ‘good times’. In my mind, this period is a time to challenge, rethink and review what didn’t work as well as it should. However Ram Charan identifies the key fundamentals and I am sure senior executives will find a very useful read.