What the CEO Wants You To Know, Expanded and Updated: How Your Company Really Works

by Ram Charan

The universal laws of business success . . . no matter whether you are selling fruit from a stand or running a Fortune 500 company.

Have you ever noticed that the business savvy of the world's best CEOs seems like a kind of street smarts? They sense where the opportunities are and how to take advantage of them. And their companies make money consistently, year after year.

How different is it to run a big company than to sell fruit from a cart or run a small shop in a village? In essence, not very, according to Ram Charan. From his childhood in India, where he worked in his family's shoe shop, to his education at Harvard Business School and his daily work advising many of the world's best CEOs, Ram understands business as few can.

The best CEOs have a knack for bringing the most complex business down to the fundamentals -- the same fundamentals of the family shoe shop. They have business acumen -- the ability to focus on the basics and make money for the company.

What the CEO Wants You to Know captures these insights and explains in clear, simple language how to do what great CEOs do instinctively and

* 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 clutter of day-to-day business and the complexity of the real world.

Many people spend more than a hundred thousand dollars on an MBA without learning to pull these pieces of the puzzle together. Many others lack a formal business education and feel shut out from the executive suite. What the CEO Wants You to Know takes the mystery out of business and shows the secrets of success used by business legends like Jack Welch of GE.


From the Hardcover edition.

Genres: Business, Leadership, Nonfiction, Management, Entrepreneurship, Buisness, Finance

Unknown Binding

About the author

Ram Charan is an Indian-American business consultant, speaker, and writer resident in Dallas, Texas.

Reviews

[Leah Sciabarrasi · Rating 4 out of 5]

This was a pretty good book. Unlike other feedback, I did enjoy reading it. I was in an interesting position at the time at a college that was run as a business. This book helped me understand my role in the college. I realized that I wasn't a good fit for my position because I didn't have much say in the global picture, and I wanted to. I had to move on. I've taken the tools I've learned in this book and applied them to my current position. I now have a say in the global picture, and I am very happy about my move.

[Newell Starks · Rating 5 out of 5]

If there is one book which any non-business person or new business person should read, this is it. As a person who has invested in companies for over 30-years and been on numerous boards for over 20, it is incomprehensible why others rate this less than a 5 star.

The facts are that business is, at a very fundamental level (similar to sports), quite simple, which most people fail to comprehend. At another level, it can appear quite complex. The difficulty which most people have is that they get confused with the complexity and fail to cut through the clutter in order to get back to the fundamentals.

For instance, follow Marissa Mayer's new technical strategy at Yahoo (dropping any product which cannot be completed within 6-months of starting) as a way to cut through the myriad of problems at Yahoo. This simple, fundamental method (rapid cycle time in product development) is likely to yield significant gains over any prior strategies used at Yahoo since it's inception. One could ask, why it took so long to make this decision - the answer is, it takes a very good CEO to cut through the clutter in a complex situation.

That's basically what Ram Charan's book is attempting to tell the reader - a giant company is no different from a shoemaker - it's just a lot bigger.

[Scott Sinks · Rating 3 out of 5]

Do you know how money works? Do you know how the most successful people on the planet manage their business? do you know what business acumen is and how it works? Do you ever feel like the path to becoming rich seems like street smarts?

"What the CEO wants you to know" written by Ram Charan, explains everything you need to know about running a successful business as simply as it can be explained. Charan, repedively compares running a big business or corporation to running a small fruit stand from a cart, or running a small shop in a village, through the overall understanding of how CEOs and companies demonstrate "business acumen" through their use of management fundamentals. This book essentially teaches the reader to understand the foundation of a business and use that information to figure out how your company makes money and operates as a total business. Once that is achieved this book explains you how to decide what to do with your business despite the chaos formed from the real world.

Charan relates frequently to his family owned shoe store in India. This family-owned business fought hard for every sale, and each night the relatives discussed what had happened during the day, which goods customers bought and what the store's competitors were doing. When he left home to study and, eventually, to become an author and a successful advisor to CEOs and senior executives in companies ranging form start ups to the fortune 500, including GE, Ford, Dupont, EDS, Universal Studios and Verizon. Charan remembered those lessons, and has turned them into what he calls business acumen.

To be honest, this book is a little over my head. My brother recommended me to read this book, he was referred to the book by one of his college professors. I would recommend this book to someone who is extremely interested in business and economics, and would want to pursue a career in the field. Its a very interesting book to understand how money works, and even more important how the business you work for, that makes you money works.

[Rohit Tandekar · Rating 4 out of 5]

It is the title that intrigued me the most when I read it in the reference section of another business book. An eagle-eyed view of what is expected from an employee in the company by the person at the apex, the CEO, was something I was eager to find out.

And the book surely didn't disappoint. This quick read simplifies the expectations of a CEO from his top talent and it draws analogies between a complex, hierarchical MNC and a humble, street vendor. The rules of business and money making essentially stay the same, Ram argues. And he provides you with the same lens to look at both ends of the spectrum that leaves you feeling that it is after all common sense that is being spelt out. Common sense that is unfortunately so uncommon.

Mr. Charan says that a successful business boils down to four main aspects - Customers, Cash Generation, Return on Invested Capital and Growth. Everything you do and everything that's important and ought to be done should revolve around these four parameters. This books urges you to stop and ponder about these and how they apply to the company you work for.

It is the simplest of the questions that lead to the most wondrous of solutions. A good read for freshers in their first few years of their careers.

[Alexandra · Rating 2 out of 5]

Apparently the CEO wants you to know what making money means. The part about cashflow speed was very interesting. Also the hardon for amazon so much.

"Everything about a business flows from this nucleus: Is the business attracting and retaining new customers? Does that business generate cash and earn a good return on the money invested in the business? Is it growing?"

"The boss is asking 'how can I help you?' in other words he thinks help is needed."

"If informality loosens the atmosphere, closure imposes discipline. Closure means at the end of the meeting...people know exactly what is expected. Closure produces decisiveness by assigning accountability and deadlines. Lack of closure coupled with a lack of sanctions is the primary reason for indecisiveness and inaction."

"As you cut through the complexity you will get a clear fix on what is happening in the world."

"It is far better to get to 80% agreement and then convince the other 20% to come along."

[Kelly Ross · Rating 2 out of 5]

Short book with watery content. Many out-of-touch examples of how to run a Fortune 500 business. I found it to all be common sense, but perhaps this book would be good for a high schooler first studying business. Book was written in 2001, so it has language specifically for men. Even says how happy your “wife and children” will be when you find a job that utilizes your skills.

[Faudhiath Kangesa · Rating 4 out of 5]

This is a short but detailed book that basically explains in layman language on how to focus on the going concern of any organization that you are working for whether it is a NGO, government institution, non profit or business enterprise.

No matter what department you work in, your contribution matters. We should all work with business acumen in place. Broaden our mindsets and think of the bigger picture that is larger than our departments. No matter what position you hold, you stand a chance to impact your organization positively by setting your priorities right. Always have your clients in mind and ensure that your teamwork and commitment is working on growing the institution in a profitable direction.

The book challenges one to know customer needs, to identify competitors and their weaknesses and to also invest in one’s strengths and to ensure you are working in a role that makes you productive to your organization. It also encourages on seeking coaching both personally and professionally so as to continuously improve one’s performance. Though I am not confident if a reader with no finance background will easily grasp the first few chapters but I would definitely recommend that you all give it a try and gain a thing or two.

[Greg · Rating 4 out of 5]

Ram Charan, a prominent business consultant, examines the functions of business by examining his own family's business in India. He explores the decision-making processes any CEO must use, looking at key issues such as profit margin, customer service, product turnover, and the like. He argues that though the companies may differ in size and other relatively superficial attributes, the functions and principles of doing business successfully are the same. Charan argues that successful CEO's and business leaders willingly seek out help and counsel from sources such as executive coaches, business colleagues, employees, and others, and that anyone who would be similarly successful must do the same. The book is a simple introduction to some very complex topics; a good way to begin.

[Shana · Rating 4 out of 5]

My husband recommended this book to me while I was working full time as a Credit Director at a national office furniture manufacturer. At the time, the information contained was pertinent and practical. It's not fun to read by any means and for those of you who have shared in one too many executive "go get 'em" meetings....well, some of this might be passe to you. Nonetheless, it's advice worth repeating and driving home the fact that we always have the choice and the gift of choice to excel at what we do - even if we don't necessarily enjoy our jobs, we can enjoy engaging others and helping them grow professionally.

[David Robins · Rating 5 out of 5]

Unlike Execution, which contained a lot of extraneous material, What the CEO Wants You To Know gets right to the point. I was a bit confused by the title, but read it on a recommendation: it is simply what a CEO wants a person working for him, especially a manager, to know about business in general and their business in particular: margin, velocity, turnover, ROE/ROI/ROA, and so on, as well as how to fit people to roles and grow social operating mechanisms.

[Jose Miranda-alvarez · Rating 5 out of 5]

"You make a bet even when you don't make a bet. That is, by not choosing to do anything different, you are choosing the status quo"

A great reminder for any time one knows a decision has to be made, and yet one is hesitant about taking the risk.

This is a great read to understand the basics of money making, combined with the importance of developing a culture of candor, and growing the right talent for the right job.

[Devadeep Gupta · Rating 3 out of 5]

Interesting book for someone working in a corporate setting and wishing to know what the overall company strategy is - beyond one's own narrow silo which often makes no sense. Not a necessary read unless you are looking to climb the corporate ladder.

[Paula · Rating 4 out of 5]

Dedico esse livro a todos os profissionais de RH. Como grupo temos um problema: não temos business sense. Não sabemos como negócios funcionam e, portanto, não sabemos avaliar em que pé andam os negócios em que trabalhamos. Depois ficamos sem entender por que as organizações em que trabalhamos não veem o papel do RH como "estratégico" mas todos os artigos da HBR ou do MIT Sloan Management Review dizem que eles deveriam. Nos apressamos em responsabilizar o negócio por sua falta de visão, mas são as nossas vistas que estão restritas.

Esse livro do Ram Charan é uma excelente forma de começar a entender como negócios funcionam. O autor escreve o livro inteiro se orientando por conceitos fundamentais e frameworks simples que me ajudaram a entender "a ideia" por trás de mecanismos e alavancas de negócios sem aprofundar na matemática/conta. Essa abordagem me ajuda muito, dado que meu raciocínio é mais conceitual e eu aprendo e compreendo o mundo olhando para a árvore, não começando pela análise das folhas.

No fim das contas, para meu próprio registro, ficam aqui as 4 leis universais dos negócios (em inglês, porque foi como tomei notas e não vou arriscar traduzir): satisfying customer needs, generating cash, measuring and monitoring return, creating healthy and sustainable growth. Os cases do Starbucks, GE, Netflix, Amazon e até de camelôs anônimos pelas ruas do mundo ajudam a entender cada conceito na prática

Terminei a leitura consciente de onde estão as lacunas no meu conhecimento sobre os negócios de que fui e sou parte - e já com uma listinha de informações que vou buscar e analisar para aumentar o impacto da minha atuação profissional.

[Carlos Miguel · Rating 4 out of 5]

I truly enjoyed this book. It is very short, but not as lacking depth, but because the author goes directly to the point while wasting no time. There are multiple gold nuggets in it, but it depends where the reader is in his or her professional life. Therefore, it is a book that will still bring insights in future rereads.

For me, this time brought me two main takeaways:
- Put the consumer always first. In data analysts, it is very easy to forget this. I am focusing more on user's experience in addition to aggregated data.
- Find a mentor. Working on it, especially one from the business side.

[Gustavo Garcia · Rating 4 out of 5]

Good reading that will let your mind start thinking about different ways to help the business you opened or you are working on.

[Heather Knoelk · Rating 4 out of 5]

This is a good quick hit on important skills that a leader needs across all aspects of business from operations to financials and managing people.

[Michael Mayhall · Rating 4 out of 5]

Decent perspective for what a CEO would want the organization to understand and how to apply it at any position level.

[Manoj Ekkundi · Rating 4 out of 5]

A good book to get the basics of business.

[Nate Seliger · Rating 5 out of 5]

Ram does a solid job of simplifying complex business practices into actionable steps business professionals can implement regardless of the size of the company or department they are in.

[Daniel Marques · Rating 5 out of 5]

Excelentes dicas práticas. Achei extremamente relevante. Talvez não recomendaria que não CEOs lessem, acho que ficaria confuso, mas quem está na linha de frente, absorverá bastante.

[Manik Koul · Rating 4 out of 5]

Margin & Velocity.

[Gustavo Amaral · Rating 5 out of 5]

"Durante esse tempo, observei que os melhores CEOs se assemelham aos melhores professores, isto é, são capazes de remover a complexidade e o mistério dos negócios, focando nos fundamentos da obtenção de lucros"

"Pois todos se sentem mais conectados e satisfeitos com o trabalho quando realmente entendem como a organização funciona"

"[...] Conhecido como millenials ou geração Y[...] [...] Hoje essa geração, propulsora da revolução digital [...] [...] são pessoas que, entendendo o funcionamento das empresas, logo assumirão altos cargos de liderança nas organizações."

"Atualmente, você deve não apenas ser um bom membro de equipe, mas também atuar como um integrador"

"Qualquer que seja seu cargo, será necessário compreender como a organização ganha dinheiro"

"Não importa qual seja o seu cargo: desenvolva a habilidade de observar clientes"

"Aí está um elemento que diferencia os CEOs de sucesso dos demais executivos: eles pensam em margem e velocidade, o ponto central para entender como uma empresa de fato funciona"

"Ou você está crescendo, ou está morrendo"

[Book · Rating 4 out of 5]

Ram “has the rare ability to distill meaningful from meaningless and transfer it in a quiet, effective way without destroying confidences,” says former Chairman of GE, Jack Welch.

In this update of the book he originally published in 2001, he very succinctly, and in simple language, describes the basics of what it takes to be a business success. In this book he clearly defines "the universal principles that apply whether you sell fruit from a stand or run a Fortune 500 company."

The four basic musts for every organization, as he has observed over a career of consulting with CEO around the globe, are:
 manage its cash effectively
 use its assets wisely
 constantly improve and grow
 serve its customers

He argues that while the complexities of businesses are different; their approach to business is not. "In every business, the basic building blocks are always the same."

He uses excellent examples of how different companies have handled these basics, citing details that help the reader understand the contribution each plays in a company's business success.

His chapter on financials, and the effective management of same, explains these issues in very direct and easy to comprehend language with appropriate examples. He uses Amazon's published financials to walk the reader through what this information looks like and how to interpret it.

This is an excellent discussion of what it takes to create and maintain a successful business using four basic building blocks. It is well written, easy to understand and uses stories very effectively to make key points throughout the book. In fact, some of his primary examples include the small business his family operated in India when he was growing up and how he learned about business basics back then.

The point is that this book could have a much greater impact on small businesses that need to master these basics.

So, the one puzzling aspect of updating this book is why it seems to be directed to large companies and their employees. The title almost suggests this book is for individuals in large corporations with a CEO and not for any and every one who wants to understand what it takes to build a successful business.

ARC provided by netgalley.com

[Chris · Rating 4 out of 5]

Quick and easy read for all levels of experience. For me personally, it was a refreshing reminder of what matters in running a business and how to get the most out of your team and apply it to a complex business cross-functionally. The “synchronize” material was particularly useful where leaders need to facilitate group effectiveness at solving business problems and exploiting opportunities.

[Ashutosh · Rating 4 out of 5]

A short master read.
This book helps in refining your business decision-making ability. Cash(flow), Return(RoI or RoA), Growth(Customer) are three fundamental to business. This book helps you to learn business acumen and metaphor of it.
Simple to understand, Think like a Street Fruit Vendor from North India.

Thanks, Mr Ram Charan for writing this book.
It indeed brought (a lot of business priority which always enticed me to pursue) complexity to clarity.

[Jason · Rating 1 out of 5]

Presented as an advanced book, but covers very simple topics (P/E, margin, velocity of business). Seemed like the author threw in example after example in order to extend the page count rather than trying to efficiently communicate the point. 90% of the information could be conveyed in a two-page flyer.

Would be valuable for people that have zero business background.

[Jered Skousen · Rating 4 out of 5]

If you want to move into the executive suite (or just be a better employee), this book gives some great insight.
It is a short read (120 pages), and the first half is better information. The last half is some examples, and it is a little thin.

[Jesse Winslow · Rating 5 out of 5]

Loved this book. I've never been a business guy, I've always been a people guy. This book finally tied together some ideas I had about the way business works in a very easy to understand and concise manner.

[Amanda Tang · Rating 5 out of 5]

An easy read I would highly recommend to those wanting to grasp the fundamental business basics of their companies. It’s time to ask ourselves if we can do more for our companies and this book helps you get started.

[Abdul Koya · Rating 4 out of 5]

My manager gave me this book to read. This is the only Ram Charan book that gave me valuable insight. Highly recommended.