Customer Reviews

What the CEO Wants You to Know : How Your Company Really Works

5 star:		(17)
4 star:		(14)
3 star:		(5)
2 star:		(1)
1 star:		(4)

 

 

Dr. Charan has used his decades of experience with top CEOs to write a book that explains the overall concepts and focus of a successful business using simple metaphors. "The best CEOs . . . are able to take the complexity and mystery out of business by focusing on the fundamentals." "And they make sure everone in the company . . . understands these fundamentals." If you work in a small part of a large organization and don't understand how what you do contributes to the whole, this book will be a revelation to you. If you do not understand how business people think and would like to learn, this book will help you more than any five courses you could take.

The book is organized into four parts.

In part one, you learn the universal language of business though concepts like inventory, product mix, merchandising, pricing, return on assets, customer focus, product quality, cash generation, growth, and finding out what you need to change from customers. The primary metaphor used here is that of a street vendor who is selling fruit in India and cannot afford to have a bad day. Dr. Charan fleshes out the examples by referring to his family's shoe business, and to decisions taken by leading executives he has worked with (like Jack Welch of General Electric, Jac Nassar of Ford, and Dick Brown at EDS).

In part two, he talks about how to use these concepts in the real world. His key point is to take the measurements and create a focus on 3 or 4 key activities that will make the most difference. He also relates this work to expanding the value of the company's share price.

In part three, he turns his attention to getting key tasks done. This involves putting the right people in the right jobs, improving group effectiveness (usually by putting in place activities that provide more timely focus), and how to lead change. Dick Brown is the key example in this last area.

In part four, you pay attention to what you need to do to aply these concepts to your own situation so you "become a businessperson first" in your approach to everything. This part gives you help with assessing the whole business, cutting through complexity, providing focus, helping others expand their abilities and synchronize with their colleagues to be more effective, and being a leader (regardless of your role now).

You are left then with this challenge: "What are you going to do to help your company's money making in the next sixty to ninety days?

The book is quite simple and can be read fairly quickly. I think that few will be confused by it. If you have questions, ask someone who has some business education to help you.

The book's great strength is its simplicity. It takes business concepts and approaches down to the lowest common denominator. For many people, this will provide a great advance over doing what is best for the way you are measured in your part of the organization. But you will have to get those measurements changed if you want focus and behavior to improve in a lasting way.

The book's weaknesses are in four areas. First, the street vendor and shoe company examples won't work for everyone. I suspect that a carefully drawn lemonade stand example would have worked better since almost everyone in the United States has either had one of those or been a customer of one.

Second, it is a little opaque from the material here how to find the key leverage points to improve the business. Talking to your customers will get their issues, but then what do you do next? This subject implies doing some systems thinking, and the basis for doing that work isn't laid here.

Third, the material on stock price improvement is weak. It also doesn't have any connection to a simple example. You are just expected to take his conclusions. It would have been easy to strengthen this section by extending the analogy of how a family that depends on a business feels when the business doesn't do well. I actually thought the Ford example was one of failure rather than success. Reasonable people will differ on these things.

Fourth, most businesses today need totally improved economic models rather than evolution of the ones they are using now. This book doesn't adequately surface that key point. In fact, the examples are drawn from companies that have done relatively little to change business models.

The person who will get the most benefit from this book will be the executive who wants to get her or his colleagues more involved in thinking like CEOs (and shareholders). You could take this book, and refocus it around simple examples that fit your business, and use examples of focus from things you are working on now. That would make this book extremely beneficial.

Help people understand what the issues are, how to think about those issues, encourage everyone to come up with better solutions, and make it simple and easy to experiment with new approaches. That approach can help you make progress much faster.

Take on the big picture!

The most brilliant thing about this extremely slim volume is it's title. Any ambitious person in a corporate setting will want what the book promises. Unfortunately, the promise is not fulfilled.

One problem is the book is most applicable to retail or manufacturing. The central insight of the book deals with inventory turnover. That may be fine for Dell Computers, but CEOs of companies that develop software don't care about inventory, because there is none. The entire service/information economy is more or less ignored.

Overall I found the book interesting and worthwhile. But if you strip away the folksy tales about fruit vendors in the third world and anecdotes about the CEO of Ford, what you have left is a short pamphlet.

I would guess this book contains information my CEO would probably would want me to know. But I am pretty sure my CEO would want me to know a whole lot more than whats in this book.

I have to laugh every time I hear about some CEO or manager that has passed out, to their employees, "Who Moved My Cheese." My money is with the company that passes this book out to their employees.

It's nothing we haven't learned in business school or during our MBA studies-basic business fundamentals. Ram, however, pulls all these concepts together, quite elegantly, and reminds us that these fundamental concepts should be our focus if we want a strong viable company. I throughly enjoyed it. An easy 2-Hour read.

It is humbling. After B-School and hundreds of business books, it took these 150 or so pages of text lay explain why I spent time learning finance and accounting, marketing, communications and leadership: To build my business acumen. And Mr. Charan makes it clear that business acumen drives all businesses, be they apple carts or multi-nationals.

How simple is Charan's exposition on building business acumen?
-Finance and operations management are boiled down to one equation (R=M*V). As basic as it gets.
-And marketing gets covered just as simply: "Do they like my fruit? If customers cleared me out of bananas but I have apples left, should I abandon apples and specialize in bananas?"
- Leadership is getting people to focus on the important drivers of wealth generation: cash, velocity, and margins. The best leaders cut through the complexity of their businesses, and get their employees entirely focused on these fundamentals.

But do not be fooled by the brevity. This book is actually quite rigorous. Of course, you will still need spreadsheets and inventory management software and SAS to mine data in this increasingly complex world. Charan does not deny this, but cuts through the complexity so you can see how it all fits together. And that is business acumen, the knowledge and understanding of which will enrich any job you do.

This book is one of the most simple business books to read and I would highly recommend it to those that are looking to understand how businesses operate. I believe this book would be highest valued by those without extensive business backgrounds and by others that are seeking to understand why some companies are great whereas others are average. Mr. Charan explains the most important element of businesses, generating cash. He then talks about numerous business concepts at a very basic level, which I think would help everyone (including MBAs and CEOs). At 150 pages or so it is an easy read and can be read quickly for those seeking information quickly.

I personally have a degree in accounting, an MBA in finance and I worked in corporate strategy. I found this book definitely worth the while and ranks up in the top 2 of overall general business books I have read. I am just now starting to put my reviews online.

What the CEO wants you to know cuts through much of the complexity surrounding business. Basics topics such as cash, margin, velocity, growth and customers are addressed. They are addresses from the stand point of a street vendor. The street vendor has to have an understanding of cash, margin, velocity (how often inventory is turned over) and what customers want.

What the CEO wants you to know is a very easy and quick read. It brings together a lot of the basic factors that affect a business operation. What the CEO wants you to know views these basic factors as a whole with a perspective on how they interact.

What the CEO wants you to know is a good get back to the basics that matter for the business executive. For any employee this book is a good view in what top management should be considering and how you can impact the company's top and bottom line (the book also covers what these terms mean). I recommend this book.

This book explains that business success is not based on complicated science but understanding of fundamentals and basics. This is very true when you compare it to real business examples -- people just don't realize that! The author used very simple examples to illustrate key business concepts and how to put them all together into action. It helps readers quickly grab key points (as building blocks) in analyzing business issues: cash position, return (margin x inventory turn), growth and customers. This is also a great book to refresh learnings from business school.

I read this book in one sitting, which most of you who read this book will. Being a MBA graduate who has drudged through several business courses and books, I was glad to see something that puts it all in a really simple perspective.

The top things I took from this book are:
1. Cash Flow, ROA = M*V, Growth are fundamental to every business
2. Business vs. People - you need others to get the job done, even if you are a street vendor
3. The letters from the CEO to the VPs were very educational - the best part of my education from this book. I am looking for other published "letters from the CEO" - and I am talking not to all employees (like the ones by Dick Brown, I was one of the employees who felt no extra connection from his emails!), but pointed letters saying what needs to be done like the ones from the book.

This book is a great little introduction to REAL economics- not the useless junk most often taught in schools- but the real economics that makes the world go-round. This book briefly tries to explain why it is important that everyone in a company understand this, but falls a little short. For more detail on this aspect, I strongly recommend the classic "Open-Book Management" By John Case.

This book will also help you understand financial statements, particularly income statements. This comes in handy when looking at your company's public competitors or for analyzing investments.

After reading this book, I'd have to say that I did come away from it with more information than when I started with. Specifically concepts like ROA, asset velocity, and inventory control have become more clearly defined in my mind. The book does a good job of conveying these concepts.

I work for a wall street brokerage firm, so in some regards, many of the topics discussed here do not apply. Firstly, this company is quite focused on public companies with open financials. Public companies have expectations to meet that are set by the public, to some extent. Private companies have expectations that are set by the participating shareholders, which is naturally a smaller set of people as it does not benefit from widespread ownership of the company.

Next, the author discusses P/E heavily. He defines it thoroughly (painful for me, since I know what it is). He talks about P/E expansion and contraction in response to company performance. I do not agree, I think P/E generalizations are short term observations, as we have seen from the dot-com craze. In addition, the E in P/E is specified by GAAP defined earnings in public companies. Anyone who knows anything about accounting will realize that accounting is a loose science.

Next, I am disappointed in the authors unwillingness to focus on the ability for CEOs to empower their subordinates. The author quotes CEO letters to subordinates in which the CEO utilizes a harsh authoritative tone. Of course this may work with some companies, although I believe that if the author truly believes that one of the CEO's goals is to introduce new energy into the corporation, then the CEO will empower his employees and work with them to set the direction of their companies. The letters quoted show me a CEO who does not understand people and what people require, they require that they feel important by utilizing positive energies.