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

~ (Author) "Chances are that sometime in your life you passed through a city or town where people were selling goods from tables and carts right there..." (more)
Key Phrases: asset velocity, inventory velocity, cash generation, Jack Welch, Dick Brown, Jac Nasser (more...)

Editorial Reviews

Amazon.com Review

Ram Charan learned about business from his family's shoe shop in India before attending Harvard Business School and going on to advise senior executives in companies large and small. His experiences taught him that universal laws apply "whether you sell fruit from a stand or are running a Fortune 500 company," and that the business acumen that comes from understanding these basics can be applied throughout any operation. What the CEO Wants You to Know is Charan's primer on this point, which he illustrates with explanations filtered through the eyes of street venders and other small shopkeepers. One, for example, involves a woman in Managua, Nicaragua, who sells clothing from a small cart and beats the oppressive interest rates on her loans and the puny profit margins on her goods with a skillfully selected inventory that is quickly and repeatedly turned over. Whether it's a corner merchant or a giant manufacturing concern, Charan notes, "the faster the velocity, the higher the return." Relating such thinking to cash generation, customer satisfaction, and other essentials, he describes the universal principles that help all companies make money. "What your CEO wants you to know is how these fundamentals of business work in your company," he writes before embarking on a very lucid explanation that can be quickly absorbed and put into practice. --Howard Rothman

From Publishers Weekly

Charan (Boards at Work), a consultant, draws an analogy between the decision-making processes of the CEO and the street vendor in his native India. The vendor must focus on profit margin, returns and customer demands. CEOs must "Think like the street vendor. Cut through to the nucleus of the business." Successful leaders, says Charan, aren't afraid to seek help---from coaches, colleagues or employees. With its friendly, conversational tone, this book will be useful to some readers on the lower and middle rungs, but may prove too simplistic for aspiring CEOs.

Copyright 2001 Cahners Business Information, Inc.

See all Editorial Reviews

Product Details

• Hardcover: 144 pages
• Publisher: Crown Business; 1 edition (February 13, 2001)
• Language: English
• ISBN-10: 0609608398
• ISBN-13: 978-0609608395
• Product Dimensions: 8.1 x 5.2 x 0.8 inches
• Shipping Weight: 7.2 ounces (View shipping rates and policies)
• Average Customer Review: 3.9 out of 5 stars  See all reviews (33 customer reviews)
• Amazon.com Sales Rank: #21,745 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

78 of 82 people found the following review helpful:

5.0 out of 5 stars Business Basics in Simple Concepts and Metaphors, February 26, 2001

By	Professor Donald Mitchell "Jesus Makes Me a P... (Boston) - See all my reviews (TOP 10 REVIEWER)

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!

19 of 20 people found the following review helpful:

3.0 out of 5 stars doesn't live up to the title., August 11, 2005

By	Daniel Ginensky (Bet Shemesh Israel) - See all my reviews (REAL NAME)

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.

14 of 16 people found the following review helpful:

5.0 out of 5 stars Fundamentals!!!, April 30, 2001

By	Timothy Smith "Attention to Detail" (Plainfield, IL USA) - See all my reviews

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.