Know-How We all know of charismatic, well-educated CEOs brought in to change the fortunes of floundering companies, but nevertheless could not make that turnaround possible.

What is it that distinguishes successful leaders? There are thousands of books published every year that seek to identify the core set of "tricks" which will make every leader successful. Very few "get" it.

 

Ram Charan is probably one of those few authors who manage to isolate that core traits of a successful leader without having actually being a leader himself. This he does, being a Harvard Scholar, consultant to Fortune 100 companies and in his own words, "I have had a front-row seat" at the senior management level.

In this book, Ram Charan identifies the "8 Skills that separate people who perform from those who don’t". Weaving a brilliant narrative with lots of examples, he is at once profound and eminently readable. For those of you who think it is another management book, let me assure you it is practical and therefore immediately applicable to any working individual.

You can read more about Ram Charan’s background here.

A deeper look inside the book, as I paraphrase the chapter headings with insights gleaned from the book:

1. Who are you?

Positioning your business is one of the great challenges for any leader. This could be in the marketplace or even within your organization. What is it that you offer? Who is your target consumer? Why should your product be sold?

These are the questions the author poses to every leader. If you do not have sharp responses, you probably are not ready. The examples for this chapter include the relative positioning of Wal-mart and Target – Wal-mart was seen as decent quality at low prices, while Target had better quality with higher prices. Over the years, Wal-mart showed a decline in revenues which was due to two facts – the purchasing power of people had improved and people were becoming more style-conscious. Wal-mart is trying to reposition itself as is every other major chain.

The message is clear. Answer the what, who and why quickly and move to occupy that space in people’s minds. Otherwise you are doomed, like the Dog food company which had a great ‘Vision’ – "To provide our beloved animal companions with high-quality food that is on par with what we humans eat." But, the dogs wouldn’t eat the dog food!

2. External change and what you should do to be competitive

The chapter is interestingly titled "Before the point tips" and discusses the fast-changing world in which we have to run the business. The author makes a strong case for leaders to look at changes in economic, political, social and environmental aspects and identify those changes that could become game changers. This is an inherently difficult subject to write about and so several examples are discussed. Interesting are those of GE looking at emerging markets and alternate sources of energy for future growth as well as the "dream sessions" held by GE chief Jeff Immelt with his customers.

On a personal level, reading up on developments in the world and constantly thinking how it may affect your organization is an effort worth making. For instance, entrepreneurs looking for ideas to invest can profit from the tremendous popularity in "Green" and start businesses in energy efficiency, green products etc.

The author also gives some extremely valuable advice in choosing jobs that help you develop such skills – jobs that allow you to collect and analyze demographics on a large scale.

3. Building a team

A great leader is primarily a person who has formed great teams – that is well-known. In practice, it is not as easy as it sounds. Any bunch of intelligent people are going to have contradicting opinions and even conflicts – the key is to inspire them to work as a team. This is what Ram calls "Herding the Cats".

He argues that one of the fundamental things a leader has to do is to understand the social system of the organization and create conditions to either improve it or change it depending on the situation. This skill has apparently two aspects:

  • Understand what are the critical decisions and who would make them and then use this information to bring the right info to the right people at the right time.
  • Actively ensure that the organization exhibits behaviours consistent with providing that information. The behaviours could be anything – from withholding information or conflicts in decision-making leading to loss of morale and therefore reduced efficiency.
    Ram goes on to give a lot of examples in different situations on what and how operating mechanisms were used in each situation. For example, Bob Nardelli took over a successful Home Depot and saw that the company needed to go in a different direction fast and to achieve it, the company had to move away from the behaviours and operating mechanisms that it used in the past. It is a measure of the courage that Nardelli had in changing the entire social system of Home Depot, with its thousands of stores and employees.
    4. Building Leaders

All books on leadership have one chapter on succession planning and on creating a system that identifies and develops leaders at all levels. This chapter stresses on the importance on identifying the qualities that a leader should have and then identifying the people who have those qualities. Often, young leaders may not have all the required skills, so a development path and coaching needs to be built into the system.

This is a great chapter for young leaders to find out what top managers look for and develop those skills. Some of them include the ability to think about positioning, about competition and about pricing.

Some important points are covered in this chapter that are seldom mentioned anywhere else, like the importance of defining and communicating non-negotiable criteria, developing and deploying talented people in the right way.

5. Molding Leaders

This chapter takes off from where the previous one left. Once you have defined the criteria, identified potential leaders and deploying them, you have to spend a lot of time tracking their performance, stepping in for coaching when needed and ensuring they continue to perform. At the end of a defined time, they have to show they have what it takes to move to the next level.

And moving to the next level means working increasingly in teams. People at the top need to see across the company and hence need information across all facets of the organization. This is where having people who are not only individually brilliant, but also work well as a team.

Part 2 will cover the rest of the skills that are essential for becoming a "performing leader".