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Be in tune with the change, says Ram Charan

Management guru and thought leader Ram Charan shared his ideas on what qualities should a business leader have and what processes are necessary to thrive.

N. Madhavan        Last Updated: January 15, 2014  | 20:15 IST
Be in tune with the change, says Ram Charan
Management guru and thought leader Ram Charan.

The current business environment is turbulent and will likely remain so in the near future. In these circumstances what qualities should a business leader have and what processes are necessary to thrive. Management guru and thought leader Ram Charan shared his ideas while delivering the Great Lakes Global Thought Leader Series lecture in Chennai on Wednesday. He listed five attributes:

1. Be in tune with external change:

Change is constant and in turbulent times it is important to fine tune your antenna to pick these changes early. "There is a need to improve your perceptual equity," he said. One way to do this is spare half a day every quarter and call for a meeting where the participants will try and answer three questions: Which are the five companies in the world that appear to be in tune with the speed of change? What are the three things that these companies do? What events will change the game for your business?

Doing this once a year is not enough, he added. The composition of the team that will do this meeting is important. "Make sure you have people in the room who are not your type of thinkers," he said. The presence of young people and outsiders from a leader's core group will help bring in different perspectives and enable the team to think out of the box.

They will also prevent the top management from reverting to a 'rear view mirror' thinking, which looks at past achievements. He particularly asked business leaders to be aware of the changes that digitisation, analytics and the Internet are bringing about. The advantage of this exercise- looking at changes outside their core businesses-is that it will enable leaders to look at changes in an unbiased manner. "All future trends are visible today. It has to be connected by the leaders," Charan said.

2. Create your own personal social network: Build a network of people-CEOs from different sectors, bureaucrats, ministers and others from different functions- and make it a point to meet them three or four times a year. This will help you to understand change through their lens.

3. Know your customer: Amazon's Jeff Bezos meets his top team every Monday and the question he asks them is: What can we do better for our customers? He does not ask how Amazon can beat the competition. "His logic is that if Amazon is ahead in the customer game, competition will have to naturally follow," said Charan. A constant focus on customers will help handle turbulence better.

Ram Charan

4. Realise the global tilt: The centre of economic growth is shifting from north to south- from developed nations to emerging economies. To take advantage of this growth prospect, multinational companies will look for opportunities in developing countries and this would mean local companies there will face intense competition. In this shift select industries will get anchored in select emerging countries. There is a need to segment which industry will get anchored in which country and take advantage of the opportunity.

5. Create a leadership pipeline: There are two types of employees- individual contributors and team leaders. It is important to identify team leaders and groom them for leadership roles. A strong pipeline of leaders is important to handle turbulence and, more importantly, to grab growth opportunities that turbulence will throw up, like acquisitions. Charan listed four attributes team leaders show: They have a natural aptitude to get others to deliver; they have a nose for making money; they are highly tuned to what is required to succeed at the next level; and they can link numbers and trends easily. "It is important to find these leaders and groom them differently. The mental make up of a team leader is different from an individual contributor."

Charan also said that company boards should be encouraged to play a more proactive role. He said that it is already happening in the US. He also identified what companies that handle turbulence better do. "They are superb when it comes to execution. They continuously experiment and incubate and seek productivity improvement every year," he said.

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