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

• Business Basics in Simple Concepts and Metaphors

  
  By A1K1JW1C5CUSUZ on 2001-02-26
  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!
  
  

• doesn't live up to the title.

  
  By ACNBY57LG1CG4 on 2005-08-11
  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.
  
  

• Simple and Right to the Point

  
  By on 2001-02-26
  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.
  
  

• Fundamentals!!!

  
  By A275JLUO4NMPMQ on 2001-04-30
  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.
  
  

• Dangerously Oversimplified and Misleading

  
  By AEEJT0FZECV9M on 2005-10-10
  This is the first book I've picked from the ChangeThis "Personal MBA" list (http://www.changethis.com/17.PersonalMBA) and boy am I disappointed.
  
  I thought this primer-level introduction to business would give me the tools I needed to understand the nuts & bolts of Collins and Lazier's *Running the Small to Mid-Sized Business* but no such luck.
  
  He gives us a taste of the math that is required to understand business, but I guess he's afraid of scaring people off with too much math, because it's glossed over in such a way as to be unusable. It's like sex without penetration.
  
  And right now I'm reading a section where he says, "Obviously, the higher the P-E multiple, the more wealth is created."
  
  By that logic, all those overvalued internet stocks during the dot com bubble created a lot of wealth. And so did Enron.
  
  I hope the other books on the "Personal MBA" list are better than this.
  
  
• Very Basic Business Book - 5 Stars
  By A1A7VS5J7OR71D on 2001-09-26
  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.
  
  

• A Simple No Nonsense Handbook
  By A35IDAXLJMYRNM on 2001-03-27
  Ram Charan's books have always interested me. It is a departure from the traditional authors who like to complicate simple material. The greatest asset that Ram has in his writings is his ability to simplify seemingly complex concepts to easy reading. Make no mistake ...this is a very powerful book that has profound concepts and it is targeted to the average employee in the organization... I just love Ram's work... Thanks Ram and hope you continue writing in ways that seks to inspire and provide understanding to millions.
  
  
• Packed With Knowledge!
  By A1NATT3PN24QWY on 2001-06-19
  If you like your business books short, sweet and free of jargon and equations, this is the manual for you. Educator and corporate business advisor Ram Charan explains core business fundamentals in clear, concise - though not very sophisticated - language. The book's style and tone resemble that of to-the-point business writer Og Mandino. Charan begins with the metaphor of his childhood in his family's shoe shop in India, noting, "My experience growing up is typical of how children learn about business." His family store was just one door away from a competitor's shop, so the business was "hand-to-hand combat." From his humble roots, Charan explains the essentials of business that he believes all CEOs should know. Charan, an advisor to major corporations, fills his books with intriguing anecdotes and insights. We [...] recommend this book to those who want to understand business better, but it's not an onerous recommendation - you can finish Charan's book in a single Sunday afternoon.
  
  
  
• Life on the Street
  By A1STWK33TMM7IJ on 2002-08-08
  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.
  
  

• why grow your business acumen?
  By AKXSTJQH1YUL7 on 2004-09-23
  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.
  
  
  
• Disappointing. Another obvious/general advice, hire me book
  By A1NBHWBM6XD6OG on 2001-09-13
  A disappointment. I've bought this book full of expectations, only to find out that it contains either irrelevant or obvious advice. It's obvious that the writer either does not have real solutions to problems, or he is keeping them to his $500 an hour customers. Anyway, don't bother with this book.
  
  
• Looking for business sense?
  By A357KA9W1DI36U on 2002-12-09
  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.
  
  

• This should be given to all new hires!
  By A3S9FDZSHZW79Y on 2004-03-02
  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.
  
  

• Insightful
  By A3A3TNIJ964P7I on 2004-09-25
  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.
  
  
  
  
• New corporate managers and young entrepreneurs reading list
  By A3H5VO429A9818 on 2002-04-11
  This is a concise and quick read that should really be targetd to the new first line manager, supervisor or young entrepreneur. Although written in a simple and obvious advice format, there are a lot of middle managers out there that still need these fundamentals also. I would recommend using this book as a required reading and discussion book with all first time leaders in your company.

  Charan depicts the key issues of running a corporation to the same gut instincts of running a business in India...everyday cut throat competition for cash...turn it fast!

  I also support his views on addressing frankly the leadership development issues of your employees. However, I did not think he was thorough enough in the coaching of employees section as his only examples were to fire those that struggled. One of the great challenges in managing leaders is putting them in developmental positions and giving them the tools/coaching to succeed. I find his recommendations lean to a failure in dealing with leaders that may have struggled without the necessary preparation or tools.

  Overall, this primer book is a recommended book for my new leaders and I would recommend this as a light read on your next three hour business trip...
  
  

• It All Comes Down To Fundamentals
  By A2AR9G90MRIXZT on 2002-11-02
  There are waaay too many MBAs and CEOs who want to make business a lot more complicated than it really is. Part of my job is conducting business seminars for builders, contractors and remodelers - an industry with a very high attrition rate. Most of the people I get to meet and talk to are very good craftsmen; but who have little knowledge of the business side of what they do. The reason I think this book is so wonderful is that it truly is simplistic. I have tried in my sessions to break seemingly complex ideas into easy-to-understand concepts. After five years, we get many nice compliments and testimonials about results. If more business people (and I don't mean Jack Welch and others of his estimable caliber) read this book, we would have fewer business failures and more success stories. Mr. Charon is to be commended for writing such a readable and enlightening book. Also for resisting the temptation to "show off" his obviously more advanced skills. There are tons of small business people who absolutely need a book such as this. My intent is for my entire B2B sales staff to read it so that they understand how to better serve and service their customers by understanding how they make money. If you're not Jack Welch, Peter Drucker or Larry Bossidy, buy this book. All will become clear.
  
  
• Great start for the non-business manager
  By A2244W5S4U5TEJ on 2004-03-07
  This book is great for the technically inclined management; a definite guide for those of us that have to lubricate and keep the machine running.

  If you are like me, after reading this book you will have some of the non-technical tools needed to deal with those impromptu invitations to the board meeting.

  It will be in my reference shelf for years to come!
  
  

• A good afternoon read
  By A75KN2RGVOBB6 on 2002-02-03
  The book is a definite buy for all. It builds a framework for
  those just starting out in any business and it reminds those with experience that it all still comes down to the basics. I'll be reading it again soon.
  
  
• Business in layman's language
  By A1RC7775O6HB4Q on 2003-08-16
  Ram Charan has explained the complexities of running a multinational business from the view point of a street vendor. Both a street vendor and a CEO has the same problems and both tackle them in similar ways. Anticipating customers needs, generating cash, profits, return on your capital are all explained very simply, without complications. I learnt how to analyze a company from the results it declares, especially how fast is it growing, is it profitable, how to interpret the P/E ratio. It is must read for any engineer, manager or business owner.
  
  
• Business Simplified
  By A1OIVXGCZC09KJ on 2006-12-29
  Ram Charan cuts right to the chase in this book. It's a short one, but it's packed with goodies. Charan explains the keys to making money and increasing wealth: 1) Business Acumen (the main components being cash generation, margin, velocity, return on assets, growth, and focus on the customer) and 2) Getting things done (which includes selecting the right people, increasing their capacity, and linking their efforts to a core set of business goals - developed using business acumen). Sounds simple, right? Frankly, it is. It's a no-nonsense explanation of what all managers, and all employees ought to know about business to enable them to gauge the performance of their company/organization/group, and put practical achievable plans in place to improve it.
  
  Nick McCormick - Author, Lead Well and Prosper
  
  
• An insightful, simple read on many company issues
  By ASEN2Y1P9SXH2 on 2001-10-04
  Ram Charan, the author, clearly and simply states the financial factors that influence a company's success. He emphasizes a person's ability to take the chaotic mess of financial data and break it into digestible, relevant chunks of knowledge through which a "leader" can make precise and informed financial decisions.

  He dedicates a small, but captivating, portion of the book on creating sychrnocity between people within a team, which I feel is a strong driving force behind a company's success.

  Overall, I was quite pleased with this book. It address many issues for an individual who isn't financially-oriented. I suggest reading "Douglas McGregor: Revisited" for further analysis on how to work with people in a team environment.
  
  

• Lacking Depth
  By A2WWI9C77S4GKA on 2002-07-31
  This is good as seminar notes, but as a book it is simplistic.
  
  
• Revival of Business Fundamentalism in Globalization
  By A1GXDBQ1MW1O3O on 2003-06-05
  The problems of globalization have surfaced eventually. With the China ¡§world factory¡¨ in operation, prices and wages are cut. The concept of ¡§value-added¡¨ is boosted every now and then. People are looking for directions in this globally competitive environment.

  Perhaps the answer is: to know what the CEO wants you to know, but which he never speaks out. This little book by Ram Charan, aptly subtitled ¡§how your company really works¡¨ offers you the chance to get to know your boss¡¦ mind. Ram, a business fundamentalist from Harvard Business School, says every business is just the same as a street vendor business. He cuts the business complexities down to just TWO principles: 1.) Cashflow is of utmost importance. Without it, you won¡¦t survive into tomorrow. 2.) Is customer focused.

  The cashflow problem is a basic financial formula: Return on Asset (R) = Margin (M) * Velocity (V). All companies are trying to increase the margin and the velocity. In turn, shareholder value is increased when return on asset is increased and is able to cover the cost of capital. Basic finance stuff in every finance textbooks? Ram recalls you to re-focus on this issue. With prices dropping, it appears that cutting operational costs might be the answer. But the concept of Growth must come in. That is, to grow the business with faster turnover to customer. How? Increase customer satisfaction.

  Mr. Charan calls for companies to have direct, unfiltered, close contact with customers. Customers are now paying premium for trust- worthiness. You want them to come to make business again with you without worrying that you may suddenly disappear, i.e. that you are out of business. And that¡¦s what we call quality counts.

  As it claims, such formula generates a cash generation cycle. As productivity increases because of better quality, margin increases, leading to increased cashflow to cater for better customer service and thus satisfaction and in turn, expands the company¡¦s market share. Well, you name the next one¡K

  Business leaders are to set business priorities, balancing the cash generation with prices cut versus keeping the inventory so that customers are happy. Business acumen is required (and that is what CEOs are priced for). Mr. Charan also urges you to grow company¡¦s employees, making a decisive team with zero information distortion, zero delay and zero distrust ¡V a ¡§synchronized¡¦ company.

  This 140-pages little page-turner is crammed full with lots of ideas. Read it fast and most important of all, to act on it. There is no excessive word and you feel motivated to get your own hands wet and dirty. A good book especially for the finance professionals. For the general public at large, you might be better to get some financial background knowledge first.
  
  

• A quick summary of business fundamentals but incomplete
  By ADN7XP5QJTSJC on 2003-09-03
  The book can serve a quick summary of basics of business. However, to really understand a business from inside one also has to undertand core processes such as

  1. How is supply chain managed

  2. How is Information technology Leveraged

  3. What is the "core" strength of the business - economies of scale/eco. of scope/unique products etc.

  Venkat
  
  

• Overly simplified and not helpful
  By A23B8G76S292EV on 2005-06-05
  I purchased this after reading rave reviews as well as the recommendation by my company and was very disappointed. Even though I have a BA in Business, I'm always looking for new ideas and ways to learn. However, I was disappointed at how much Charan oversimplified some basic terms and didn't even give a thorough defintion of "velocity" -- one of his key points. I read in just a few hours and am giving to goodwill -- one of the few books I won't put in my home library.
  
  
• simple, straightforward, short, repetitive
  By A38OQ628GIVWLA on 2006-07-04
  This book can be read in several hours and is definitely worth of the invested time. I am a total beginner in business, In fact, I study informatics. After reading this book I have a clear view of basic aspects of business. Also, it gave me a more clear understanging of what is a CEO's role.
  let's summarize my thoughts:
  +simple
  +short (less then 130 little pages)
  +gives a great overview of core business aspects
  +good for beginners (contains even links to popular business web sites)
  
  -focused on employees in a leader position
  -focused on international (stock) companies. (I work at software companies, can't see, how could I apply the velocity principle here. We have no shareholders, no transparent assests, nor stock, nor transparent margins)
  -quite repetitive. The word 'business acumen' is listed at least one hundred times. Some may find the repetition usefull...especially me not
  
  
  
  p.s.: I've found this book on the recommended list of PersonalMBA (personalmba.com)
  
  
• How my company really works
  By AB1IRNPGCFBZ9 on 2004-10-22
  It was my curiosity (about the author) that took me to reading this book. The book was an easy read, especially because of Ram's writing style.
  
  Professionally I saw myself and my career when I went through the pages. How much we know about the 'total business' of the company when one grow vertical.
  
  The best I liked is Chapter III, getting things done. How and what a CEO. Perhaps I would find them handy one day!
  
  
• Good book
  By AVRMZGBBQ5BS7 on 2005-08-16
  Good book and straight to the point. Good for strategic thinking and planning of a business. I picked it up with Stop Working by Rohan Hall which was also an excellent book about strategically building a business.
  
  I recommend these books highly.
  
  
• What the CEO Wants...
  By A1AFZ4NRRFC6G2 on 2005-09-16
  Excellent book. Author presented complex ideas in a simple format.
  
  
• Ok book but a little too wordy
  By ADDGNK8YIVR04 on 2006-02-08
  Yes, it's a small book already but I thought the author could have got to the points sooner with a little less prose and more advise. I can see that he did a lot of work and is obviously an intelligent person it just as another reviewer put it "the book does not deliver on what the title suggests".
  It's worth a read on a long airplane ride but not worth setting your career by.
  
  

• Know-How: The 8 Skills That Separate People Who Perform from Those Who Don't
• Execution: The Discipline of Getting Things Done
• Profitable Growth Is Everyone's Business : 10 Tools You Can Use Monday Morning
• What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales
• Confronting Reality: Doing What Matters to Get Things Right