Thursday, August 09, 2007

Book Review : Know- How

Title : Know -How
The eight skills that separate people who perform and those who don't.

Author : Ram Charan

Publisher : Random House
Book review # 4


Know-How is a must read for all business students and professionals. After reading this book , I must admit that I became a fan of the author Ram Charan. Ram Charan is known for making complex business concepts simple and this book is a classic example of that skill.

Know-How is what separates leaders who perform from those who doesn't, the author says. He defines this quality as follows

" Know- How is about what you must both do and be to lead your business in what is shaping up to be the most challenging business environment in decades." ( page 2)
He also cites certain personal traits that is an absolute must in developing and deploying Know-How. They are
Ambition, Drive and Tenacity, Self Confidence, Psychological Openness, Realism and Appetite for learning. ( P.17)
The author then spends the rest of the book explaining the eight know-hows that will guide the leader to greatness. The eight Know-Hows are listed below:

  1. Positioning and Repositioning : This refers to finding a central idea for business that meets customer demands and that makes money. This was one of my favorite chapters where Ram Charan emphasis indirectly that Marketing is a strategic function. He cites innumerable examples to stress the fact that a customer focus is important when trying to position /reposition your business. He uses the simple example to cite the importance of customers " If the dog does not eat the dog food , You will lose money ".
  2. Pinpointing external change : Detecting patterns in a complex world to put the business on the offensive.The author warns the corporate leaders to look for signs of impeding changes that can either disrupt your business or provide new opportunities.
  3. Leading the social system : Getting the right people together with the right behaviors and the right information to make better , faster decisions and achieve business results. In the HR perspective, Ram Charan exhorts the leaders to understand the social system in an organisation .
  4. Judging people: Calibrating people based on their actions, decisions,and behaviors and matching them to non-negotiables of the job. Do you have a right succession plan in place ? In this segment, the author gives invaluable guidelines to spot the future leaders of the business. He cites the examples of Jack Welch, Nardelli ,Jeff Immelt to substantiate the importance of getting and retaining good people.
  5. Molding a team : Getting highly competent , high-ego leaders to coordinate seamlessly.
  6. Setting goals : Determining the set of goals that balances what the business can become with what it can realistically achieve.
  7. Setting laser-sharp priorities : Defining the path and aligning resources , actions and energy to accomplish the goals
  8. Dealing with forces beyond the market : Anticipating and responding to societal pressures you don't control but that can affect your business.
Some of my favorite quotes from the book.

  • Will the dogs eat the dog food ? p.44
  • The key element of positioning Know-how- the mentality to dissect which new or already existing market segments would contribute to moneymaking and which would detract, and the psychological inclination to confront reality sooner rather than later. p.50
  • Detecting changes in the external environment and linking them with the positioning of your business is what I call business acumen . p56
  • The know-how of pinpointing and taking action on changes in the external environment is one of the most important skills you must master in your job. p58
  • The greatest challenge today is finding new opportunities for profitable and sustainable growth in the complex and tough environment. To achieve and objective like this, you have to be psychologically comfortable to go beyond traditional thinking about an industry and sense what is happening on the outside, connect the dots and discover what the new opportunities are. p68
  • Jeff Immelt has the capacity to take in huge amount of detail and sift , sort and select it to make sense of it. p69
  • Seven questions to make a sense of world around you . P71
      • What is happening in the world today?
      • What part of my frame of reference has worked for me? What hasn't worked for me?
      • What does it mean for anyone?
      • What does it mean for us?
      • What would have to happen?
      • What do we have to do to play a role?
      • What do we do next?
  • Every company has a social system.Social system describe the various ways people come together to do their work. Managing social system has two parts : determine what critical decisions and trade-offs must get made and by whom, to accomplish your business goals. Then use that insight to design disciplined ,routine regularly scheduled meetings. p80
  • The defining qualities /behaviors that companies would need for the future : Collaboration, candor, informality, accountability and realism. P 105
  • Selecting leaders is not risk free but paying attention to whether the person is making the transition lets you address problems quickly. P 138
  • Principles involved in molding a team of leaders
    • Share numbers, reasoning and results to share a common view of the business and its context.
    • Have the psychological courage to confront behaviors that harm the team's effectiveness.
    • Anticipate, surface, and resolve conflicts.
    • Pick the right people.
    • Provide prompt feedback and coaching.
    • Recognize and avoid derailers.
  • Its the people who must bring the priorities to life. Therefore whenever you set new priorities, you have to ask, Do we have the right people to carry them out? P 221
Know-How is a remarkable book which is lucid and easy to understand. What differentiates this book from the rest is the innumerable examples which the author has distilled from his vast experience .