By Thomas M. Loarie

BOOK REVIEW: Ram Charan’s Guide to Catching Structural Transitions before They Arrive, Using Perceptual Acuity, Reinvention and Courage

May 21, 2020
Column: CEO Learnings

Best-selling author and global consultant to CEOs, Ram Charan has been a privileged insider and an acute observer of business for more than 40 years. He has written and lectured extensively on strategy, execution, innovation, executive leadership, the board’s role, alignment, and global competition.

Best-selling author and global consultant to CEOs, Ram Charan has been a privileged insider and an acute observer of business for more than 40 years. He has written and lectured extensively on strategy, execution, innovation, executive leadership, the board’s role, alignment, and global competition.

In The Attackers Advantage: Turning Uncertainity into Breakthrough Opportunities, Charan zeroes in on today’s global market uncertainty caused by the revolution in digital and communications technologies which are feeding an increasingly faster rate-of-change and transformative structural changes. The victors today are those who create change (e.g. Google, Alibaba, GE, Apple, TATA, Kaiser, and Merck)  by, as Charan puts it, “immersing themselves in the ambiguities of the external environment, sort through them before things are settled and known, set a path, and steer the organizations decisively into it.”  They succeed by identifying and anticipating “bends in the road and new needs or a total redefinition of an existing need.“

Innovation is either treated as a sideshow or as an executive sound-byte that has no follow-through in most quarters. Long-term plans become toothless – even dangerous, and rigid planning processes stymie the flexible thinking needed to identify the next big thing. Companies must abandon a fixed mindset based in “the tried and true” and its past success because past success blinds companies to the fact that every new challenge is unique and demands another approach for success. Technology cycles are getting shorter and shorter—forcing incumbents to unlearn and learn anew faster than ever before, and to identify the “bends in the road” (not trends but changes in trends) in order to ride the next “wave.”

John Chambers, CEO of Cisco, reported the Number One issue on everyone’s mind at the 2015 World Economic Forum (Davos) was innovation and how to become “a math company” (Charan’s lexicon). The second most important thing was the “Internet of everything” and the growing capability of sensors, etc. “This has exploded. It’s going to change every country and every business,” notes Charan.

Charan feels strongly that, as he writes: “40% of the companies represented at Davos won’t exist in a meaningful way in 10 years unless they change dramatically. “Every company’s future is going to depend on whether they catch the market transitions right.” … Most every company coming out of Davos said, “I’m not moving fast enough. I have to become a digital company first, a physical company second.” Companies, executive teams and CEOs must reinvent themselves. They cannot continue doing the same thing much longer.

In The Attacker’s Advantage, Charan provides a practical “how to” guide defining the critical business skills needed to succeed in this completely different and enormously challenging environment, an environment marked by “creative destruction” and structural uncertainty.  It requires a new mindset and new mental tools to chart today’s uncertain waters, anticipate change, and go on the attack.

The ‘attacker’ who gains the advantage has the perceptual acuity to detect forces causing changes in trends that could radically reshape the marketplace ahead of others …allowing the CEO and his/her team  to position the business to make the next move first. He/she needs the “mind-set to overcome the fear of uncertainty to find opportunities, to muster the courage to move forward despite the unknowns, and to gain the advantage with speed and focus, without breaking morale.”

The book is organized around four sections – 1) The Fundamental Leadership Challenge of Our Time, 2) Building on Perceptual Acuity, 3) Going on the Offense, and 4) Making the Organization Agile.  Each of these four sections build on one another.

Section One centers on the challenge of structural change, the algorithmic revolution, and identifying early warning signs. Section Two identifies the catalysts (people, government, companies) of change and understanding what it is they see, and tools for developing perceptual acuity. Section Three focuses on defining a path and developing a mindset for taking the offense. Section Four outlines the use of idea-generating Joint Practice Sessions (JPS) which also provide transparency and coordination and, lastly, the what, who, and how of decision-making to zero-in on critical decision nodes.

I cannot over-emphasize the importance of Joint Practice Sessions (JPS) in creating positive change and goal alignment. It is a form of executive crowdsourcing that demands humility and openness to another’s ideas for success.  I have been in several JPS sessions with previous boards and executive teams facilitated by Ram Charan. It was an epiphany for me and for others who participated. Ram orchestrated a free flow of concerns, opportunities, and needed actions which led to the transformation the company’s direction, as well as alignment and support from all participants. We exited these sessions laser-focused on key short-term (6 months) and long-term (18 month) objectives. JPS also stoked morale.

One of my learnings about the Joint Practice Sessions process is that it is important to have a third party facilitator involved. CEOs need to participate but also need to be on the back bench listening. CEOs have their own biases and can unconsciously direct the conversation as a facilitator. A good outside facilitator who has no bias will draw on the wisdom of all participants and provide better insights.

The Attacker’s Advantage is this year’s must-read for CEOs, executives, consultants, and board members in both the for-profit and not-for-profit sectors. The U.S. is facing an unprecedented change in the age structure of its population. Without increased growth in productivity, we face economic growth that will make it impossible to finance the social costs of an aging population. We are better off than most of our competitors, whose populations have or will peak and then decline. This structural change makes it imperative for all to move now with a relentless focus and an all-hands-on-deck effort to accelerate innovation.

Attacker’s Advantage is a call-to-action providing a much-needed game plan for companies and executives to address structural change in today’s rapidly changing global environment.

Addendum

The five capabilities listed by Charan that are required to succeed in today’s challenging global environment include:

  1. Perceptual acuity
  2. A mind-set to see opportunities in uncertainty
  3. The ability to see a new path forward and commit to it
  4. Adeptness in managing the transition from the current path to the new one (characterized as “pivoting” in the world of start-ups)
  5. Skill in making the organization steerable and agile

These resonate with me as I have been embracing uncertainty for a number of years as a medical technology entrepreneur. These capabilities are crucial to successfully bringing a new idea to the market when the conventional wisdom of doctors, investors, and regulators erect multiple obstacles, “the thousand nos.”

This brings to mind a conversation I had with Ram in the 1990s. He felt strongly that CEOs of multi-nationals and larger companies should sit on the boards of start-ups to gain an appreciation for the skills required to bring innovative products to market. He also advocated that multi-nationals and larger companies will benefit with start-up CEOs on their boards. They bring a different and much needed perspective to the boardroom. A need, I believe, that has been amplified by today’s accelerating pace of change.

—originally posted in Catholic Business Journal 2/24/2015

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BUY NOW FROM AMAZON:  The Attacker’s Advantage: Turning Uncertainity into Breatkthrough Opportunities, by Ram Charan

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Thomas M. Loarie is the CEO of BryoLogyx, a rotating host of THE MENTORS RADIO SHOW, and a senior editorial advisor and columnist for Catholic Business Journal. He may be reached at [email protected]

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