The dominant psychology of sales and marketing for the past decade has been to capture as many customers as possible. There's been a psychological aversion to raising prices, but almost every business does need to do now. What should businesses be thinking about in that context of pricing? "It is where the rubber hits the road," he says.
Ram Charan: Leading Through Inflation
Ram Charan is a bestselling author, teacher, and world-renowned advisor to CEOs and other business leaders of some of the world’s best-known companies. His work is often behind the scenes and focused on highly sensitive and fate-making issues. Fortune magazine published a profile of Ram in which it called him “the most influential consultant alive.” His book Execution, lauded for its practicality, spent more than 150 weeks on the New York Times bestseller list.
Ram’s energetic, interactive teaching style has won him several awards, including from GE’s famous Crotonville Institute and Northwestern. Ram was elected a Distinguished Fellow of the National Academy of Human Resources and was named one of the most influential people in corporate governance and the board room by Directorship magazine. He has served on the Blue Ribbon Commission on Corporate Governance and serves or has served on a dozen boards in the U.S., Brazil, China, India, Canada, and Dubai. He is the author with Geri Willigan of Leading Through Inflation: And Recession And Stagflation.
In this conversation, Ram and I explore the changing macroeconomic environment and what leaders can do to address it. We discuss the importance of managing cash well and how pricing decisions can be made effectively. Plus, we discuss the critical nature of partnerships throughout the supply chain — and where the opportunities may be in the midst of challenge.
Key Points
Inflation consumes cash. Cash management is the number one risk to an organization during this time.
The way to get ahead of the curve is to be predictive vs. reactive. This may be a time the existing business model needs to change.
Inflation creates an illusion of growth. It’s important to adjust for this in all reporting and planning.
Work with all sides of the value chain. Help customers deal with rising costs while also working closely with suppliers. Regular communication is essential.
Smaller, regular price adjustments are better than less frequent, larger increases. Resist the temptation to offer less for the same price.
Resources Mentioned
Leading Through Inflation: And Recession And Stagflation* by Ram Charan and Geri Willigan.
Interview Notes
Download my interview notes in PDF format (free membership required).
Related Episodes
Improve Your Financial Intelligence, with Joe Knight (episode 244)
How to Approach Corporate Budgeting, with Jody Wodrich (episode 355)
How to Multiply Your Impact, with Liz Wiseman (episode 554)
Discover More
Activate your free membership for full access to the entire library of interviews since 2011, searchable by topic.
