Ram Charan, a bestselling author and advisor to CEOs, shares his insights on navigating economic turbulence. He discusses the critical role of proactive leadership during inflation, emphasizing the need for effective cash management and strategic pricing. Ram highlights the importance of partnerships across the supply chain and the benefits of implementing smaller, frequent price changes over large adjustments. The conversation also touches on enhancing financial literacy and the necessity of swift decision-making in uncertain times.
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volunteer_activism ADVICE
Cash is King
Prepare your team mentally and psychologically for recession.
Manage finances based on cash flow, not earnings per share, during inflation.
volunteer_activism ADVICE
Inflationary Illusion
Understand that inflation creates an illusion of growth with increased revenue but the same units sold.
Use both nominal and inflation-adjusted figures in reporting and planning for a clearer picture.
volunteer_activism ADVICE
Proactive vs. Reactive
Be proactive by anticipating price increases and adjusting your business accordingly.
Trim customers and products, lower your break-even point, and focus on maintaining a healthy gross margin.
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This book provides hands-on advice for business leaders to manage the challenges of inflation, including strategies for protecting cash flow, adjusting pricing, and making strategic investments. It offers real-world examples and guidance on leading teams through economic uncertainty.
Execution
The Discipline of Getting Things Done
Ram Charan
Larry Bossidy
Execution: The Discipline of Getting Things Done emphasizes the importance of linking people, strategy, and operations to deliver results. It highlights execution as a core discipline necessary for competitive advantage, especially in uncertain business environments. The book provides practical advice on how leaders can ensure effective execution within their organizations.
Financial Intelligence
A Manager's Guide to Knowing What the Numbers Really Mean
Joe Knight
Karen Berman
John Case
Financial Intelligence provides a clear and accessible guide to financial concepts, helping managers understand income statements, balance sheets, cash flow statements, and key financial ratios. It emphasizes the importance of financial literacy in business decision-making and offers practical advice on interpreting financial data.
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).
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