WHAT THE CEO WANTS YOU TO KNOW

If you could summarize the most essential aspects involved in running a business, what would make your list? Author Ram Charan tackles this question head-on by identifying the four things anyone needs to understand about a business, in the aptly titled, What the CEO Wants You to Know.

Those four things are as follows: customers, cash generation, return on invested capital, and growth. For a business to be successful it must master these four dimensions, and in Charan's estimation these are the most basic things any executive would want his employees and colleagues to understand about their business.

What the CEO Wants You to Know is a book targeted at two specific audiences. First are millennials, who it goes without saying are destined to be the next generation of executives and business leaders the world over. Second, business-to-business salespeople, because it is only by understanding why these four things are important that a salesperson can explain how their business/product/service can be of help to other businesses also looking to improve in terms of their own market share, cash generation, return on invested capital, and growth.

By its very nature, What the CEO Wants You to Know is neither a technical nor lengthy book. It's really more of a primer, a short volume whose aim is to communicate a core business idea (or four, as the case may be) in an exceedingly simple and straightforward manner. Thus it has more to offer than other similar books that serve as a collection of business concepts, and is particularly suited to readers who do not hail from business backgrounds. While the wizened business professional may find Charan's discussion somewhat rudimentary, there is nonetheless much to appreciate in terms of the clarity and brevity with which the book conveys such essential concepts.

Ram “has the rare ability to distill meaningful from meaningless and transfer it in a quiet, effective way without destroying confidences,” says former Chairman of GE, Jack Welch.

In this update of the book he originally published in 2001, he very succinctly, and in simple language, describes the basics of what it takes to be a business success. In this book he clearly defines "the universal principles that apply whether you sell fruit from a stand or run a Fortune 500 company."

The four basic musts for every organization, as he has observed over a career of consulting with CEO around the globe, are:
 manage its cash effectively
 use its assets wisely
 constantly improve and grow
 serve its customers

He argues that while the complexities of businesses are different; their approach to business is not. "In every business, the basic building blocks are always the same."

He uses excellent examples of how different companies have handled these basics, citing details that help the reader understand the contribution each plays in a company's business success.

His chapter on financials, and the effective management of same, explains these issues in very direct and easy to comprehend language with appropriate examples. He uses Amazon's published financials to walk the reader through what this information looks like and how to interpret it.

This is an excellent discussion of what it takes to create and maintain a successful business using four basic building blocks. It is well written, easy to understand and uses stories very effectively to make key points throughout the book. In fact, some of his primary examples include the small business his family operated in India when he was growing up and how he learned about business basics back then.

The point is that this book could have a much greater impact on small businesses that need to master these basics.

So, the one puzzling aspect of updating this book is why it seems to be directed to large companies and their employees. The title almost suggests this book is for individuals in large corporations with a CEO and not for any and every one who wants to understand what it takes to build a successful business.

The book was a little more basic than I thought it should be.