Rediscovering old virtues

After co-authoring that forgettable book, Execution: The Discipline of Getting Things Done, Ram Charan is back with a quickie that clearly has only Western readers in mind. It should, just the same, be welcomed because it roots for the old virtues of steady growth "" that comes from lots of little projects creating differentiated customer value.

Here is someone talking about the top line, and he is not demanding more mergers and acquisitions or mega investments, but good old organic growth. After a decade of bashing TQM for its alleged preference for incremental improvements, here is a vote for "singles and doubles", not just "home runs". Organic growth through singles and doubles necessarily involves small projects "" Charan sets $250,000 as a baseline. Such growth must obviously come from meeting customer needs hitherto unmet, and must be sustainable and profitable. As each project is relatively small, many people would be involved.

So Charan defines "good growth" as organic, differentiated, sustainable and profitable. "Bad growth" comes from mergers and acquisitions.

In the eastern world, there may not be many who would find it necessary to argue against Charan's advocacy. Indeed, Charan might be asked if he is saying anything new. But clearly, after an era of M&A bloodbaths, Charan's voice of sanity is required where he lives.

It seems to be an American habit to publish a book around a single idea, where a paper or article might have sufficed. What Charan has done, to borrow is own metaphor, is to score a healthy single or double, but he has had to package it as though it were a home run. One expects a book to present an integrated vision of a topic, not just weave around a single idea. Charan runs out of steam after the second chapter, and gets repetitive. The publishers have spaced the book generously to let it touch 200 pages.

What Charan says is wise, but, not new. So we have to wonder why he has to present it as though it were a stunning new insight. For example, he asks that we "turn the idea of productivity on its head by increasing revenue productivity". The idea of revenue productivity is new?

Like other books of this genre, Profitable Growth is sprinkled generously with anecdotes. The story of Avery Dennison is told. The CEO orders growth. Nothing happens. He realises he has not put a method in place.

What is supposed to be new in this? Likewise in the story of NETg, they discover that their customers were unable to access the content. This is what the Japanese have described for decades as "product out", or, looking at issues from our point of view instead of the customer's. In a later chapter, Charan explains another basic with examples "" that the end-user, and not just the intermediary is a customer.

Charan is a good storyteller. His book is readable. What he says makes good sense. His ideas on growth, market segmentation and the creation of value propositions are sharp, and simply explained. If you are a CEO rooting for organic growth against a tide that favours acquisitions, perhaps you have a reputed author to quote in your defence.

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Profitable growth is everyone's business

Ram Charan
Crown Business
Price: $22