It is important to figure out a person's talent and negatives, says Ram Charan, leading business advisor and author. He was in Mumbai to facilitate a workshop for entrepreneurs as part of the Ernst & Young Entrepreneur Of The Year Awards program. Edited excerpts from an interview.
How is it different coaching entrepreneurs from CEOs?
You have to know the person. Entrepreneurs are visionaries since they build what has not been built before. A CEO might be leading a company, expanding what he has and, maybe, in the future they change. The key point to see is where the difficulties lie. Entrepreneurs lack experience, the skills to expand in scale. A CEO does not.
With the learning portals buzzing with students opting for entrepreneurship, what should they look out for?
They need to nurture their ambition. So many opportunities are opening up in India, so there is no dearth of that. The advice is to identify an unmet need, a precise need. It is not difficult. They have to work at it. It might not come out the first time. But research, research and research. Opportunities are huge. But you’ve got to drill down to see what is the customer need that is unmet, undermet or is going to be here. You start here and you will be successful. Until then, you are going to be wasting a lot of time.
You have challenged assumptions that CEOs might have held to get them to see the ground realities. Any new assumption that you have challenged of late?
Most of the CEOs are very interested in new ideas. They need a menu of new best practices and then select what is relevant to them, because no human being is going to know everything. Priorities differ from company to company.
Do CEOs behave differently depending on where they hail from or have things become more homogenised globally?
The key here is that some CEOs are good for certain industries and some for others. Do not ever assume that a CEO can work in any industry or a CEO can run all kinds of situations. A few may have a broader range. There are CEOs who are very good in turning around a company, but they are not for growth.
If people switch sectors at a lower level, then they can learn it. That's a good time. Though, there have been exceptions. It is important to figure out a person's gift and what his or her negatives are. Leaders must assess if the negatives come in the way of the person in that role. If they do, then that could prove a fatal flaw since it would mean a bad fit. He has to be put in a role where the negatives would not come in the way. I once had to tell the CEO of a company that the vice-president had a negative that made him flounder in his current position. After reallocation, he went on to be happier and effective.
A CEO would also have to handle external relationships such as labour groups and the government. A CEO who cannot do it, will not work.
Do conflicts arise between strategy and the people who execute them?
No, it is a fact that strategy comes from people. Some think about a strategy and the choice that they make. Strategy will not make them. We need to focus on the people who are going to make that choice. Each of these people will choose people accordingly for their marketing team. It is an observable fact.
Is innovation effective through new products or in looking at new markets?
How about innovation through new business models? When the word ‘innovation’ is used, the conjecture is a new product or a gadget. That is fine. But you also innovate processes in a business model. The Nano is an innovation in business model because you can't produce a $2,500 car unless you innovate this entire model of manufacturing, cost, logistics and servicing.
