What the Ceo Wants You to Know How Your Company Really Works

Chapter 1 What Jack Welch and Street Vendors Share The Essence of Business Thinking Chances are that sometime in your life you passed through a city or town where people were selling goods from tables and carts right there on the street. Anywhere you go in the world, you can find street vendors hawking their wares. In Chicago, Mexico City, Sao Paulo, Bombay, Barcelona, San Francisco, New York. Anywhere. If you bought something, you probably made your purchase quickly and went on your way. It didn't occur to you to talk to the street vendors about business. After all, what they do is very simple. What could you possibly learn from them? But if you did talk with street vendors about how they make a living, you would notice something surprising. No matter where they live, what they sell, or what culture they come from, they talk about-and think about-their business in remarkably similar ways. They speak a universal language of business. They practice a universal law of business. Even more surprising is that the street vendor's language is the same as Jack Welch's language (he's the chief executive officer of General Electric Company, named the best manager of the century by Fortune magazine) and Michael Dell's language (you've heard of Dell Computer) and Jac Nasser's language (CEO of Ford). It's the same as Jorma Ollila's (CEO of the Finnish company Nokia) and Nobuyuki Idei's (CEO of Sony). In other words, when it comes to running a business successfully, the street vendor and the CEOs of some of the world's largest and most successful companies talk and think very much alike. There are differences, of course, between running a huge corporation and a small shop, and we'll get to those, but the fundamentals, or basics, of business are the same. People like Jack Welch, Michael Dell, and Jac Nasser manage and lead large numbers of people in huge, global organizations. They are often referred to as managers or leaders, but they think of themselves as businesspeople first, not unlike street vendors. I know because I've been permitted to observe some of these business leaders and others like them firsthand. For more than three decades, I have had the privilege of working one-on-one with some of the most successful business leaders in the world, including Larry Bossidy, formerly of AlliedSignal; Dick Brown of EDS; John Cleghorn of Royal Bank of Canada; Chad Holliday of DuPont; Jac Nasser of Ford; John Reed, formerly of Citigroup; and Jack Welch of GE. I have seen the way their minds work, the way they cut through the largest and most complex issues to the fundamentals of business. I learned those fundamentals as a child growing up in a small agricultural town in northern India. There I watched my father and uncle struggle to make a living selling shoes from their small shop, a joint family enterprise. With no experience and no formal training, they competed head to head against others in the town who were also trying to eke out a living. My family learned, and over time they built a name brand and earned the trust of the local farmers, who were their customers. Other shops have come and gone, but ours has flourished, and my nephews continue to run the shop to this day. That shoe shop paid for my education and allowed me to venture far beyond my roots. At the age of nineteen, with an engineering degree in hand, I took a job at a gas utility company in Sydney, Australia. The CEO discovered that I had a nose for business, and I soon found myself devising marketing plans and pricing strategies instead of designing pipeline networks. My interest in business proved to be irrepressible, and that CEO encouraged me to go to Harvard Business School, where I earned an MBA and a doctorate, and where I later taught. Since then, I have had the opportunity to advise dozens of CEOs around the world and to teach business to thousands more. In my early days of consultinCharan, Ram is the author of 'What the Ceo Wants You to Know How Your Company Really Works', published 2001 under ISBN 9780609608395 and ISBN 0609608398.