Thursday, March 17, 2011

Book Review Titled “Leaders At All Levels” Authored By Ram Charan – Professor M.S.Rao, Reviewer

Ram Charan’s book titled Leaders At All Levels emphasizes on rebuilding succession and leadership development from the ground up. Ram Charan needs no introduction. He is the America’s leading consultant. The book is based on his rich corporate experiences with top CEOs of Fortune 500 Companies. The book churns the cream from his consultancy experience as well. He connects the content with real corporate world such as companies like General Electric, Colgate-Palmolive, Novartis Pharmaceuticals, Textron, and WellPoint, Inc. He outlines a radical remedy for the crisis in leadership in this book. He addresses the shortage of leadership talent at the corporate world. The book basically deals with ways to getting succession right. He unfolds the tools to spot the hidden leaders within the company at an early stage for grooming.

Precisely, the book touches on measuring the "leadership talent deficit" in an organization and then fund efforts to reduce (if not eliminate) it; developing effective leaders through apprenticeship; recognizing leadership potential; customizing growth plan for each leader; explaining crucial role of bosses; managing apprenticeship initiatives and relationships; selecting the CEO candidates early and grooming them; and institutionalizing the Apprenticeship Model.

The book is divided into 8 chapters with epilogue titled ‘what can a leader do?’ At the end of the book it provides the building blocks of the Apprenticeship Model. The book preludes with “Crisis may be an overused word, but it’s fair description of the state of leadership in today’s corporations. CEOs are failing sooner and fling harder, leaving their companies in turmoil. At all levels, companies are short on the quantity and quality of leaders they need.”

He backs fully that leaders have to be developed at all levels. Usually there is a myth that the only top brass has to be developed. He advises to abandon traditional leadership development practices. He further adds, during his experience he has come to conclusions such as not everyone can become a leader; leadership ability is developed through practice and self-correction and the CEO job requires giant leaps in learning.

He has coined Apprenticeship Model that may sound wrong for business executives, but it isn’t. He says apprentices are people who learn from doing, that is precisely what the Apprenticeship Model provides: practice, feedback, corrections, and more practice. He differentiates between conventional leadership development and apprenticeship model.

Ram coined the concept of Leadership Growth Through Concentric Learning. According to this, leaders expand their capabilities through deliberate practice of a core skill in increasingly complex situations. Each new use strengthens the existing core and allows the leader to use it innovatively. Here’s how a leader might develop his social acumen:

. A. In an early job, the leader selects good people and gets them working well as a team.
B. In the next job, the leader influences and directs people who don’t report to him, such as a cross-functional team or a group of suppliers.
C. Now the leader is running a global business and building teams of people from diverse cultures, with which he has no previous experience. He refines his instincts about pole and depends his understanding of group dynamics. He is now a good judge or diverse people and a keen diagnostician of complex group dynamics.

Ram Charan outlines GE Leadership Criteria as follows:

• Create an external focus that defines success in market terms.
• Be clear thinkers who can simplify strategy into specific actins, make decisions, and communicate priorities.
• Have imagination and courage to take risks on people and ideas.
• Energize teams through inclusiveness and connection with people, building both loyalty and commitment
• Develop expertise in a function or domain, using depth as a source of confidence to drive change.

Ram Charan unfolds that some –GE, Procter & Gamble, Colgate, PepsiCo, and Sherwin-Williams, among them – are net producers of senior leaders. If we learn the right lessons from these successes, we can incorporate the underlying principles into a new approach to leadership development and, with renewed effort, produce the kinds of leaders our corporations desperately need, including twenty-first-century CEOs

He says that Michelangelo turned a block of marble into the breathtaking beautiful Pieta because he had the talent. Similarly, a talented leader can turn otherwise shapeless organization and mold into a highly efficient, highly motivated force for innovation and growth.

Leadership can be developed through practice. People can pick up tools and techniques and ideas about leadership from a book or a classroom. A lot of what passes for leadership development for leadership must develop their abilities by practicing in the real world and converting that experience into improved skill and judgment.

Finding leadership talent early is essential. The path from initial recruitment to the senior level of a company is approximately twenty-five years long and involves, on average, only five jobs before becoming eligible for the CEO post. Most high-level job incumbents reach that point by the age of about fifty.

Ram asserts three fundamental principles should guide the CEO succession process. The first is to recognize that the CEO’s job is quantitatively and qualitatively different from all other jobs; the second is no two CEO jobs are alike; and the third is CEOs are people, complete with their share of human flaws.

Ram says that the board must approach the CEO succession decision with passion and intensity, devoting a lot of time and energy to it years in advance. The senior most human resources (HR) executive and, in most cases, the incumbent CEO should be involved, not only to design the tools but also to contribute to the discussion of the business and the candidates and to manage the tricky issues an that arise as the list of potential CEO contenders gets whittled down.

Ram pats the young people that those who are coming out of universities and business schools are quick thinkers, conceptually agile, facile with models and numbers, and able to diagnose a situation through data. They often show keen insight into business problems. Many are ambitious and driven.

Ram applauds leadership training in military is second to none. People who have been through it and seem to have a natural interest in business can be a good bet.

He refers about Immelt who pores over the list of 175 top leaders at his company, each and every day, thinking about where they fit, what they can do, and who needs to go into another job soon. As observing and providing feedback becomes part of the boss’s everyday routine, it gets to be second nature.

Leaders must expand themselves beyond a single culture. It’s not good enough to have direct reports in other countries. Running a business in China from New York is a completely different experience from living in China while running the business. The leader must be immersed in that milieu to get the experience necessary to deal with different cultures and different constituencies, such as government agencies, nongovernmental organizations, and the special interest groups that are becoming increasingly influential in corporate affairs.

Leaders must possess both people acumen and business acumen. Anyone can improve his or her ability to select and develop people’s talents, but other aspects of people acumen are hard to teach. Leaders with people acumen have good instincts to anticipant problems among individuals who must work together and to get the resolved. When leaders are unable to make good decisions, or any decisions at all, it may be that their business acumen is not expanding. They cannot be considered to have CEO potential.

It is well known that Jack Welch, the former CEO and chair of General Electric, was a superb coach and mentor to the leaders who reported to him and contributed greatly to their development and the success of their business units and functions. Ram observed him and GE over many years and can attest that he was constantly practicing and improving his management skills almost without thinking about it. When it came to making judgments about people, for instance, Welch seems to have internalized some of the most critical skills as a teenager when he was playing hockey.

In the 1970s and 1980s, for example, companies like IBM, Xerox, and General Motors had what appeared to be excellent leadership development programs that were regarded as benchmarks within their industries. Yet, none produced the kind of CEOs that were most needed by those companies. Something was wrong in their leadership framework.

Ram Charan reveals why some leaders Jack Welch and Jeff Immelt at General Electric, Andy Grove of Intel, Reuben Mark of Colgate-Palmolive, Michael Dell of Dell Computer, Andrea Jung of Avon, and Ivan Seidenberg of Verizon are successful at a relatively early age because they expanded their depth and breadth of understanding of business and improved their judgment quickly.

He reveals that Colgate’s secret weapon is the depth of its leadership, all the way to the top; the company never even missed a beat when longtime CEO Reuben Mark announced in 2006 that insider Ian Cook would succeed him. Colgate’s leadership identification and development process takes place at three levels: local, regional, and global. Local talent may be someone who is relatively early in his or her career but who can make it to the level of reporting directly to a general manager in a subsidiary. Regional talent is someone with more experience, capable of going beyond a subsidiary to responsible positions in regions like Asia or Latin America. The global talent pool is at the core of Colgate’s long-term succession planning.

Ram asserts that probably GE and Colgate-Palmolive are the companies that follow the tenets of leadership development process outlined in his book. In the final chapter, Ram provides the glimpse of Textron and explains its transformation through leadership development.

Ram unfolds five building blocks for the individual and six for the company at the end of the book in appendix. And the sixth building block for the company is that – leadership can’t be taught in a classroom, but educational experiences-classroom training, voracious reading, rubbing shoulders with others in seminars-can accelerate a leader’s growth.

Leadership Lessons

• Remember that leadership is a job, not a badge of honor.
• Your inner voice will tell you if the fit isn’t right.
• There are many leaders who claim to be humble, but their humility is just a façade.
• The best way to use outside coaches to involve them early in the leadership development process to help a person develop inherent strengths.
• It is the positives that make the person valuable leader.
• If a flaw comes to light, it must be viewed in the context of the particular job and shouldn’t necessarily take the leader off the list of high potentials.
• The bosses view leadership as a corporate resource.
• High potential person knows that the decision is in his or her best interests.
• Rewards and recognition play an important role in the talent development process.
• No forty-five-year-old will become the CEO of a major company unless he outshines every boss from the time he enters the company until he is nominated for the job.
• Failure is not necessarily the end of a leader’s talent track. Many people who fail in one job flourish when they are reassigned to another that better fits their talents and skills.
• Best bosses are advisers and teachers who adhere to the old Chinese proverb: Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.
• Building the CEO nucleus is a must. Leaders should start with a core understanding of money making, then develop that capability by moving from simple situations to those that are more complex.
• Real leaders exhibit an enthusiasm for selecting people who are better than they are – whether or not they have worked with them before – and then using those subordinates to lift the organization and themselves to new levels of accomplishment.
• The leader needs greater mental breadth and depth to make the connections between the complexities of the outside world and intricacies of moneymaking.
• Filling the CEO Job is the ultimate challenge of any succession and talent development system; it takes a ton of leadership ore to produce an ounce of CEO gold.
• A successful succession process must have an explicit component for identifying leaders early who could someday be a CEO and tailoring their experiences, training, and development to both their individual talents and to the demands of that most challenging job.
• Seeking a CEO from outside a company is not only risky but also getting harder and more costly.
• Companies have to ensure that potential leadership talent, wherever it resides, is spotted early and developed thoroughly to create corporate talent pool that is capable of leading in an environment not yet foreseen.
• Finding the right talent is equally important because growing high-potential leaders is highly resource intensive.

Final Word

Ram advises companies to shed traditional leadership development programs and practices. He suggests finding out the root causes of current looming leadership crisis and addressing immediately. He wrote book based on his corporate and consultancy experience with anecdotes and well-punches ideas. He coins his own concepts such as Apprenticeship Model and Leadership Growth Through Concentric Learning. He motivates readers with successful stories. He shares anecdotes. It contains few activities that help readers assess themselves.

It is an amazing book to read. The book is useful for the ambitious and driven executives who intend to scale corporate ladder quickly. It outlines tools and techniques and secrets and strategies that enable them to reach higher positions quickly. For instance, it clearly emphasizes that the people who work in line jobs can grow faster than the ones in staff jobs. Precisely, the book provides a blueprint and paves the way to reach CEO level. The book is worth reading for directors, senior executives and CEOs to learn the practical problems from the perspective of CEO trainer, Ram Charan.

Professor M.S.Rao
Founder and Chief Consultant,
MSR Leadership Consultants, India
Blog: http://profmsr.blogspot.com
Where Knowledge is Wealth
Email: profmsr7@gmail.com

Dear readers,

I would appreciate your comments about this article.


Spinning said...

I am really impressed with your findings sir & your outlook about the management pattern which is need of hour in today's highly competitive world... I appreciate to seek more guidance from you in future...
Sushant - Ahmedabad

Godsubtleties said...

Dear Professor,
Your synopsis of the book captures all the salient points of Ram’s ideas very beautifully. I am in total agreement with Ram and you on this. I firmly believe that an organizations success today depends largely on the pace at which they develop leaders at every level. To survive you have to outpace the competition. To be a really great organization you have to outpace everyone else as today anyone in any part of the world can turn your business on its head overnight. That is the reality of a flat world.
I am working with FranklinCovey and Ram and Jack Wlech are a few of the people on our knowledge board.
Thanks for the review. Look forward to reading more of your comments.

Heracli Tzafestas said...

Dear Professor,
Thank you for this summary of Ram Charan's book. While it gave me a precise idea of what the book deals with, it triggered the desire to go, buy it and deepen the subject.
I like much Ram Charan's approach to issues. He is systematic and systemic and brings, in all the cases, breakthrough ideas.
To my regret, when reading him I lack some insights about a critic on leadership - the way Manfred Kets de Vries does it. The truth is that they are two very different persons who aim different things. In my sense, Ram works for creating leaders and industries who succeed - from a very pragmatic perspective whereas Manfred works for these leaders to be thoughtful in their action.
Thanks a lot again for the present you've made us here and all the best for 2012!
Heracli Tzafestas, Brussels, Belgium