Leadership in the Era of Economic Uncertainty
Book

Leadership in the Era of Economic Uncertainty

Managing in a Downturn

Ram Charan
McGraw-Hill, 2008
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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
  • Applicable

Recommendation

This short, pointed book by one of America’s leading management thinkers offers a checklist of to-do steps for managers who are coping with the economic crisis. Ram Charan covers all the bases: the board of directors, chief officers, operations, sales, research and development, and more. He offers direct, unambiguous, actionable advice for managing at each level, including: manage for cash, watch the numbers, know which customers to fire and recognize that annual targets make no sense when demand is unpredictable. Charan’s record as a coach to CEOs and as an author of best-selling business books speaks for itself. In this book, getAbstract finds that he more than lives up to his reputation, avoiding jargon, generalizations and lofty theoretical pronouncements to focus on what managers must do now for their companies to survive.

Summary

When Crisis Strikes, Covet Cash

In the midst of an economic downturn, monitoring and managing cash are among your most important responsibilities. Know your company’s liquidity level every day. Track your daily cash flow and weekly changes in working capital. Make sure that every executive who needs such information can get it. Calculate your cash break-even point and try to lower it. Centralization or decentralization of operations may help, depending on your company’s needs. If need be, cut your employee headcount prudently but expeditiously; don’t wait for a steep decline in revenue before commencing layoffs.

In the global slump that began in 2007, cash is king; managers confront an unprecedented lack of liquidity. The fate of the American auto industry should be instructive: Major carmakers basically ran out of money. Avoid that kind of wreck. Carefully manage working capital, considering ideas for asset sales and other means of generating cash.

Crisis Leadership

Boldness is a virtue not to be underestimated. Opportunities always exist in economic downturns. Take time to identify and protect your core businesses, customers and assets. Continue...

About the Author

Ram Charan is the co-author of Execution and Confronting Reality, and the author of What the CEO Wants You to Know. A noted expert on business strategy, he has coached some of the world’s most successful CEOs.

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