By THEAN LEE CHENG
leecheng@thestar.com.my
Cash. A simple four-letter word, but the most critical metric in the economic world today.
When former Harvard business professor Ram Charan was a child, he learned the importance of money.
“Before the crisis struck, your company's indicators of success were increasing earnings per share and growing revenues by gaining market share. Today, it is cash. You absolutely must have sufficient cash or credible access to it, to weather the storm. And with today's information technology, you can and should know your company's cash position every single day,” he writes in Leadership in the Era of Economic Uncertainty.
Ram was in Kuala Lumpur at the end of March as a guest speaker in an instalment of Sime Darby Bhd's lecture series held at the Sime Darby Convention Centre.
There, he spoke about the importance of execution.Much has transpired between the time when he was an 11-year-old helping out with the family shoe business and being the Dallas-based advisor and speaker he is today.
But he has not forgotten the importance of cash flow.
Back then, his duty was to clean the shoes, deal with customer requests and count the rupees in the till in that little shop of about 400sq ft.
Although he has the benefit of an early training in business, he grew up unaware that he was adept at it.
“I will go to the shop after school. My two older brothers and I were also dealing with customers,” he recalls.
When it was time for him to enter university, he joined the engineering department because “that was the way to get out into the new world”.
Finance and the business world were not on his agenda.
After earning his engineering degree, he took a job in Australia in a gas and light company for four years.
It was during this time that he realised that he has good business acumen.
He was encouraged to do his MBA and doctorate degrees, which he did at Harvard Business School, where he graduated with high distinction.
He served on its business faculty after his doctorate.
About 30 years ago, he quit a tenured professorship at Boston University to devote himself full-time to consulting.
Today, Ram is alone at the top of his profession - not so much a consultant but a guru, a corporate sage with access to boardrooms across the globe, and enjoys intimate, enduring relationships with an array of powerful CEOs.
Among them are Jack Welch, formerly of General Electric (“He has this rare ability to distil the meaningful from the meaningless and transfer it to others in a quiet, effective way without destroying confidences.”); Dick Harrington of Thomson Corp (“He probably knows more about corporate America than anybody.”); and Verizon's Ivan Seidenberg (“I love him. He's my secret weapon.”).
“He's like your conscience,” says former Citicorp CEO John Reed, in a magazine article. “Just when you sort of think you have everything done and you're feeling pretty good about yourself, he calls you up and says, 'Hey, Reed, did you do this and that and the other?'”
Writes Fortune magazine: “What he does is hard to describe. But the most powerful CEOs love it enough to keep him on the road 24/7 and make him the most influential consultant alive.”
At 71, Ram continues to travel extensively.
He purchased his first apartment at 67 in Dallas.
Saturday, May 15, 2010
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