Indian-born Ram Charan, known as one of the world’s most influential management gurus, has a simple take on the globe’s mounting financial troubles.
“Until people face some constraints, they’ll keep pushing the boundaries and creating chaos,” the 72-year-old Charan said, shaking his head ruefully as he sits in an armchair at a five-star hotel in New Delhi.
“We’ve got to make the (financial) system more transparent,” he told AFP, after giving the keynote address at a global advertising conference.
“Even the regulators don’t understand what’s going on,” he said.
Described by Fortune magazine in 2009 as “the most influential consultant alive,” US-based Charan criss-crosses the world, dispensing his no-nonsense counsel to bosses and boards of some of the globe’s biggest firms.
Charan, who lives out of hotels and never takes a vacation, has advised among others GE, Microsoft, Ford, Bank of America and Dupont, and is author of 16 management tomes including “Execution: The Discipline of Getting Things Done.”
“I’m happy with what I do. I sometimes feel I’m the luckiest person around,” said the bachelor, whose nomadic life and desire to travel light means aides at his Dallas office courier clean clothes to whichever hotel he is staying in.
What makes Charan – who by his own account flies around 800,000 kilometres (500,000 miles) a year – unhappy is what he sees as corporate irresponsibility.
He was outraged about the downfall of US securities firm MF Global Holdings, which went bankrupt last week after its chief, Wall Street star Jon Corzine, made multi-billion-dollar bets on risky eurozone debt.
“He (Corzine) should have known better,” Charan said, his seamed brow furrowing in disapproval. “The company was leveraged to the hilt.”
One of seven children, Charan grew up in the poverty-hit northern state of Uttar Pradesh, helping his family run a small shoe store where he counted the takings at the end of the day.
It taught him the basics of business and gave him a particular respect for cash flow – which he calls the “life blood of a company” – needed to meet day-to-day costs such as wages.
“You have to know the guts of the business to be successful,” explained Charan, who says he lives by the Hindu motto “Purpose before self”.
He won a place to study engineering at India’s prestigious Banaras Hindu University despite as a youngster being “thrown out of school for not having any books” and then went on to get a doctorate at Harvard Business School.
He taught at Harvard and the Kellogg School of Management before deciding advising companies was his real calling.
Some critics consider his advice – such as “listen to others’ viewpoints”, “get the right talent” and “communicate, communicate, communicate” to be simplistic business bromides – but others value his practical counsel.
Charan refuses to talk about what he does for his clients, except that he summarises company strategy into a single page. He believes global economic clout is clearly tilting in favour of developing nations and says companies in advanced economies will have to adjust rapidly. “It’s a tectonic shift,” he said. “Countries like India, China, Brazil, Mexico, South Africa, the Middle East, Turkey, Indonesia – these markets have the momentum,” he says.
His advice to Western firms? “Get to know these markets, spend time in them – this is where the future is. The world as we know it is changing – don’t miss the boat.”
Published in The Express Tribune, November 7th, 2011.