Management magnate Ram Charan shares his insight on disruption exclusively with B&E
B&E: What strategic points are required to change the rules of the game in a sector?
Ans: First of all, a leader needs to have the courage to make strategic bets. Beyond that, the leader should: a. Define precisely what the ‘specific’ opportunity is, not just the broad category. A telecom player entering the insurance sector cannot just generally think of ‘insurance’, but rather specific segments.
b. Understand what capabilities you need to capitalise on the opportunity – both internal and external.
c. Find out what leadership/leaders you need to implement the plan in action.
d. Finally, do you have enough financial resources – can you move with speed and become profitable?
B&E: What strategic points are required to change the rules of the game in a sector?
Ans: First of all, a leader needs to have the courage to make strategic bets. Beyond that, the leader should: a. Define precisely what the ‘specific’ opportunity is, not just the broad category. A telecom player entering the insurance sector cannot just generally think of ‘insurance’, but rather specific segments.
b. Understand what capabilities you need to capitalise on the opportunity – both internal and external.
c. Find out what leadership/leaders you need to implement the plan in action.
d. Finally, do you have enough financial resources – can you move with speed and become profitable?
B&E: Which companies/leaders have been most successful in enabling disruption?
Ans: Apple (Steve Jobs) in various products. The iPod completely disrupted the music industry. In the same way, Rupert Murdoch buying The Wall Street Journal is another classic example.
B&E: Could you also cite examples of companies that missed the disruption bus?
Ans: Sony, Philips... and AOL too.
B&E: Any ground rules on implementation for players riding the disruption wave?
Ans: My book, The Discipline of Getting Things Done gives a clear idea. In short: a. Have laser sharp dominant priorities very clear. CEOs have many ‘general’ priorities. Have defined specific priorities!
b. Ensure that key performance indicators are aligned to the overall strategy.
c. Realign your financial resources to the new gain, new opportunity.
d. Align the rewards to the new gain.
e. Have right people for the right job.
Ans: Apple (Steve Jobs) in various products. The iPod completely disrupted the music industry. In the same way, Rupert Murdoch buying The Wall Street Journal is another classic example.
B&E: Could you also cite examples of companies that missed the disruption bus?
Ans: Sony, Philips... and AOL too.
B&E: Any ground rules on implementation for players riding the disruption wave?
Ans: My book, The Discipline of Getting Things Done gives a clear idea. In short: a. Have laser sharp dominant priorities very clear. CEOs have many ‘general’ priorities. Have defined specific priorities!
b. Ensure that key performance indicators are aligned to the overall strategy.
c. Realign your financial resources to the new gain, new opportunity.
d. Align the rewards to the new gain.
e. Have right people for the right job.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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