Confronting Reality

Over the years, thousands of books have been written about Strategy and its offshoots. Strategy, in a way, has become the holy grail of business literature. Interestingly, while Strategy is an important subject, more than half the literature dedicated to it is repetitive at best and pedestrian at worst. Of the few admirable authors that really stand out for having a different perspective and having an ability to impart gainful advice, Ram Charan tops the list. Author of over a dozen books, Ram Charan has established his reputation for having an impeccable knack for distilling the essential bits from complex and indiscernible data. ‘Confronting Reality: Doing what matters to get thing right’ was Ram Charan’s second book he co-authored with Larry Bossidy in 2004. Author duo’s previous work ‘Execution’ was a New York Times bestseller.

In a world, where business landscape changes by an order of magnitude in a matter of months, and where new competition pops up from the places you could least imagine, the importance of facing reality can’t be emphasized enough. In view of authors, most business strategies founder because they are not reality-based and because the people behind them have failed to see the wood for the trees. Unyielding obsession with number-crunching and willful ignorance of external environment and non-financial information can leave the top executives bewildered in the long-run as competition slips the rug from under them. The authors attribute the inability to take cognizance of future to a lack of robust, reality-based business model.

This is also the focal point of the book: an iterative business model that gives a broad view to the top executives and allow them to debate and analyze the somewhat complex interplay between its components. Authors’ business model has three components – a) external realities, b) financial targets and c) internal capabilities. To highlight the significance of their business model, author duo introduces a number of case-studies on companies such as 3M, Home Depot, Thomson Corporation, etc. Where Larry Bossidy brings in deep insights from his career at Honeywell, Ram Charan draws upon his consultancy assignments with the aforementioned companies. The only issue here is that there is no concrete proof as to whether these companies have actually turned around in the pursuance of authors’ business model.

The business model, according to Charan-Bossidy, is the lynchpin around which leaders must condition their organizational culture. While the authors’ proposed model puts on the table some harsh and unpalatable facts, it may still not enable those in the ranks and above to get accustomed to seeing the big picture. Let’s face it. In a world where wishful thinking, self-denials and emotional investments regularly supersede reality; instilling a culture that confronts reality could be an uphill task. Unarguably, to see the light of the day, such an initiative needs to start from the C-suite. A CEO must make it an imperative, a non-negotiable item on everyone’s must-have list in the organization. Without the personal involvement of top honcho, an initiative of this magnitude can fizzle out even before it takes off.

In the nutshell, ‘Confronting reality’ highlights the often-cited gap between planning and ambition. It points out the reason why leaders fail to see what is coming; it proposes a template to change that via a reality-based business model and finally, it explains how the organizations should accustom themselves to the implementation of the outcomes of the business model. While the book successfully drives home its objective, it falters on certain counts. To start with, biggest drawback of the book, in my opinion, is its length. I don’t mean to say this book is a bore. It’s a nice overview of a problem that has plagued many organizations in the 21st century. But with an agenda that could be folded within 100 odd pages, 250 pages appear too-drawn-out. Once authors introduce the business model and the subsequent case-studies, book seems to have reached a logical conclusion. Instead authors stretch the book to 250 pages (perhaps publishers won’t ever have approved of a 100 page book!) with the last two chapters – ‘Getting ready’ and ‘Leading for reality’ – by and large coming across as leadership essays. Further, much to my surprise, Bossidy & Charan’s business model completely disregards Marketing in the internal activities component. It doesn’t even have to be discussed in this review as to how inextricably marketing is tied to achieving financial targets. But for some reason, authors ignore what should have been an integral part of their business model. Lastly, ‘Confronting reality’ has its share of negatives, but its positives slightly outweigh those negatives. It’s not a must-read book but readers can definitely pick up some valuable lessons from the experiences shared by both authors.