Confronting Reality will change the way you think about and run your business. It is the first book that shows how to connect the big picture of the new era of business with the nitty-gritty of what to do about it. Through a completely new way to understand and use the business model as the primary tool for confronting reality—a breakthrough that will become the management innovation of this decade—you’ll know sooner rather than later whether your fundamental business premise is under assault, where your best opportunities lie, what you should change and what you should leave alone, and how to realistically plan the future of your business.
The fundamentals of how a business makes money are being rapidly and permanently altered by sweeping structural changes. With their extraordinary depth and breadth of experience, Larry Bossidy and Ram Charan are the ideal guides for everyone—entrepreneur, mid-level manager, or CEO—about what is to be done so you can get things right in this challenging, radically changed world. They start by showing you how to understand the most fundamental element of any business: whether you can realistically make the money you hope to in the game you’re playing.
Bossidy and Charan show how to use the business model to develop a robust, reality-based process for thinking about the specifics of your business in a holistic way. They show how to tie together the financial targets you must meet, the external realities you face, and internal activities such as strategy development, operating tactics, and selection and development of people.
Through the lens of the business model, as well as the skillful use of initiatives and development of people with the right leadership characteristics, you’ll see how Robert Nardelli at Home Depot, Jim McNerney at 3M, Dick Harrington at the Thomson Corporation, Michael Wisbrun at KLM, Joseph Tucci at EMC, and John Chambers at Cisco confronted reality. Whether they faced crisis or opportunity, all made the right kinds of changes through a combination of business savvy (the art of understanding the fundamentals driving a business) and business model thinking.
In their 2002 bestseller, Execution: The Discipline of Getting Things Done Larry Bossidy and Ram Charan identify why people don’t get results: they don’t execute. Bossidy and Charan are back with another stellar study on organizational behavior that shows how companies can succeed if they return to reality and examine every part of their business. Confronting Reality is based on a simple concept, but many companies approach strategy and execution in a surprisingly unreal manner and even the simplest of measurement methods, like the business model, are not applied correctly.
Cisco, 3M, KLM, Home Depot, and the Thomson Corporation are just a few of the companies that Bossidy and Charan examine. To demonstrate how to examine a business using the business model, Bossidy and Charan map out external variables, financial targets, internal activities, and an iteration stage (defined as a time to “make tradeoffs, apply and develop business savvy”) to prove how a dynamically evolving business model will help improve performance.
“The version of the business model we have developed is a robust, reality-based process for thinking about the specifics of your business in a holistic way. It shows you how to tie together the financial targets you must meet, the external realities of your business and internal activities such as strategy development, operating tactics, and selection and development of people.” Larry Bossidy, retired chairman and CEO of Honeywell International and Ram Charan, author of What the CEO Wants You to Know and Profitable Growth Is Everyone’s Business, have once again shed industrial-strength light on how to run a successful business.
-E. Brooke Gilbert, Amazon.com Review
On the heels of their business bestseller Execution, retired Honeywell chairman and CEO Bossidy and corporate guru Charan take a step back and focus on the more fundamental issue of figuring out what to execute in the first place. The message is simple (“relentless realism”), and their solution is a return to the “ancient analytical tool” of a three-part business model that includes external realities (such as customer demand and industry conditions), financial targets (such as cash flow and revenue growth) and internal realities (such as operational and workforce capabilities). Bossidy and Charan use that model to analyze how companies such as EMC, Cisco and Sun reacted to the meltdown of the high-tech sector, and how Home Depot built efficiency, 3M reignited growth through innovation and Thomson Corp. restructured its focus. The book loses steam in the final quarter, getting repetitious but still managing to make a few familiar points feel fresh, some as simple as developing one’s own “business savvy” and “need to know.” The authors use the same winning formula as in their first book. The concepts are basic, the tone is conversational and the content is not unique, but sales of the previous book (600,000 in the U.S.; 1.5 million worldwide) and the authors’ personal platforms virtually guarantee widespread attention in the business media and corporate sales.
– Publisher’s Weekly