TAMPA, Fla. -- With the delivery of a pragmatic professor grounded in the realities of corporate culture, Ram Charan, the nationally renowned consultant whose entrance in the business world premiered decades ago as an adolescent working at his family shoe shop in India, schooled a class of seasoned convenience operators in the lessons of retailing.
Acknowledging the increased complexities confronting today's business environment, Charan emphasized, At the end of the day it's still about running a store. Speaking Monday at the Convenience Retailing Conference [image-nocss] sponsored by Leadership Network Council and CSP Information Group, Charan, an author who has consulted such venerable outfits as GE, Home Depot and Novartis, outlined what he sees as the five essentials to running a successful enterprise:
Master the guts of your business: Charan cited Dell founder Michael Dell, musing, Thank God he didn't go to Harvard Business School. He would have been contaminated. He explained that Dell was not deterred by adopting a radically different business model than what had been vogue for the PC world. If I cannot compete on margin, I will compete on inventory, Dell determined, said Charan. The upshot? Dell's computer inventory turn has skyrocketed from 9 times in 1994 to 115 in 2005-06. Laser sharp dominant priorities: Forming a plan is great; getting there is the challenge. Assess the key needs and the type of personnel required to achieve success. In Dell's case, it was the hiring of an executive vice president of logistics to effect unprecedented seamless distribution. Right people in the right jobs: Charan suggested identifying three critical criteria to a position. In addition, seek out employees who can grow with the company, are people-friendly and share the business's values. Later, when asked about rewarding employee performance, Charan said most businesses err by basing rewards solely on results. It's not just what you delivered, but how you delivered, he said. It's not that you meet your targets, but how how you affected your people. Manage your social system: Charan talked of how legendary Wal-Mart founder Sam Walton made it a point to chat regularly with store managers and employees, impressing the importance of the consumer. The reinforcement of principles organically sprouted a corporate culture imbued with Walton's imprimatur. Elaborating on Walton's insightful probing, Charan said Walton would ask store managers not how many customers entered the store daily, but what percent left without buying anything. Another question focused on what products Wal-Mart did not carry that customers sought. Genius is in the question. Genius is to get people to open up, Charan said. Personal habit: Charan strongly encouraged retailers to talk to business leaders in other channels to obtain different perspectives. He also emphasized the importance of making every interaction and action meaningful. As an example, he asked members of the audience to raise their hands if they partake in meetings. Virtually all responded affirmatively. He then asked about nonproductive meetings, and many acknowledged such. From there, he challenged the group to transform meetings into decision forums, where decisive action and complete candor are the rules and goals, not meetings for meeting sake.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.