Ram Charan - The Attackers Advantage: Turning Uncertainty into Breakthrough Opportunities

THE
ATTACKERS
ADVANTAGE

Copyright 2015 by Ram Charan.

Published in the United States by PublicAffairs, a Member of the Perseus Books Group

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Library of Congress Cataloging-in-Publication Data

Charan, Ram.

The attackers advantage : turning uncertainty into breakthrough opportunities / Ram Charan.

pages cm

Includes bibliographical references and index.

ISBN 978-1-61039-475-8 (e-book)

1. Uncertainty. 2. Strategic planning. 3. Organizational change. I. Title.

HB615.C583 2015

658.4'012--dc23

2014035570

First Edition

10 9 8 7 6 5 4 3 2 1

Dedicated to the hearts and souls of the joint family of twelve siblings and cousins living under one roof for fifty years, whose personal sacrifices made my formal education possible.

CONTENTS

WE FEEL UNCERTAINTY in our bones: competitors that appear in an instant and scale up almost as quickly, the algorithmic revolution, a growing pool of economic contenders from virtually every part of the world, a global financial system that will not be reformed. These are just a few of the many forces that can permanently alter moneymaking for a company, industry, or entire economic sector and make uncertainty the fundamental leadership challenge of our time. The question we all ask is: How can I make decisions and lead when things change so unpredictably and fast?

In this book I explain the capabilities you need to succeed in this new era of frequent sharp bends in the road. The attackers advantage is the perceptual acuity to detect ahead of others forces that could radically reshape a market space so that you can position your business to make the next move first. It is the mind-set to overcome fear of uncertainty and find the opportunities in it and the courage to move forward despite the unknowns. It is the ability to gain the advantage with speed, with focus, and without breaking morale.

By pinpointing the sources of uncertainty, defining a path forward, and making the necessary frequent adjustments to steer your organization along it, you will see that uncertainty is not something to fear. On the contrary, by immersing yourself in it you can discover possibilities for creating something new and immensely valuable. The more you embrace uncertainty and practice the skills to deal with it, the more self-confidence you will develop and the better prepared you will be to lead.

TAKING CONTROL OF uncertainty is the fundamental leadership challenge of our time.

This is not a hypothesis extrapolated from arms-length research. It emerges from what I have learned in working as an advisor with hundreds of business leaders, ranging from board members to business unit managers, in scores of companies and multiple industries around the world. I have had close relationships with many of them over the course of several decades. These relationships have enabled me to track actions and decisions as they unfold. I talk regularly with hundreds of other leaders, always asking questions and exchanging information. Against this backdrop of experience, I can say with confidence that the immense uncertainty I see todays business leaders facing is something truly unique. In its scale, its speed, the ferocity of its impact, and its increasing ubiquity, it is qualitatively differentby orders of magnitudefrom anything that has gone before.

We all know that life is full of uncertainties, of course. Most of those that businesses face are familiar. Some are operational, such as optimizing production for shifts in demand, launching a new product, or adjusting to changing interest rates. Others are career uncertainties that can affect your job security or future opportunities, such as bad decisions made by bosses who favor less competent rivals. Some are macro: geopolitical conflict (on the upswing these days), climate change, and a seriously unstable global financial system.

Whats new is structural uncertainty. It is structural because the forces now at work can explode the existing structure of your market space or your industry, putting it at risk of being drastically diminished or completely eliminated. These forces are long term and irresistible. For those who are unprepared, the massive changes they bring are sudden bends in the road that appear seemingly without warning to obscure whatever future you envisioned for your business. But in a world economy projected to grow a net $30 trillion in the coming decade, human needs and wants are always changing. The opportunities are boundless for those who can anticipate and take control of them to create new businesses, new business models, new market segments, and even new industries.

Structural uncertainty is global and yet at the same time atomistic. A growing army of change creators everywhere is empowered by the Internet and low-cost wireless communication. In theory there are potentially seven billion of them: the entire population of the world. One could be Amol Bhave, a seventeen-year-old from Jabalpur, India, who is among the more than 800,000 people around the world

Every day more of the seven billion have instant access to any and all knowledge and insights that exist, as well as the ability to collaborate with others as never before. Their ideas can be scaled up swiftly, because capital is readily available to fund promising ideas. For digital companies, the scaling can be accomplished extremely fast and at low incremental cost. On the other side of the coin, consumers have acquired great new powers because of digitization and online connectivityincluding social media, reviews, and instant price comparisonsthat give them information and options they never had before. Their preferences can shift en masse, even globally, destroying or diminishing whole industries and creating new onesadding yet another dimension to the uncertainty. Finally, every uncertainty is magnified by quantum increases in the speed of change, largely brought about by the revolutions in computer and communications technologies.

The Essentials for Leading in Uncertainty

Steering your business through structural uncertainty will call for a distinctly different type of leadership than the one you were trained for and are likely currently exercising, requiring a radically different mind-set and new skills for anticipating events and going on the attack.