00:00:00
I will tell you something you cannot
00:00:01
publish. Maybe you can. Bodyguards are
00:00:03
split. And I said, "I heard this." He
00:00:06
said, "Yeah, you're right." I said,
00:00:07
"Dead wrong." He said, "Get your ass in
00:00:09
my office." I have companies that allow
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me, large companies, to be the [music]
00:00:13
labs. And when they see the results, I
00:00:16
don't have to say anything. So, I'm
00:00:18
inventing. Everybody knows it. Why some
00:00:21
succeed and why some fail.
00:00:25
Welcome to Grit in the Boardroom. I'm
00:00:27
Erika Ilves Norris, and today's guest is
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someone I've admired for many years.
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Ram Charan is a legend in business and
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corporate governance. For four decades,
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he's advised the boards and chief
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executives of GE, Bank of America,
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Toyota, Verizon, and many other global
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organizations.
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His insights have guided leaders through
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transformation, succession, and crisis.
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Ram's journey is remarkable. Born in
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India, he began by helping in his
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family's shoe shop before earning his
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MBA and doctorate at Harvard Business
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School.
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He later taught at Harvard and at the
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Kellogg School of Management before
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dedicating his life to helping boards
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and leaders make decisions that matter.
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His six books include Execution, Boards
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That Lead, and The Amazon Management
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System have shaped how organizations
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think about performance, strategy, and
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governance.
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Yet, what makes Ram extraordinary is not
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only his intellect, but also his
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humility, his discipline, and his
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ability to see what others miss. I've
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had the privilege for knowing Ram for
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several years. His guidance and
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friendship have meant a great deal to
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me.
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Today, we explore not only what he has
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learned from a lifetime inside the
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boardroom, but who he is, what continues
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to drive him, and how he sees leadership
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evolving in a rapidly changing world.
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Welcome, Ram. Thanks for joining us.
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Obviously, your background started in
00:01:51
India.
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Um the family shoe shop. What lessons
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did you take from that family shoe shop
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that still influence how you see
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leadership and service today?
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Yes. So,
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as you look at
00:02:07
many, many successful people,
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what they did in their early childhood
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has a lot of impact
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on their progress.
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In entertainment, somebody was a father,
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mother.
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In sports,
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somebody
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teacher spotted somebody.
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Similarly,
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in India, particularly,
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there is a kind of group
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that they are traders.
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Traders not in the
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stock market sense. These are the small
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shops
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that serve local
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needs.
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Kirana merchants, shoes, clothes.
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And this is where the children learn how
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to service a customer and how to make
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money.
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How to buy things, how to price things,
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how to store things.
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That's the essential essence of a
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business.
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So, the shoe shop is the same.
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What kind of shoes to buy, how many to
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buy, how to price, how to make a little
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profit. What do you do when you don't
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sell the shoes?
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This is the anatomy of every single
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business.
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By the age of 12, I was able to master
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it.
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Did that.
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It is exactly the training I can solve,
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learn, analyze any industry in the
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world.
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And that's what get me to know almost
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all industries the world has today.
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So, I can go to any conglomerate, any
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CEO,
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in about 5 to 8 hours, I get to the
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bottom of it.
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And be able to talk in his language,
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find his pressures and pains.
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That's what I do.
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And how do you think that that kind of
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helped support your perspective on
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leadership? Because there is there is
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that leadership, right? Even in a small
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business that you speak of.
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>> Yeah, I think the we should
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think about In those days, there was no
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such thing as leadership.
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Nobody in business, any company, ever
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called leadership.
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It was either owner
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Mhm.
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or chief executive.
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And the rest of them were managers.
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But you you must have had people within
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your family that occupied those
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>> first thing I want to disabuse the word
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leadership. Okay. Fair. It's all
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managing.
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You force people to do things they don't
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want to do.
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Think about that. Yeah, that's an
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interesting perspective, actually. No.
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>> Yeah, you are right.
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>> It's realistic question.
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>> It's Yeah. No, you're right. You are
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absolutely right.
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You get people to agree to do things
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that are legally and ethically correct,
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but they don't like to do.
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Wow, that's a great perspective.
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>> here. Yeah, that perspective
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must follow through in the way that you
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advise boards.
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Same thing.
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You don't force
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a batsman
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to be a wicket keeper.
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>> [snorts]
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>> But there,
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in a public match that is transparent,
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if you force somebody to play a certain
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thing,
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that exposure
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will have impact negatively on the coach
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and the captain.
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In business, when you're in a company,
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you do things you don't want to do. You
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think,
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"I don't I don't like it. I can't do
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it."
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You get to stretch targets.
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They know they can't do it. And this
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might be turn of energy out to figure
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out.
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When they go to reviews monthly, they
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they shake in their pants. They "What am
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I going to be saying when they said I
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didn't make it?"
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And they're horrible.
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Many of them insulted very badly.
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Mhm. It's fear.
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A great deal of managing is through
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fear.
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Does it have to be that way? No.
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Is that the default people
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>> this is what it is. So, leadership is a
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wonderful word. You're going to manage
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people to do things.
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So, the shoe shop
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>> [snorts]
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>> is run by my cousins and my brothers.
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They're running it. It's only three
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people in the shop.
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And this brother, by definition in the
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Indian civilization,
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is the captain.
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It's just the way it is.
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And it's only three people. It's the
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family.
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So, there's no real stuff. What he says,
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that's get done.
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Occasionally,
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he listens to say, "No, let's not do it
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this way."
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But you learn because he knew he knew it
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very well.
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We started the business. He started the
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business They started the business.
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And within we one year, we were number
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one.
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And within one year, we paid the capital
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back to our parents.
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Wow, that's a success.
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That shop today is 75 years old.
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Wow.
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That's a legacy.
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78, 70 years old.
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He still runs it.
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Mhm.
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My point here is a simple one.
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Learning how business makes money,
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there is no better place
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than to work either as a street vendor
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or as managing a family single store.
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It's exactly the same.
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So, I wrote that in my book, What the
00:07:56
CEO wants you to know,
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some 30 years ago. This is there. And it
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compares with Jack Welch running GE.
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It's exactly same language,
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same terminology,
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translated into local dialect. It's
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across the whole globe.
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It's been going on for centuries.
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And nobody ever had videos to go down
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and learn.
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It is prevalent in every single village,
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every single country. Same terminology,
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same language.
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Just like music has common common
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language.
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Medicine has a common language. Business
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has a common language. Business has more
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common language
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than the other two.
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It's going on for 5,000 years.
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Wow.
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And moving moving on to your time at
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Harvard,
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when you arrived at Harvard,
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how did that experience shape um your
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sense of possibility? It was obviously
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worlds apart from what you had grown up
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in. Um and was there a moment that you
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realized that you really wanted to
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dedicate your life to understanding how
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people lead? No. No, no. See, the
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First, lucky to get in Harvard.
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That's
00:09:19
the real piece.
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And you go the first day or second day,
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and they teach something.
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And you look at it. In your class, you
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have 79
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superb students, much better than I am.
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Much, much better.
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And they come from all walks of life,
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from all over the world.
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And so intimidated. Mhm.
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And the key point is
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that I had a view.
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I'm here to get all the learning I can
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to
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And I had roommate
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Catholic
00:10:00
devotee
00:10:02
Moraine
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and
00:10:05
we both had basically the same thinking.
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We don't care whether we pass or fail.
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We got to get the best out of here.
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That's what we had.
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Wow. And that's what we did.
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And you stayed on to work your way right
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through to
00:10:26
your um doctorate. Is that correct?
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>> And then I joined the faculty.
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Yeah.
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Wow.
00:10:36
One day Dean called me up and said,
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"Stay here."
00:10:40
I was in the MBA.
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I got a letter from Dr.
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You have a scholarship and you're going
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to do doctorate here.
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I never applied for doctorate.
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Never applied for the job.
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Who drew you towards teaching rather
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than remaining in corporate life? If
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[snorts] you're going to do doctorate
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you only have two things to do.
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Teach and research.
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There's no other job. Mhm.
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So, you teach.
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And how did teaching at Harvard and
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Kellogg reveal the gaps between theory
00:11:18
and practice
00:11:19
and also the way that people actually
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behave in organizations?
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You know, I think the
00:11:25
the Harvard teaching
00:11:28
is well known.
00:11:31
That you get real life cases.
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And they are real. They may be
00:11:36
truncated. They may be incomplete.
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And you study and you go to the class.
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And the instructor calls on you.
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So, that you're prepared.
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And then they say, "Okay, normal
00:11:52
practice. There is a topic there's a
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subject.
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And essence of it is what is the
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situation?
00:12:01
What are the problems or challenges?
00:12:05
And how would you go about it?"
00:12:08
So, from the very beginning it's very
00:12:10
practical oriented.
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Mhm.
00:12:14
And those are real cases. They're not
00:12:17
fiction. So, did you feel that that that
00:12:20
sets people up for that next step?
00:12:23
>> And you in a year MBAs
00:12:26
do 500 cases like this.
00:12:30
If you want to get the best out of the
00:12:32
place, you do all the 500 cases.
00:12:36
And you can never go wrong.
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Cuz you know practice it here.
00:12:41
Like the Olympics people do. Mhm.
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Northwestern is less.
00:12:48
But there's a rigor at Harvard in doing
00:12:49
that.
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Did you help develop some of those cases
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that people Yeah, you run as a faculty.
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Mhm.
00:12:57
I had 80 cases.
00:12:58
Wow.
00:13:00
You've earned the trust of boards um
00:13:03
that
00:13:04
are very productive, let's say. What
00:13:08
does it take to advise at that level?
00:13:10
>> Yeah. And speak the truth to power.
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>> is that
00:13:14
the boards in UK are totally different
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than the rest of the world.
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Boards in Germany are totally different
00:13:23
than the rest of the world.
00:13:26
But in the United States you have public
00:13:29
boards.
00:13:32
You have boards of companies
00:13:34
that
00:13:36
companies are owned by private equity.
00:13:41
And then you have boards that are public
00:13:45
but basically controlled by families.
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Okay. And then you have totally
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family owned companies.
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And they have advisory boards.
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That's America.
00:14:01
In China you have public boards.
00:14:05
And they are
00:14:06
active.
00:14:08
But on every board of any significant
00:14:11
company
00:14:12
you have a Chinese Communist Party
00:14:14
representative.
00:14:17
So, the board I have been, I'm just
00:14:18
resigned age.
00:14:20
I have a Communist Party guy sitting on
00:14:22
my left and we discuss it.
00:14:26
In Brazil is very similar to
00:14:29
the America.
00:14:31
India is totally different.
00:14:35
90% of the boards
00:14:38
or 80% of the boards
00:14:41
are family owned, family driven.
00:14:45
The rest of the boards basically
00:14:47
compliance.
00:14:51
Family boards act in India totally
00:14:54
differently
00:14:56
than any other country.
00:14:58
I've been in two public boards legally.
00:15:02
Then there are boards I go to. So, you
00:15:04
have a variety of boards.
00:15:07
I've been lucky enough to go through
00:15:09
most of them except Germany.
00:15:11
One in UK
00:15:13
in my life.
00:15:15
What do you think the differences are
00:15:17
between UK and US?
00:15:19
In UK the chairman has a lot of power.
00:15:24
So, I've been with I think it's two
00:15:26
boards in UK now I recall.
00:15:29
Where the chairman has office next to
00:15:32
the CEO.
00:15:34
So, I've been advising the CEO. It's a
00:15:36
public company well known.
00:15:39
And the CEO
00:15:41
has to [clears throat] get
00:15:43
chairman's consent before he takes
00:15:45
initiative to the board.
00:15:48
When there's a big difference
00:15:50
that's a very difficult problem.
00:15:53
Second
00:15:55
in England if company is not performing
00:15:58
well
00:16:00
the investors look at the chairman.
00:16:03
And they can get both out chairman and
00:16:06
the CEO as it is happening now. Yeah.
00:16:10
That's not the case in America.
00:16:12
America
00:16:14
is the they look at the CEO.
00:16:17
And they dump on the CEO.
00:16:19
Or activist shareholder gets on the CEO.
00:16:24
Yes, chairman takes a hit but
00:16:27
it's not the same thing at all.
00:16:30
In America you can find that the
00:16:32
chairman is also the CEO. How does that
00:16:35
work with corporate governance? It's
00:16:37
very different to the UK. No, in the US
00:16:39
in large companies
00:16:41
the CEO and chairman are the same
00:16:43
people. Mhm.
00:16:45
And the reason is that
00:16:47
they think the chairman can go to
00:16:49
various
00:16:51
big shots outside America King of Saudi
00:16:54
Arabia.
00:16:56
But they have what they call lead
00:16:58
director.
00:17:00
And that is the counterpart. Now, lead
00:17:02
director is that is strong, not a
00:17:03
strong.
00:17:06
Most public boards in America really
00:17:08
don't do spend enough power
00:17:13
enough drive, enough focus
00:17:17
on the business creating market cap.
00:17:21
They do mostly compliance, public
00:17:23
issues, safety issues.
00:17:26
Um
00:17:27
crypto issues.
00:17:30
Legal issues.
00:17:33
And then they're creating a lot of
00:17:34
diversity in the board. I don't mean
00:17:36
gender diversity.
00:17:38
Other kinds of functional diversities.
00:17:42
And the boards in large companies are
00:17:44
very large. GE board used to have 19
00:17:47
directors. They can't manage that.
00:17:51
So, all that is beginning to change.
00:17:55
The only most important job of the board
00:17:58
is to get the right CEO.
00:18:01
And when he's faltering to move fast
00:18:04
and make a change. If you do have your
00:18:07
work will be reduced
00:18:09
going forward.
00:18:11
And so, some is happening like that now.
00:18:14
Preemptive moves.
00:18:16
But it's amazing how the press knows
00:18:18
first
00:18:19
that this CEO should be removed and then
00:18:21
they come later.
00:18:23
You can do the record. You can plot it.
00:18:26
You can see it.
00:18:27
Why does it take a board so much time
00:18:30
not to come to the conclusion? To give
00:18:32
you an example.
00:18:34
The public has been saying that the the
00:18:37
CEO of Nike should be removed.
00:18:39
Let me say shareholders saying, "Press
00:18:42
is saying."
00:18:43
And the founder Phil Knight saying, "I
00:18:45
have full support on him."
00:18:48
And then 3 months later he takes him
00:18:49
out.
00:18:51
It's very common
00:18:53
that happens.
00:18:55
Why did he not take him out earlier?
00:18:58
The signals are all there.
00:19:00
Mhm.
00:19:01
There are other things than capital
00:19:03
allocation, selection of the team.
00:19:06
Relationship with the government. All
00:19:09
those are there.
00:19:10
But the most important job is keeping,
00:19:13
not keeping, coaching, not coaching
00:19:16
the right CEO.
00:19:18
Now, the CEO tenure on the average, I
00:19:20
hate averages
00:19:23
is about less than 5 years.
00:19:26
There are some that are longer.
00:19:28
And there are some they have to leave in
00:19:30
3 years.
00:19:32
And uh
00:19:33
part of the reason is
00:19:35
initially their fit is not very good.
00:19:39
No CEO can do every kind of job. You got
00:19:42
to find a fit between them
00:19:45
to do that.
00:19:47
So, Wells Fargo went through a lot of
00:19:49
difficulties as you know.
00:19:52
Yeah. They appointed an internal guy.
00:19:57
That was the first mistake. Why?
00:20:00
The problem with Wells Fargo was
00:20:01
publicly known was fraud.
00:20:04
Why would you appoint an internal guy?
00:20:09
Then they got the CEO of
00:20:12
one of the banks already, Charlie
00:20:15
Scharf.
00:20:16
And he came to it, we just saw
00:20:18
celebrating.
00:20:20
He removed all the difficulties. It's
00:20:23
back.
00:20:25
It has gone from $14 to about $80.
00:20:28
Clean it up.
00:20:31
He was the right fit.
00:20:33
He may not be the fit for the future.
00:20:38
That's the job of a board.
00:20:41
Why is it that organizations boards take
00:20:44
so long to make a decision on their CEO?
00:20:48
It It see, it depends on the board
00:20:49
composition. First,
00:20:52
in many boards, the CEO is very
00:20:56
overwhelming.
00:20:59
He has
00:21:00
and his people have a lot more data and
00:21:03
information about the company
00:21:05
than individual board member.
00:21:08
They can get it, they don't get it.
00:21:12
Second, individual board members
00:21:15
do not go to the bottom of the
00:21:18
organization, meet people.
00:21:21
Do not meet the customers. But I have
00:21:23
this lady in the United Health, she
00:21:25
takes on her own as a board member and
00:21:27
knows what's happening. She does it.
00:21:30
It's in my book, Boards That Lead.
00:21:34
And they they get almost all information
00:21:37
through the CEO.
00:21:41
His PowerPoint presentation to the
00:21:43
second.
00:21:44
Mhm.
00:21:47
They have at my proposal in 1994
00:21:51
or so
00:21:52
that every company should have an
00:21:53
executive session.
00:21:55
It's in my book.
00:21:57
And I got calls from CEOs then
00:22:00
what the hell I'm talking.
00:22:02
They cannot have a board meeting without
00:22:04
them.
00:22:05
Fear.
00:22:06
No, they are required by law.
00:22:09
So it is in these sessions, they can ask
00:22:12
these questions.
00:22:14
So they don't have time to concentrate.
00:22:17
Good board actually ask the CEO what
00:22:20
they want as an agenda.
00:22:23
What information they want.
00:22:25
And the CEO sees this as a help to him
00:22:29
or her.
00:22:31
So this way
00:22:32
this is a good relationship
00:22:35
and they also know it's working.
00:22:37
So in General Motors, it's in my book,
00:22:39
Boards That Lead, Mary Barra.
00:22:41
I have a lot of respect for her.
00:22:45
And she
00:22:47
is fully informing the board
00:22:49
every week.
00:22:52
After the investor called, she calls
00:22:54
investors to know what's on their mind
00:22:57
that they did not talk.
00:23:00
And she informs the board. The board, I
00:23:02
believe, is fully involved in the
00:23:05
General Motors case.
00:23:06
And she's performing very well.
00:23:10
Mhm. That's really interesting.
00:23:12
You've worked closely with some of the
00:23:15
most recognizable leaders in the world.
00:23:19
Those common things are giveaways.
00:23:21
They are dedicated, they have a high
00:23:23
energy.
00:23:25
They know how to read people.
00:23:29
They know how a business will make money
00:23:31
and all that.
00:23:32
And everybody knows that.
00:23:35
Why some succeed and why some fail?
00:23:42
One of the things
00:23:44
that
00:23:46
their
00:23:48
hard wiring and experience fits what is
00:23:52
required in that company at that time.
00:23:55
So there was a public debate once.
00:23:59
>> [snorts]
00:24:00
>> Public forum.
00:24:02
Where Jack Welch and the CEO of
00:24:05
Coca-Cola, Roberto Goizueta, were on the
00:24:08
dais.
00:24:10
I was not there.
00:24:12
>> [snorts]
00:24:13
>> And somebody in the audience asked
00:24:16
that would you switch?
00:24:20
You go to GE, he goes to Coca-Cola, can
00:24:24
you manage?
00:24:27
And the answer was
00:24:29
I can manage GE, I can't manage
00:24:33
Coca-Cola.
00:24:35
Same thing Roberto said
00:24:37
I can manage a consumer company.
00:24:40
One of his divisions, consumer.
00:24:43
But there's no way I can manage a
00:24:45
conglomerate.
00:24:48
Mhm.
00:24:49
Different skills.
00:24:51
I use three things.
00:24:54
Hard wiring, experience and his skills.
00:24:57
It's not his skills again.
00:25:00
At all. It's all the three.
00:25:04
Managing a consumer business is hard
00:25:07
wiring business.
00:25:09
I will be hard pressed to tell you one
00:25:12
in the world who came from industrial
00:25:14
side like GE
00:25:16
and could run a consumer company.
00:25:19
I can guarantee you
00:25:21
90% of chance he will fail.
00:25:24
That's quite a bold statement.
00:25:27
But I suppose from even my experiences,
00:25:29
you're you're right. It's not going to
00:25:31
happen. There's There's no crossover.
00:25:34
>> make make that mistake.
00:25:37
You know, it's not going to happen.
00:25:39
Not at that age. If you're 20 years of
00:25:41
age, you can learn.
00:25:43
Mhm.
00:25:43
That's different.
00:25:45
Yep.
00:25:46
But the age of 46, no way.
00:25:49
Now, you could, if you take 3 years off
00:25:52
and get work for somebody and get
00:25:54
tutoring, you could.
00:25:57
That doesn't happen.
00:25:59
Well, how do you decide when you're in
00:26:02
these rooms, when you're dealing with
00:26:04
these different people
00:26:05
when to challenge the room
00:26:08
and when to let silence do the work?
00:26:11
See, the key problem key point is that
00:26:16
unless you're truthful to them, don't
00:26:18
take the assignment.
00:26:21
That's simple.
00:26:23
You got to say,
00:26:24
I deserve to be fired.
00:26:28
It's not your ego.
00:26:31
It's if they get help.
00:26:35
I will tell you something you cannot
00:26:36
publish, maybe you can.
00:26:39
I'm the only one to tell Jack Welch
00:26:42
you were dead wrong and get his decision
00:26:44
changed.
00:26:46
And he loved it. [clears throat] Nobody
00:26:47
could But I gave him evidence it's not
00:26:50
baloney. I'm standing
00:26:54
in Washington, you can publish that. I'm
00:26:56
standing in Washington.
00:26:59
He sees me, comes towards me, bodyguards
00:27:01
they split.
00:27:04
And I said, Jack, I heard this. He said,
00:27:05
yeah, you're right. I
00:27:07
I said, dead wrong.
00:27:08
He said, get your ass in my office
00:27:11
Monday morning.
00:27:12
Kept me on the hook for 6 months.
00:27:16
He said, I changed my mind, thank you.
00:27:19
You got to tell the truth.
00:27:21
They don't like it, you walk out in a
00:27:23
nice way. He said, sir, I owe you the
00:27:25
truth. 99% they want to hear the truth.
00:27:30
But you have to do it in a courteous
00:27:31
way, not a smart way.
00:27:34
You have to give evidence.
00:27:37
No baloney.
00:27:42
In your book, Execution
00:27:46
it became a a management classic.
00:27:49
When did you first realize that the gap
00:27:52
between knowing and doing was the real
00:27:55
problem in most organizations?
00:27:57
>> Good point. By the way, I call that
00:27:59
timeless.
00:28:00
Okay. It's a time because so long
00:28:02
humanity, there will always be
00:28:04
execution.
00:28:06
And the reason I mentioned that it is
00:28:07
>> [snorts]
00:28:09
>> you can have all the ideas, if you can't
00:28:11
execute you won't survive. That's the
00:28:13
reason for it.
00:28:15
It became timeless.
00:28:17
So
00:28:18
when you're in a shoe shop, you learn
00:28:20
how to execute.
00:28:23
It becomes a part of hard wiring.
00:28:26
You teach at Harvard, Northwestern,
00:28:29
doesn't matter.
00:28:30
If you're teaching at the case
00:28:34
you got to go for execution. So
00:28:37
I'm a
00:28:38
I am a student MBA.
00:28:41
This is something really to be printed.
00:28:45
And so one of the most famous professors
00:28:47
come in to substitute another one.
00:28:51
He's also the number two guy in the
00:28:53
school.
00:28:55
Bulky, long wise.
00:28:58
And the class when he entered, chest
00:29:02
some of the energy came, we got the best
00:29:04
guy here today, lucky day.
00:29:07
You can feel it.
00:29:09
So the class is like an amphitheater
00:29:12
Harvard.
00:29:13
The guy sitting in the back.
00:29:16
And he says, Mr. Locke, please start the
00:29:18
class, which is normal.
00:29:20
They say you can prepare the call a
00:29:21
random guy and so on. He is prepared.
00:29:26
In his case, it's so demanding in the
00:29:29
sense
00:29:30
if you're not prepared, just say I'm
00:29:32
not.
00:29:33
It's okay.
00:29:34
You failed, you failed, don't waste
00:29:36
class time.
00:29:37
It was well known, so
00:29:40
which I think is a good policy, you
00:29:41
know, prepared, don't waste.
00:29:43
And he must prepare. So he asked, tell
00:29:44
us what you're going to do. He starts
00:29:46
telling.
00:29:47
I'm on looking at him. I say, "The the
00:29:49
guy is damn good. Fantastic."
00:29:54
So, the instructor says to him. He says,
00:29:57
"Mr. Locke, what would you do?"
00:30:01
He said, "I'll fire him."
00:30:04
He thumps the table.
00:30:06
Instructor.
00:30:08
He said, "Pick up your books. Get out."
00:30:12
He goes to the door.
00:30:15
"Come back."
00:30:17
"How did you feel when I asked you to
00:30:19
get out?"
00:30:22
That's teaching.
00:30:25
That's execution.
00:30:30
None of us will ever forget it.
00:30:32
That's realism.
00:30:35
It was not an occasion when we
00:30:37
recognized.
00:30:39
So, the story behind what that the book
00:30:41
came is
00:30:43
I just finished
00:30:45
No, I had a heart surgery.
00:30:49
And uh I had an appointment with Welch
00:30:52
on the 10th day.
00:30:55
Doctor said, "You can't go."
00:30:58
I decided to go.
00:31:01
It so happened
00:31:03
he was at the elevator when I arrived.
00:31:07
He was seeing somebody else. So, he
00:31:09
picked up the mailer.
00:31:11
"How are you doing inside our surgery?"
00:31:14
And he went through the room. "What the
00:31:15
hell are you doing here?"
00:31:18
I said normal stuff. He said, "You got
00:31:20
to go. Mr. Call the secretary. Call
00:31:22
Johnson over at the secretary of
00:31:24
treasury.
00:31:25
Get him to do this, this, this, all that
00:31:27
stuff." We said, "No."
00:31:29
So, he says, "Okay.
00:31:31
What's your new mind?"
00:31:34
He took me to his anteroom. There's a
00:31:35
flip chart.
00:31:37
He said, "You sit down. I'll write it."
00:31:40
I said, "No, Jack. I'll do that." "No,"
00:31:42
he said, "No."
00:31:43
So, I tell him,
00:31:46
"There's another person with me."
00:31:51
So, I took him through. I said, "Jack,
00:31:53
I've been able to nail down
00:31:56
what is your system of execution."
00:31:59
He said, "You have mercy, yeah."
00:32:02
When his eyes goes like this.
00:32:06
So, I tell him and he writes everything
00:32:07
I say.
00:32:11
He teaches me to improve it.
00:32:14
He says, "Nobody ever gotten it, but
00:32:16
this is it."
00:32:18
And he says, "I'm going to use it in 3
00:32:20
days with the security analyst."
00:32:25
So, my surmises that he talked to Larry
00:32:28
Bossidy about it.
00:32:31
They're very close friends. They had
00:32:32
dinners every 2 weeks.
00:32:34
Larry called me up and said, "I wrote
00:32:35
the book."
00:32:37
That's how the book came.
00:32:41
If you could rewrite execution today,
00:32:45
what would you change given technology
00:32:48
and speed of transformation in business?
00:32:50
First, I should tell you the driver of
00:32:52
change.
00:32:55
The The timeless principles
00:32:59
will not change. How to use them will
00:33:02
change.
00:33:05
So, here are three principles that need
00:33:08
to be insert. Three ideas for the same
00:33:11
principles to be changed.
00:33:13
The first one and the most important
00:33:15
one.
00:33:18
I have clearly demonstrated
00:33:23
and I put an article in Fortune on this.
00:33:26
Applied article.
00:33:30
That the
00:33:31
if you know how to use AI,
00:33:35
it uses your mental capacity
00:33:37
exponentially.
00:33:40
That's a part of
00:33:44
execution.
00:33:46
Second part,
00:33:48
it increases
00:33:51
your capacity
00:33:55
zillion times more.
00:34:01
How to monitor the execution
00:34:04
of ideas you have.
00:34:09
And third more important thing,
00:34:11
it helps you
00:34:14
adjusting your budget instantly
00:34:17
when you have the geopolitical
00:34:21
impact on you.
00:34:23
Most have not learned either of the
00:34:25
three yet.
00:34:29
I want you to know
00:34:31
I have now become expert
00:34:33
in
00:34:36
No organization should have more than
00:34:38
three layers.
00:34:40
No matter how big you are.
00:34:42
I'm executing it now.
00:34:45
That's part of execution.
00:34:47
Why three?
00:34:49
Fewer the layers, faster the speed.
00:34:53
>> [snorts]
00:34:54
>> Lower the bureaucracy.
00:34:57
You take those two out, people's
00:34:59
capacity increases.
00:35:01
More autonomy, more energy, more
00:35:03
creativity, more imagination.
00:35:05
>> [snorts]
00:35:08
>> Could not be done without AI.
00:35:12
That's execution.
00:35:14
You got to put that
00:35:19
So, these are the nuggets people need to
00:35:21
know.
00:35:22
They are not thoughts. They are being
00:35:25
executed today.
00:35:30
I have company that allow me
00:35:33
large companies to be the labs
00:35:36
to test these ideas.
00:35:39
And when they see the results,
00:35:41
they see the results, I don't have to
00:35:43
say anything.
00:35:46
I'm inventing
00:35:49
these things to make management more
00:35:52
effective,
00:35:53
more importantly,
00:35:55
tapping the human beings creative with
00:35:58
him more often.
00:36:00
That's what I do.
00:36:02
How do those three layers work, Ram?
00:36:05
Yes.
00:36:07
So, the first part is
00:36:10
what is AI?
00:36:14
Data. Data.
00:36:16
Data.
00:36:19
And the data has to be conformed to
00:36:24
the language of the computer.
00:36:27
0 1.
00:36:30
It has to be reliable.
00:36:33
Converting data into
00:36:36
useful insights, useful
00:36:40
combinations, useful outputs
00:36:44
is what AI does.
00:36:48
That is the
00:36:50
automation part.
00:36:54
But now AI has more to it.
00:36:59
It applies the reasoning that you and I
00:37:01
apply
00:37:03
in creating outputs.
00:37:07
Man,
00:37:09
human human mind
00:37:11
cannot deal more than five or six
00:37:13
variables.
00:37:17
AI reasoning can
00:37:20
and does
00:37:22
billions of variables today.
00:37:26
It does.
00:37:28
It acts instantly.
00:37:31
It can evaluate zillion options
00:37:34
instantly, so to speak.
00:37:38
It can challenge assumptions. It can
00:37:40
create options.
00:37:43
So, we say
00:37:45
that if you have
00:37:47
10,000 employees,
00:37:50
you're going to have three layers.
00:37:53
The bottom layer is the people
00:37:56
who interfacing with the customer.
00:37:59
We take that part of it. There are
00:38:01
others who service it.
00:38:03
But we know
00:38:05
of the 10,000 employees,
00:38:08
roughly,
00:38:10
how many interfacing with the customer.
00:38:16
So, I'm saying
00:38:18
9,000 going to interface with the
00:38:21
customer.
00:38:23
If I take the hierarchy out, Mhm.
00:38:26
you will find out only 7,000 are
00:38:28
employees.
00:38:30
Cuz you got all the hierarchy. I'm going
00:38:32
to take all out.
00:38:35
Now, I have 1,000 employees
00:38:38
who are forming the
00:38:41
hierarchy.
00:38:44
So, at the very top as Nvidia has,
00:38:48
50 employees reporting to. This is
00:38:50
authoritative cuz I talked to his
00:38:52
assistant now and then.
00:38:54
It's public, too. It's not a matter of
00:38:56
50's good number. And any employee can
00:38:59
write to him.
00:39:00
And it is responded.
00:39:04
It's well known. It's not a matter of
00:39:06
guessing.
00:39:07
So, now he's got 50.
00:39:11
And obviously, they do something.
00:39:14
And there's a mechanism somehow to work
00:39:15
with it.
00:39:17
Now, each of these can have 20.
00:39:24
They do the work of what is to be done.
00:39:27
How to be done.
00:39:29
Controlling of the 9,000 is done by AI.
00:39:33
Now, stay with that.
00:39:36
We know today for at least
00:39:40
25 years.
00:39:42
Every
00:39:44
Every customer is unique in Amazon.
00:39:49
Otherwise known as personalization.
00:39:53
We know that you and I personalize with
00:39:54
data ways.
00:39:56
We're going to personalize every
00:39:57
employee.
00:40:01
And every employee has now
00:40:03
let us say
00:40:06
thousand customers.
00:40:09
His area.
00:40:10
Her area.
00:40:12
So personalizing each employee
00:40:16
what he needs, what training he needs
00:40:19
why is he floundering, why is he
00:40:21
succeeding.
00:40:22
Algorithm doing it instant analysis all
00:40:25
the way through.
00:40:27
And we're going to provide help.
00:40:29
Now help, yes, you can have on your
00:40:31
staff or help you rent.
00:40:34
Yes.
00:40:35
I'm going to rent it. I'm not going to
00:40:37
have on a staff.
00:40:41
That's how you create three layers.
00:40:44
And Nvidia is going to do that soon. I'm
00:40:46
not working. Sooner or later going to
00:40:48
come. But I am moving ahead with it in
00:40:50
one company.
00:40:52
That sounds like
00:40:54
corporate governance at its very essence
00:40:56
is something that builds efficiency.
00:40:58
Corporate governance doesn't do it. It's
00:41:00
the CEO.
00:41:02
Corporate Those directors have no clue.
00:41:05
No.
00:41:07
Now if you have an active chairman in
00:41:09
UK, he would drive there.
00:41:12
If he is an active chairman.
00:41:16
So if I would put
00:41:18
Benny office chairman in the UK company
00:41:21
I bet you money he will get it done.
00:41:24
Mhm.
00:41:25
He's built that way. He knows that way.
00:41:27
He has the largest sales force in the
00:41:30
world other than Oracle
00:41:32
in that area.
00:41:33
So he knows what it takes.
00:41:35
What do you think is some of the warning
00:41:37
signs
00:41:38
that boards are spending too much time
00:41:40
talking and not enough time deciding?
00:41:44
You see
00:41:45
First we go to variety boards, but I
00:41:47
pick some. Mhm.
00:41:50
If you're a family-owned company totally
00:41:56
all the major things are decided by the
00:41:58
family, not by the board.
00:42:01
There are
00:42:02
occasional exceptions.
00:42:07
Boards are there for name
00:42:10
contact with the governments, regulators
00:42:14
advising in a stressful situations
00:42:18
bringing outside view.
00:42:20
Those boards, you leave them alone.
00:42:23
Private equity firms that own firms or
00:42:27
participate their boards
00:42:28
they work.
00:42:31
They have accountability.
00:42:33
They are selected for
00:42:35
ideas that create shareholder value.
00:42:39
There's a term called
00:42:43
capital clock.
00:42:46
Most people have never heard of it.
00:42:49
That term is
00:42:51
means
00:42:52
your capital has to return it as a
00:42:56
clock.
00:42:57
You must return
00:43:00
return on capital in three years, four
00:43:02
years, five years.
00:43:04
It's time-based return.
00:43:07
Therefore the clock.
00:43:09
Those boards they can
00:43:11
those boards look at it, they understand
00:43:14
they allocate capital.
00:43:16
They are the real boss of the CEO.
00:43:20
That's what public boards like uh
00:43:22
AT&T, Verizon and so on.
00:43:27
Not much really on
00:43:32
market cap takes place. I use the word
00:43:34
creating market cap.
00:43:38
So it's a measure of shareholder value.
00:43:41
And creating value for the customer.
00:43:44
In AT&T, the previous CEO made a
00:43:46
blunder. It's being rectified.
00:43:51
In Verizon, they just fired the CEO.
00:43:57
On the board is Schulman
00:44:00
who has been before in AT&T, knows the
00:44:02
business.
00:44:03
He was PayPal.
00:44:05
He's on the board.
00:44:07
And Mark Bertolini
00:44:09
at Now, he's very shareholder oriented.
00:44:13
So now fired the other guy.
00:44:17
And now he has been very clearly
00:44:20
thinking how to reposition Verizon.
00:44:25
They've talked about it.
00:44:27
Scherzinger was brought in from
00:44:29
Ericsson.
00:44:31
And
00:44:32
don't have the mindset
00:44:36
of a private equity
00:44:40
capital clock. These two guys do.
00:44:43
They have now see how they go.
00:44:45
So in the public domain, they spend time
00:44:48
on strategy.
00:44:51
I can take you through that. It's
00:44:52
pitiful what they do in strategy. The
00:44:54
boards I've been there myself
00:44:57
presenting all that.
00:45:00
It's a two-day retreat, lot of
00:45:01
PowerPoints.
00:45:04
In some cases, they have now assigned
00:45:06
teams of the board to work with the CEO
00:45:08
for a strategy. That can be helpful, it
00:45:10
can be harmful, both.
00:45:13
But a strategy does not earn money.
00:45:19
It does not create market cap.
00:45:23
You don't know how good is the strategy
00:45:26
unless you execute it.
00:45:30
And there is a gap between that
00:45:32
and the execution.
00:45:35
So again, it's not the board, it's going
00:45:37
to be the CEO.
00:45:40
Boards can help
00:45:42
to figure out the blind sides.
00:45:45
Boards can help say
00:45:47
your assumption really is good or not so
00:45:50
good.
00:45:52
We do the rethink.
00:45:54
They can say that. And they are very
00:45:55
incisive people who do that.
00:45:58
They [snorts] are highly valuable.
00:46:01
So if the
00:46:03
importance
00:46:04
sits with the CEO the need to be able to
00:46:08
drive this forward to to make sure that
00:46:10
the execution happens
00:46:12
you've advised countless boards on CEO
00:46:15
succession. What do you think
00:46:17
distinguishes the best transitions from
00:46:20
the ones that falter?
00:46:22
Well, first we got to come to terms.
00:46:26
At the end of the day, do you have all
00:46:28
the processes
00:46:32
it's going to be a gut decision.
00:46:35
Judgment decision.
00:46:40
And every decision to be CEO selection
00:46:47
it's going to be imperfect.
00:46:51
But you raise the odds.
00:46:55
The
00:46:56
most common succession processes
00:47:01
are PowerPoint presentations.
00:47:04
No digging.
00:47:09
There are some good practices.
00:47:12
In one of the companies
00:47:15
the board members met in every board
00:47:17
meeting
00:47:19
at breakfast.
00:47:22
Two board members and potential
00:47:23
candidate
00:47:25
for years.
00:47:27
I think you get a good feeling what's
00:47:29
happening.
00:47:33
In GE, we had critical directors. You
00:47:37
know, they're not all of them.
00:47:39
My chair
00:47:41
committees and all that. We'll go to the
00:47:43
site
00:47:45
up to two days together
00:47:47
to the site of the candidates.
00:47:51
They get a feel.
00:47:53
So we have an article for I wrote it
00:47:57
succession at Coca-Cola.
00:48:01
In the first round, I organized it.
00:48:05
Where the
00:48:07
Muhtar Kent CEO
00:48:10
opened up the place and talked to the
00:48:12
directors and say
00:48:14
we're going to send you candidates. You
00:48:15
interview them. Tell them whatever.
00:48:20
Tell us anybody any good.
00:48:24
And also tell us what they need to do to
00:48:26
develop.
00:48:28
I believe which I wrote it for him
00:48:32
that he did real dedicated job.
00:48:36
And the answer was nobody is suitable.
00:48:40
That was a lesson. And Muhtar wanted to
00:48:43
know, so that's good.
00:48:45
So then opened the kimono for me
00:48:47
further.
00:48:50
And they had a
00:48:53
great relationship with Allen and
00:48:55
Company for a long time.
00:48:59
And one of their I think it is the CEO
00:49:02
who was on the board of Coca-Cola.
00:49:07
And those people met her in the
00:49:08
succession.
00:49:11
So Muhtar Kent took them all around the
00:49:13
world
00:49:14
to meet
00:49:16
all these chiefs in various countries.
00:49:21
And they struck by the guy in Argentina.
00:49:28
They moved him to Europe
00:49:29
fast.
00:49:31
Kept him, saw him.
00:49:34
I interviewed him.
00:49:36
He's a CEO.
00:49:38
and done very well.
00:49:40
All the succession planning that was out
00:49:42
of the window.
00:49:44
So, like you say, it comes down to gut
00:49:45
feel.
00:49:47
At the end, but they do say
00:49:49
there was a record of this person. It's
00:49:51
known. This was all prepared.
00:49:52
>> Of course. It was the record.
00:49:55
But, I have not known a company that
00:49:58
takes the
00:49:59
five, six members of the board all over
00:50:01
the world
00:50:03
and spend a day, they would be receiving
00:50:05
data and all that.
00:50:07
And so, obviously CEO's with them and
00:50:10
he's look at their point, the question
00:50:11
they're asking and they say
00:50:13
I think that looks to us better. It's a
00:50:16
gut side, but they're very sharp
00:50:18
questions. I mean, these people know how
00:50:20
to read people.
00:50:21
So, I have a lot of faith in Ellen and
00:50:23
company because I've known their record.
00:50:26
That's all they do, money and people.
00:50:29
And you see that, yeah.
00:50:31
Now, I have to tell you
00:50:33
the
00:50:35
Quincy
00:50:37
if you meet him, he could not be the
00:50:38
candidate.
00:50:42
He's a Britisher.
00:50:44
But, he is the right person. His
00:50:47
appearance and all that
00:50:49
doesn't look he should be chief of
00:50:51
Coca-Cola.
00:50:52
>> [snorts]
00:50:53
>> But, when you dig into him, you say,
00:50:56
"Oh, yes."
00:50:59
So, all this succession pipeline that is
00:51:01
done by HR needs a big beefing.
00:51:05
The facts are this should go in. Very
00:51:09
large proportion of HR people
00:51:13
hesitate to put the judgment on people.
00:51:20
Or
00:51:22
they don't know how to judge people.
00:51:27
But, that's a fact they are not willing
00:51:29
to tell
00:51:31
and put in writing
00:51:33
I think this is the best candidate.
00:51:35
These are the reasons in my judgment.
00:51:38
I know yours could be totally different.
00:51:41
So, in one of the companies, I'm not
00:51:43
putting that in.
00:51:44
I said, "Go on the line."
00:51:46
You're not really as far as the matter
00:51:48
of your judgment versus somebody else's
00:51:50
judgment.
00:51:52
But, you can give some reasons for it.
00:51:53
This is a major failure in HR. You think
00:51:56
Can you think about a finance person not
00:51:58
saying to the boss
00:52:00
You
00:52:01
You are
00:52:02
raising the money in a different way.
00:52:05
You're going to go broke.
00:52:10
Um you've advised boards through
00:52:13
recessions Yes.
00:52:14
>> scandals and geopolitical shocks.
00:52:16
>> Oh, yes. Very difficult situations. What
00:52:19
mistakes do boards repeat when the world
00:52:21
changes faster than they do? Yeah, one
00:52:23
of the things I'm doing The first thing
00:52:25
I should tell you is that
00:52:28
a large part is to get the CEO
00:52:32
and the board on the same page. I do
00:52:34
that.
00:52:35
They're very difficult situations.
00:52:39
A second one I do
00:52:41
to have the boards learn
00:52:45
the decisions only they should make and
00:52:48
not others.
00:52:52
Third, I advise them how to conduct the
00:52:55
executive sessions.
00:52:59
Fourth, I advise them
00:53:04
they must tell the CEO
00:53:09
only one thing that he must change. Not
00:53:13
two, not three, not four.
00:53:16
But, they get it.
00:53:19
I do advise them
00:53:21
they must learn the business
00:53:23
money-making model of the company by
00:53:25
heart.
00:53:28
Take a day, go down, learn it.
00:53:33
And then, they should together
00:53:36
with the CEO should do 12-month agenda.
00:53:39
They should say, "We want to see this."
00:53:42
Get the information.
00:53:45
Work with the CEO, get a common agenda.
00:53:49
You see a different board.
00:53:52
And do you think that boards today are
00:53:56
better equipped to manage uncertainty
00:53:58
than those 20 years ago? Boards never
00:54:01
manage uncertainty.
00:54:03
They should be fired.
00:54:05
There is no way a board can manage a
00:54:07
pricing. CEO has to manage a price.
00:54:10
And his people have to manage pricing
00:54:12
and quality. But, what board can say
00:54:15
take us through the methodology how
00:54:18
you're going to do that.
00:54:20
We may have some ideas.
00:54:25
I did not say we will have some ideas.
00:54:28
We may have some ideas.
00:54:30
But, the board has to ensure the company
00:54:33
has a methodology of managing
00:54:36
and a methodology of managing risks.
00:54:41
And as a result, what will be the cash
00:54:44
flow and what will be the capital
00:54:46
allocation.
00:54:48
That is their accountability. They
00:54:50
should do that.
00:54:53
After meeting some of the most powerful
00:54:56
people in the world what have you
00:54:58
learned about vulnerability and fear
00:55:01
amongst those people?
00:55:03
One of the things I saw in Jack Welch
00:55:07
if you're in private with him
00:55:10
he wants to hear all the bad news. He
00:55:12
doesn't want to hear good news. He's
00:55:14
very good at it.
00:55:16
So, I felt very comfortable.
00:55:19
He knows I'm going to come and say him,
00:55:20
obviously.
00:55:22
And he knows I'm not going to say great
00:55:24
things.
00:55:26
But, I've done my homework.
00:55:29
He'll listen.
00:55:30
So, in my work, I see these very
00:55:32
powerful people. So long they trust you.
00:55:35
More importantly, they know
00:55:37
I'm not a blabbermouth.
00:55:40
So, one of the reasons I don't have firm
00:55:44
is strictly that.
00:55:46
I've been offered chairmanship of
00:55:48
consulting companies.
00:55:51
I've never taken them.
00:55:53
So, you prefer to work alone,
00:55:55
essentially. Nobody knows a secret.
00:55:57
Everything I told you
00:55:59
there's no secret in any of this.
00:56:01
But, I have some of the most
00:56:03
confidential stuff.
00:56:06
I think I'm one of the probably one of
00:56:07
the few people in the cabin on the
00:56:10
on the planet who knows why GE failed.
00:56:13
But, I'm not going public.
00:56:15
People have come to me
00:56:18
incessantly the writers, they know
00:56:20
they've been told
00:56:22
they're going to I said, "No, I'm not
00:56:23
going to talk. It's done It's done. You
00:56:25
go forward."
00:56:28
And you can't say this is my fault, this
00:56:30
is his fault. It's
00:56:31
No.
00:56:33
But, I have very specific things.
00:56:37
What went wrong, but there were some
00:56:39
very good things
00:56:41
that are done and then those good
00:56:43
things, they now built GE back
00:56:47
to the highest price ever.
00:56:50
So, there were some great things.
00:56:52
So, that's why
00:56:54
you you have to be
00:56:56
totally trustworthy.
00:56:59
Integrity is such a major part of being
00:57:02
in the
00:57:02
>> Blabbermouthing is the worst thing. You
00:57:05
can talk to any powerful person.
00:57:07
Any powerful person. Because they know
00:57:10
they need the truth.
00:57:13
They know they need the truth.
00:57:16
What's one piece of advice you find
00:57:18
yourself repeating no matter who you
00:57:21
speak to?
00:57:23
You see, every situation is different.
00:57:27
Every situation in my kind of work has
00:57:30
nuances.
00:57:34
Generalities don't do any good. Don't do
00:57:37
any good.
00:57:41
Give you an example. Dependence on India
00:57:43
and China is significant.
00:57:46
>> [snorts]
00:57:47
>> We give 100 billion dollars to China in
00:57:50
imports in hard dollars.
00:57:53
With those dollars, they buy gold.
00:57:56
Think about that.
00:57:59
It's simple.
00:58:01
So, how do we reduce
00:58:04
the dependence on China?
00:58:07
And so
00:58:09
the idea here is that I can use general
00:58:12
talk.
00:58:14
I believe others can do general talk.
00:58:17
Mine is to take them by hand.
00:58:21
How do we reduce in 3 years?
00:58:25
First one is can't be done. Second is
00:58:30
here's a blueprint. Third is here's the
00:58:32
first action.
00:58:35
I begin in August.
00:58:37
We now have the section rolling right
00:58:39
now.
00:58:41
The announcement yesterday by President
00:58:43
Xi now
00:58:45
put the nail in the head
00:58:47
that we were right to move ahead.
00:58:51
So, it has to be very specific.
00:58:56
Do you believe that good leadership can
00:58:59
be taught or do you think it must be
00:59:00
lived?
00:59:01
>> I think we should go this way.
00:59:04
The tools to improve your performance
00:59:08
and leadership
00:59:09
are taught, can be taught, can be
00:59:12
improved.
00:59:14
If you don't use them, it's not going to
00:59:16
happen.
00:59:19
Those tools are a
00:59:21
are here.
00:59:23
They can be improved and they will be
00:59:25
improved.
00:59:27
But, the hardwiring
00:59:30
conditioned by
00:59:34
has to fit what is the situation
00:59:37
demands.
00:59:40
Just like an industrial
00:59:43
30-year-old experience 30-year
00:59:45
experience guy
00:59:48
running a chain stores
00:59:51
consumer thing
00:59:53
is not the best idea.
00:59:57
But I could take a
01:00:00
person who has run a small chain of
01:00:02
chain stores
01:00:04
and there are enough tools for this
01:00:06
person to scale up
01:00:08
fast
01:00:10
and be better.
01:00:13
I could do that.
01:00:15
This idea that any leader can run any
01:00:18
other company
01:00:20
could be true
01:00:22
but it's not for 99% of the people.
01:00:26
It's not.
01:00:28
The GE model was okay for GE at that
01:00:32
time.
01:00:35
If you could
01:00:37
speak to your younger self
01:00:40
standing [snorts] in that shoe shop in
01:00:42
India
01:00:43
what would you tell him?
01:00:45
Yesterday there is a school named Ram
01:00:48
Charan School of Leadership in Pune.
01:00:52
It's in my name.
01:00:54
And here
01:00:56
I went in yesterday.
01:01:00
So I had the full hall
01:01:02
mostly first-year students.
01:01:06
I had challenged the faculty just an
01:01:08
hour before
01:01:11
that I'm not involved in the governance
01:01:13
of it.
01:01:15
I said your best metric
01:01:19
is that
01:01:20
every graduate gets employed
01:01:23
within 120 days of graduation.
01:01:27
I'll give you a process how to do that.
01:01:30
And that would be the measure I will
01:01:32
have if I were the chairman of
01:01:34
governance which I'm not.
01:01:36
But the person who is owns the place
01:01:39
he has now given that directive
01:01:41
yesterday afternoon. Faculty together,
01:01:44
this is what you're going to do.
01:01:46
It doesn't matter what else you do.
01:01:49
That's a legacy for you. It's amazing.
01:01:53
Yeah, it is going to be. But I'm going
01:01:54
to be watching that because while I'm
01:01:56
not in it
01:01:58
which I can be in it.
01:02:00
I said, "You should be proud of it.
01:02:03
You're a teaching institution. You are
01:02:05
not an institution to do fundamental
01:02:07
research. They are not
01:02:08
by definition. So I met these young
01:02:10
people.
01:02:13
They gave me 40 minutes to do that.
01:02:15
And so I said
01:02:17
"All of you got to have
01:02:19
employment within 120 days.
01:02:23
You start thinking now.
01:02:25
Day one
01:02:27
faculty will help you."
01:02:30
So in doing that
01:02:33
I got them to all
01:02:35
chat GPT first.
01:02:39
I just saw there. So how many of you
01:02:41
want to be in sales?
01:02:43
Nobody there.
01:02:46
It's okay, you can change your mind.
01:02:49
How [snorts] many of you in production?
01:02:53
How many of you
01:02:55
going to do
01:02:58
public relations, government relations?
01:03:01
Then I how many of you want to be
01:03:03
building a business?
01:03:05
And then three quarter of the class went
01:03:07
like this. I said, "Yes, I love that.
01:03:10
So how do we start?"
01:03:14
So open your chat GPT.
01:03:17
And learn what does it take to start
01:03:19
from day one. Who has done it? Who have
01:03:21
not done it?
01:03:23
I say, "Forget the school.
01:03:25
You are the captain." So then I take
01:03:28
them through and say
01:03:30
"Learn to find out what's your calling."
01:03:36
I give them Indian examples of calling.
01:03:39
I give you Steve Jobs example of
01:03:41
calling.
01:03:44
Give yourself a test.
01:03:47
What I love to do even though I'm
01:03:48
failing.
01:03:50
That's your first signal. Ask your
01:03:53
colleagues what you love to do, what you
01:03:55
shy away from doing that.
01:03:57
Pursue that.
01:03:59
And that is the secret of all people
01:04:01
I've ever known
01:04:03
who became very successful.
01:04:06
So that was the first one.
01:04:09
The second one in life
01:04:12
your learning here is packaged learning.
01:04:16
And learning in real life
01:04:18
is learning from experience in a messy
01:04:21
situations.
01:04:22
You got to learn how to learn in real
01:04:24
life.
01:04:26
And third
01:04:27
you got to learn [clears throat]
01:04:29
how to work with people.
01:04:31
Working in people here is different than
01:04:34
working with the people in real life.
01:04:36
And to do that
01:04:39
I use it. I see in interviews
01:04:42
show how you learn to listen.
01:04:46
Those are the things I told them.
01:04:48
What do you hope future generations
01:04:51
remember about your work?
01:04:53
Nothing.
01:04:57
Nothing.
01:05:00
They got to create their own.
01:05:03
That's what it is.
01:05:07
I don't believe in legacies.
01:05:10
They got to create their own.
01:05:13
Ram, what advice would you give to CEOs?
01:05:18
I think it's a foregone conclusion.
01:05:21
There will be more
01:05:27
uncertainties
01:05:29
driven by
01:05:31
governments
01:05:34
regulations and AI.
01:05:38
Not less.
01:05:39
Change your psychology how to navigate
01:05:44
from how to be
01:05:47
hope to have a stability.
01:05:50
So you will be dealing
01:05:53
with these
01:05:55
different type of people called in
01:05:58
government regulations
01:06:00
politicians.
01:06:03
Are you psychologically ready to do
01:06:06
that?
01:06:10
What I have observed
01:06:12
first you have to come to respect
01:06:17
that they are bright people
01:06:19
most of them dedicating
01:06:22
to achieve something that has been
01:06:24
designed for the system.
01:06:26
It's no use of calling them bureaucrats.
01:06:30
It doesn't accomplish anything.
01:06:33
When they are on their own outside the
01:06:35
bureaucracy, they're bright people,
01:06:37
dedicated people, honest people. Some
01:06:40
may not be.
01:06:41
So to learn how to take
01:06:45
their point of view.
01:06:48
Why is their point of view?
01:06:51
How the system demands for them to have
01:06:54
a point of view.
01:06:55
And then engage in discussion.
01:06:59
Example
01:07:01
I was in Seitenberg, lower level
01:07:03
employee.
01:07:05
AT&T got a split.
01:07:08
Before the split, he made the case to
01:07:10
the chairman.
01:07:12
Three levels between him and the
01:07:13
chairman.
01:07:15
We are not taking the viewpoint
01:07:19
of the regulator. Showed.
01:07:22
Everybody between the chairman and him
01:07:24
hated him.
01:07:26
Eventually he became the chairman of
01:07:28
Verizon.
01:07:30
That's how I took this number nine
01:07:32
company to be number one.
01:07:35
Adopt
01:07:37
learning the viewpoint
01:07:40
of the other person
01:07:42
and deal with it.
01:07:45
It's a requirement of leadership of the
01:07:47
future.
01:07:52
Thank you very much for your time today,
01:07:53
Ram. Really appreciate it.
01:07:55
>> I
01:07:56
don't think I need to write a note. I
01:07:57
really sincerely thank you. Prepared
01:08:00
extremely well.
01:08:01
Had a great set of questions to get the
01:08:03
best out of the person.
01:08:05
Having Ram here today was fantastic. Had
01:08:08
an opportunity to reconnect but also to
01:08:11
have conversations with him that I know
01:08:14
that he is developing his ideas on.
01:08:17
For instance, execution is key. I'm sure
01:08:20
all CEOs would understand that and
01:08:23
that's something for them to drive in
01:08:25
organizations.
01:08:27
It's really important to ensure that
01:08:29
there's efficiency within an
01:08:30
organization and Ram suggested his new
01:08:33
concept of three tiers which is really
01:08:36
interesting and helps cut bureaucracy
01:08:38
and get everything moving really
01:08:40
efficiently. The use of AI was also
01:08:42
really interesting as to how he would
01:08:44
look to manage the majority of the
01:08:46
workforce through AI. And finally, I
01:08:49
think it's about creating your own
01:08:51
story. Ram is definitely somebody that's
01:08:54
keen that people do that for themselves
01:08:56
and everyone's journey will look
01:08:58
different. But we should look at
01:08:59
everything with a fresh pair of eyes
01:09:01
every time we come to the new situation
01:09:03
in order to make sure we interpret
01:09:05
things with that new perspective. Thank
01:09:08
you, Ram, for sharing your wisdom and
01:09:10
for reminding us that leadership at its
01:09:12
best is deeply human. And to everyone
01:09:14
listening, thank you for being with us.
01:09:17
I'm Erica Elias and Norris and this has
01:09:19
been Grit in the Boardroom. Until next
01:09:21
time.
01:09:31
>> [music]
01:09:39
[music]
01:09:43
>> Mhm.
