What The CEO Wants You To Know The highly respected author Ram Charan has taught business at Harvard and Northwestern universities. In his best-selling book, he describes universal business principles that help all companies make money. What your CEO wants everyone in his or her organisation to know is how these fundamentals of business work. In this revealing session, David will explain why every senior IT manager needs to understand the key business concepts in Charan’s book, and he’ll also challenge you to think about your IT business planning process to assess whether it is strongly aligned with corporate goals and priorities.

1. Pink Elephant – Knowledge Translated Into Results
What The CEO
Wants You To Know
David Ratcliffe
President
Pink Elephant

2. What The CEO Wants You To Know © Pink Elephant, 2016. All Rights Reserved.
Agenda
§ Insert text here 1. Introduction To Ram Charan
2. Overview of “What The CEO
Wants You To Know”
3. How Can We Apply What
We’ve Learned To IT
Services
4. The Dragon’s Den of IT
Services
5. What To Do When You
Return To Work
2

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About The Author: Ram Charan
According to Wikipedia:
§ Charan worked in his family's shoe shop in northern India
while growing up.
§ He earned a degree in engineering from Banaras Hindu
University and later studied at Harvard Business School,
where he was awarded an MBA (1965) and a doctorate
(1967).
§ Before becoming a full-time consultant in 1978, he taught at
Harvard Business School, the Kellogg School of
Management and Boston University.
§ Charan has consulted for many well-know companies such
as GE, KLM and Bank of America.
§ He is the author of various popular books on business,
including “Boards That Deliver”, “Boards At Work”, “Every
Business Is A Growth Business”, “Profitable Growth Is
Everyone’s Business”, “Confronting Reality, Know How &
Execution”.
§ Charan is a workaholic, is not married and has no children.
At age 67 he recently purchased his first apartment – in
Dallas, TX. Before this purchase he did not have a home
and spent every night in a hotel or associate’s residence.
Regardless of his location, his assistants in Dallas send him
new clothes via courier and he returns dirty laundry to them.
§ Charan was elected a Fellow of the National Academy of
Human Resources in 2000, and named a Distinguished
Fellow in 2005.
§ Charan is also a Director of Austin Industries.

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“What The CEO Wants You To Know”
§ Full title: “What The CEO Wants You
To Know: Using Your Business
Acumen To Understand How Your
Company Really Works”
§ “Once in a great while, a business
book comes along whose startling
usefulness springs from its simplicity.”
– Fortune
§ “One of the most user-friendly books
of its kind . . . a veritable crash course
in the basic fundamentals of good
business, designed to empower
employees at virtually any level.
Clear, authoritative, and never
condescending.”
—National Post

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Other Books We Can Talk About Today
§ “What The Customer Wants You To Know:
How Everybody Needs To Think Differently
About Sales” by Ram Charan
§ “Execution: The Discipline Of Getting
Things Done” by Larry Bossidy & Ram
Charan
1. Laser sharp focus & dominant
priorities
2. Know the guts of the business
3. Right people in the right jobs
4. Managing a social system
5. 3 core processes
6. The habit of following through
§ “Leadership in the Era of Economic
Uncertainty: The New Rules For Getting
Things Done in Difficult Times” by Ram
Charan - www.ram-charan.com

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What The CEO Wants You To Know
1. Overview of the book
2. How the information & lessons
described in the book can be applied
in IT services
3. What you should do when you get
back to work
As we go through this 1st section
think about how these lessons
can be applied in IT services

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Do You Understand & Speak The Universal
Language of Business?
If not, it’s probably because of “silo-thinking”.
You’re not a businessperson.
You need to look outside your silo.
What is meant by the phrase “Run IT like a Business?”
Business
Business
Staff
IT
Services
IT
Staff

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Some Terminology
CASH
§ It’s the oxygen of any business
§ In & out = Cash Flow
§ Staff need to have a greater awareness of the
significance of cash flow management
INVESTMENTS & ASSETS
§ Raw materials & finished goods – inventory
§ Buildings, equipment, IT systems – fixed
§ IP, know-how, people/training, customers, cash
reserve, etc.

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Some Terminology
PROFIT MARGIN
§ Gross Margin = Total Revenue – Direct Costs (Product)
§ Net Profit Margin = Total Revenue – All Costs
(Business)
VELOCITY
§ Turnover of goods by frequency, i.e. the number of
times you can make, sell & deliver your wares.
RETURN
§ ROA = Margin X (Sales/Assets)
§ ROI = Margin X (Sales/Investments)
§ ROE = Margin X (Sales/Equity)
§ RETURN = MARGIN X VELOCITY

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Relationships: Margin, Velocity & Return
Keep in mind:
§ The best companies make 10% ROA
§ The big mistake is to focus too much on Margin,
instead of Velocity
§ The lazy product developers will look at premium
pricing as the way to get a quick return, instead
of putting effort into operations (production,
marketing & sales) so that velocity can be
increased.
§ The cost of borrowing capital (for investments) is
typically 10%+!

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Some Terminology - GROWTH
What if there is no growth?
§ Costs are cut
§ Personal development
opportunities dry-up
§ The best people leave
§ Costs increase
§ “Death Spiral!”
What if there is growth?
§ Energy & excitement
§ Positive challenges
§ Talent is motivated &
attracted
§ Greater revenues
§ More growth!
Change For Bad
Change For Good

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So Far …
We’ve been told we must understand:
ü Cash
ü Return
ü Growth
But there’s one more …!

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Customers ….
§ Clinical (empirical) data is not enough
§ The best leaders must make direct contact with
customers
§ Talk AND listen
§ Then, focus on what customers have told you
they need, not what you think they need/want
§ Certainty: You will be surprised at what you learn!

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Business Acumen
Means understanding:
ü Cash situation
ü Profitable items
ü Non-profitable items
ü Velocity of products
ü Customers
The best business leaders demonstrate an
intense focus on these fundamentals

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Dragon’s Den Of ITSM
The CEO Dragon
The CFO Dragon
The CIO Dragon
15

16. What The CEO Wants You To Know © Pink Elephant, 2016. All Rights Reserved.
The CEO Dragon
Focus is on business objectives.
§ Do you know your current
business objectives?
§ If not, where can you find out?
§ Make reference to specific
business objectives in your
proposal
§ Describe how the outcomes of
your ITSM project will enable
the business objectives
BE SPECIFIC!
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The CFO Dragon
Focus is on revenues and costs.
§ Make sure you know how
much your project will cost
§ Be realistic when estimating
costs
§ If the costs cannot be
contained by the current
budget – make sure there are
very specific and achievable
business benefits
BE SPECIFIC!
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The CIO Dragon
Focus is on IT resources and risks
to IT performance and image.
§ Explain who will do the work
§ Explain what tools and
resources will be needed
§ Explain how much time will be
needed
§ Explain the potential impact
on other projects
BE SPECIFIC!
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When You Get Back To Work
Key questions you should be able to answer:
§ What were your company’s sales in the last year?
§ Is the company growing?
§ What is your company’s profit margin?
§ How does your margin compare with your competitors?
§ Is your company gaining or losing market share?
§ Do you know your company’s inventory velocity?
§ What is your company’s ROA?
§ Is your company’s cash generation increasing?
When you can answer these questions
you are speaking the
Universal Language of Business!

20. What The CEO Wants You To Know © Pink Elephant, 2016. All Rights Reserved. 20
When You Get Back To Work
According to Ram Charan from
“Leadership In The Era of Economic Uncertainty”
”As the leader of the IT function you should assume the IT
budget will be cut. You need to develop a strong
viewpoint on re-prioritizing your projects.”
§ Projects related to compliance (interactions with the board, auditors and
the CFO) should be fully funded.
§ Utility-oriented projects - Things that keep the lights on and the processes
running.
§ Both of the above have the advantage of helping management sleep
better!
§ Re-think all other projects - If there are still funds availabl,e focus on
those that create value, such as automation of data that can provide
guidance for production, sales & marketing. This type of project helps
others achieve budgets in the short-term.”

21. What The CEO Wants You To Know © Pink Elephant, 2016. All Rights Reserved.
David Ratcliffe
President
Pink Elephant
Email: david.ratcliffe@pinkelephant.com
Web: www.pinkelephant.com
Twitter: www.twitter.com/pinkerdavid
Thank You. Questions?
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