Published On: Mon, Jun 15th, 2015

Ram Charan’s Global Tilt – V.P.NandaKumar

Ram Charan’s Global Tilt - V.P. NandaKumarA couple of months ago, in an article in this publication about how innovations in information technology are beginning to bring about fundamental changes in the way we do business, I had made a reference to Mr. Ram Charan, the celebrated management guru. Specifically, the reference was to his latest book, The Attacker’s Advantage, where he predicts that companies with extraordinary algorithmic capabilities— so called “Math Houses”—are set to change every other industry.

In this context, I have had the good fortune to attend Mr. Ram Charan’s lectures when I had gone to the Wharton School of Business in December 2013 to take part in an executive leadership programme. It so happened that Mr. Ram Charan was on the faculty for the programme. At the conclusion, participants were presented with a copy of his book (then the latest), Global Tilt—Leading your Business Through the Great Economic Power Shift.

I was reminded of this book when I recently heard news about veteran banker Mr. K.V. Kamath being nominated as the first president of the New Development Bank (earlier known as BRICS Development Bank). This bank, as you may know, has been set up by Brazil, Russia, India, China and South Africa (BRICS) with a total initial capital of a whopping US$ 100 billion. Ram Charan’s book, Global Tilt, is precisely about how economic power is shifting from the advanced west to the developing world.
To put this book in perspective, it is worth going back in time to 2005 when the journalist Thomas Friedman published his bestseller “The World Is Flat: A Brief History of the Twenty-First Century”. That book is an analysis of globalization in the early 21st century and its central idea was that the world had become a level playing field for business where all competitors—no matter which part of the world they happen to be located—have an equal opportunity.  As I see it, Ram Charan carries this idea further to suggest that the world is not only flat but that it has also tilted. In other words, the economic centre has shifted from the traditional economic powers, the advanced Western countries (the North) to the fast developing countries like China and India (the South).

 

This tilt towards the developing world is marked by a shift in wealth and jobs from the industrialized North to the newly industrializing emerging markets. The South is driving the change whereas the North is actually afraid of the change and is essentially being forced to go along by the South. These changes presage a transition to a more even distribution of wealth and opportunity. The countries of the South are writing new rules in pursuit of their growth plans to create jobs for their people and to get hold of the resources needed to realize these ambitions.

Many factors are responsible for the rise of the Southern nations. Some are well known, like low cost labour and the large manpower possessed with technical expertise. Ram Charan goes beyond and looks at other factors too. For example, he narrows down to the unwillingness of northern companies to invest in southern countries due to a lack of infrastructure and also the political uncertainties that can negatively affect business outcomes. He rightly points out that leaders of southern companies are “accustomed to the vagaries of the government and regulators and to the inadequacies of ubiquities such as electrical power.” In contrast, notwithstanding the rich pickings to be had in a $2 trillion growth market, northern companies hesitate to move into places where offices may lack air conditioning.

Northern companies, faced with stagnant markets at home, are pushing for access to markets in the South, but in the process they also end up creating their own future competitors. Of course, along the way, there is turbulence and the tilt will seesaw, nevertheless, companies will have to give thought to how best to position their business in light of these changes.

As we proceed along this increasingly turbulent “economic shift,” Ram Charan’s advice is that “Every company needs flexibility and responsiveness to keep attuned to changing conditions and new opportunities – and to stay financially afloat in the event of a tidal wave that washes in from some unknown corner.” The key is to be prepared to meet these changes “by developing the mind-set and skills needed to be a leader in the global tilt.”

These are just some of the thoughts in the book. To conclude, I would say, the proof of the pudding is in the eating. Therefore, a true evaluation of the worth of this book can only be had by one’s own reading of it.

V.P. NandaKumar

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Ram Charan’s Global Tilt – V.P.NandaKumar