As artificial intelligence remakes the way businesses think, work and compete, the wisdom of one man still resonates powerfully. Ram Charan — now well into his 80s and still reinforcing business principles so basic they go far beyond buzzwords, industries or even technologies. He is not only teaching management; he is teaching clarity in complexity.
A true global nomad, Dr Charan calls hotel rooms home. The doorman of the Waldorf Astoria, New York, opens the doors and greets him with, “Welcome home Professor Charan, welcome back to New York.” His carbon footprint may match those of a globe-trotting CEO, but the footprints he leaves behind in boardrooms around the world are in a class of their own.
What’s remarkable is how his first lessons — lessons not learned at Harvard or Wharton, but at his family’s small shoe shop in rural Uttar Pradesh — continue to shape the world’s most influential business minds. “Common sense,” he insists, “is not common.”
The Fundamentals That Continue to Drive the World
Whether you’re the chief of a tech startup, a government agency or a legacy manufacturing business, Dr Charan urges leaders to master these five building blocks:
- Cash Generation: Your business has to generate more cash than it consumes. If this is not done, nothing else matters.
- Profit Margin: Keep an eye on what you take home from each dollar you earn.
- Velocity (speed of operations): The more quickly you move inventory or ideas through the stages of the cycle, the more quickly you create returns.
- Growth: Growth which is profitable is growth in real terms. Don’t chase growth without margins.
- Business Intelligence: Understand your customers better than they understand themselves.
Those principles are timeless — but in the new world of A.I., they’re more important than ever. Why?
Because AI is only as powerful as the business model it supports.
The Four Questions Every Great Leader Asks
Great leaders, Dr. Charan says, are constantly asking themselves and their teams four deceptively simple questions.
- What is our money-making model?
- How does my team contribute to it?
- Does everyone on my team understand the answers to the first two questions?
- What’s new? (Ask this every day.)
This is not management mumbo jumbo. They’re clarity generators amid an age of data noise and online confusion.
Consider the fourth question: “What’s new?”
AI may seem like the most important “new”, but AI is only a tool. What’s new — really new — is the mindset it demands: agility, curiosity, speed and a willingness to put everything on the table for re-examination, from hiring to product delivery.
In 1995 Dr. Charan was riding an elevator when Jack Welch stepped in. After a moment’s silence, Welch said, “Ram, what’s new?”
Charan responded, “Zero working capital.” Welch had never heard of it. A few weeks later, Welch had fleshed it out, reorganized GE’s businesses, and saved the company $5 billion.
A question during a ride in an elevator turned into one of GE’s most lucrative operational pivots.
Now imagine following up with, “What’s new?” in 2025.
What’s different in our customer behavior? What’s new in our data? What’s changed in our competitors’ capabilities? What’s new in how our people think, feel, or work?
Dr. Charan’s advice: If you look for what’s new all the time, you will start to notice ruptures before they’re apparent — and you will lead through them rather than react to them.
From Shoe Shop to Boardroom
Dr. Charan frequently talks about getting his early business education in his family’s shoe store. Everything he knew about cash flow, customer loyalty, pricing and trust was forged there — long before he taught at Harvard, Stanford or Wharton or advised the chief executives of GE, Verizon or Bank of America.
And those principles still apply. Even in the age of AI.
AI can help optimize pricing, personalize customer experiences, reduce costs significantly and forecast demand — but only if you have a deep grasp of the human dynamics that power your business.
Use AI, Don’t Be Used By AI
So it’s easy to get swept up in AI trends or wowed by automation. But Dr. Charan counsels that leadership is not about tools. It’s about judgment.
It doesn’t mean you can outsource an understanding of your business model to ChatGPT. You can’t offload cultural alignment to a dashboard. You simply can’t automate the sense-making that tells us what is really “new.”
Use AI, yes. But don’t forget the basics. They haven’t changed.
Last Word: Make Your Teams Think Like This
Dr. Charan doesn’t merely talk to CEOs — he teaches organizations to act like CEOs.
Imagine if everyone on your team could respond:
- How does our business make money?
- How do I contribute to that?
- What’s new today, and what does it mean for us?
You don’t need another piece of software to make your organization agile. You need deeper awareness. Sharper thinking. And a tendency to ask the right questions.
In a world of exponential change, it’s not the most digital leaders who prevail. It’s the most awake.
That is the genius of a Charanism. And it has never been so relevant.
The END
Sources & Writings by Dr. Ram Charan
- What the CEO Wants You to Know – Ram Charan
Core principles of business: cash, margin, velocity, growth, customer. - Execution: The Discipline of Getting Things Done – Ram Charan & Larry Bossidy
Emphasis on linking strategy with execution and real-world leadership. - The Digital Leader – Ram Charan
Simplifying digital transformation and aligning tech with business value. - Leadership in the Era of Economic Uncertainty – Ram Charan
Leading with clarity in volatile, fast-changing conditions.
- Global Indian of the Year Award Speech (Paraphrased in blog)
Ram Charan’s gratitude, values, and mission to help people double capacity. - Interviews with Economic Times, Forbes India, McKinsey Quarterly
Themes of leadership agility, customer obsession, and strategic foresight. - AI & Business Trends –
PwC Global AI Study (2023) – Impact of AI on productivity & GDP
McKinsey: The State of AI in 2023 – AI adoption across industries
Bain & Company: Reinventing the Organization for AI
- Example Cases Referenced
Amazon’s cash flow model
GE’s zero working capital initiative under Jack Welch
Microsoft’s gross margins (~90%)
Street vendors and customer intimacy (used as universal business metaphor by Charan)