Mar 31, 2007

Managing external constituents

Ram Charan in his column talks about the skills and "know-hows" of a CEO in managing external constituents. It's particularly important in this age of social media (which puts, as someone said it, "word of mouth on steroids"). He even touches about the Pepsi-Coke pesticide controversy in India.

As he says:
For all the time and attention it requires, managing external constituencies is not likely to create value for your company. On the other hand, if you fail to manage these groups and issues and instead let them manage you, you may very well destroy value

In today's world, there's no escaping the need to deal with external constituencies directly, fairly, and with the courage to do what's right even in the face of conflicting agendas.

So what are the skills and know-hows that Ram talks about?

Being psychologically open.
Understanding that perceptions trump facts.
Keeping your antennas up.
Being proactive.

I guess that's one of the difficult things that people experience when going from a support role to a leadership role. You move from controlling things you have direct control over to a role where there are things that you barely have control over. It's very imperative that finance, HR professionals who want to lead organizations have 'market' experience in sales and marketing to prepare them for the role.