Book Summary Preview : WHAT THE CEO WANTS YOU TO KNOW

The Big Idea
From running a multi-billion dollar business to selling fruit on the street, the CEO and the vendor share the same street-smart instincts or “business acumen” that are the essential skills to running a business. A CEO wants his or her people to understand business basics, from cash flow, to ROI, to sniffing out new opportunities and eventually becoming more involved in the decision-making that leads to bigger profits. The more you get what the CEO wants you to know, the faster your company will grow!

Part 1

Business Acumen
The universal language of business

1. Why Jack Welch thinks and talks like a street merchant

No matter where you go in the world, street vendors are all alike: they borrow money to get their produce (inventory), sell at a profit, pay off their interest by making more sales faster (inventory velocity) and making sure they don’t bring home any leftover fruit but bring home cash instead.

Every morning the vendor arranges his wares in an attractive manner (merchandising), calls out to potential customers louder than his competition (advertising), adjusts his prices throughout the day (increasing value to customer by slashing prices), and focuses on the bottom line with a very keen sense of what sells and what works.

You don’t have to be an MBA graduate from Harvard to hone these skills and understand the basics of business. The key is to send the executives back down to the floor, where the nitty-gritty everyday sales calls, rejections, complaints, and individual decision-making that affects the bottom line is more real than anything that occurs within the confines of a board meeting.

The Universal Laws of Business Acumen

Learn to see your company as a whole and make decisions that enhance the overall performance.

If you are in promotions and you don’t give a flying fig what goes on in the finance and planning department, how can you possibly think up a campaign that will address the money issues, move stock off the shelves faster, or make customers come back for more? Coordination is the key in any organization and seeing things as one unified whole is the beginning. Think like you own the business, after all…it is paying you.

2. How your company makes money

How cash, ROA, growth, and customers work together to create a profit

Cash generation is the difference between all the cash that flows into the business and out of the business in a given period of time. CEOs want their people to be cash-wise, from a sales representative negotiating a 30-day payment down from the usual 45, to a janitor turning off more lights during lunch hours, the little things all count and add up at the end of the month. When accounts receivables (money owed to your company by customers) are not properly scheduled for collection, to the management of accounts payables (money the company owes its suppliers) a company’s oxygen (cash) is the lifeblood and can spell bankruptcy if there is not enough to go around. . . . . . . . . . . . . . . . . . . .

Want to read the rest of this summary? click here >>