Companies

Math-driven firms will change every industry: Ram Charan

VINAY KAMATH LOKESHWARRI SK Chennai | Updated on January 24, 2018

Ram Charan

Legacy cos that can’t make the shift will be vulnerable, says management guru





So, you weren’t good at Math in school? It could come back to haunt you someday when you have to deal with esoteric equations in a corporate entity.

World renowned management guru Ram Charan, in his soon to be released book, The Attacker’s Advantage, says that companies that have deep algorithmic capabilities will possess a huge advantage over those that don’t, even over those that have been highly successful in the past.

Charan calls these companies Math houses, and says they are creating structural uncertainty for all industries. “Google, FB and Amazon were created as mathematical corporations; they were born digital. Apple became a Math corporation after Steve Jobs returned as CEO. This trend will accelerate. Legacy companies that can’t make the shift will be vulnerable to digital competitors,” he explains in the book, his 15th.

The global guru, who advises top corporate entities around the world, says the algorithmic revolution is sweeping across all industries from pharma to manufacturing.

Algorithmic revolution

“These Math houses are going to change every other industry; it’s just begun. Connecting dumb devices through sensors — sensors in tyres, unmanned vehicles … they all need algorithms. Math houses either have to be in-house or with outside sources, every major company has to have it,” emphasises Charan in an interview.

He says this algorithmic revolution will create greater uncertainty for established companies with competitors that appear in an instant and scale up quickly.

The change in its speed, the ferocity of its impact, its ubiquity and magnitude will be on a greater scale than anything that has happened before. And, top leadership better be prepared for it.

“The attitude of leaders matters. If the attitude is to look backwards because you were successful and that you will be successful in the future is not a good sign; they need to look outside in and not in the rear-view mirror. So, any organisation that is not in tune with the speed and composition of external change is at a huge risk of becoming less relevant, even irrelevant,” warns Charan.

Published on February 13, 2015

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