Man of Mystery

Probing, questioning, and digging into the psyches of others is Charan's most successful technique. Yet when the tables are turned, when he is presented with an opportunity to hype The Brand Called Ram, the man grows suddenly mute. Few know anything about the personal side of Charan, and he clearly wants to keep it that way. "He's a loner. He's very reserved," says C.K. Prahalad, the strategy expert. "A lot of people respect him, but I haven't figured out who are his friends." Ask him a question about, say, his hobbies, his lack of family or home, or even what motivates him to do what he does, and you're deflected with a dismissive, or perhaps defensive, wave of the hand. "I don't want publicity," he says. "I've avoided that. This is not my purpose. The purpose here is that when I work for somebody, somewhere, can I add value?"

A reporter tries to burrow deeper: How do you know whether you can add value or not? "I don't know," he says, hand in the air. "That's not me. I'm not the self-reflecting guy." It's rather unusual that you have no home or fam-ily. Is this on purpose? "Just leave that out," he says. "I just have no family." He is rumored to be taking care of his extended family in India, but that's not an appropriate discussion topic, either. The only baggage he's willing to discuss is the black bag in the corner of the room. His face clouds over, brightening only when he spies a copy of his book What the CEO Wants You to Know (Crown Business, 2001) on a nearby shelf. "That's me," he says, relieved to be on safe ground again. "This is it. That's what I do. I love that book, because it gets to the guts of the business."

The guts of the business. In an era when few people see much of anything that's noble about business, Charan provides a much-needed antidote. For him, it's about making a difference, in the same way that an athlete gives up everything to get to the Olympics or a nun renounces secular pleasures to serve a higher being. So what's an-other lonely plane ride or a bulky suitcase, after all?

Sidebar: Getting to Growth: Charan's Commandments

Some of the key ideas in Ram Charan's latest book, Profitable Growth Is Everyone's Business: 10 Tools You Can Use Monday Morning

Be a Rod Carew, Not a Barry Bonds

Charan went to his first baseball game just last year. But the metaphor he uses for sustaining corporate growth is to hit singles and doubles rather than home runs, to fund smaller projects that will bring in regular revenue. "In the past," says DuPont EVP John C. Hodgson, who worked with Charan, "people would have looked down on a successful $50 million product, saying, 'Why are you screwing around with that little thing?' That is a giant change." DuPont now gets 28% of its revenues from new products, up from 20% a few years ago.

All Growth Is Not Created Equal

Acquisitions aren't always bad growth, but they usually are, as companies such as Daimler-Benz and Vivendi learned the hard way. Price-cutting to gain market share is another practice that hurts everyone and ultimately leads to shrinking profits and revenues. "Good" growth should be sustainable, organic, and capital efficient. That means both boosting profitability and developing new products, even if it requires a significant investment.

Productivity Goes Beyond Cutting

For Charan, the focus should be on revenue productivity, which is about boosting revenues from the same cost basis rather than reducing expenses. And to boost return on investment, the ratio of earnings divided by investment, most people slice the denominator. Upping the numerator by taking a hard look within a business and improv-ing existing practices is a much better way to go.

Build a Growth Budget

Charan thinks that in order to grow, you must create a growth budget that is segmented into short-, medium-, and long-term investments, with different levels of risk. Next, you divide them into projects that cut across silos and involve people across the organization. Finally, you review the growth budget the same way you review any budget, and kill the losers and add resources to the winners as time goes on.

A New Definition of Cross-Selling

This is not pushing more offerings on a client--the classic definition--but rather figuring out a customer's most basic need and presenting a proposition that lets your existing products solve the problem. You start with a tool called the "market map," which carefully segments customers into geographic, industry, or revenue groups and helps find the best opportunities. Then you can zero in on the highest-potential customers and try to tailor offerings for their specific concerns.

Jennifer Reingold (jreingold@fastcompany.com) is a Fast Company senior writer.