Book review: Confronting Reality: Doing What Matters to Get Things Right, by Larry Bossidy and Ram Charan

originally posted elsewhere: June 14, 2005

tl;dr: Decent general overview for general managers, but lacks detail...

Ex-General Electric (and Allied Signal / Honeywell) executive Larry Bossidy and Harvard Business School professor Ram Charan have given themselves quite a significant challenge in their latest collaborative book, Confronting Reality. The global business environment has gone through numerous upheavals over the past five years, with the bursting of the technology / Internet bubble, outsourcing, and the growing dominance of mega-retailers, and the pace of change has never appeared greater. In Confronting Reality, Bossidy and Charan attempt to offer new rules for succeeding in this changed environment. For the most part, their prescriptions appear very reasonable, although the book lacks detail in both its guidelines and the supporting evidence for them.

The main thesis of Confronting Reality is that business leaders should thoroughly examine their company's business model, focus on making money, and change the business model (perhaps radically) if conditions in the external environment demand it. Without claiming that particular businesses have implemented their framework (after all, how could that be, since they are describing the framework for the first time in this book), they present a number of success cases and make the claim that the leaders of these companies have adhered to their guidelines. This, of course, is more than a bit subjective, and would fail the standards of mathematical proof and the scientific method. Furthermore, the description of the framework lacks detail, so it is not possible to know if a given company is adhering to it or not.

A simple book cover with a light grey background and black all-capitals text for the book's title and the authors' names at the top and bottom respectively, and red text for the book's subtitle in the middle

However, the recommendations Bossidy and Charan make seem beneficial. Looking outside the company at how the external environment is changing should prevent companies from becoming too insular and from missing major market moves. It is usually the case that when a once-successful business fails, it is due to some environmental change that becomes obvious to outside observers well before the company's leaders finally realize it and act upon it. Bossidy and Charan present Sun Microsystems as a case of a company that missed a structural change in the environment, but even they aren't quite ready to write Sun off yet. They heap praise on the job Jeffrey Immelt has done so far at GE (as well as Bob Nardelli at Home Depot), and strongly claim that those leaders are adhering to their guidelines, so if GE and Home Depot do well in the years ahead, it will be the best proof that their recommendations have value.

Confronting Reality can be read in a single cross-country plane flight. The vocabulary is none too challenging, and the footnotes are so sparse as to cause me to wonder why the authors bothered including any at all. Anecdotal stories are sprinkled throughout the book, and they hold the reader's attention. Confronting Reality is a decent high-level overview of the changes roiling businesses and industries in the early 21st century, and can be a good book to start a discussion of these topics within a company. But if you are looking for detailed answers and guidance, you will have to continue your search.