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    Confronting Reality: Doing What Matters to Get Things Right

     
    To understand your business reality, take a look around. Then take another look, and another.
    12/13/2004

    Speaking of reality, does this statement from Confronting Reality ring true? "Though businesspeople like to think of themselves as realists, the fact is that wishful thinking, denial, and other forms of avoiding reality are deeply embedded in most corporate cultures."

    While it's essential to confront the reality of your business, of course, how can you be sure what that reality is? According to this guide, your best bet is to look a lot harder at your business model and closely examine how it "harmonizes" with the competitive environment outside. But your job doesn't stop there. Most importantly, the authors say, it is essential to revisit the model on a regular and rigorous basis. How and why to do that is the focus of this book.

    The basic framework explains how to analyze a company's environment, financial targets, and internal capabilities and activities (such as strategy, human resources, and organizational structures). Examples from EMC, Cisco, Home Depot, 3M, and Thomson Corporation help to put a stamp on the theoretical discussion.

    As the business model is advanced as a lever for business success, the merits of strategy are somewhat downplayed here. Strategy often turns out to be the cart that comes before the horse, they say, a view that some may take issue with. "People with a well-developed sense of business savvy seldom have a strategy ahead of time. Instead, they devise their strategies as a means of meeting financial targets, not the other way around," write Bossidy and Charan. They use the success of the Oakland A's baseball team to show how it can be possible to upend conventional wisdom and rise from behind by setting hard-to-reach goals.

    Larry Bossidy is retired chairman of the board and CEO of Honeywell International. Ram Charan, an HBS alumnus for both his MBA and doctorate, is a consultant, speaker, and author of other business books and articles. Charles Burck contributed to the writing.—Martha Lagace

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