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Ram Charan: The Business of Security

Lynn Mattice, CSO of Boston Scientific, quizzes the man Fortune magazine calls "the most influential business consultant alive" about how security executives can better serve the business

Mattice: When I read your book What the CEO Wants You to Know, it was very clear that there are a broad range of elements leaders need to have. From your view, what are the most critical elements that need to be in place for the next generation of security leaders?

Charan: As I mentioned, first there's the business side of it. Second, security leaders have to be very externally oriented, because a number of risks come on a surprise basis. Some are anticipated, but a good deal are not. Third, they need to take a more active role in working with line people to get them to anticipate risks in the factoring of their strategy and their execution.

Mattice: I'm sure you're familiar with an effort that the Council on Competitiveness is working on about resiliency. What role would you see a security executive play in dealing with the issue of business resiliency?

Charan: I do not know that particular effort. What's the effort?

Mattice: The essence of it is ensuring that companies understand their environments, the risks to their environments and the issues that can disrupt their business.

Charan: Yes. They have to understand the business; they have to look on the outside constantly; they're going to work with the line people to get them to see that their business actions, both strategically and operationally, take into account the possible risks.

Mattice: One of the things that they're saying is that security can be a profit enhancer for corporations.

Charan: No question about that. For example, if you have a construction company that is building some important item for some other company, and the security is very important and the risk is reduced and you build a building a month ahead of time, it's a huge profit enhancer.

Mattice: There are a number of programs that security organizations participate heavily in that can have a very positive impact, like the Customs Trade Partnership Against Terrorism (C-TPAT), where if you have the right programs in place, your containers and shipments bypass all the customs controls....

Charan: You go work with the logistics people, anticipate, look at the external environment and say what has to be done strategically. Plus it will allow you to decide what kind of insurance you're going to have.

Mattice: It can reduce your velocity in the business. If you can speed up your delivery [of] the raw goods or finished OEM goods, you can speed things to market and have to have less in the pipeline, which frees up a lot of capital.