This Columbia Business School professor understands the challenges of developing business strategy in times of insecurity.
Who? Rita Gunther McGrath is a professor at New York’s Columbia Business School and an expert in strategy and innovation. She’s spent her career working out how organisations should act when they don’t know what to do – or in more formal language, “developing strategy in uncertain and volatile environments”. Among her honours is the 2013 Strategy Award from Thinkers50, a group that ranks management experts.
What does she think? In general, that firms need to take risks in uncertain markets, but also understand the ways to manage those risks. Her most recent book, The End of Competitive Advantage, argues that the old model of a firm with a long-term sustainable advantage has disappeared. These days, successful firms now exploit one temporary advantage after another. The best firms are those that adapt fastest as the landscape changes around them.
“Things move quickly in technology, which is why technology companies are fascinating to strategists the way fruit flies are for biologists.” Rita Gunther McGrath, blogs.hbr.org
What’s smart about this? Traditional management thinking didn’t always deal well with uncertainty. Uncertainty is McGrath’s comfort zone, fitting her well for an era when technology and globalisation continually destabilise the existing order. Her 1990s work explained why lean start-ups might succeed, even before start-ups became commonplace, and suggested how established organisations could emulate them.
McGrath first came to prominence in 1995 with a Harvard Business Review article called “Discovery Driven Planning” (co-authored with Ian MacMillan). It argued that rather than making cheery projections for some new venture, organisations should ask what will have to prove true in order to reach those numbers. The technique’s fans include innovation guru Clayton Christensen, and it became a book called Discovery-Driven Growth.
How to apply it? Set up processes that let your organisation move into exploratory mode and learn from failure. McGrath’s books provide toolkits and discoverydrivengrowth.com has useful material.
This article is from the October issue of INTHEBLACK