Rita Gunther McGrath

I don’t think there’s any perfect organizational structure. But we tend, unfortunately, to perceive reorganization as a negative thing. Companies use structures as a means to an end—to coordinate activity, to capture and share information, and to get the right expertise to bear on the right problem. There’s nothing wrong with changing structure.

But there’s a nuance to it. In a fast-moving environment, structures that require … [ Read more ]

Rita Gunther McGrath

Industry is a very traditional concept in corporate strategy. Industrial organization economics says that the structure of the industry determines the profitability of the firms within it, and those firms with favorable positions within an industry will outperform those with less favorable positions. I would argue that is a dangerous idea because in many sectors, the most significant competition you’re going to face will come … [ Read more ]

Rita Gunther McGrath

Companies need to provide some stability in the midst of change. There has to be a mix. People need to be able to count on their leaders and the values of the firm. They need to have a common understanding of what’s within the strategy and what’s excluded from the strategy. There needs to be clarity about the relationships and the development of people. These … [ Read more ]

Rita Gunther McGrath

The trouble with innovation is that it’s unpredictable. New businesses tend to be small and failure rates are high. They don’t operate with the same rhythm as core businesses, and their size and scope are insignificant relative to core businesses. That’s problematic if you’re running a P&L, and that’s why resource allocation should not be wedded to a particular line of business. It should be … [ Read more ]

Six Signs that Your Innovation Program is Broken

A successful innovation is a little like an iceberg: Look under or behind the innovation and you’ll see the smart practices, processes and structures that supported the success of the innovation. Herewith, six practices to avoid, and that are sure to compromise the chances of success.

The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business

Chances are the strategies that worked well for you even a few years ago no longer deliver the results you need. Dramatic changes in business have unearthed a major gap between traditional approaches to strategy and the way the real world works now.

In short, strategy is stuck. Most leaders are using frameworks that were designed for a different era of business and based on a … [ Read more ]

Management’s Three Eras: A Brief History

Even as old ideas remain in use (and are still taught), management as it is practiced by the most thoughtful executives evolves. Building on ideas from my colleague Ian MacMillan, I’d propose that we’ve seen three “ages” of management since the industrial revolution, with each putting the emphasis on a different theme: execution, expertise, and empathy.

Rita Gunther McGrath on the End of Competitive Advantage

The Columbia Business School professor says the era of sustainable competitive advantage is being replaced by an age of flexibility. Are you ready?

Gökçe Sargut, Rita Gunther McGrath

Simple decision rules, structures and relationships are not likely to be effective approaches when the task at hand involves making decisions in the context of complex systems. Ironically, many of our most embedded management practices—such as designing for optimization and for efficiency—only exacerbate the risks of things going wrong at a systems level. Somewhat counter-intuitively, the most robust complex systems are often not designed for … [ Read more ]

Alternative Systems for Corporate Survival

Change management expert John Kotter argues that companies cannot adapt to change mainly because of their hierarchical management systems. These systems are designed to coordinate large groups of people in the consistent and efficient delivery of products and services—and they do it well. They are, Kotter says, “absolutely necessary to make organizations work.” Here’s the conundrum: You can’t jettison the hierarchical system that runs your … [ Read more ]

Managing Under Complexity: Where Is Einstein When You Really Need Him?

Some managers might think that they’ll be able to comprehend a complex situation by reducing their analysis into a few, simple rules. But simplification can be dangerous and costly. Instead, as these authors describe, managers can address complex situations with certain appropriate, and sometimes counterintuitive, practices — and a hefty dose of humility.

Obvious, Intuitive and Wrong

Past success can become tomorrow’s liability. But instead of throwing out the old and taking a bold leap into the new, leaders in uncertain times should focus on creating conditions for internally generated growth. Columbia’s Rita Gunther McGrath presents a portfolio of opportunities that managers can employ, including a questionnaire to help you pinpoint the greatest sources of uncertainty in the business, and thereby focus … [ Read more ]

Rita Gunther McGrath

One of the biggest differences between a core business and an entrepreneurial one is what colleagues and I have termed the difference in the Assumption:Knowledge ratio. Businesses with a low ratio – such as your core – can be managed conventionally. In such situations, the measure of a good plan is how close results came to expectations, and failure rates should be low. In a … [ Read more ]

Marketbusters: A Call to Arms for Upper-level Managers Looking to Increase Market Share

MacMillan and McGrath’s new book, Marketbusters: 40 Strategic Moves that Drive Exceptional Business Growth, is intended to help managers identify similar high-impact opportunities within their own companies and industries. MacMillan, a Wharton management professor, and McGrath, a management professor at Columbia University, collaborated on a prior book, The Entrepreneurial Mindset, published in 2000. Marketbusters grew out of it.

But where the Entrepreneurial Mindset focused on fostering … [ Read more ]

MarketBusters: 40 Strategic Moves That Drive Exceptional Business Growth

McGrath and MacMillan, graduate business school academics, offer assistance to executives for improving growth and profitability, especially those seeking skills such as improving their decision-making ability, working with the reality that failure is linked to intelligent risk, and making sense of ambiguous information. To achieve growth and profitability, the authors suggest using market busters, actions they define as those a company can take to change … [ Read more ]