#75
A Strategic Masterclass with Rita McGrath
Rita McGrath is a best-selling author, sought-after speaker, and longtime professor at Columbia Business School. As one of the world’s top experts on innovation and growth, Rita’s work is regularly published in the Harvard Business Review. She is consistently ranked among the Top 10 management thinkers in the world and was ranked #1 for strategy by Thinkers50. Rita is the author of the best-selling ‘The End of Competitive Advantage’ and ‘Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen’.
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Summary
02:57 Reflecting on Rita’s business ‘failures’
- She started a political consulting business whilst she was at university – and realised elections don’t happen every year
- She quit her second business because it was deviating away from what she really wanted to do
- “To develop as a human being you need a mix of support and challenge”
08:48 On electioneering today
- In the US, it rewards polarisation
- It’s good to learn from other systems like in Dublin, Ireland with approval voting and for more centrist appeals
10:22 The power of quitting
- New opportunities arise when you let go of other opportunities
- Having a clear vision of your future helps you to quit the right things
18:33 Who are MBAs most suitable for?
- It’s not just about the content – it’s about the network you build and the way of learning
20:27 Having an unofficial board of directors
- Rita was deciding which direction to take her next book, and she sought feedback from others to help her decide
- Marshall Goldsmith has devised a good exercise of receiving feedback, which is “like speed dating” – all you can do is listen and say “thank you”
- Take time to build a network of people you value
- A mentoring relationship is a two-way relationship
24:17 Building a rich and diverse network
- Consider opening up your network to something more global to embrace and learn from different cultures and backgrounds
- Execution networks: these are dense, everyday networks of people with smooth flow of conversations
- Entrepreneurial networks: these are people you don’t speak with everyday but can help find opportunities outside of your day-to-day
26:11 Inflection points
- It is a shift in what is possible and could have a 10x effect on your business or life (e.g. 10x faster, more possible, accessible, etc)
- Inflection points often feel like they have come out of nowhere, but they have been developing underway for a long period of time
- You can learn over time to be self-aware to spot the inflection points
- You can’t always trust your gut or intuition if you have just been exposed to the same experiences over time
30:40 The four basic stages in the development of inflection points
- Hype, dismissive, emergent, and maturity
- Gartner Hype Cycle methodology is used to understand how technologies are commercialised
34:49 Why is it so hard for executives to anticipate major shifts in the business or market?
- It can take a long time for something to reach a tipping point
- Most often, leaders are incentivized not to upset the outcome but to see if you can ride out a model for a few more years
41:48 The concept of ‘snow melting from the edges’
- People who are working at the frontline are often the first exposed to see what is changing
- The phrases comes from Andy Grove, Intel’s former CEO and author of ‘Only the Paranoid Survive’: “When spring comes, snow melts first at the periphery, because that is where it is most exposed”
- Senior leaders often hear what they don’t want to hear and get “wrapped up in bubble wrap”
44:24 Engaging with people on the frontline
- Skip-level meetings are where a manager’s manager meets directly with employees, without that manager in attendance
- Choose employees randomly and get them together to discuss their experiences across the business
- Non-hierarchical communication
- Create a space for psychological safety
47:51 How to watch out for blind spots
- Diversity is key – you need to have regular contact with people from different backgrounds
- Make space for feedback
- Create progressive careers that rewards skills and capabilities
50:40 How to design your ‘Strategy spine’
- Executives should create a simple document called a strategy spine
- It is based on an imagined future: fill out the six elements – planned sources of revenue, key operating assumptions, key goals, revenue implications of those goals and assumptions, investments needed, and additional infrastructure needs
53:29 Is it better to promote certain people, or let them stay in their lane if they’re doing a great job?
- The choice doesn’t need to be binary – you can do a short-term trial (over a few months) to see how they get on as managers
- Test your managerial skills outside of work, e.g. through voluntary work
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