Fostering Innovation Skills, Culture & Metrics with Rita Gunther McGrath, Author of Seeing Around Corners and Professor at Columbia Business School: Replay

Inside Outside

On this week's episode of Inside Outside Innovation, we sit down with the legendary Rita Gunther McGrath, best-selling author of books like The End of Competitive Advantage, Discovery Driven Growth, and her latest book Seeing Around Corners. Rita and I talk about what companies need to do to navigate the pace and intensity of today's changing environments and what needs to happen to foster the skills, the culture, and the metrics around innovation.

Inside Outside Innovation is a podcast to help new innovators navigate what's next each week. We'll give you a front row seat into what it takes to learn, grow, and thrive in today's world of accelerating change and uncertainty. Join us as we explore, engage and experiment with the best and the brightest innovators, entrepreneurs, and pioneering businesses. It's time to get started.

Interview Transcript with Rita Gunther McGrath, Author of Seeing Around Corners and Professor at Columbia Business School

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger, and as always, we have another amazing guest. With me is Rita Gunther McGrath. She's the author of Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen. Welcome Rita.

Rita Gunther McGrath: It is a pleasure to be here.

Brian Ardinger: I can't tell you how excited I am to have you on the show. I've been a big fan for a long time. You're a best-selling author of a number of books: The End of Competitive Advantage, Discovery Driven Growth. You're a sought-after speaker and consultant and a long-time professor at Columbia Business School. So, thank you very much for coming on and sharing your insights about innovation.

You've written this new book, Seeing Around Corners about how do you navigate and become better prepared for this inevitable change. What made you decide like this is the right time for this particular book and it came out right before COVID.

Rita Gunther McGrath: For once I got the timing on a book right. Well, the idea of strategic inflection points intrigued me beginning back in the nineties with Andy Grove's work on how Intel had to make this incredible transformation from selling memory devices, to selling microprocessors and what a courageous journey that was for them.

And there hasn't really been a lot done on that theme since then. Not a lot. As we were looking at inflection points and, you know, before the pandemic, the ones I was watching were certainly digital touching every part of everybody's life. The merging of strategy and innovation as separate fields, we know they've really been separate for and now I really, as competitive advantages, get shorter, I think they're really emerging.

And then perhaps the whole issue around productivity, automation, what's the right kind of social contract. And it seemed to me, these were all the kinds of change which feel really slow moving until they hit some kind of tipping point. And that's when you have the inflection point. And what got me intrigued about the book at this particular time was how far ahead you can pick up the weak signals that something really is brewing.

And if you keep an eye on it, right, it can take your business to new heights. And if you sort of stick your head in the sand and pretend it's not happening, that's where we see the great corporate catastrophes.

Brian Ardinger: And your book breaks it down really into three core questions. Like how do you see an inflection point coming? How do you decide what to do about it? And then how do you bring the organization along with you to make that happen. To set the stage, how do you define an inflection point. What's out there? And why is it so important to identify an inflection point.

Rita Gunther McGrath: Yeah. So, I define an inflection point as some external force that exerts a 10X pressure on something about your organization or your business. That would be, that often is technology, but it could be other things. It could be a regulation, it could be social norms, you know, it could be a number of different things. So, for instance, if you're in the energy world today, you know you're staring at dramatic pressure on the fossil fuels business, and that's not a big mystery.

And it's not going to happen overnight, but you know, that's something you're going to have to respond to. So, the reason I think this is an interesting way of thinking is that if you think about it, any business, any organization is born at a certain point in time. And there are things that are possible and things that aren't.

You can almost think of it as like living within an envelope of constraints. So, 30 years ago, if I wanted to get a video message to millions of people. I had to be Metro-Goldwyn-Mayer or Sky News. I mean I had to own satellites and production equipment and camera crews all over the world. Huge investment required to do that.

Fast forward to today and if I want to get a message that's compelling to 30 million people, you know, I can pick up my device. Hopefully I'm talented enough that I can post it on Instagram or wherever if it goes viral, Voilà. And what have you spent almost nothing.

And that to me is an example of the kind of inflection point that overtakes businesses sometimes before they're really aware of it. Because we built our assumptions around what's possible at the time those assumptions were formed. And when those assumptions change, it's super easy to miss them.

Brian Ardinger: Yeah. I mean, the pace of change is absolutely accelerating. We've got technologies, markets, access to capital. Think about we're filming this a couple of weeks into January. If you think about the first three Wednesdays of January, you had a riot on the Capitol, an impeachment, and an inauguration, and that's just the political side of change.

Is it the inflection points? Are they coming more frequently? Is it the number of inflection points that are happening right now that's making it so dynamic or is it the intensity of these inflection points or both?

Rita Gunther McGrath: Yeah, I kind of go with intensity, right? If I go back to my media example, to think that in the span of just a couple of decades, you went from something that was literally a multimillion-dollar, tens of million dollar required investment to something where any kid on a scooter can do it for nothing.

You know, that to me is just an intensity level of inflection point that I don't think we've really adjusted to. The other thing I would argue is that these inflection points happen before our institutions catch up. And there's always a lag between what's possible, human and technology wise, and what the regulators are there to provide and what is happening with institutions.

So an example that's playing out right now is the whole conversation about personal privacy, the data mining and advertising business that's made out of money, people's personal data and the whole third party data selling kind of things. And in my book, I talk about this as an issue where, you know, institutions and the public in general, just haven't caught up to practice.

So if I go all the way back in time and look at the previous regime, like, what was privacy, how was ...