Rita McGrath
Rita McGrath is a globally recognized thought leader who focuses on leading innovation and growth during times of uncertainty. She works with boards, CEOs, and senior executives to help them think strategically, even in today’s rapidly changing and volatile environments. She received the #1 achievement award in strategy from the prestigious management rankings group Thinkers50 and is consistently ranked in the Top 10. Her most recent book was the best-selling The End of Competitive Advantage. She has written three other books, including Discovery Driven Growth, cited by Clayton Christensen as describing one of the most important management ideas ever developed. She is a regular speaker in exclusive events such as the Drucker Forum and various CEO Summits. She is working on a new book about strategic inflection points.
McGrath has recently founded Valize, LLC, a new company focused on helping organizations get beyond innovation theater by unlocking the power of the Discovery Driven growth approach. McGrath joined the faculty of Columbia Business School in 1993. Prior to life in academia, she was an IT director, worked in the political arena, and founded two startups. She received her PhD from the Wharton School, University of Pennsylvania, and has degrees with honors from Barnard College and the Columbia School of International and Public Affairs. She is married and is proud to be the mother of two delightful grownups. Follow Rita on Twitter: @rgmcgrath. For more information, visit RitaMcGrath.com.
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The year was 1993. I was a newly minted PhD student and a brand-new faculty member at Columbia Business School. At the time, a rite of passage for junior members of the faculty was to teach the core, required, full-semester course, Strategic Management of the Enterprise. Teaching MBAs is challenging enough, but teaching Columbia MBAs about strategy, at that particular time in the school’s history, was grim.
For starters, about half the class had come from consulting firms and didn’t think there was much they could learn from a 32-year-old academic about strategy in the real world. The other half of the class were from or were aiming to join financial services firms on Wall Street. In neither case did they think that this course was going to be useful in the near term. To be honest, they resented how much of their tuition money the course was going to soak up. It also didn’t help that we were required to grade on a curve or that a big proportion of the grade depended on my subjective assessment of class participation. To say the least, it was an intimidating undertaking!
Nonetheless, I really tried. I hung in there when I was characterized as a foil flipper (yes, we actually used printed slides and an overhead projector – and chalk – in those days). When a student remarked that I didn’t seem to be that up to date on the latest news (with two kids under five and a killer commute, there wasn’t much time for reading the paper!). Another student asked something about how I would tackle work–life balance and another shouted, “She’d probably put it in a 2 x 2 matrix!” I guess I overused that particular teaching tool. I also kept my cool when, for their final project, a student team did an in-depth analysis of Larry Flynt’s Hustler magazine empire, complete with a copy of its signature publication attached to their report!
And then came an unexpected gift in the form of course evaluations. One thing to know about me is that while I do see feedback as a gift, as Marshall Goldsmith constantly reminds me, my initial reaction is to overreact. I could have 99 out of 100 people say that I walk on water and one person could say, “Well, Professor X can run on water,” and I would be devastated. As I was going through the evaluations and homing in on all the negative comments (despite the reality that there were probably more positive ones), I suddenly ran across a real gem.
“Professor McGrath,” the student said, “has an uncanny ability to connect anything to anything, no matter how seemingly unrelated.”
Until that moment, it hadn’t occurred to me that this was a sufficiently unusual skill that a student, who may well have resented having to take the class, would remark upon it. I’ve now become convinced that what I see when I look out the window are motifs – the often-subtle patterns that inform how organizations and other kinds of systems work. Having that perspective suggests a good point of departure for making interventions. If you want to change a system, you need to understand the interrelationships between its components. That’s the kind of work to which I have dedicated most of my research, thinking, and actions.
Throughout my twenties, I was a caricature of the “young woman comes to New York City to seek fame and fortune” kind of person. With glee, I had fled the Rochester area to attend Barnard College in the Big Apple. When my parents objected to my majoring in history (each week’s mail contained clippings of the awful jobs and ruined lives of former history majors), I switched to political science and fell in love. At the time, there was still room in the field for rich, narrative stories about the fascinating people, circumstances, and decisions that created the political economy around us.
I also started to work in actual political systems, with internships at the Parks and Recreation department, the City Council President’s office, and in various political campaigns. I also started two businesses, one in the political arena, one not. It was addictive.
Eventually, I completed a master’s of public administration at Columbia’s School of Public and International Affairs, which led to a job at what is now the New York City Department of Citywide Administrative Services. Running the city then was daunting. Ironically, its many problems created all kinds of opportunities; I mean, you were hardly going to make things worse. Mayor Ed Koch was a relentless and energetic advocate for his city and pushed his agencies to take advantage of new ideas.
My big break came when the powers that be decided to computerize the then-manual procurement process. I know, it doesn’t sound glamourous, but the project (which I named CLIPS, for Commodity Line Item Purchasing System) proved to be a catapult to a major new role. At the age of about 25, I found myself with a staff of 12, a team of consultants, a budget that ran into the millions, the authority to weigh in on vendor decisions, and a mandate to shepherd a project that would eventually touch every city agency and affect how all commodities purchased by the city were bought. I didn’t know this was going to be nearly impossible. So, my team and I waded right in. With wise support from the department’s head of IT, we pulled it off, within budget and pretty much on schedule.
This period really sharpened my motif-building skills. Computer systems touch stakeholders in unpredictable ways, and a large-scale one like this is as much about organizational change as it is about technology. Some of the most significant lessons I learned about how to promote change in organizations, how to see around corners politically, how to influence people without formal authority, and so on, were from this period.
That work, despite the long hours and occasional frustrations, was exhilarating.
So there I was – a job I loved, a decent salary, a place in Brooklyn, and, eventually, a husband and an apartment in Manhattan. What could possibly have been better than that? As readers will appreciate, it’s exactly when all seems to be going swimmingly well that you are often in the greatest danger of stagnation.
On the career front, I was beginning to realize that this happy, static situation of running the now up-and-running system could go on indefinitely, creating a very comfortable dead end. Or, I could take my skills and go to the private sector. Since we were, by then, expecting our first child, that didn’t seem like a sensible transition.
I had heard that business schools were booming and needed people with PhD degrees, and that there were lots of jobs for new business PhDs. The idea of doing research, writing, and teaching appealed to me, and it seemed that a professor’s job was probably more compatible with motherhood than a corporate executive’s would be.
I was accepted to the PhD program in social systems sciences at the Wharton School. Baby in tow, we decided to move to the Princeton area, in between New York and Philadelphia, and my husband and I entered a new world of parenting, commuting, day care, and a new house, mortgage, and community where we knew no one.
I was miserable.
Things got even worse once I started my PhD, where it seemed that the purpose of your first year was to break down any misconceptions you may have that you know anything at all about the subjects you are studying. Remember, by then I had been managing people for some years, and you might think I knew something about management. That counted for nothing in academic circles. Every article I read felt to me as though it was part of a conversation that had begun long before I arrived on the scene and would likely continue long after I left it. Take, for instance, a classic article by John Child, which took 30 pages to make the point that strategic choice was important for organizational performance1. I thought that was blitheringly obvious from the get-go, and frankly didn’t see why such an article would cause the major stir that it did (John and I later became friends and co-edited a special issue of a very prestigious academic journal together).
One bright spot in that difficult year was being assigned to read the entire works of Peter Drucker, a book a week, as I “learned to read like a graduate student.” It left me with a great appreciation of Drucker’s ability to synthesize and integrate patterns in the phenomena he observed, as well as (just as with my political science study) a joy in reading in-depth discussions of people and phenomena. This flew in the face of most academic work (even in management), which has often been described as having a bad case of physics envy, in which statistics and large data sets are often more respected than in-depth observational studies. The same thing happened in political science as well, as the softer sciences attempted to gain respect for their academic rigor.
My professor Kenwyn Smith also led a course on organizational diagnosis that was foundational for my later consulting and strategy work. “It’s all there when you walk in the door,” he would say, “you just can’t see it yet.” That is very much in the spirit of being able to see the deeper patterns in an organization. And this led to a major insight: what clients diagnose as their problems seldom are.
Another bright spot was working at Ian MacMillan’s entrepreneurship center. After rejecting various ideas for my thesis, an opportunity provided by Citibank solved the dilemma. They wanted to do a three-year study to understand their own corporate venturing process, and commissioned us to do in-depth case studies of 23 of their successful and failed internal corporate ventures. There was a modest budget to go with that, which meant that I was once again employed. The case studies were fascinating, and I discovered my love for figuring out how all the pieces of a puzzle fit together.
This statement from Kurt Lewin is a mantra for my life, which has to do with spotting the underlying patterns and motifs. As I’ve learned, a good theory has boundary conditions (when will a certain cause lead to an effect?), clear independent and dependent variables (what are we solving for?), and distinguishes between correlation and causality.
To give an example, my work on discovery-driven planning, which has now resurfaced as part of the lean toolkit, began with the recognition that when one is working with assumptions rather than facts, the primary challenge is learning as much as possible with as little risk as possible. That theoretical world is completely different than the world in which few assumptions need to be made because the past is a good predictor of the future.
As I reflect on my story, a few key motifs stand out. The first is that discovering what you love almost always takes you down unexpected paths, and sometimes that journey is uncomfortable. This brings me to the second theme, which is that being unhappy, mad, and frustrated comes with the territory of doing something new. Having sources of support – in my case, my husband and colleagues – who can assure you that you’re not the stupidest person ever to open a management journal, is key. I think, as with strategy, finding what you uniquely do well is a matter of setting a broad direction and working really hard to go there.
And yes, Marshall, feedback is a gift.