How do companies and firms become unstuck to pursue sustainable competitive advantage? Best-selling author, globally renowned strategic advisor, and Columbia Professor, Rita McGrath has an in-depth conversation with host Greg LaBlanc on sustaining a culture of innovation and strategy.
Their chat revolved around her two books: The End Of The Competitive Advantage And Discovery-Driven Growth. The episode covers interesting points on how to avoid having a whipsaw reaction when major external events happen and affect your business. Building a process for systematic and proactive exploration and exploitation is a must. Some key concepts unpacked in the discussion include:
- Innovative governance
- Being aware of indicators of blind spots that will soon get them stuck
But, how do you maintain stability while fostering innovation and dynamic change? Listen to her tips on creating a system nurturing leaders who raise these signals. Take notes on the discussion of creating KPIs' and metrics that incentivize innovation initiatives that tie into the organization's long-term view and purpose.
Episode Quotes:
How can leaders access indicators to lack of innovation and competitive advantage blind spots?
Pushing yourself to go to places that are diverse, that is not necessarily conforming to your pre-existing beliefs. And as Steve blank likes to say, there are no answers in the building. You have to get out of the building and see what's going on. And even if we have to do it virtually, I think there's still benefit in putting yourself in a position where you could find contradictory information to what you believe. A great question to ask is, you know, what would have to be true for my current assumption to not hold? Like what would I have to be able to observe? And when you start asking people those kinds of questions, they look at the world in a different way.
How do you build processes and systems for exploration?
If you look at high-reliability systems like air traffic control when flying, why is it so safe? It's so safe because everybody who's a participant is required to report on things that were out of order. And you know, they don't get punished for it. They get punished if they don't report. Right? And so you need to put in place this system of incentives, which means anybody who has that valuable piece of information not only feels comfortable letting you know, but they feel an obligation to bring it forward to decision-makers, and most companies don't do that.
How do you engineer an innovation governance process and an audit system within the organization?
Under Gerstner, IBM had a terrific program. They call it The Emerging Business Opportunity Program. If there was any cut in budget or anything that would, you know, move people out of these innovation projects, they had to come and explain themselves like what was going on. And so you created this power at the, at the staff level, senior staff level where all kinds of provided connection, authority, and protection for these innovation ventures. So they weren't allowed to get sort of sucked into business as usual.
How does an individual know when they need to ramp up their competitive advantage in their career and retool to meet these changes?
If you're not learning, that's a big red flag to me. If every day starts to look like every other day and you're not trying anything, that's a strong signal that you're risking obsolescence. I think that's one. The second one is if you're kind of going through the motions and your heart's not really in it anymore, you know, even if you are learning.
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