Business Insights Blog: Interview with Rita McGrath
Business Insights blog is publishing excerpts from an interview with Rita McGrath: “In order to avoid becoming complacent with your clients, you’ve got to keep your eyes open. Creating benchmarks in the market will help you compare key ratios with those of your competition, comparing factors such as customer-referral propensity. You should also always be on the lookout for word-of-mouth and referral business. Were your clients happy enough with you to refer you to somebody else?
Measure your metrics to gauge whether these clients are falling off, and if you’re getting unique visitors. And even if you’re in a low-competition market, you should still practice ‘fire drills.’Create a ghost competitor to develop tactics to deal with competition and stay sharp. Not only are you preparing yourself for the possibility of a surge in market competition, you’re pushing yourself to achieve better results right now, which means more money.” To read the entire blog post, click here.
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- Posted Admin on September 22, 2008
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Real Options, the Living Dead, and how to play the possibility of failure in the financial markets
I’m a big fan of thinking of bets in highly uncertain environments in terms of options. With growth options, I usually advise thinking of new opportunities as options - in which you place a small bet with a contained downside, that buys you the right, but not the obligation to make bigger bets later on. Thus, you spread your risks, and if you win, you have the potential to win big.
A recent note in the Wall Street Journal speculated that investors are making exactly the opposite bets in the case of companies suffering in the current downturn. The ‘cheap’ buy is actually the depressed stock of a company in trouble. Although some are likely to go bust, the options bet is that a few will survive, draw the attention of other investors, and pay a nice return to those steadfast enough to purchase when things looked grim.
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- Posted Rita McGrath on September 08, 2008
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Management Techniques actually work!
If you didn’t catch the article by Scott Thurm in today’s Wall Street Journal, you should check it out.
He reports that researchers from Stanford University, the London School of Economics and the consulting firm McKinsey & Co. found that solid management techniques, yes, the kind we teach in business schools, actually make a difference to the performance of manufacturing plants. They found that better managed facilities employed management tools that helped them achieve better performance. It’s comforting to know that the research we do and the resulting tools and techniques can have a good performance effect.
Among the studies’ more intersting finding is that (for now) factories in the US are better managed than those in other countries. But - that gap could soon close, they warn.
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- Posted Rita McGrath on September 08, 2008
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Powerful use of symbolism by leaders of change
One of the most powerful levers for leaders to use in trying to create change is through symbolism. Symbols give meaning to activities that would otherwise lack emotion or conviction. I was thinking about this when reading a recent Fast Company article on Michelle Rhee, recently appointed chancellor of the District of Columbia Public Schools (DCPS). The article cites Kent McGuire, dean of Temple University’s education school as saying “An unfortunate reality about large urban districts is that they’re set up to satisfy the adults who work in them, not the kids they’re supposed to serve. Kids don’t vote.”
Rhee has turned this observation into something of a battle cry, with powerful symbolic effect. In response to criticism about having fired 15% of the central office staff, she said, “Children are losing their lives because we’re not educating htem well. But we’re concerned about the adults? I’m not firing people because I’m mean or heartless or don’t care about people. I’m just not willing to forsake the future of thousands of kids for the comfort of a few adults.” In a further powerful bit of symbolism, Rhee’s own children attend school in the district she is trying to reform.
Tackling large-scale change is never without controversy and it’s early days yet for the efforts to solve the intractable problems of a large district like DCPS. But as an example of powerful symbolism, it really works.
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- Posted Rita McGrath on August 31, 2008
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Unleash the Emotional Appeal of Your Product
Rita McGrath posted to the Harvard Business Publishing site on this topic on August 20th: “In our book MarketBusters, my colleague Ian MacMillan and I encouraged companies to think about how adding an emotional appeal to their offerings can create massive differentiation in an otherwise crowded field.” To read the entire post, click here.
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- Posted Admin on August 27, 2008
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