How to stay relevant during a crisis - Rita McGrath [Interview]

Anushka
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How to stay relevant during a crisis - Rita McGrath [Interview]

About Rita McGrath

How to stay relevant during a crisis - Rita McGrath

Rita McGrath is a best-selling author, a sought-after speaker, and a longtime professor at Columbia Business School. She is widely recognized as a premier expert on leading innovation and growth during times of uncertainty. Rita has received the #1 achievement award for strategy from the prestigious Thinkers50 and has been consistently named one of the world’s Top 10 management thinkers in its bi-annual ranking. As a consultant to CEOs, her work has had a lasting impact on the strategy and growth programs of Fortune 500 companies worldwide.

Sneha Moorthy

Welcome to another episode of the peopleHum interview series. I am your host Sneha Moorthy and let's begin with a quick introduction of peopleHum. peopleHum is an end-to-end, one-view, integrated human capital management automation platform, the winner of the 2019 global Codie Award for HCM that is specifically built for crafted employee experiences and the future of work.

We run the peopleHum blog and video channel which receives upwards of 200,000 visitors a year and publish around 2 interviews with well-known names globally, every month.

Sneha  

Welcome Rita. We’re thrilled to have you. 

Rita

Oh, it's a delight to be here. 

Sneha 

Yeah. 

So the first question I had for you Rita was, you've had such an eventful journey working for corporates and also teaching in prestigious business schools. So can you tell us a little bit about your learnings along the way? 

Rita

Well, I think one of the biggest learnings is that a lot of the tools that we use for managing under high uncertainty situations that we've learned from innovation are now really central to what people are trying to use as they're navigating their way through this crisis, right? So many, many executives and leaders have never had to deal with high uncertainty situations. So they're really hungry for that insight? 

Sneha 

Wow, that's so true. 

And I also came across this phrase ‘Creating growth under Uncertain Conditions’ in your profile and that is suddenly so relevant at this moment. So can you tell us how really can one grow under such precarious circumstances? 

Rita

Well, the research is pretty clear that the companies that invest in growth and invest in their people and invest, when things are tough, when the easiest thing to do is to shut everything down, right? But the companies that invest through that tend to really accelerate their growth once they're through the crisis.

I think the most important thing to figure out is, what are the new, I'll use Clay Christensen’s term, what are the new jobs to be done that are emerging from this crisis? And when you look at the companies that are successfully navigating, what you see is very aggressive pivots to coming up with the opportunities that are now more relevant than ever. 

So companies that used to be, an example is a company called Timberlane, which used to be making shutters, really high quality shutters for people's houses. And, of course, nobody's buying that right now. But they realize their capabilities could be tilted to make protective gear. And so they've gone full bore into that which, unfortunately is now in very high demand here in the US. 

Sneha 

Yeah, that's so right. We need to start adopting to what the situation is and make optimum use of it. That's the key takeaway, right? 

Rita 

(Nods in affirmation)

Sneha 

Absolutely. 

So, how much of a role do you think that technology plays in the world of strategy and innovation?

Rita

I think technology is absolutely critical and I think we suffer from a recency bias when we think about technology. I mean, the AT&T picture phone was first debut in 1964 at Disney World, and that was the first visual, face-to-face, sort of Zoom of its day. But I think what technology really does is accelerate.

“What technology really does is accelerate.”

And so we think about digital operations. They have had a life cycle that I think we've overlooked. So when digital first began, making a big impact on business and I'll pin this to the mid-90s let’s say, everybody had a web page, and it was all about, oh, Netscape and oh my god, a browser and a dot com and all this stuff and it really started out in marketing. 

And so if you look at the chief digital officer role at that time, it was oftentimes reported up to marketing, and that was considered to be kind of what digital was, right? Then you started to have digital in products, so if you wanted to buy a hammer let's say, you go to Amazon or your provider of choice and you will see their user reviews. And you would say, oh, left this hammer out in the sun and the plastic handle melted. And so now a hammer has got another digital component to it. 

And now what we're seeing is digital is really making its way into business models, and that now has a real existential question to it, which is, how should I be competing? How should I be thinking about competition when my business model is up for grabs, right? 

When, for example, the whole population of direct consumer companies, so Dollar Shave Club or Harry's or companies like that has now become kind of the way people do business or with respect to the pandemic, companies like Instacart that are basically knitting together people who can perform these services and people who need these services and it's just changed the business model for how we take for granted things that used to be done very differently. 

Sneha 

Absolutely. That's insightful. Thank you so much for that. 

And is innovation all about liberty? How can leaders balance the freedom to experiment and also not let it go beyond a certain risk stage?  

Rita 

Yeah, that's a question I hear a lot. So sort of two responses to that. The first is something Jeff Bezos talks a lot about a lot, he says, you have to understand the difference between type one and type two decisions. So a type one decision is very consequential, irreversible, commits the organization, involves a lot of potential downside, really serious decisions that you have to think about incredibly carefully. 

Now type two decisions, on the other hand, are, they are reversible, if you make the decision and you decide you don't like what you've learned, you just turn around and walk back, so you walk through the door. And if you don't like what you see on the other side, you walk back. They are low risk, they are fast, you can do them quickly and you see, the problem with large organizations is, what tends to happen is we treat every decision as though it was a type one indecision. So I think that's the first observation. 

Second observation is that for many organizations, what you're trying to do is not so much the classic leadership thing, which is, here's the vision and we're gonna go for that vision and everybody follow me. It's much more what Linda Hill, who's a good friend of mine, calls knitting together slices of genius into a collective genius and that when you're in a situation which requires creativity and new answers that you can't formulate a vision and go for it. What you gotta do is really create the context in which people can discover new solutions. 

Sneha 

Wow, that is so beautiful the way you put it, knitting together a lot of geniuses together. It really is very beautiful. It sums up everything. Thank you so much for that. 

So before we just wrap up the interview, I would love to ask you, do you have any soundbites to leave off with our audience?

Rita

Soundbites? Oh, that's a challenge. I'd say right now when uncertainty is at its greatest, that's also the greatest opportunity.

“When uncertainty is at its greatest, that's also the greatest opportunity.”

Because the old rules are no longer applicable. So don't be afraid to try some new things because the old regime is not necessarily going to be what the future holds. 

Sneha 

Yeah, that is so insightful. I mean, yes, we need to try out new things to figure out what works and what not, right?

Rita

Absolutely.

Sneha 

Thank you so much, Rita. It was wonderful talking to you. I had a great time and I’m sure our audience are gonna love this too. 

Rita 

It was a pleasure meeting you. ‘peopleHum’, I love that name. 

Sneha 

Thank you, thank you so much.

We hope you got some great insights from this blog. Its now time to apply it. Get started with peopleHum for free today. No credit card needed.

Tags
change management
startups
Rita McGrath
Sneha moorthy
remote work
crisis management
pandemic
futureofwork
adapting technology

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