If there is one thing consistent in business it’s change. Columbia Business School professor Rita Gunther McGrath believes that rule applies to large, venerable, and outwardly stable-appearing corporations as well as to small, fast growing start-ups.
As McGrath wrote in an Interchange column for U.S. 1 published on January 4, “the competitive advantages of organizations last for shorter periods of time, and new technologies and ways of working seem to change by the minute. . . The old rules for success don’t necessarily work in today’s volatile business environment.”
McGrath recently participated in the Drucker forum on “The Entrepreneurial Society,” leading a panel discussion entitled “Time to Change the Practice of Management?” She will participate in the Thinkers50 2017 European Business Forum in November in London along with Lars Rebien Sorensen, the former CEO of Novo Nordisk, and others. At Columbia she has just launched a three-part online program on “Mastering Corporate Entrepreneurship,” designed to help corporate teams through the innovation process. She has written books on “The End of Competitive Advantage,” “Discovery Driven Growth,” “Marketbusters,” and “The Entrepreneurial Mindset.”
A longtime resident of West Windsor, McGrath has made relatively few appearances in central New Jersey. Now, as part of a new consulting firm she recently formed, Valize LLC, McGrath will lead a coffee and conversation on “Accelerating Team Effectiveness” Tuesday, January 31, from 8 to 10:30 a.m. at Collaboration Core, 3150 Brunswick Pike, Suite 300, in Lawrenceville. Cost: $95. For information e-mail Growth@valize.co or call 609-436-9946.
As the promotional material for the workshop state, “your organization’s results depend on people working together effectively. But all too often, under conditions of uncertainty, teams get stuck. Instead of flowing smoothly, work gets bogged down, things take way too much time, and people don’t connect. Even worse, nobody is talking honestly about what the real issues are.”
There are several reasons why teams don’t function as smoothly as they once did, says McGrath. “Teams are a lot less stable,” she says, because the workforce is a lot more mobile. Because of virtual working arrangements, the team members often are not physically co-located. The people may never actually get together. And there are often issues of “psychological safety,” says McGrath. If people are reluctant to share their opinions, the team does not function as well as it might.
Most team effectiveness assessments focus on the level of satisfaction of team members, according to McGrath. However, research has shown that there is not a strong correlation between satisfaction and team performance. The mere fact that everyone on the team likes one another and bonds well over beers at a team-building function does not mean the team will be exceptionally effective. McGrath believes that five other elements have greater impact on a team’s effectiveness: 1.) Roles — the right skills and capabilities; 2.) Trust — confidence and trust in one another; 3.) Information — fluid and dynamic information flows; 4.) Commitment — mutual commitment to the team’s goals; and 5.) Challenge — comfort in raising difficult issues.
Joining McGrath at the workshop will be Marion Reinson, a longtime central New Jersey marketing strategy and communications specialist who is now part of the Valize team.
McGrath was raised in a German-speaking home — her father, an organic chemist, and mother, a microbiologist, were born in northern Germany, met in Great Britain, and emigrated to the U.S. When Rita was eight years old, the family moved to a suburb of Rochester, New York, where her father worked for Xerox and then for Kodak.
McGrath graduated from Barnard College in 1981 with a degree in political science, then earned a master’s in public administration from the Columbia. After graduate school she became an entrepreneur. She and a partner first started a political consulting business in the early 1980s, assembling primary voting lists and other data during the early days of personal computers and desktops. “The problem with that business, which we didn’t realize when we started, is that elections don’t happen every year,” she says.
After eight-years as a project manager of computer-related design for New York City’s online procurement system, McGrath returned to school for a doctorate from the Wharton School. Recalling dinner table conversations as a child, when her father voiced frustrations over company politics interfering with what were the right technical solutions, McGrath made her primary interest corporate venturing — how to create new business from within a firm.
After finishing her degree in 1993, McGrath joined the faculty of Columbia, where she teaches MBA and executive MBA courses and is director of the Columbia executive education program.
One of her research projects at Columbia involved studying the ebb and flow of businesses within the U.S. 1 business community in central New Jersey. Her source of data: The U.S. 1 Business Directory, which was being published annually and tracked the comings — and goings — of more than 4,000 companies in the Route 1 corridor.
As McGrath pointed out in an interview with U.S. 1 (April 12, 2006), many scholars do their research by taking a snapshot of a particular economic community, but long-term studies are hard to find. “To have this information go back as far as the U.S. 1 database is unusual. It shows how regional development plays out over time,” she said at the time. “The U.S. 1 database has some diversity and is pretty comprehensive, so we can challenge the generally accepted assumptions about entrepreneurship.”
Her business, Valize, takes its name from the concept of “value realized.” McGrath says she started it first to expand the impact she can have with her teaching. “If I can get 35 people in a classroom that’s awesome,” she says. “But I’d like to find a platform to have a greater impact.”
The goal of the company is to create a framework for people to take what they learned at a workshop and implement it back at their companies. “Some people have to invent an implementation process,” says McGrath, whose career has been based on the challenges of effecting change at companies large and small. “We are hoping to create a framework, possibly in the form of easy-to-use software or an app, that can help people implement change at their workplace.”
#b#Your Business Edge May Be Razor Thin#/b#
An iconic brand and a dominant position in the market. As Rita Gunther McGrath points out in an article in the current issue of the Harvard Business Review, that was the position of P&G’s Gillette brand in 2010: “Gillette had 70 percent of the global shaving market and legions of loyal customers who reliably traded up as the next generation of products, with higher prices, were released.”
Then in 2012 came the launch of DollarShaveClub.com. “The promise was simple: great razors with few frills, for a low subscription price, delivered to your door automatically. Not only did you save money, but you didn’t have to visit a store or risk running out,” McGrath wrote.
P&G’s share of men’s razors and blades reportedly fell to 59 percent in 2015. One of its responses was to launch the Gillette Shave Club. Having seen the potentially habit-destroying effects of the subscription model, P&G now offers subscription and delivery for other products.
The Dollar Shave Club, meanwhile, had attracted the attention of Unilever, which last year purchased the start-up for about $1 billion.
McGrath’s takeaway: “Twenty years ago it would have been inconceivable that a marketing message could reach 20 million people in a matter of weeks without massive television and other advertising. But Dollar Shave Club accomplished that with an entertaining launch video, promotion on social media, and enthusiastic brand ambassadors who provided feet on the ground to promote its products — free.”