When all businesses become uncertain

What if every business had to be managed like a start-up?


What if every business had to be managed like a start-up? Rita Gunther McGrath, an associate professor of management at Columbia Business School, has some interesting observations along those lines – about managing in today’s uncertain business climate.  McGrath, who has written in the past on corporate venturing for MIT Sloan Management Review, recently noted that it may no longer be so clear that managing innovation requires different tools from managing established “core” businesses. 

Why? Because nowadays, even a company’s so-called “core” businesses may be subject to the same kind of uncertainty that has traditionally characterized new businesses, McGrath observes.  And that, she argues, means that using traditional metrics to measure management performance might no longer be a good idea.

Writes McGrath in a recent entry in her blog for Harvard Business Publishing : ”The question to me…is whether we are inappropriately trying to hold leaders accountable for predictable performance in a fundamentally unpredictable time. Perhaps the model for future discussions of corporate performance will have to begin to look a lot more like the models we have been using to deliver new businesses and innovation.”

2 Comments On: When all businesses become uncertain

  • arthur smith | December 11, 2008

    Rita,

    The question to me… how do we get leaders to let go of the inappropriate beliefs that they cling too so tightly before the company fails?

    Art

  • rgmcgrath | December 17, 2008

    Well, there is nothing like first-hand experience that all is not well to shake them up. So I try to confront leaders directly with evidence of the problems – visit customers, talk to suppliers, etc. Other approaches have been to have them talk to peers they respect about what they see as changes; have them exposed to ‘shock therapy’ where they have to think about how vulnerable they are to a catastrophic event; introduce new blood in the management team and spend some serious time educating them. It sure isn’t easy….Rita

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