Rita Gunther McGrath, an associate professor at Columbia Business School, has studied corporate new ventures extensively. In the process, Dr. McGrath concluded that many traditional tools for corporate planning, while useful in relatively stable markets, aren’t much help when companies are dealing with new, uncertain business initiatives.

MIT Sloan Management Review senior editor Martha E. Mangelsdorf spoke with Dr. McGrath on behalf of Business Insight. Here are edited excerpts from that interview.

BUSINESS INSIGHT: You and Prof. Ian C. MacMillan of the Wharton School of the University of Pennsylvania wrote a book called Discovery-Driven Growth. What is discovery-driven growth?

DR. MCGRATH: Discovery-driven growth is a way of planning to grow that doesn’t require a lot of analytical information at the outset. It recognizes that many of the data that you need to make decisions don’t exist at the time that you have to make the decisions. It’s a plan to learn.

I think we all live with a conceptual overhang from an industrial era when things were more predictable. You had big production runs. At least if you were an American company, you had a lot of markets with very little competition, and what competition there was was more or less predictable. In many businesses you could use the past as an adequate guide to what the future held for you.

In more and more industries, those conditions no longer apply. You’re seeing temporary advantages, very rapid swings in who’s on top competitively, new technologies that make older ones irrelevant at an ever-faster clip—the usual litany of things people moan about today. But I think one of the things that has not yet quite been fully recognized is that these have an impact on our management processes—or should.

BUSINESS INSIGHT: How did you get started studying corporate planning for new ventures?

DR. MCGRATH: My dissertation was about how established organizations can create new capabilities. I got fascinated by the conundrum of how is it that big, established companies really struggle so often when they have to get into areas that are new to them. In the course of that research, I ran across what I call flops—corporate new ventures that were big, massive disasters.

What got me intrigued was when you look at the history