Thursday, April 22, 2010

DigitalNow Speaker Rita Gunther McGrath

Growth in the Face of Uncertainty

If Ian Ayres is the Supercruncher, Rita McGrath is the Disciplinarian. In the reality of daily work we don't always have the luxury of complete data and analysis. McGrath's discussion was on disciplining ourselves to be discovery-driven decision-makers.

90% of growth barriers are self-inflicted. We need to remove internal obstacles to become poised for change.

How do we plan for something when we don't have the data to make an informed decision?

Problem: As knowledge is uncertain we increase assumptions - assumptions about what we know versus what we think we know. Too often assumptions become fact in our memory. We take in things that confirm what we already believe to be true.

Assumptions underlying a typical corporate plan are forgotten within 6 weeks. Document Assumptions.

Five disciplines for Working with People
  1. Define what success would look like
  2. Am I being sensible (do benchmarking)
  3. Lay out operational specifications
  4. Articulate and document assumptions
  5. Plan to checkpoints (rather than the end product)

1. Define what success would look like/define the prize. For example build an upside-down income statement. Begin with required profits and then figure out what amount of revenues less allowable costs will help you achieve those profits. Consider return on time and dollars invested relative to other opportunities.

2. Am I being sensible? Remember the discipline of the market. (Example: black widow spider farm) Can it sustain your revenue goals?

3. Lay out operational specifications - implementation and execution

4. Articulate and document assumptions. Use an Assumption checklist. (Click on Rita McGrath's slides)

5. Plan to checkpoints - What are the moments of time at which I'm going to learn a lot. Map assumptions to those checkpoints.

How to anticipate potential roadblocks...External Barriers

  1. Power of incumbent stakeholders: anything that takes away someone's job - stuff that people have always done
  2. Risk - retaliations
  3. Reaction from advocacy groups (e.g. Monsanto in Europe - Frankenfood)
  4. Inertia or indifferent recipients - when will people be more confortable with the status quo?
  5. Embeddedness required by offering (example RFID baggage handling)
  6. Regulations

Internal Barriers

  1. Internal political maneuvering
  2. People are busy - reluctance by those needed for active implementation
  3. Resource constraints - platform changes required (e.g. Blockbuster vs Netflix)

Have I built an organization that is capable of delivering on my vision? The kite metaphor (see kite analysis on page linked above)

Components of Kite Analysis

  1. Agenda: Time & attention - Match manager meeting agendas to strategy. If they don't match why? Should things be incorporated into your strategy that aren't currently or are you focusing your attention in the wrong place?
  2. Norms: Values and behaviors e.g. When I promise somebody something it will be done
  3. News: Measures and information - make sure you interpret. Data does not equal insight.
  4. Structure: people and their relationships - there is a catastrophic decline in information flows when the distance exceeds 60 ft
  5. Allocations: Resources - if you say innovation is important but the way people get ahead in the company is by keeping their head down you really don't want change
  6. History: the corporate inheritance e.g. Disney does it well
  7. Leadership: Substance and symbols - everything has both substance and symbolic fallout, for example an office move. All too often we focus on the substance when the meaning is equally if not more important (e.g. Postal service retiring a machine) Bad symbolism will kill you (e.g. German minister of defense) Never try to respond to the symbolic challenge on substantive grounds

From Q & A:

How to get people to see what is an assumption? Ask, "What data could cause you to change your mind on an assumption?" Articulate early warning system on outcomes.

How would you apply the thought process when reorganizing? Ask what do you rall want to accomplish? Which have served their purpose? Come up with a stop doing list. Figure out stakeholders, determine where the harm will occur - emotional, substantive, and address that. Don't assume what people will feel. emotional responses are not necessarily resistance - it is most likely adjustment.

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