Rita Gunther McGrath and the New Playbook For Strategy

Rita Gunther McGrath and the New Playbook For Strategy

The business world today bears little resemblance to that of 40-50 years ago. Yet for some reason many companies still clutch to the archaic dogmas of strategy developed during that time period. Rita Gunther McGrath, a professor at Columbia Business School and the author of The End of Competitive Advantage, advocates for a more modern strategy she deems "transient advantage" in this clip from her Big Think interview:


As McGrath explains, the first step to rewriting the playbook for strategy is to tear out the weathered pages of old. These are the pages that encourage companies to make foolish and dangerous decisions based on outdated allegiances to stability:

"Like focus[ing] excessively on your competition rather than really thinking about your customer.  Focus[ing] excessively on your industry rather than thinking really about the arenas in which you're competing.  And most dangerous of all focus[ing] on stability when what you need to really be thinking about is change in dynamism."

The old strategies were mostly developed during the Cold War era when American companies faced very little international competition. No China. No India. Most of Europe lay beneath the shroud of the U.S.S.R. The world isn't like that anymore and McGrath explains how time has sapped the old strategic creeds of their relevance:

"American companies had a pretty big period of stability in which they got to compete. And so the essence of competition back then was really about the classics: scale, scope, comparative advantage, optimization, running efficiently. Because that's what got you the real edge because you didn't have global competition, you didn't have the Internet, you didn't have digitalization, you didn't have some kid in a garage able to invent something that four weeks later is worth a billion dollars."

So the changing world and its many new phenomena laugh in the face of sustainable advantage. To McGrath, businesses that still employee it as strategy are victims of both inertia and faulty analytical thinking. She instead champions a newer set of practices and principles called transient advantage, which consists of six key elements:

1. Always Be Changing

"Continuously reconfigure what you're doing rather than depending on a huge seismic change that involves massive restructuring and downsizing."

2. Improve at Disengagement

"[Be] able to stop activities that are no longer relevant or stop ventures that you started that just aren't panning out the way that you had hoped."

3. Smart Resource Allocation

"What often happens in companies is powerful people running core businesses get to call the shots with regards to where the resources get spent.  And if you want to know how that ends up just look at BlackBerry or Nokia or any of those firms where powerful people tried to defend their advantages far longer than they should have."

4. Embrace Innovation

"Innovation has to become a proficiency.  It can't just be episodic; it can't just be something we do once in a while."

5. Adaptive Leadership 

"Leaders need to be increasingly discovery driven, meaning they have to be able to adapt their mindset as new information comes in and they have to be very candid and willing to have frank discussions about what's really going on."

6. Acknowledging Dynamism's Effect on Individual Career Paths 

"I think all of this has huge implications for individuals and how we structure our jobs, how we structure our careers, what we do both as employers and as persons who are working ourselves.  And I think the traditional career path for a whole lot of people is going to be radically different than anything we seen before."

Business conditions in 2014 are faster and more dynamic than ever before. Think of them as gusts of wind. Modern companies should embrace the gusts; grow wings, find ways to glide with the dynamism. Other firms that insist on setting their feet in cement for the sake of stability will get blown over time and time again, and come away with little more than fractured ankles.

A landslide is imminent and so is its tsunami

An open letter predicts that a massive wall of rock is about to plunge into Barry Arm Fjord in Alaska.

Image source: Christian Zimmerman/USGS/Big Think
Surprising Science
  • A remote area visited by tourists and cruises, and home to fishing villages, is about to be visited by a devastating tsunami.
  • A wall of rock exposed by a receding glacier is about crash into the waters below.
  • Glaciers hold such areas together — and when they're gone, bad stuff can be left behind.

The Barry Glacier gives its name to Alaska's Barry Arm Fjord, and a new open letter forecasts trouble ahead.

Thanks to global warming, the glacier has been retreating, so far removing two-thirds of its support for a steep mile-long slope, or scarp, containing perhaps 500 million cubic meters of material. (Think the Hoover Dam times several hundred.) The slope has been moving slowly since 1957, but scientists say it's become an avalanche waiting to happen, maybe within the next year, and likely within 20. When it does come crashing down into the fjord, it could set in motion a frightening tsunami overwhelming the fjord's normally peaceful waters .

"It could happen anytime, but the risk just goes way up as this glacier recedes," says hydrologist Anna Liljedahl of Woods Hole, one of the signatories to the letter.

The Barry Arm Fjord

Camping on the fjord's Black Sand Beach

Image source: Matt Zimmerman

The Barry Arm Fjord is a stretch of water between the Harriman Fjord and the Port Wills Fjord, located at the northwest corner of the well-known Prince William Sound. It's a beautiful area, home to a few hundred people supporting the local fishing industry, and it's also a popular destination for tourists — its Black Sand Beach is one of Alaska's most scenic — and cruise ships.

Not Alaska’s first watery rodeo, but likely the biggest

Image source: whrc.org

There have been at least two similar events in the state's recent history, though not on such a massive scale. On July 9, 1958, an earthquake nearby caused 40 million cubic yards of rock to suddenly slide 2,000 feet down into Lituya Bay, producing a tsunami whose peak waves reportedly reached 1,720 feet in height. By the time the wall of water reached the mouth of the bay, it was still 75 feet high. At Taan Fjord in 2015, a landslide caused a tsunami that crested at 600 feet. Both of these events thankfully occurred in sparsely populated areas, so few fatalities occurred.

The Barry Arm event will be larger than either of these by far.

"This is an enormous slope — the mass that could fail weighs over a billion tonnes," said geologist Dave Petley, speaking to Earther. "The internal structure of that rock mass, which will determine whether it collapses, is very complex. At the moment we don't know enough about it to be able to forecast its future behavior."

Outside of Alaska, on the west coast of Greenland, a landslide-produced tsunami towered 300 feet high, obliterating a fishing village in its path.

What the letter predicts for Barry Arm Fjord

Moving slowly at first...

Image source: whrc.org

"The effects would be especially severe near where the landslide enters the water at the head of Barry Arm. Additionally, areas of shallow water, or low-lying land near the shore, would be in danger even further from the source. A minor failure may not produce significant impacts beyond the inner parts of the fiord, while a complete failure could be destructive throughout Barry Arm, Harriman Fiord, and parts of Port Wells. Our initial results show complex impacts further from the landslide than Barry Arm, with over 30 foot waves in some distant bays, including Whittier."

The discovery of the impeding landslide began with an observation by the sister of geologist Hig Higman of Ground Truth, an organization in Seldovia, Alaska. Artist Valisa Higman was vacationing in the area and sent her brother some photos of worrying fractures she noticed in the slope, taken while she was on a boat cruising the fjord.

Higman confirmed his sister's hunch via available satellite imagery and, digging deeper, found that between 2009 and 2015 the slope had moved 600 feet downhill, leaving a prominent scar.

Ohio State's Chunli Dai unearthed a connection between the movement and the receding of the Barry Glacier. Comparison of the Barry Arm slope with other similar areas, combined with computer modeling of the possible resulting tsunamis, led to the publication of the group's letter.

While the full group of signatories from 14 organizations and institutions has only been working on the situation for a month, the implications were immediately clear. The signers include experts from Ohio State University, the University of Southern California, and the Anchorage and Fairbanks campuses of the University of Alaska.

Once informed of the open letter's contents, the Alaska's Department of Natural Resources immediately released a warning that "an increasingly likely landslide could generate a wave with devastating effects on fishermen and recreationalists."

How do you prepare for something like this?

Image source: whrc.org

The obvious question is what can be done to prepare for the landslide and tsunami? For one thing, there's more to understand about the upcoming event, and the researchers lay out their plan in the letter:

"To inform and refine hazard mitigation efforts, we would like to pursue several lines of investigation: Detect changes in the slope that might forewarn of a landslide, better understand what could trigger a landslide, and refine tsunami model projections. By mapping the landslide and nearby terrain, both above and below sea level, we can more accurately determine the basic physical dimensions of the landslide. This can be paired with GPS and seismic measurements made over time to see how the slope responds to changes in the glacier and to events like rainstorms and earthquakes. Field and satellite data can support near-real time hazard monitoring, while computer models of landslide and tsunami scenarios can help identify specific places that are most at risk."

In the letter, the authors reached out to those living in and visiting the area, asking, "What specific questions are most important to you?" and "What could be done to reduce the danger to people who want to visit or work in Barry Arm?" They also invited locals to let them know about any changes, including even small rock-falls and landslides.

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