Publications & Articles

Unlocking Opportunities for Growth

A Breakthrough Approach to Investing in Business Innovation

Most companies analyze investments using tools that bias them against real innovation and lead them to avoid their best opportunities. This book introduces a breakthrough alternative: Opportunity Engineering.

Drawing upon recent advances in financial analysis, but without requiring a lot of math, the authors show how to engineer the risk out of uncertain opportunities so you can pursue more high-payoff innovations. You’ll learn how to escape from the “go/no-go vise” and implement more flexible decision-making that considers all the business alternatives, models, and opportunities associated with each project. You’ll learn how to systematically structure high-potential projects to limit downside exposure and boost your potential upside.

The authors show how to define the scope of investment opportunities, identify key drivers of potential profits, document assumptions, design out major risks, and tease out key challenges and vulnerabilities.

Using these techniques, you can escape the mindset that limits you to low-impact innovations and begin pursuingserious growth opportunities–and make business uncertainty work for you, not against you.

Ideas Explored

Why companies avoid their best opportunities for innovation – Getting past risk-averse analysis that snuffs out experimentation and innovation

Systematically engineering your opportunities – Capturing the upside, slicing out the downside

Beyond rigid “go/no-go” decisions – How flexible, staged innovation creates more opportunities for delivering value

Constructing an engineered growth portfolio of innovation investments – Optimizing your mix of core-enhancing investments and high potential “long shots”

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Discovery-Driven Growth

Discovery-Driven Growth

Even in the best of times, most companies struggle to gain traction in their growth initiatives.  Today the world is full of uncertainties.  Many companies have become risk-averse.  Others must dig their way out of a downturn.  Growth is even more elusive than before – yet more necessary than ever.

How can you achieve truly dynamic growth, without risking an expensive gamble?  By adopting a practical, organic “discovery driven” approach to innovation.

In Discovery-Driven Growth, authors and longtime consultants Rita McGrath and Ian MacMillan show how you can plan and pursue an aggressive growth agenda with confidence.  You’ll learn how to reframe your strategic opportunities, test each project assumption against a series of specific checkpoints, and act on evidence and learning.  You’ll control your costs more effectively, minimize surprises, and know when to disengage from questionable projects before it’s too late.  Quite simply, McGrath and MacMillan provide the road-tested plans that you need – regardless of industry or location – to ensure maximum success with your new initiatives.


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Market Busters

MarketBusters: 40 Strategic Moves That Drive Exceptional Business GrowthOpportunities for achieving blockbuster growth don’t have to be “pie-in-the-sky” ventures. In fact, they are likely hiding in plain sight along a company’s existing business platform. Here is a revolutionary new framework for identifying and exploiting them—before competitors do
There’s no way around it. Companies must grow to survive. But the dismal failure rate of most growth strategies speaks volumes about how poorly understood—and therefore grossly mismanaged—this vital business process really is.

In this hands-on guide, Rita Gunther McGrath and Ian C. MacMillan outline a systematic, field-tested method for identifying specific types of growth opportunities, choosing the best option for a company’s competitive situation, and executing that strategy in a way that achieves spectacular growth. Best of all, the authors show that these opportunities can easily be found within a firm’s existing customer base, offerings, internal processes and competitive arena.

McGrath and MacMillan argue that the key to exploiting these opportunities lies in strategic moves they call “MarketBusters”: approaches that dramatically reconfigure profit streams in an industry and upend conventional competition. Based on an intensive three-year research program, MarketBusters reveals forty marketbusting moves used by firms to successfully transform their market spaces. The book maps these moves to five strategic lenses through which companies can analyze their current business, and includes targeted “prospecting questions” and corresponding tools to guide executives as they mine these areas for growth opportunities:

  • Customers: View customers the way they view themselves, and intelligently tap into their experiences in order to change their perspective in your favor
  • Products and Services: Transform your offerings to play up the positive attributes, lessen or eliminate the negative, and ultimately make your offering clearly superior to competitors’
  • Redefine Your Business and Associated Key Metrics: Radically change some factor that drives performance in your industry, either to significantly boost your numbers or to help your customers become more competitive in their markets
  • Anticipate or Exploit Industry Shifts: Capitalize on—or spark—a major upheaval in your industry before competitors do
  • Create a New Market Space: Identify and exploit radically new opportunity spaces—whether wholly new markets or arenas your company has never competed in

The authors also describe a simple analytical tool to assist executives in ensuring they have prepared their organizations to successfully execute the chosen strategy. Vivid company examples from industries as diverse as manufacturing, software, retail, and pharmaceuticals illustrate each move in practice, and cautionary tales reveal common pitfalls that could cause well-intentioned strategies to backfire.

Filled with tools, checklists, and techniques proven to work in even the most unforgiving competitive environments, MarketBusters is the indispensable field guide to realizing sustained, profitable growth.

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The Entrepreneurial Mindset

A Blueprint for Building Entrepreneurial Organizations

Nobody needs to tell you that in the new economy, managers using conventional strategies are losing out to smart, fast, entrepreneurial competitors who move on ideas others overlook and who confidently act while others dither. Are the managers of leading companies simply doomed to let this happen? Not at all, argue Rita Gunther McGrath and Ian MacMillan. The fundamental problem is that the tools, training, and conceptual frameworks that work for business-as-usual can’t, and don’t, work when your main challenge is to bury old business models and aggressively create completely new ones. To succeed, today’s strategists need the thought process and discipline that are second nature to successful entrepreneurs. The Entrepreneurial Mindset offers a refreshingly practical blueprint for thinking and acting in environments that are fast-paced, rapidly changing, and highly uncertain. It provides both a guide to energizing the organization to find tomorrow’s opportunities and a set of entrepreneurial principles you can use personally to transform the arenas in which you compete.

Using lessons drawn from leading entrepreneurs and entrepreneurial companies, The Entrepreneurial Mindset presents a set of practices for capitalizing on uncertainty and rapid change. Like McGrath and MacMillan’s bestselling Harvard Business Review articles, such as “Discovery-Driven Planning,” the book provides simple but powerful ways to stop acting by the old rules and start thinking with the discipline of habitual entrepreneurs.

The Entrepreneurial Mindset will show you how to:

  • Eliminate paralyzing uncertainty by creating an entrepreneurial frame that shapes a shared understanding of what is to be accomplished and what would be worthwhile
  • Create a richly stocked opportunity register in which you mobilize great ideas for redesigning existing products, finding new sources of differentiation, resegmenting existing markets, reconfiguring market spaces, and seizing the huge upside potential of breakthroughs
  • Build a dynamic portfolio of businesses and options that continuously move your organization toward the future
  • Execute dynamically your ideas so that you can move fast, with confidence and without undue risk
  • Develop your own way of leading with an entrepreneurial mindset to create a vibrant entrepreneurial climate within your organization

The Entrepreneurial Mindset is about succeeding in an unpredictable world. It will help everyone from independent entrepreneurs to managers of large corporations develop insights that others overlook and act on them to build the truly entrepreneurial organizations of the future.

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Rethinking Valuation So You Don?t Miss a Good Deal

by Alexander B. van Putten, Mehrdad Baghai, and Ian C. MacMillan, December 2, 2010

The odds of a successful acquisition are long — something research has proven time and again — yet executives show no signs of losing interest in M&A. Even Dell, famous for eschewing acquisitions in favor of organic growth, has thrown in the towel with its $5 billion acquisition of Perot Systems.

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Failing By Design

by Rita Gunther McGrath, April 2011

The Idea in Brief:If you’re launching a new business, creating a new product, or developing a new technology, the principles of intelligent failure provide both logic and a safety net.Decide what you’re trying to do and what success would look like.Be explicit about the assumptions you’re making and have a plan for testing them throughout the project.Design the initiative in small chunks so that you learn fast, without spending too much money. Don’t try to learn more than one significant thing at a time.Create a culture that shares, forgives, and sometimes even celebrates failure.

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When Your Business Model is in Trouble

An Interview with Rita Gunther McGrath by Sarah Cliffe, January–February 2011

Columbia Business School professor Rita Gunther McGrath studies strategy in highly uncertain, volatile environments. She spoke recently with HBR executive editor Sarah Cliffe about how to recognize an oncoming crisis—and seize opportunities to get ahead of competitors.

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Create Three Distinct Career Paths for Innovators

by Gina Colarelli O’Connor, Andrew Corbett, and Ron Pierantozzi, December 2009

Big companies are much better at incremental innovation than they are at radical innovation. That’s as true now as it was 20 years ago, despite countless programs aimed at strengthening innovation capabilities. To understand why, researchers at Rensselaer Polytechnic Institute studied 21 large companies’ efforts to build a capability for breakthrough innovations over several years. They found that even though companies pay lip service to innovation, most fail to provide the formal structure and support that programs need to succeed, such as an autonomous organization, processes tailored for highly uncertain work, and well-designed metrics…

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Making Social Ventures Work

by James D. Thompson and Ian C. MacMillan, September 2010

In recent years, we’ve all experienced considerable volatility—financial breakdowns, natural disasters, wars, and other disruptions. It’s clear we need new approaches to the world’s toughest economic challenges and social problems. Entrepreneurs can play a central role in finding the solutions, driving economic growth (building infrastructure, developing local talent, infusing struggling regions with investment capital) and helping hundreds of millions of people worldwide. If successful, socially minded entrepreneurial efforts create a virtuous cycle: The greater the profits these ventures make, the greater the incentives for them to grow their businesses. And the more societal problems they help alleviate, the more people who can join the mainstream of global consumers….

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How Vulnerable Is Your Business to Consumer Debt

by William Jarvis and Ian C. MacMillan, October 2009

Struggling buyers are increasingly tapping—and tapping out—their credit. Calculate your company’s exposure.

This past summer a certain amount of optimism began to reemerge, with talk of “green shoots” and even a potential recovery as the stock market rebounded by 30% from its low in March. That optimism may be misplaced, however. Look at the graph below, which tracks the ratio of U.S. consumers’ debt to their disposable income. While a little off its high point, the number now stands at around 130%. In other words, it will take American consumers nearly 16 months ( 1.3 years), on average, to pay off their debt, assuming that they spend absolutely nothing on housing, clothes, or food. American consumers have maxed out their credit, and with household wealth down as a result of the property collapse and employment prospects uncertain, they’re not about to take on more. Instead, they’ll be looking to cut back on it. Many will default. Both the defaults and the waning consumer appetite for credit bode ill for businesses….

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How to Get Unstock

by Rita Gunther McGrath and Ian C. MacMillan, May 2009

A lot of businesspeople seem to be frozen in the headlights, paralyzed by uncertainty, fear of failure, and lack of trust. In this economy, inaction is understandable but shortsighted. Those who face their fear and get unstuck can outrun hesitant competitors and seize advantage. In studying how leaders prevail in uncertain times, we’ve observed four practices you can use to get yourself, your people, and your firm moving again…

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Implementing a Learning Plan to Counter Project Uncertainty

by Mark P. Rice, Gina Colarelli O’Connor and Ronald Pierantozzi, January 2008

For any breakthrough innovation project, specific objectives are often unclear or highly malleable, and the paths to them are murky. Rather than feign a certainty that doesn’t exist, project managers need a systematic, disciplined framework for turning uncertainty into useful learning that keeps the project tacking on a successful course.

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Change with Your Customers – and Win Big

by Ian C. MacMillan and Larry Selden, December 2008

Companies should exploit an economic downturn by identifying and meeting emerging customer needs that competitors can’t—or don’t even see. For consumers, the world is changing: Fuel prices are volatile, jobs and compensation are in jeopardy, loans are harder to get, and debts are more difficult to pay off. For B2B customers, volumes and margins are shrinking, credit is tightening, and suppliers are getting tougher. Under these pressures, customers need new types of offerings. It’s an ideal time to go on the strategic offensive and innovate…

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The Incumbent’s Advantage

by Ian C. MacMillan and Larry Selden, October 2008

CEOs of large companies often complain to us about how hard it is to grow profits organically. They worry that it’s just a matter of time before they fall prey to invaders—and therefore assume that to grow robustly they will need to seek out new markets, territories, or acquisitions…

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Growing Your Business: Strategies that Work for Small and Midsize Companies

by Karen Dillon, Clifford Baden, Amar V. Bhide, Adrian J. Slywotzky, Richard Wise, Rita Gunther McGrath, Ian C. MacMillan, Thomas J. Waite, Chris Zook, James Allen, Paul Hemp, W. Chan Kim, Michael C. Mankins, Richard Steele, Nitin Nohria, William Joyce, Bruce Roberson, Renee A. Mauborgne, Publication date: Aug 15, 2006

For many small and midsize organizations, growth can be a wild ride. Mind-boggling expansion during the start-up years can turn to incremental progress as a company reaches maturity. Too few small and midsize companies have time–or make time–to stop and ask hard questions about their long-term growth strategy before it becomes a matter of survival. Consider this Harvard Business Review OnPoint Executive Edition a jumping-off point for strategic conversations within your organization….

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Manage Customer-Centric Innovation – Systematically

by Larry Selden and Ian C. MacMillan

It takes more than good intentions to innovate in a customer-centric way. A disciplined process of customer R&D at the front lines will turn wishes into an enduring competitive edge?and a growing market cap….

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MarketBusting: Strategies for Exceptional Business Growth

by Rita Gunther McGrath and Ian C. MacMillan, March 2005

You can’t outperform rivals if you compete the same way they do. To be king of the jungle, not copycat, you must spur substantial new growth—quickly, profitably, and safely.

How? With deceptively simple moves. Redefine your unit of business—what you bill customers for—to reflect what customers value. Then boost your performance on key metrics. Mexican cement company Cemex shifted its unit of business from cubic yards of cement to delivery window: the right amount of concrete delivered when needed. Then it reoriented its information systems, logistics, and delivery infrastructure to improve truck utilization—a key metric for delivery businesses. For instance, it developed digital systems enabling real-time adjustments to trucks’ destinations…

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MarketBusting: Strategies for Exeptional Business Growth (Enhanced)

by Rita Gunther McGrath, Ian C. MacMillan, Mar 01, 2005

If company leaders were granted a single wish, it would surely be for a reliable way to create new growth businesses. Business practitioners’ overwhelming interest in this subject prompted the authors to conduct a three-year study of organizational growth–specifically, to find out which growth strategies were most successful. They discovered, somewhat to their surprise, that even companies in mature industries found rich new sources of growth when they reconfigured their unit of business…

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Making Real Options Really Work

by Alexander B. van Putten and Ian C. MacMillan, December 2004

Real options are a complement to, not a substitute for, discounted cash flow analysis. To pick the best growth projects, managers need to use the two methods in tandem.
For all their theoretical attractiveness as a way to value growth projects, real options have had a difficult time catching on with managers. CFOs tell us that real options overestimate the value of uncertain projects, encouraging companies to overinvest in them. In the worst case, they grant excessively ambitious managers a license to gamble with shareholders’ money…

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Global Gamesmanship

by Ian C. MacMillan, Alexander B. van Putten, and Rita Gunther McGrath, May 2003

When the whole world (or even a good-size city) is your playing field, you might find that a move your company makes in one market provokes a counterattack from a completely different direction. Smart managers can learn how to anticipate those reactions and manipulate them to their own advantage…

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Discovering New Points of Differentiation

by Rita Gunther McGrath and Ian C. MacMillan, July–August 1995

Most profitable strategies are built on differentiation: offering customers something they value that competitors don’t have. But most companies, in seeking to differentiate themselves, focus their energy only on their products or services. In fact, a company has the opportunity to differentiate itself at every point where it comes in contact with its customers—from the moment customers realize that they need a product or service to the time when they no longer want it and decide to dispose of it. We believe that if companies open up their creative thinking to their customers’ entire experience with a product or service—what we call the consumption chain—they can uncover opportunities to position their offerings in ways that they, and their competitors, would never have thought possible.

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Discover Your Product’s Hidden Potential

by Ian C. MacMillan and Rita Gunther McGrath, May–June 1996

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Discovery-Driven Planning

by Rita Gunther McGrath and Ian C. MacMillan, July–August 1995

Business lore is full of stories about smart companies that incur huge losses when they enter unknown territory—new alliances, new markets, new products, new technologies. The Walt Disney Company’s 1992 foray into Europe with its theme park had accumulated losses of more than $1 billion by 1994. Zap-mail, a fax product, cost Federal Express Corporation $600 million before it was dropped. Polaroid lost $200 million when it ventured into instant movies. Why do such efforts often defeat even experienced, smart companies? One obvious answer is that strategic ventures are inherently risky: The probability of failure simply comes with the territory. But many failures could be prevented or their cost contained if senior managers approached innovative ventures with the right planning and control tools.

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