Rita Gunther McGrath Author. Speaker. Consultant.
One reason Tesla Lost $10 Billion in Market Capitalization in a Breathtakingly short period of time
by Rita on July 7, 2017 at 12:44 am
Understanding investor psychology can be baffling and frustrating for the managers of publicly traded corporations. For instance, despite what many would regard as a stellar track record of proven performance, CEO Mark Fields was fired at Ford. Apparently, the company’s success at making vehicles like its 150 truck the ride of choice for wealthy Americans (even besting longstanding luxury brands such as BMW and Audi) combined with Field’s determination not to be left behind by potential disruptions in the mobility business just weren’t enough. It’s not just a puzzle for management, though. Other observers noted that in market capitalization terms, Tesla in April of 2017 had the largest market cap of any U. S. based manufacturer and was right up there in the league tables globally. Yes, a company that lost $773 million (Tesla) has a higher market capitalization than Ford, a company that made $4.6 billion in net income for 2016. While the explanation for this is usually that investors are betting on a high-growth big win, an article in Investopedia to me, captures the allure of the stock more succinctly. “Tesla”, they note, “has caught the imagination” of investors through its masterful media strategy, its appeal to the sustainability and energy-conscious among us and of course the charismatic world view of its founder and chief spokesperson, Elon Musk. The sizzle vs. the steak Which brings me to some new research that colleague Alex van Putten and I have been doing to better understand, and if possible, to get ahead of, […]
Are all advantages now #transient? Question from a follower
by Rita on June 21, 2017 at 7:08 pm
I’ve been making the point for years, which is that as barriers to entry collapse, advantages last for shorter and shorter periods of time. People like Roger Martin would argue otherwise (see our back and forth in the Harvard Business Review). And there is evidence that in certain industries (banking, education, healthcare, housing, cable broadcasting, telecoms) that there is less competition than ever due to consolidation and weak anti-trust enforcement. But by and large, my recommendation to senior leaders is to assume that transient advantage is the norm. For some great case studies of how firms have learned to cope with this, check out Innosight’s new book on how companies engage in what they call dual transformation which is about keeping your core business fresh while inventing the businesses that will be part of your future business. Lots of useful tools and ideas there. &nbs […]
Fantastic Day on Innovation and new Tools in Norway, Part 1
by Rita on May 19, 2017 at 2:12 am
One of the great joys of working with colleagues like Alf Steinar Sætre, of the Norwegian University of Science and Technology, is the opportunity to share ideas and concepts with a variety of audiences. In this case, I was a lead faculty member in an innovative seminar program he runs that mixes executives, master’s degree students and doctoral students, giving everyone an opportunity to participate in the conversation from their different perspectives. If you can read Norwegian, you will see coverage of the event here. […]
An #Innovation Maturity Scale – Where does your organization stand?
by Rita on May 6, 2017 at 5:37 pm
One of the projects I’ve been working on is to create a set of metrics that organizations can use to measure their level of innovation maturity. We’re piloting it with my Leading Strategic Growth and Change program which runs next beginning on May 15, in New York City (there is still time to sign up – you bring a real project with you and work on it during the week). The first question in the assessment is “Could you describe your organization’s innovation system?” with responses of no, some aspects, most aspects or yes. How would you answer for your organization? &nbs […]
This month’s newsletter-All about what’s going on in the #grocery store
by Rita on May 2, 2017 at 10:54 pm
It’s ironic – Whole Foods did a great job of teaching all of us that natural and organic are desirable. And for about 30 years, that created a strong, high-margin position for them in the competition to put dinner on your table. Now, though, as I discuss in my recent newsletter, competitors have matched them on the variety of organic material on offer, and beaten them on price. Transient advantage once more. The newsletter has a look at some of the key trends keeping those in the grocery business up at night, from Amazon experimenting with a bricks-and-mortar format, to the kinds of connections customers expect on social media to the competition that undid Boston Market. We’ll also talk about what executives in those industries might do in the light of these trends. Later this month, Leading Strategic Growth and Change, my Columbia Executive Education course that features cutting edge practices to drive innovation-led growth, will run. We have participants registered from all over the world, from really interesting companies in a variety of sectors. I’ll be there the whole week – looking forward to it! […]