Rita Gunther McGrath one of the world’s top 20 business thinkers
The global management list of leading thinkers has just been released, and I'm happy to share that I am one of the top 20 on the list.
You can see the list, images of the swanky awards dinner and other images at this link.
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- Posted Rita McGrath on November 15, 2011
Rita Gunther McGrath short-listed in strategy category by Thinkers50
Rita Gunther McGrath was short-listed in the strategy category by Thinkers50, a one-every-two-years compendium of the world's top business thinkers. The category considers who CEO's would turn to for practical and imaginative strategic advice. Awards will be announced at a major event in November, 2011.
The complete shortlist can be downloaded here.
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- Posted Rita McGrath on October 05, 2011
So much for “Keep the Change”
In 2005, Bank of America did something very unusual - they introduced an innovation in financial services that customers actually liked! Called Keep the Change, the program targeted young women who were terrified of running up credit card debt and so used their debit cards for everything from coffee to the newspaper. Consultancy IDEO helped with the design of the program, by observing how the target customers kept track of their spending. Rather than noting each amount precisely, they would round up to make the record-keeping easier, then reconcile their accounts once in a while. The innovation was to 'round up' the purchase to the next dollar, and put the difference between the cost and the next dollar into a savings account linked to the card. Brilliant. It won a design award in 2007, attracted reams of new deposits and has been, I'm told, really good for customer loyalty. I thought the example was so great that I've been using it as an illustration in class.
Well I guess it was fun while it lasted. B of A has just announced that they are going to levy a $5 monthly fee for its customers that use debit cards. Swipe it once, swipe it 50 times, same card fee, with some exceptions for certain higher worth accounts. I think this has every indication of being what my colleagues and I call an 'enrager' - a move by a company that is highly emotionally charged in a negative direction. Seems to me that the very customers "keep the change" attracted (and to whom BofA, like every bank on the planet, is paying virtually nothing to hold onto their deposits) will flee in droves to avoid the fee.
It also violates a number of basic principles in the contract between a company and its customers. Firstly, it is not proportional to use. Even telephone operators (themselves not the most beloved of organizations) allow you to some extent to pay for what level of service you think you will use! Further, and this is just simple business, the company is adding no more differentiation or value, but expecting customers to pay more. BofA, for the time being, stands alone, so there is nothing to prevent enraged customers from yanking their deposits and walking across the street. In the 5 mile radius around where I live, there must be branches of 20 banks, quite happy to take that money. I wouldn't be surprised if the bad vibes this produces have a negative effect on those customers BofA wants to keep, meaning that they aren't just going to lose expensive to maintain low-balance customers but possibly the higher end ones as well. Finally, the profile of people who tend to use debit cards - like my daughter, a college student - are really going to notice that $60 disappearing over the course of a year.
Note to self: Perhaps change our daughter's bank.
I guess I'll be rewriting my slide deck.
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- Posted Rita McGrath on September 30, 2011
New HBR article: Living with Complexity and Link for Free Download
Gokce Sargut and I are working together on the fascinating subject of how organizations can sensibly and strategically cope with the demands of complex situations. One of the papers from our ongoing research project is out in this months' Harvard Business Review. We offer a perspective on why complexity is so hard to deal with (because it has interactive qualities that make outcomes unpredictable) and offer some suggestions on how you might want to manage differently if you are facing a complex situation.
I will be doing a webinar on this topic on September 28 - more on that later.
For the first 100 readers, HBR has offered the opportunity to download the article for free. You can access the free download here:
Link:
https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=13661&i=13663&cs=a03f1edb1a3280fb601ad40dde903190
If you're too late for the free link, drop me an email and we'll figure out how to get you a copy.
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- Posted Rita McGrath on August 26, 2011
Out of touch Telco Managers and my colleague Tom Stewart’s response!
"Shocked, Shocked" says my dear friend Tom Stewart of a recent report in the New York Times that Telecommunications operators felt "out of touch" with their customers.
What do you mean? That call to a robot in which you are asked to enter your customer number, only to reach a real person and be told to enter your customer number?
The completely incomprehensible pricing models for wireless data plans?
Being charged for services you never bought?
Being completely unapologetic about lackluster coverage, dropped calls and generally unreliable service?
Wanting to sell you a new phone and then (true recent experience) when I finally got to the web site retreating in complete confusion.
Any interesting stories to tell?
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- Posted Rita McGrath on July 12, 2011
