Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity [Hardcover]

Rita Gunther McGrath (Author), Ian C. Macmillan (Author)

Book Description

Publication Date: March 16, 2009

You've been charged with growing your business. Incremental growth can no longer deliver the results you need. You need truly dynamic growth - and you need to achieve it without risking a hugely expensive gamble. How can you encourage innovative new ventures and pursue ambitious growth while minimizing risk?

Editorial Reviews

About the Author

Rita Gunther McGrath is Associate Professor of Management at Columbia Business School. Ian C. MacMillan is the Dhirubhai Ambani Professor of Entrepreneurship and Innovation at the University of Pennsylvania's Wharton School. They are coauthors of MarketBusters and The Entrepreneurial Mindset.

Product Details

• Hardcover: 200 pages
• Publisher: Harvard Business School Press (March 16, 2009)
• Language: English
• ISBN-10: 1591396859
• ISBN-13: 978-1591396857
• Product Dimensions: 9.5 x 6.3 x 1 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #103,195 in Books (See Top 100 in Books)
  • #100 in Books > Business & Investing > Organizational Behavior > Organizational Change

More About the Author

Rita McGrath, an Associate Professor at Columbia Business School in New York, is one of the world's leading experts on strategic business growth in highly uncertain environments. She works with both Global 1,000 icons and smaller, but fast-growing organizations. Her current clients include Air Products and Chemicals, Inc., Nokia, Microsoft, AXA Equitable, Novartis, Swiss Re, Glanbia, ON2 Technologies and the World Economic Forum. She is a popular speaker and works extensively with senior leadership teams.

Her new co-authored book, Discovery Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity was published by Harvard Business Press in the Spring of 2009. She has co-authored two previous books: The Entrepreneurial Mindset (2000) and MarketBusters: 40 Strategic Moves that Drive Exceptional Business Growth (2005), also published by Harvard Business Press. MarketBusters has been translated into ten languages and was named one of the best business books of 2005 by strategy+business. It was featured by Bill Gates at the 2005 Microsoft CEO Summit, whose theme "New Pathways to Growth" was derived from the book's main topic.

Rita has appeared on television and radio and has been interviewed by numerous publications including The Wall Street Journal, New York Times, Financial Times, Businessweek, Inc., and Entrepreneur. She blogs actively on strategic growth (see www.ritamcgrath.com) and is featured as a discussion leader at Harvard Business Online (see http://discussionleader.hbsp.com/mcgrath/). She has co-authored six articles in the Harvard Business Review, including the best-selling "Discovery Driven Planning," which has been highly recommended by Clayton Christensen.

Rita joined the faculty of Columbia Business School in 1993. Prior to life in academia, she was an IT director, worked in the political arena and founded two startups. Her Ph.D. is from the Wharton School, University of Pennsylvania. At Columbia, she teaches MBA and Executive MBA courses in strategy and growth. She teaches regularly in Columbia's top-rated executive education programs, and is the Faculty Director for Leading Strategic Growth and Change, and Creating Strategy, Tokyo.

Rita's academic publications have appeared in leading journals such as the Strategic Management Journal, Academy of Management Review, Academy of Management Journal and Management Science. She has won numerous awards for excellence in scholarship. Among these are the Strategic Management Society 'best paper' and 'runner up' awards in 2001 and 2004; the Maurice Holland award from the Industrial Research Institute; the Academy of Management Review "best paper" award, and the Entrepreneurship Theory and Practice Award for the Best Conceptual Paper (both 1992 and 1996). She is on several editorial boards of prestigious journals.

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

5.0 out of 5 stars How to develop and execute business cases in an environment of uncertainty, June 11, 2009

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J. Groen "Jerry Groen" (GURNEE, ILLINOIS USA) - See all my reviews
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This review is from: Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity (Hardcover)

This is a very enlightening book that builds on the authors' HBR article of July-August, 1995 called Discovery-driven planning. Instead of the typical approach for evaluating innovative projects of complex, risk adjusted financials, that results in analysis paralysis, and reduces judgement, the authors suggest an innovative approach that focuses more on the assumptions and generates the results by backing into the financial justification with reverse financials. The assumptions based planning approach is very rich and powerful, and having used it myself a number of times with teams, I can tell you that it results in a very motivated team developed plan and business case. Then, instead of using the potentially bureaucratic "stage-gate" processes for governing execution that are in place today in most companies (but often don't work well with highly uncertain projects, by the way, due more to the mechanics than the process), they recommend an assumptions driven conversation based upon the completion of deliverables (of course, this could work with stage-gates but not the way that these are typically used today). The whole approach, I think, can be highly liberating for organizations today that are trying to get more collaborative and enabling. At the end of the book, through their experiences, they recommend approaches to getting the discovery driven approaches implemented. Consequently, I highly recommend this book for any innovation champion who wants to work on eliminating the burden that they feel in trying to get things done. I can't wait to use these tools myself.

5 of 5 people found the following review helpful:

5.0 out of 5 stars Growing in Uncertain Times - A valuable resource to make it possbile, March 29, 2009

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R. Pierantozzi (Allentown) - See all my reviews
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This review is from: Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity (Hardcover)

In my former role as Air Products and Chemicals Director of New Business Development, I was responsible for finding and implementing the very best tools for innovation that we could find to grow the company. Discovery Driven Planning has since been at the core of our successful efforts to incubate new businesses and innovate, while containing risks. Our Chief Financial Officer at Air Products is a huge fan of the technique, because for the first time he's found a solution to either constraining innovation projects with planning methodologies that aren't appropriate for high-uncertainty ventures, or letting projects go forward without discipline. The approach has been used in our company to test ideas for new technologies, to plan our entry into new markets and to decide when a project needs to be redirected, or even shut down. It has saved us hundreds of thousands of dollars by helping detect issues early and take corrective action before the big, expensive investments have been made.

The book, Discovery Driven Growth, distills the lessons McGrath and MacMillan have learned working with dozens of companies like ours into a practical, useful and easy to follow bible for organizations intent on driving growth and renewal, but reluctant to take on big risks in doing so. Our experiences are described in the book, as are applications of the book in companies as diverse as Nokia, Microsoft, IBM and small entrepreneurial ventures. One of the things I like best about the book is that it operates at both the strategic level and the level of individual initiatives. As a CEO or senior team member, you can use its concepts to think through the broader questions of strategic direction and portfolio resource allocation that must be determined at the top of the organization. As a Division head, you can use the disciplines to make decisions consistently and with a strong basis of facts (where there are facts) and good assumptions (where the data don't yet exist). As a project leader or someone directing an uncertain venture, the book contains detailed tools and templates that you can apply immediately, supported with downloadable software that is available on the web site to get you up to speed quickly. I also appreciated that the book discussed the implementation and ongoing leadership challenges that face innovation leaders, pointing out that no two companies will implement these techniques the same way and providing examples of how firms have done it.

Had "Discovery Driven Growth" been available when Air Products started its innovation thrust, we could have moved even faster to drive our growth trajectory. In today's uncertain times, we need the kind of fresh thinking and new tools that the book provides. You won't regret buying it.

5 of 5 people found the following review helpful:

5.0 out of 5 stars "All truths are easy to understand once they are discovered; the point is to discover them." Galileo Galilei, March 24, 2009

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Robert Morris (Dallas, Texas) - See all my reviews
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This review is from: Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity (Hardcover)

In the first chapter, Rita Gunther McGrath and Ian MacMillan explain that their core thesis is that companies that use conventional methodologies to pursue exceptional growth will simply not be able to accomplish growth that allows them to break out of the pack and deliver exceptional results." If so, what do they recommend? What they call "discovery-driven planning" that will guide and inform the introduction of new growth initiatives (e.g. businesses, products, services, franchises, strategic alliances, and even potential mergers and acquisitions). "Through discovery-driven planning (DDP)," McGrath and MacMillan point out, "organizations set up bold plans to pursue futures they frame, to learn where their futures lie, and to test their assumptions about those futures at the lowest possible cost."

Readers will especially appreciate McGrath and MacMillan's brilliant use of reader-friendly devices, including self-diagnostics, check-lists, figures, and tables, to identify key points. For example, a "Simple quiz to find your openness to discovery-driven growth " (Table 1-1,Page 9), several processes that can help executives to plan their firms' growth during the first steps of DDP (Pages 11-13), and "Conventional versus discovery-driven growth" (Table 1-2, Page 13) in Chapter One. McGrath and MacMillan make equally effective use of BioBarrier, a disguised version of a corporate growth project at a major corporation that illustrates both the perils and the possibilities of DDP. This material serves, in effect, as a hypothetical test case but, again, McGrath and MacMillan cleverly include the aforementioned reader-friendly devices such as the "Initial frame for BioBarrier project" (Table 4-1, Page 83), "BareBones specification for BioBarrier project (million dollars)" (Figure 4-1, Page 87), and "Steady rate expectation profile" (Figure 4-2, Page 88). It should also be noted that McGrath and MacMillan suggest "Action Steps" at the conclusion of most of the ten chapters.

In Enterprise Architecture As Strategy: Creating a Foundation for Business Execution, Jeanne Ross, Peter Weill, and David Robertson suggest that, untilnow [2006], research and executive education have failed to make a breakthrough in understanding and improving IT architecture efforts. They then recall Albert Einstein's observation, "The significant problems we face cannot be solved by the same level of thinking that created them." What do the authors recommend? "The focus needs to be higher - on [in italics] enterprise architecture [end italics], the organizing logic for core business processes and IT infrastructure reflecting the standardization and integration of a company's operating model...[Therefore] enterprise architecture boils down to these two concepts: business process integration and business process standardization. In short, enterprise architecture is not an IT issue - it's a business issue." In Chapter Five, when suggesting how to design the business model architecture, McGrath and MacMillan seem to agree with Ross, Peter Weill, and David Robertson that a specific project not only can but should be evaluated within an overall strategic framework the foundation and "the fundamental architecture of a discovery-driven plan is established with the selection of a business unit that will drive the revenue and profits of the business."

In my review of their previous collaboration, MarketBusters (2005), I noted that "the core of this book involves five strategies to create "marketbusters": Transform the customers' experience, transform your offerings, redefine profit drivers, exploit industry shifts, and consider entering (for you) new markets. No news there. The value of this book is derived from McGrath and MacMillan's explanations of (a) HOW to select the strategies which are most appropriate to your organization's current and imminent needs and (b) WHAT to do when coordinating those strategies with tactics (or `moves') during the implementation process." They urge those who read Discovery-Driven Growth to consult the list in the earlier book or visit www.discoverydrivengrowth.com to complete an exercise that identifies the key metrics that are most relevant to their own industry. In my opinion, the selection of appropriate metrics and then applying them with seamless consistency is of critical importance to any growth initiatives.

Once these initiatives are launched and begin to achieve measurable progress, how to sustain them while - meanwhile - making necessary modifications, except of the metrics? McGrath and MacMillan devote the final chapter to answering that question. To set the context within which everyone involved will pursue and commit to discovery-driven behavior, they suggest six sets of actions to be taken by the CEO and other members of the senior team. They conclude their book with an expressed hope that the information and counsel they provide will give C-level executives the processes needed to "free up the creativity" in their organization "without "going down the black hole of undisciplined innovation"; to give a division or business unit head some ideas to consider about formulating and then implementing a "stealth" strategy for bringing discovery-driven principles to bear; and to provide to a less experienced manager some techniques to help them think "more sharply and with more discipline about the things that [their] bosses are worried about." I share these fervent hopes as well as the last: "And for the entrepreneur in many of us, discovery-given growth can provide road map to a successful business future. Best of luck."

Congratulations to Rita Gunther McGrath and Ian MacMillan on their brilliant achievement. They invite their readers to check out the resources at http://discoverydrivengrowth.com.