Setting the scene
Welcome to Imaginize World, where we hear from forward thinkers, activists and sci-fi visionaries. Today I’m with RITA McGrath, one of the world’s top experts on innovation and growth. She’s the author of Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen. Well, hello Rita. It’s such a pleasure to see you after all this time.
RITA
It’s delightful to be here. Thank you.
Seeing Around Corners
I know that the last time and the only time we’ve met face-to-face was at a Drucker Forum, but I still remember you very clearly from that. You are one of the top experts in the world on innovation and growth, and that underlies a lot of things that you talk about. And I read one of your books, I know you wrote it several years ago, but it’s an incredible book. The title just grabbed me, Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen. And the Seeing Around Corners is such a smart title. That’s what we all want to do in business and in our personal lives. And so I think you’re really well-positioned to talk about the future with me.
RITA
Well, thank you very much.
JANE
What made you write Seeing Around Corners? How did you get into it?
RITA
Well, I was always fascinated by this concept of strategic inflection points, which Andy Grove started writing about that in the 1990s, back in the days of Intel’s transition from memory chips to microprocessors. And he said, It’s a 10X shift in what’s possible about your business.” And I thought, “Well, what do I do with that? If it’s an inflection point and comes out of nowhere and bonks you on the side of the head and you didn’t see it coming, what do you do with that as a strategist?” And then what I started to dig into was the idea that these things actually happen gradually, gradually, gradually, and then suddenly, as the old Hemingway book says, The Sun Also Rises. And one character is another, “Well, how did you go bankrupt?” And the answer was, “Well, two ways, gradually.”
And what I began to realize was that for many of these big earth-shattering things, there’s lots of weak signals that precede them, and that’s really where the inspiration for the book came from.
Futurist and Strategy Thinker
Very interesting. I know it’s gotten a lot of reviews and comments. I’m going to link to the Aidan McCullen’s conversations with you. I’ve listened to several of them. He’s a great interviewer. So I’ll give my readers and my viewers plenty of opportunities to dig into what you’re doing. I wanted to start with a question I ask everybody. If I were to say to someone, “I met this incredible woman the other day. She’s…” How would you want me to finish the sentence?
RITA
Warm human, thought leader, bit of a futurist and somebody who thinks about strategy.
JANE
It’s about the future in general. If we start with some future questions, if we talk about the future in terms of say, 20 years from now, it’s not tomorrow, but it’s not that far away. Are you pessimistic or optimistic?
RITA
I think we have to be optimistic. I think if you’re just a pessimist, you’re just grumpy and moaning into your oatmeal all day long. So I’m optimistic. I think the world bends gradually towards justice and hope, and I think that’s the way I think about things.
Common misconception about the future
Do you think there’s a common misconception that people have about the future?
RITA
Well, I think what most people do is they do linear projections of the future. So we start from where we are, and then we have a path that we lead and that takes it to somewhere. And that worked really well back in the day when we were hunters and gatherers and the biggest mission you had to accomplish was escaping from a saber-toothed tiger. It works really well in those situations, but we’re in a world now of much greater complexity. So I think one of the things that people get wrong about the future is that it’s a point forecast. And instead, what I really encourage is to think about multiple possible futures. And there are systematic ways you can construct those things.
And one of my favorite books of all time, it’s an old book now, but one of my favorites is called The Living Company from Royal Dutch Shell called Arie de Geus, and what he talks about is memories of the future. And his point is that human brains do this all the time. So every minute of our lives, our brains are always thinking, “Oh, where am I going to have lunch? Will it be the salad place or the burger place? Where am I going to get the train after I go to work?” And we’re not doing this consciously, it’s all subconscious. So right now, you’re thinking about, “Who am I meeting for dinner? What’s happening after this podcast is over? Who’s going to record this?” And the reason our brains do this is because we are trying to train ourselves to what we should be paying attention to in our daily lives.
So if I’m on a flight to Paris tomorrow and there’s a strike at the airport, I will be paying attention to that. If I’m not on a plane to Paris and there’s a strike at the Paris airport, I might hear about it, but it’s not relevant, so I don’t pay attention to it. So I think one of the things that people get really wrong about the future is that we need to actually prepare our brains to take in signals of what might be happening, but that isn’t for sure. But what might be happening in the future, we need to open ourselves up to considering those signals that could be important, but we don’t know whether they’re or not.
How to see inflection points
So that’s an intriguing key thing you just said. They might be important, but we don’t know. How can we figure it out?
RITA
The framework that I talk about in the book is… So if you posit a time zero event, something that’s really significant, but we don’t know if it’s happening or not, it’s an inflection point that’s arrived. So electric cars have become 50% of the market, or, “Oh my goodness, autonomous driving has suddenly become a reality or autonomous driving for sure has been outlawed.” Whatever that event is that’s going to be material to your business, that’s time zero. And then what you do is you work backwards and you say, “Before that could happen, what are all the things that would have to be true for that to happen?”
So let’s just take autonomous driving is completely outlawed in every jurisdiction. Well, before that could happen, we’d have to have a really big technology failure. We’d have to have some body that says, “Okay, if the autonomous car gets to decide between the grandmother and the baby, we can’t let that happen.” In other words, it’d have to be a bunch of things that would happen before that. That’s how you determine whether something is significant or not.
JANE
So it comes down to it’s not a hierarchical way of leading.
RITA
Oh, no.
JANE
If we talk about organizations, that’s one thing I like about it. It’s a distributed-
Permissionless and distributed
I call it permissionless.
JANE
Permissionless. I like that. The book that I wrote is called The Gig Mindset Advantage Inside Organizations. I had been doing a big global survey for 10 years, about 400 or 500 companies around the world starting back in 2006. And little by little, year after year, I could see that employees’ autonomy was going up and leadership was not. And so I saw this bigger, bigger gap coming. And so I began to study the people who were moving up in terms of autonomy and independence and daring to do things without asking permission. Gig mindsetters work with diverse people in the organization and outside the organization. They challenge the state’s quo. They’re highly aware of what’s happening outside their organization and they network extensively, internally and externally, but that strikes me as the kind of people who you might be thinking of in terms of permissionless and feeling free to do something, but how do the leaders respond? That’s the question then.
RITA
Well, there’s a whole range. So I think in the best organizations, you have this concept, it’s an old idea now, but of servant leadership where leaders create the framework, they tell the organization what’s non-negotiable and what’s up for grabs. A great example of this that everybody will be familiar with is IKEA. And in IKEA, it’s very clear what’s not debatable. So sourcing, supply chain, pricing design, those are set, corporate decides those things. But in your store, if you’re a Store Manager and you want to have Pajama Wednesday and anybody wears their pajamas to the store, gets a 10% discount, go for it.
And I think that’s part of the challenge, which is how do you provide enough structure and coherence that the organization operates well as a whole, but give people the freedom to really let their humanity flourish and let their ingenuity flourish? Humans are ingenious creatures, and I think that’s the skill that we are facing today. So organizations, not so much as machines where you turn a crank and predictable things happen, but as entities that are capable of responding to changing circumstances, I think that’s the magic.
What to do in this transition?
What do you think is key to our future, say 20, 30 years? What do we need to do the most, we people? What would make a real important difference?
RITA
We’re in a huge transition from the fossil fuel, automobile, suburban-based economy to whatever the next thing is. We don’t have seven planets to burn, so we’ve got to really take seriously what harm we’re doing to the planet. We need to rethink how we build humanity into our lives. The sad thing to me is in spite of all the richness that we have in terms of incomes are higher than ever for humanity, we’ve got more access to resources than we’ve ever had. We’ve got more information and knowledge than we’ve ever had. And yet so many people are feeling isolated and alone and lonely and that their life has no purpose.
And so I think we’re in this huge transition where we’re going to rediscover what being human means, what community means, what the next transition is going to mean. And I think digital AI, all these new technologies are going to really reform the way society conducts itself. And I think that’s the journey that I think we’re going to be on for the next 20 years.
JANE
And people are frightened about that.
RITA
Well, some people are and some people are enthusiastic, and I think people that are frightened are fear of loss, right? They’re afraid they’re going to lose, and some will. Any transition means there will be people who, at least for a period of time, lose something, but I think there’s an enormous opportunity for the greater good.
Thought Sparks
Yes. You have a great take on that. That has a lot to do probably with how you influence people around you. Do you still write Thought Sparks?
RITA
I do.
JANE
The thing I like about it is the idea. Again, like your title, Seeing Around Corners, Thought Sparks is such a good title.
RITA
So I’ve been doing Thought Sparks probably for two decades now. When I have the time, they’re weekly. It’s my own way of thinking about, “Hey, what do I need to think about differently? What might my readers think about differently? What might we as a collective come to try to understand?” So I’ve written about things like, why is insulin so expensive when the drug has been out in the world for 100 years? Why is it still, people are not giving themselves the appropriate dosage because it’s so expensive? Why is that? And I think probing into those kinds of things is really an interesting exercise for somebody like me who’s an academic and a reader.
JANE
You strike me as a very pragmatic academic.
RITA
I try to be.
Tripwires and decision-making frameworks
You’re not in an ivory tower, at least I don’t have that impression. In my work on The Gig Mindset Inside Organizations, I focus very much on the individual people inside organizations. How do they survive the context that they’re in? One of the things I talked about in the book is that when you’re really in a situation like that, fighting against administration to some extent or leadership, you can either try to convince, try to win, you keep working, or you can just compromise and just do what you have to do to keep your job, or you can leave. You can leave the organization and build something yourself. And I was very interested in something you talked about, about individuals. You talk about tripwires. Can you talk about tripwires and explain what that means?
RITA
Yeah. Well, the idea with tripwires is that if you imagine as we said before, this time zero event, and then you work backwards and you say, “Well, what would’ve to be true before that would happen?” The concept of tripwires is that if you say, “Okay, here are all the events as a leadership team.” If we agree that if this happens and this happens and this happens and that happens, let us have the discussion about what we would do in that world, but let’s have that discussion long before we’re confronted reality. And the idea of tripwires is we’ll agree in advance what action we will take if a certain combination of futures transpires. And for an individual, I think the idea of tripwires is you need to think to yourself, “If this happens at work and that happens at work and this other thing happens at work, do I stay or do I go?” Have that conversation with yourself before it’s essential.
JANE
Yes, I like that very much. I’ve often wished I could rewrite my book. Have you ever had that feeling about a book? After it’s been out for a while, a lot of people have given you reactions to it. Has it made you think, “Okay,” or not maybe rewrite it, but develop the ideas in a stronger way?
Writing books and mistiming the release
Well, I have a history of mistiming books.
JANE
What do you mean? You write them too early?
RITA
The Entrepreneurial Mindset, it came out in the year 2000, and I wanted to call it Discovery-Driven Strategy, and my editor at the time said… This was in the froth of all the dot-com stuff, so you have to remember that. And my editor at the time said, “No, no, we have to call it Entrepreneurial Mindset.” And I said, “I don’t believe in that,” and they prevailed. And so it came out just immediately after the whole dot-com thing blew up. And so nobody wanted to talk about entrepreneurship, and in the bookstores, because it had entrepreneurship in the title, all the Store Managers put it in the small business section [inaudible 00:13 :39] extended audience. So I wouldn’t rewrite the book, but I would definitely rewrite the title.
JANE
Yeah, that’s interesting. You have an interesting idea. When you ask people to write an article about yourself from the future, that’s powerful. Can you talk about that a little bit?
Writing about yourself in the future
Sure. So the ideas, most of us go through our careers thinking about, “What do I need to do today? What’s the next step? What’s the path to advancement? How do I grow? Blah, blah, blah, blah. We don’t really ever take the time to sit back and think about, “Okay, I’ve got one precious life. If I were to think about an article, a business article written by someone admiringly about me 10 years from now, let’s say, what would they say? What would they say about the choices I made, what I did, who I influenced? What would they say about my family? What would they say about the people in my personal life? How that was really an example for others?” What I often do with clients is I’ll ask them to really think that through, and it’s often a huge breakthrough for them because they’re so focused on, “What’s the next step? What’s the next step? What’s the next step?” They don’t pick up that piece in the future and work backward to what would that imply.
JANE
Yeah, and I think you give people, by doing that, an opportunity to think about themselves from a very positive way in the future, rather than being afraid of the future. Have you done this exercise a lot with people and have you had any particular striking outcomes?
RITA
Oh, I’ve had people that have said, “I’ve thought about it and I’ve made the money I need to make. What I want to do is dedicate myself to a cause or a purpose,” and they’ve left their corporate lives and gone into not-for-profit work. That’s certainly been a pattern that’s happened a couple of times. I’ve had people saying, “Hang on, I’ve been afraid to make this move or make this play for a long time. What am I so afraid of? I should just go do it.” And they’ve gone out and struck something really different. I’ve had a bunch of women, interestingly, who’ve said, “I’ve been holding myself back for so long, why am I doing that? Now’s my time.” And really reaching out to take control of what they need to take control of.
So it can have really positive effects. And this connects to this whole inflection point thing, which is for a lot of people, if they have a setback, you lose a job, you have a relationship problem, something bad happens. And there’s a tendency to think of it in really negative terms, but in a way, it removes a lot of constraints that you may have been operating under. And if you really take the time to step back and think, “How could this be a turning point for me? How could this be the beginning of a whole new trajectory?” And I think that’s where people often don’t take advantage of the benefit of having some kind of major change.
The next generation: fathers and their children
Is there any particular thing that you think the next generation will be better at than we are?
RITA
Oh, absolutely. I think the attention young men are giving to their children is absolutely remarkable. I’ll be personal. I have a son and his wife, and the two of them are both full-time, full-on careers, really heavy-duty jobs, but the two of them are true partners in raising their daughter, and that’s new. My husband’s lovely and he, to the best of his ability was supportive of our kids and everything, but didn’t have the time, didn’t have the resources, didn’t have the societal permission to be as fully involved as he would’ve liked to be. And I think this next generation of young men are actually going to be able to be true partners in the raising of their children. I think that’s fantastic.
JANE
That’s very interesting. I saw a thing recently about young men being depressed and lonely. Does that ring a bell with you?
RITA
A lot of our institutions are not doing what, in my opinion, they should. So our educational institutions have left them behind. We’ve got this whole gap in young people without a college education being able to find jobs where they could use their skills to support a family. A lot of those institutions have really eroded, and that’s something I’ve written about extensively. And I think it’s a problem, but I think that’s a problem we will hopefully begin to address.
JANE
I think first, it has to be recognized as a problem. Is it a question, do you think of government actions or private initiatives? How can that come about, if you’re talking about education?
Public education not doing its job
In many ways, public education is not doing its job. It’s leaving a lot of these young men out, but we also, in America in particular, it’s really different than Europe. So for example, in Germany, you can take an apprenticeship track, and that’s considered a perfectly legitimate route to a very important and potentially influential job. Here in the States, we’re still very hung up on four-year college degrees. And so I think there’s a whole very complex set of circumstances around what jobs are in America. We have something like 45,000,000 terrible jobs in this country. Jobs where you can’t make enough to support a family. You’re working two jobs, you’re trying to juggle multiple unpredictable hours. It’s a real, to me, kind of a meltdown. And I would trace it to the Reagan administration, where we started to really financialize the economy and we stopped being an economy where hopefully everybody could have an opportunity to being an economy of haves and have nots.
My hope is that we eventually will correct on that, and somebody I looked to for inspiration, this is Zeynep Ton. She’s a professor at MIT, and she wrote two wonderful books. One is called The Good Job Strategy, and the second one is called The Case for Good Jobs, and her argument is we have to stop thinking about people. And I think the young men problem falls into this category, stop thinking about people as just units of cost. Many, many, many young men who just feel left behind, left out, their skills aren’t valued, and they’re just depressed.
Challenge for humanity to solve this decade
I think you’ve actually already answered my next question, which is what challenge do you think humanity will solve in the next decade? I don’t know if that change in education attitude can be solved in a decade.
RITA
Well, we’re in a situation with the introduction of AI, with increasingly digitalized ways of living, that a lot of the existing frameworks for how to live a good life are going to be up for grabs, frankly. Let’s just say we democratize expertise. So the diagnosis that a school doctor used to be required to do, and a doctor in the United States is a $1 million proposition. That’s a hugely expensive investment, but let’s say that you’ve got AI that’s smart enough to do a lot of what a trained doctor does, so the diagnosis, the whatever, then what you can do is you can create systems that involve a lot more humans in human-to-human care interaction.
And if we can start to build those things, and there are examples, so Southern New Hampshire University, One Medical, institutions like that, that are actually using the tools, the digital tools to do what the digital tools can do, and then providing a place for humans to have a human-to-human impact and make a decent living and live a good life and feel that you’ve had a meaningful day at work. I think if we could solve that over the next 10 years.
JANE
Yeah, the way you describe it, it really sounds fantastic. It’s a really admirable goal for all of us to have. Rita, I’m going to ask you a question now that I don’t know if you’ll answer me or not because you’re such a modest person, but I’d like to know, what do you feel the most proud of in your work? Something that you’ve accomplished, that you feel-
RITA
In my work?
JANE
Yeah, in your work.
RITA
Work or personal?
JANE
I wouldn’t ask you personally unless you want to.
RITA
Personal, I’ll go there. My two children, being a working woman is… Even today, it’s still this tension. Right? If you’re a working woman, you’re leaving your children behind. If you stay at home, you’re neglecting your skills and talents. There’s no winning. It’s all guilt. And to be the proud mother of two wonderful grownups is an amazing, amazing, personally. At work, I would say the thing I’m most proud of is really being one of the founders of a whole movement around how do we make uncertainty and innovation a more predictable, more relatable process? We’re saying, hey, innovation isn’t this mysterious… Steve Jobs arrives on a clamp chair with a black t-shirt. It’s actually something you can learn. It’s something repeatable, and so too with entrepreneurship. So I think there’s a whole line of work, and it goes together with the renewal of company.
Permissionless organization
So I’m working on a new book on this permissionless organization idea, and it begins with this fundamental puzzle, which is if you take the average company, large company, Fortune 500, Global 2000, that kind of company, they tap out at about 40, 50 years before they get split up, acquired or they go out of business. And I think that’s fascinating because why is that? It’s not that they have stupid people. They have smart managers, they’ve got the best talent money can buy. They’ve got lots of resources. So why is it that they just can’t seem to manage from transition to transition in a capitalist economy? So that’s something I’m very interested by, and I believe it’s because they have the wrong… Over time, they develop the wrong reflexes to responding to their environment. So beginning with innovation, entrepreneurship into this current work, that’s something I would love to be able to bring to the world.
JANE
That sounds very, very interesting. I was going to ask you how you see your work evolving over the next 20 years? I think what you just said is part of it. When will your book be available for us to read?
RITA
I don’t know. I’m still working on it. [inaudible 00:23 :10] gets in the way, as you may know, but hopefully sometime in 2025.
JANE
Oh, sometime in 2025. That’s not far off.
RITA
No, it isn’t.
JANE
One last question for you regarding everybody, in a very general thing. What should we all be thinking about?
RITA
I think we need to get away from the rabbit holes and the stimulus response world, and really think about what would give you joy, what would give you meaning, how could you make an impact on other people? And take maybe 10 minutes out of your day and just reflect on, “Is what I’m doing right now contributing to any of that?” Be much more mindful about our agendas, and I talk about this a lot with leaders. I’ll get leaders who come to me and say, “Oh, somebody doesn’t do innovation well,” and blah, blah, blah, blah, blah. And then I’ll say, “Well, send me the list of things that you talked about at your last significant meeting where important people got together to talk about important stuff, and tell me what’s on the list.” And then I’ll go through the list. And if it’s a paper list, I’ll actually highlight what they’re spending time on.
And if innovation, if that’s what you say you want, is not one of your one, two or three items, then you don’t really mean it. And I think what each of us should have is that kind of agenda, the, “What’s on the top of our one, two, or three list?”
JANE
Well, that’s it for my questions, Rita. Have you got any comment or thoughts that you’d like to share before we close?
Creating a new world after leaving the old one behind
Oh, well, I think people need to understand that human evolution, it’s bumpy, right? And many times, it’s a struggle. And I think what we are in the midst of is a major transition. And as an Argentinian economist, [inaudible 00:24 :47], would say, we’re going from this world of… It’s fossil fuels, it’s suburbs, it’s cars, it’s the post-World War II world, to something different, and that’s hard, right? Because the old rules are being re-written. And so I think what people need to try to get their heads around is just because it’s different doesn’t mean it’s bad, and it doesn’t mean it’s scary. There are lots of opportunities to be had. So I’d like people to be thinking about if we left that older world behind, what kind of new world would you like to create?
JANE
Well, that’s exactly the theme, the reason I created Imaginize World. And so your final thought is inspiring, I think. I’d like to thank you very much, Rita, for your time.
RITA
Lovely to be here.
JANE
We’ll stay in touch, I hope, and have a chance to talk again, maybe when your next book comes out.
RITA
That would be great. Okay.
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