Professor Ian MacMillan of Wharton on Innovation and Marketbusters
Wednesday, July 25 2007
We talked to Professor Ian MacMillan about innovation, differentiation and his latest book “Marketbusters: 40 Strategic Moves That Drive Exceptional Business Growth“, which he wrote together with Rita Gunther McGrath of Columbia University.
In the podcast Professor MacMillan explains that innovation and differentiation also apply to a growing industry like private banking, since growth attracts a lot of competitors. He explains how innovation can best be achieved by emphasizing that companies must focus on the cost of failure rather than the rate of failure. In other words, by failing often and failing cheaply (i.e. limiting the downside risk) there is a larger chance of achieving innovations with a high return.
Professor MacMillan further outlines the different strategic lenses described in Marketbusters through which companies can analyze their current business to discover new (innovative) growth opportunities. He illustrates this through various cases, notably the one of the Mexican cement company Cemex. This company has completely changed the industry which it is operating in and has outgrown its rivals to become global market leader. They achieved this by changing the metrics of their industry when they started selling cement by the load within a time window, rather than by the cubic meter.
I wonder what changes could revolutionize private banking in such a profound way?
Enjoy the podcast:
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August 21st, 2007 at 4:26 pm
[…] Rita McGrath is professor at Columbia Business School and works extensively with leadership teams in Global 500 companies. In her consulting she focuses on developing innovation programs for growth, designing and leading strategy retreats, managing workshops, keynote speeches and working with executive teams. Her clients include Nokia, Microsoft, 3M, The Kerry Group, Kone Corporation, Swiss Reinsurance, Air Products and Chemicals, Inc., the Japan Bank for International Cooperation and many others, worldwide. Rita’s latest book is called “Marketbusters: 40 Strategic Moves That Drive Exceptional Business Growth“, which she wrote together with Ian MacMillan of Wharton, who we interviewed on this blog previously. […]
August 22nd, 2007 at 10:07 am
Starting by integrating performance-based fees in the pricing model would certainly be a good start. Without underestimating the complexity behind such a model and its implementation, a pricing which shares risks and returns whould certainly be a breakthrough in private banking industry and a key element of the Unique Selling Proposition. Being very attractive for the client while forcing major internal changes. To test the model, one could start with the next fund being launched.