In an ever-evolving world where the only constant is change, it’s rare to find someone who consistently sees the future with clarity. Rita McGrath, a professor at Columbia Business School, is one such luminary in the field of strategic management and innovation.
Her books are the type you go back to read two or three times over. Go ahead, read "The End of Competitive Advantage" and "Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen," and you’ll see what I mean. Rita McGrath is a leading authority on strategy in volatile and fast-changing business environments. Volatile and fast-changing… feel familiar?
I’ve had the privilege of learning from Rita over the last few years. In a recent candid conversation, I asked her for her thoughts on the transformation of the media industry, and the evolving nature of leadership.
Every time I talk to Rita, I find myself furiously filling notebook pages, and in this month’s column @ Inside Radio, I’d like to share some of the biggest takeaways from our conversation on…
The End of Competitive Advantage
Rita McGrath has famously asserted that companies can no longer rely on long-term competitive advantages. Instead, they must focus on ‘transient advantages’ that require continuous innovation and adaptability. She suggests that growth-oriented companies adopt flexible ways of working, foster a culture of learning and quick adaptation, and monitor performance in a way that accurately reflects their ability to stay relevant and responsive to market changes.
Reflecting on this, agility has always been a strength of radio from a content and advertising perspective – creating flexible and responsive campaigns. Ad campaigns that feel like they’re relevant to the moment are “our thing!” Are we doing enough of that as an industry? We can certainly use AI to do it more. In last month’s Inside Radio, I shared some of our insights from the first 5,000 spec spots created by Futuri’s SpotOn. We’re constantly seeing our partners creating multiple versions of spots for the same advertiser, helping to market different aspects of their business, adjusting messaging to fit the moment – the day, the weather, the current trend. This is something radio can do more now with AI than before, and we should embrace this as an industry.
I asked Rita a straightforward question: Can a company that ‘keeps things the same,’ avoiding risks, and not changing much, be just as successful as a company that’s all about changing and adapting quickly, like she suggests? Basically, if you're really good at doing things the traditional way, can you still be a top player?
“Sure, there are organizations that haven’t changed in centuries… but what I would expect to see in companies doing this is loss of global dominance, other players who are starting to catch up, and softness in their financial performance.”
She remarked that “for most of human history, the world was rigid… we had fiefs, guilds… things were stable. But now, innovation is necessary for survival and success.” Now we’re in an “innovation arms race” where we all have to adapt, as staying still leads to obsolescence.
The Role of AI in Enhancing Decision-Making
Rita sees more advancement in AI and adoption of it in management coming in the future. Leading companies will continue to incorporate AI that “scooches across your company and sees right at the edges where the interesting things are happening.” This will help companies to make better decisions that are informed by a full understanding of operations, market trends, and customer behaviors.
“AI is most useful in assisting with decision making,” she says, but she doubts its potential to replace human leadership. “AI can support leaders, but it cannot replicate human insight or foresight.” This resonated with me, as I’ve felt that people will not be replaced by AI; people will be replaced by other people who use AI.
AI’s ability to analyze vast datasets can reveal hidden patterns and opportunities that might be overlooked by human analysis alone, but most companies are still only using AI that looks at lagging indicators.
At Futuri, we use AI to assist us in virtually every facet of our business, and we see opportunities for AI to help broadcasters in the same way – from predictions to creation of content. And I’m not just talking about ChatGPT. I’m talking about AI that is purpose-built for specific situations. In my view, AI designed to assist us in better understanding our most important customers (our audience and advertisers/marketing partners) brings great promise to our industry and helps us to stay competitive in a world that changes every second.
Adaptability: A Crucial Aspect of Decision-Making
“Vital information often resides close to the customer.” … If our customers in radio are audiences and brands, are we close enough to them? How often do we really give ourselves the gift of direct interaction, candid feedback, and clear insight? While our industry may not do research in the traditional way or frequency it has in the past, are we taking advantage of all of the data at our fingertips? This is perhaps one of the greatest opportunities for our industry.
Rita emphasizes the importance of balance in decision-making within organizations, highlighting the benefits of both corporate and local-level insights. She proposes a concept she's working on called the 'permissionless organization', where well-structured information flows enable decision-making to be more distributed throughout the organization, potentially leading to more effective outcomes. This is an artful way of saying that we need to be able to trust people in every level of our organization to make decisions.
Great leaders are flexible and responsive to changing situations, which is a key quality in effective decision-making.
A broader range of insights and experiences leads to more comprehensive and well-rounded decision-making. “We’re very incomplete in what qualities we think leaders need to have, and we’re just starting to understand what the richer picture could be. Great leaders are commanding, inspiring, decisive, confident… what we should be looking at is how effectively are our leaders marshaling the right qualities and resources for the right situation.”
We live in a fast-paced world where each day brings a new challenge. Conversations like this inspire me, and I hope this glimpse into our conversation inspired you too to think about your leadership style, decision-making, and the future of AI in strategic decision-making.
Daniel Anstandig is Founder and CEO of Futuri, whose AI-driven technology solutions are used by thousands of broadcasters worldwide to grow their content, audience, and revenue. He holds 20 published or pending patents in 151 countries worldwide. Reach him at linkedin.com/in/anstandig/.
