Rita McGrath: Author of the Best-Selling book, “The End of Competitive Advantage”

In this episode, Alex Pascal engages in a captivating discussion with Rita McGrath, a renowned author and long-time professor at Columbia Business School. McGrath shares insights from her bestselling book, "The End of Competitive Advantage," challenging traditional notions of sustainable competitive advantage in today's rapidly evolving business landscape.

The conversation delves into the concept of transient advantage, which McGrath proposes as a more relevant framework for modern strategy. She emphasizes the importance of continually creating waves of new advantages to replace fading ones, drawing parallels to the successful strategic shifts at Microsoft under Satya Nadella's leadership.

McGrath also reflects on her early experiences working in government, highlighting the power of shared mission and passion in driving motivation beyond mere financial incentives. The discussion touches on the reception of her groundbreaking work and its implications for various domains, from individual organizations to entire economies.

Throughout the episode, McGrath offers valuable perspectives on innovation, the evolution of strategy, and the importance of understanding the boundary conditions of management theories. This thought-provoking conversation is a must-listen for anyone seeking to navigate the complexities of the modern business world and develop strategies for enduring success.

Transcript

Rita: A lot of what moves and motivates people really isn’t what we think. I mean, money is great and all that, but when it comes to a sense of shared mission, having passion for what you’re doing, believing that you’re making a difference, in many ways, those things actually matter more, once you’ve got a sustainable level of income, those things start to matter a lot more.

(intro)

Alex: Hi, I’m Alex Pascal, CEO of Coaching.com, and this is Coaches on Zoom Drinking Coffee. My guest today is a bestselling author and sought-after speaker and a longtime professor at Columbia Business School. She’s the author of the bestselling book, The End of Competitive Advantage, and, in 2013, she received the number one achievement award for strategy from Thinkers50. Please welcome Rita McGrath.

(Interview)

Alex: Hi, Rita.

Rita: Hi, Alex. How are you? 

Alex: Good. It’s great to see you. I remember seeing you in the hallways at the Thinkers50 gala in November so it’s nice to see you again. 

Rita: It was a lovely event, wasn’t it? 

Alex: Beautiful. What an incredible location, Guildhall. Beautiful. That was very fun. I’m looking forward to the next one. It’s such a pleasure having you on this episode of Coaches on Zoom Drinking Coffee. Let’s start where we always start. What are we drinking today? 

Rita: Oh, I’m drinking the most fabulous, Small World in Princeton coffee that my husband lovingly made for me right before this. The perfect amount of foam on it. It’s gorgeous.

Alex: That is amazing. I am also drinking a nice little Americano here that I made. I’m actually joining from my parents’ house in La Jolla, California and I had to borrow some of their tools to make coffee today but it’s really good. It’s not nearly as good as your husband’s, I think.

Rita: There’s always something to aspire to, right? 

Alex: Yes, next time we do an episode, we’ll do it in person and your husband will make two cups.

Rita: Okay.

Alex: Three.

Rita: There you go. 

Alex: Wonderful. Such a pleasure having you here. Love your work. I followed it for a while. It’s nice when you get into that Thinkers50 ecosystem, you start getting exposed to different ideas and different people’s work and it is really an amazing community. So excited to hear more about your journey and to talk about that journey in the context of coaching so I’m looking forward to our conversation. Let’s go back to the beginning. Most people don’t end up saying when they’re five years old, “Hey, I wanna write a book on leadership or business strategy,” so tell me about your journey. How is it that you ended up doing the work that you do today? 

Rita: Well, I think it starts with my parents, as most people’s journeys do, and they were both scientists. My mother was a microbiologist and my dad was an organic chemist. And so we always had books and whatnot in the house. And they were also both very interested in organizations and what went on in organizations so the conversation was often about, “Well, why did this happen? Why did that happen? Who made that decision?” So I think that was always a backdrop for me. So when I went to university, I wanted to do public policy related so I have a bachelor’s in political science and got my master’s degree in public administration and then actually did go work for a variety of governmental entities for a while. I ran a small political consulting firm, I participated as an intern in a bunch of different public agencies, and then took a full-time role with the City of New York government. 

Alex: That’s amazing. So you’ve worked both in government and also in organizations so you have experience with both. Very common to hear people kind of making jokes about government, like the DMV, so how do you apply some of those ideas that work in business to government that, at least, in the common way of thinking, it’s not as innovative as businesses in some ways? Maybe it is but people seem to think it’s not.

Rita: Yeah. Well, I think they both involve people so anything that is central to human behavior applies equally well to both settings. I think the dilemma that government, and that’s a very big sector, I mean, it’s everything from education to defense to you name it, but one of the tricky things about government is you’ve often got multiple missions that you’re trying to deal with, where business is a little more straightforward. At the end of the day, maybe there’s a purpose you want to accomplish and you have to make enough money that you can support yourself doing that. It’s pretty straightforward. Government, you get pulled in all kinds of different directions so I think the strategy process in government is a lot harder. Some of the lessons that I took away though from my period of government service was that a lot of what moves and motivates people really isn’t what we think. I mean, money is great and all that, but when it comes to a sense of shared mission, having passion for what you’re doing, believing that you’re making a difference, in many ways those things actually matter more. Once you’ve got a sustainable level of income, those things start to matter a lot more.

Alex: Absolutely. I think there’s a famous study, I think it’s probably not accurate anymore with inflation but if you made more than 70, I think it was like $72,000 a year or something like that, that more money wouldn’t make you incrementally more happy. It’s probably a lot more than $70,000 now but certainly.

Rita: Yeah. Well, there was another really interesting study that was done which showed that there’s two breakpoints. So the first is the one you’ve just mentioned, which is do I make enough to live without having to study my checkbook every night, but there’s a second breakpoint, which is the point at which you earn enough money that there’s literally nothing more you can buy with it, like you’ve got the houses, you’ve got the yachts, you’ve got whatever it is, and once you go above that threshold, this fascinating thing sets in where now you’re in the case of it’s never enough, because you’re comparing yourself to all the other billionaires. And so, in a weird way, having that much money actually makes you more unhappy.

Alex: Yeah, there’s always that guy with the bigger yacht, right? 

Rita: There’s always going to be someone. 

Alex: It’s good for the shipbuilders.

Rita: I guess. 

Alex: They could build them bigger yachts. Yeah, absolutely. So I’m interested in — you’ve been at Columbia as a professor for a really long time, I believe since like the 90s, and you’ve also written some very interesting works. When you’re thinking about writing a book, let’s say, for example, The End of Competitive Advantage, which I’d love to talk about, what’s your inspiration? In the case of that specific book, how did that book come about? 

Rita: Well, for a long time, I’ve been looking at the phenomena of what I call transient advantage so I really started with innovation in my PhD work but that got me realizing that the reason companies need a functioning innovation process is that your competitive advantages are increasingly getting shorter. And that has some very fundamental reasons. If you go back to our strategy textbooks from the 50s and 60s, they were basically written for American and maybe British companies. And if you think about it, India was closed, China was closed, much of Latin America was closed, Europe was still recovering from a devastating war, and so if you got together the manufacturing capacity to make tires, it was pretty sure you were going to sell most of them and you had very clearly defined industry boundaries, the unit of competition was a product, refrigerator or washing machine, and strategy back in those days really reflected that environment. And if you fast forward to the 90s, you got the rise of knowledge workers, you’ve got value coming from things other than products, you’ve got complementary issues, you’ve got ecosystem issues, barriers to entry are coming down like crazy, globalization is now a reality, and so the world really changed and I felt that our theories of strategy weren’t keeping up. 

Alex: And how did you come up with a frame around it’s like the end of competitive advantage? What replaces it?

Rita: Transient advantage, where what you’re basically doing is you’re creating waves of new advantages that can take over when the old ones go. And so you can think of it like waves on a beach. You want to continually have the next set of things in the works so that when your core businesses begin to fade, you’ve got something to replace them with. So a good example of this would be at Microsoft. Under Steve Ballmer, the company was really missing a lot of opportunities. It was making incredible amounts of money from its then core businesses tied to the PC, but nothing else they’ve tried worked. They missed mobile, they missed a bunch of other things. And when Satya Nadella became CEO, he said, “Look, we don’t need to discover something that’s never been done before. We already have Azure, we’ve already got cloud business, we’ve already got the glide path to what we can be,” and so he made the very courageous decision, I think, of selling off their mobile phone business, saying, “Look, we’re not in that line of work,” and really redirecting the company towards businesses of the future. 

Alex: Yeah, they’ve done really well with our M&A strategy, acquiring LinkedIn at a really good inflection point. We just went through the OpenAI saga, how they’re involved with that, so, yeah, Microsoft’s a great example. And innovation over a really long period of time too. There’s been moments where they faltered a little bit. 

Rita: Of course.

Alex: But when you think about innovation as kind of like a longer wave, to really sustain that, it was never like the most innovative company, right? Even when you looked at the origin story of Microsoft and how they licensed the operating system from Xerox. I mean, Microsoft’s a fascinating story. There’s something I say typically about Microsoft that I don’t really like should not do it on the podcast because maybe one day they want to be clients but I will just say that in the spirit of transparency, I’ve been saying this for a long time, it’s the only company I would not use their products and I would love to buy their stocks. Typically, if I don’t like a product, I wouldn’t want to buy the stock but Microsoft is one of those that traditionally, we use MacBook, I use a MacBook, I’m on the Apple operating system and all that so Microsoft products has never been kind of my top choice yet the stock has always — I’ve always regretted not buying it as it goes up. So isn’t that interesting? When you buy stocks, you typically buy the stocks of the — if it’s something that’s consumer oriented, you typically tend to buy from the companies you consume from because you know them. So, tell me about the reception for that book. I mean, innovation is such an interesting area. I would love to talk to you about what’s happening with AI but, usually, when people try to reframe a concept that is, if not tried and true, it is very prevalent, there’s usually interesting reaction so what was the reaction for your work and how has that changed since publication? 

Rita: You know, a lot of people would say to me things like, “Oh, you’re saying Michael Porter’s theory doesn’t work,” and that was never my intention. My intention was to say any theory only really works when you understand the boundary conditions. So, a very famous theory in management would be the learning curve theory, which means the more you do something, the better you get at it and there’s a predictable amount of improvement in productivity that happens the more units that you create, and this led to the very famous Boston Consulting Group matrix, where you look at growth versus cumulative units shipped and that divided your portfolio into four quadrants, right? Shooting stars, cows, dairy milk, dogs, and I’ve always wondered about the pervasiveness of this model because a quarter of the possible use cases were blank, they’re question mark. And it worked really well in industries where there’s a steep learning curve and the original work behind that was done in the aircraft engine building business. The trouble was it doesn’t tell you much of anything when you’re in industries with a very shallow learning curve. So most services, things like textiles where you just don’t improve productivity that much by repeating what you’re doing. And so I think the point I wanted to make with end of advantage was that we’re in a new world, we’ve got very different boundary conditions than we had when some of the original work on competitive advantage was done so I think that was one big thing. In terms of the reaction, it was really across the board. There are some people who felt, as with anything that’s calling something that’s been taken for granted for a long time into question, they go, “Well, who do you think you are questioning these very esteemed theories?” By and large, though, more and more people were saying, “I always thought there was something wrong with what we were being taught, with what they show in the strategy textbooks so this is kind of a relief to discover something that is more consistent with my lived experience.” 

Alex: And it applies also to geopolitical scenarios as well, right? I mean, the whole way in which we think about trade, for example, is what’s your competitive advantage and certain countries should focus on a narrow range of areas where they have a competitive advantage in export and then import directly. I mean, it really applies to such a broad range of not just organizations but really governments and whole countries and the way they think about their economy. So, yeah, it’s a fascinating topic. 

Rita: Yeah. 

Alex: So since a lot of coaches listen to our podcast, I actually kind of want to pick your brain a little bit and think about innovation and how coaches can help clients navigate through times like ours where innovation is rampant and that leads to uncertainty. Innovation is growth and it sounds like, face value, what an incredible thing to continue to innovate and to change things in many ways for the better, but when you have such a momentous shift, like right now we’re seeing with AI, for example, everything seems to be changing really quickly. A lot of professions are going to become outdated and easily replaceable with technology, even positions that we would never think we could delegate to a computer five years ago, now, you’re like, “Hmm, do you need a copywriter? Do you need someone to write very technical documentation and things like that?” You know, things that you think you need to have all this knowledge that you need to have, suddenly, it’s changing. So, a lot of coaches are working in ecosystems that are experiencing these rapid change. How do coaches adapt to work with clients in an age like ours filled with so much opportunity but also the anxiety of the quick changes and not necessarily a clear beacon of kind of where things are headed in many of the daily tasks that people in organizations deal with? 

Rita: Well, the first observation I would make is that coaches are incredibly helpful in helping their clients clear out the clutter and set priorities. In a very uncertain environment, one of the worst things you can do is let yourself just get whipsawed by every day, some new crisis, some new something comes up. So I think coaches can help clients create that bit of calm and reserve in the day. The second thing that I would observe is that when you’re in a highly uncertain environment, the key challenge is not proving you are right, the key challenge is learning. So what you want to do is think about here are my assumptions about what I think is going to happen, how could I test those assumptions? How could I validate them quickly and at low cost? And then for their teams, like when you’re working with an executive, say, who’s got a whole team of people, there’s some key practices those executives need to exhibit in a highly stressful situation. The first is they need to bring down the emotional temperature. And this is something I think the movies have done us a huge disservice because if you look at someone in crisis in the movies, they’re banging down telephones, they’re yelling at everybody and raising the emotional temperature, and that’s not what works. You need to get everybody calm, you need to get them kind of centered, you need to say, “Okay, here’s what we think we know. Here’s what we don’t know. Here, therefore, is the course of action that I want you to take.” And a key insight from this work done by Tom Kolditz and others who’ve studied people operating in really stressful situations, like war zones and stuff, get people focused on something outside themselves. Because what happens when human beings are threatened, our brains start picking up all these hormones that create a threat rigidity response and so our range of behaviors will consider narrows, our behavior gets more patternized, and we actually are less creative, we’re actually less able to get ourselves out of the stressful situation. Because what we’re evolved for was escaping saber-toothed tigers, we weren’t evolved for considering how AI might help my competition if I don’t do something. I mean, it’s a different question.

Alex: That’s so interesting, like we’re not wired for the world that we’ve quickly created, are we?

Rita: Yeah, I mean, one of the most important things, and this, again, is something I think a coach could really help by bringing to the table is our brains are wired to think in terms of linear progress. So if I have a journey, it’s going to take 100 days, I’m on day 33, my brain instantly leaps to, “Okay, I’m a third of the way there.” That’s not how exponential change works. Exponential change works often very, very, very slowly at first, and then when it starts compounding, it takes off. 

Alex: Yeah, I’ve seen some exercises of how to think about exponential change and it’s mind blowing when you go through them because just our conception of exponential, it’s not exponential.

Rita: Yeah. And that was, I think it was Kurzweil who said that any system that involves trial and error learning begins to take on an exponential shape. 

Alex: Love that. He’s incredible. Ray’s really been masterful at having a vision for the future and making predictions. I think he has like the best-rated predictions of the future of anyone that’s made predictions, which is incredible, because predictions about technology are notoriously nefarious. It’s so hard to understand the nature and speed of change when it comes to technology, and my favorite of his books is, I think it’s something like the Rise of Spiritual Machines or something like that. Even the title makes me kind of go back and read again. 

Rita: There you go.

Alex: Speaking about the titles, one of your books, Seeing Around Corners, that, to me is particularly relevant to coaches and their clients. Can you tell us a little bit about that book? What led to it? What is it all about? And how is that applicable for coaches and their clients? 

Rita: Well, the book is about strategic inflection points, which are changes in the environment that create a 10X force. So 10X faster, 10X cheaper, and in the case of AI, 10X smarter, whatever it is, and this concept was actually made popular by Andy Grove back in the 90s. And I mulled this over forever and then I’ve had, what do I do with it, right? So the strategic inflection point comes out of nowhere and it feels as though it happened overnight. As a strategist, that’s not particularly useful. And then a friend sent me this wonderful article and the article was called “What If You Changed the World but Nobody Noticed?” and the feature story in this article was about the Wright brothers and manned flight. And if you think about it, manned flight’s a big deal, like we wanted to fly since we’ve been people, and many, many, many attempts have been made and even at the time they were proving that this can be done, there were people who just literally saw them up in the sky and dismissed them out of hand. So this historian went back and looked at their public record, next day in the newspaper, nothing. Next week, nothing. Next year, nothing. It took five full years before the Wright brothers’ accomplishment was actually evaluated by any serious journalist here in the United States. And that gave me the aha that became the seed for the book, which is when they happen, inflection points feel as though they came out of nowhere but, actually, there’s usually this huge, slow, gradual process that takes place and then it tips over and it’s a bit like the line from the old Hemingway novel, right? One character asks another, “How did you go bankrupt?” and the answer was, “Well, two ways, gradually and then suddenly.”

Alex: That is so true. And very applicable to I think what a lot of people in organizations are experiencing today. I mean, we see it with the rise of AI. It wasn’t until ChatGPT became a thing that people actually started noticing AI. 

Rita: You know, what’s interesting to me about the origin story of the public’s fascination with ChatGPT is the researchers at OpenAI didn’t have any marketers. This was actually released to the world as an experiment, because their logic was we’ve gone about as far with these large language models as we can think about working on our own, let’s see if we can get a whole bunch of users on the system and then we’ll be able to observe and watch how the AI and people interact. And they never intended it to be like a marketed product. I mean, just think of the name, ChatGPT, I mean, that’s a real engineering name. No marketer would get in there and go, “Oh, it’s Whizbam, your AI friend.” I mean, this was not a marketing thing. And so the fact that it took off the way it did, I think really speaks to the public’s fascination with and hunger for this thing. Now, I would also submit had they charged right off the bat for it, I don’t think it would have become the phenomenon that it was, but because it was free and because it was new and because it was really the very first readily available, reasonably reliable AI system, it picked up a lot of adoption very quickly. 

Alex: And I love to hear your talk about entrepreneurship and kind of giving that side of things. I mean, you wrote The Entrepreneurial Mindset. Was it like in the early 2000s?

Rita: It came out in the year 2000. 

Alex: I mean, what a preamble to the explosion of entrepreneurial innovation that we’ve seen in the 21st century. What’s changed since the early 2000s to today in terms of entrepreneurialism in general?

Rita: Well, I think the ease of entering a new business has radically changed. So, back in those days, if you wanted to have a position from which to advertise your business, websites were still incredibly primitive. We didn’t have this whole scaffolding of digital awareness that we have today. So I think digital is probably the biggest thing that’s changed. The other thing that hasn’t changed, which I think is important for entrepreneurs to remember, is strategy 101 still matters. You need to be able to defend your advantage after you’ve created one. And the reality of a lot of these very buzzy Internet businesses is there’s no protection. If I want to be the Uber of the Upper West Side, I could do that this afternoon, probably with all the software. And guys that are currently driving for Uber and Lyft, just slap another app on their phone. 

Alex: I would love to see you go out in the Upper West Side today and kind of try to recruit drivers to start driving for you. That’d be very fun to watch.

Rita: Well, here’s an interesting twist on that story, which I’m very taken by. There’s a driver’s coop now that is set up in New York City. It’s a cooperative organization so it’s employee owned, not employee, I mean, it’s driver owned, and it’s set up as a coop so the drivers can charge less per ride and they get a piece of the profits at the end of the year. So it’s being set up as a for the benefit of the drivers system, unlike Uber and Lyft, which are basically set up to reward shareholders.

Alex: Yeah. I mean, I think that’s very interesting when you think about it, in general, but when you think about it in terms of this dance between centralization and decentralization, I mean, the whole promise of the blockchain was to have a decentralized internet, essentially, but then you look at how, for example, Coinbase, for cryptocurrency, I mean, you’re building centralized entities on this decentralized ecosystem. There’s this dance in play between centralization and decentralization. I think it’s going to be one of the most interesting things to watch in the 21st century, that and then applying that to organizational systems, self-organization, I mean, can we create entities that self organize that are more flat, less hierarchical, information flows faster, decision making is augmented, that is kind of like the holy grail of organizational structures, yet, 20 years ago, we probably would have thought that by today, we’d have a lot more fluid structures but seems that we still have those hierarchical, more rigid systems that are fueled and enhanced with informational systems that are a lot more effective than they used to be, yet we don’t seem to be living necessarily in the age that we would have thought maybe 20 years ago, in some ways, and in some ways, we’re living in an age far beyond what we thought. So tell me a little bit about that dance between centralization and decentralization and how it applies to organizational systems. 

Rita: Sure. So, actually, my next book is about the permissionless organization which echoes this concept. So what needs to be centralized? Well, you need to have a common vision, you need to have a common understanding of what your swim lanes are, you need to really understand what your strategy is, and that needs to be all the way down the organization. And that’s where I think we just can’t have everybody coming in on any random day of the week and saying, “Our strategy this week is…” I mean, that doesn’t work, right? Otherwise, you’re on your own. You’re an independent player and you don’t need an organization if you’re living in an environment where you could do that. So, I’m an independent contributor, if I just said I want to write about X on Monday and Y on Tuesday, that’s not a problem, but if I’m actually trying to deliver a product or a service or a creative output to an audience, I need to do that with some coherence. So there needs to be clarity around those things. I also think you need someone making the decisions about structure and part of why I think we’ve seen less advancement of organizational structures is that these things accumulate debt, they accumulate technical debt and organizational debt, and to get past that, you can literally think of it like paying down debt. You’ve got to just take out the old SAP system and put in something new, you’ve got to dismember the hierarchy, and while all that’s going on, you’re suffering, probably investing and you’re suffering lowered performance because this other thing that you’re working on is taking up so much of your time. So I think one of the things, if I come back to a coaching perspective, is getting people to honestly confront have you brought your organization to the highest level it could be? Have you put in place the tools that your people need to be at their best? Have you made sure that you’re investing in the kind of training that people need in order to be able to take independent action? And I think these are really hard questions that a trusted coach can begin to raise.

Alex: It is a fascinating time to be a coach to help people navigate through the complexities of modern day life. I mean, it’s no coincidence that coaching emerged as a profession beyond the remedial use of coaching over the last — the last 10 years have been really critical to the growth of coaching and the awareness of coaching as a tool, as a technique as a practice that can help organizations think about a myriad of topics, from innovation to development to strategy to leadership competence. I mean, it’s really an incredible toolkit. And it seems still applicable to a world of organizations that are less hierarchical because it puts pressure on people to make better decisions and to be more connected to the mission of the organization in a way that there’s fluidity between these overarching objectives and the decisions you have to take every day. And having someone that you can go and talk to, to me, is an invaluable component of enabling that kind of fluid organization. So coaching, I think, is here to stay in whatever form it takes. The traditional model of coaching of human to human seems to be starting to be challenged in a way, I am very human-oriented kind of coaching guy. For me, coaching, the beauty of that is that human connection. Obviously, there’s a layer of technology that can completely enhance that, but even recently, I was having a conversation and we were planning a talk at a conference and someone said, “Well, we have to make the case that we’re referring in this case to human to human coaching.” Two years ago, you didn’t have to make the case that you were talking about human to human coaching, right? It was just assumed it was human to human so you started to see a shift here. How do you see the innovations in technology impacting the human coaching delivery model that we’re used to? 

Rita: Sure. So I think you have to look at it in terms of two kinds of situations. So the first kind of situation is highly patterned. So, we know XYZ about human behavior. Therefore, if you’re in a situation that looks like that, here’s your recipe book for how you play that. And I think a lot of that stuff can be automated, right? And so just as an example, if I know that I’m going into a compliance meeting with my board, there’s a whole bunch of things I need to check off and what the automated coach can do is sort of walk you through those and say, “Okay, think about and rehearse your presentation.” So kind of the world of the pattern and relatively known and stable. Then we have the world of the unknown, where you don’t know the answer, the answer may not exist, it has to be discovered, where the certainty is not there, where you don’t know the costs and benefits, and I think that’s going to require human to human. And then maybe there’s a space in between where a really well-trained chatbot-type coach could help you get to a basic level of understanding and maybe the human takes it from there. So, as an example, one of my good friends is Hitendra Wadhwa and he runs a small firm called Mentora Institute, and what they’ve basically done is they’ve fed all of his corpus information into this AI chatbot and what it forces you to do is walk through Hitendra’s problem solving method so it starts off with what’s your intent and you put in your intent, what’s the thing you’re trying to prepare for, you put that in, and you say what your challenges are and who the players are and then it’ll spit back sort of a set of recommended actions that you might consider taking. Now, it’s not going to have the human judgment of saying, “This is the one you should take,” but it’ll also give you a short list of options as though you were having a conversation with Hitendra and I think that’s quite valuable.

Alex: Very interesting. We’re seeing an explosion of approaches. Better use of content as part of the coaching process, being able to match content with individuals. Being able to prep coaches ahead of sessions. Coaches being able to very quickly stay more in tune with the progress the clients have between those sessions. I mean, it is a really exciting time but also it’s also a time to think about what is coaching and how do we maintain the core of it, and then augment it with technology. It’s going to be fascinating to see an expert in innovation, in entrepreneurship, I think, as you are, I’m sure we can probably — there will be a lot of different experiments and some we’ll look back and be like, “What were they thinking?” and some will be like, “Why were they thinking? Wow, that was successful.” It will be fun — even in three, four, five years, to look back and see how technology has impacted coaching. But I know there’s some real fear forming in the coaching community as to whether they are the new target of potentially, you know, how drivers, we were talking about Uber. Well, Uber would be a much more profitable business if they could run it with driverless cars. I think driverless car technology and technology as coach technologies are very different, but you saw Uber try to do that. It will be interesting if some companies in the coaching space try to learn from the real human interactions and apply some of those learnings to create technology layers that could, in some way, replace a coach. So I think there’s a level of nervousness in some coaches that I’ve talked to, many coaches that I’ve talked to, as to whether they can be replaced with AI and it will be interesting to see. I think people that are people oriented tend to be drawn to coaching so I think that augments the fear of like, “Hmm, well, I love the connection. How am I gonna keep that and scale my business?”

Rita: Well, I think where you’re going to see this is, as most technologies like this, you’ll start to see it nibble away at the low end, so if you’re a smaller, midsized company, you’ve only got so many dollars to spend on something like training for coaching and you can get something that’s better than nothing, then I would suspect a chunk of that budget is going to get put into that. So, we hear that at Columbia, which is, “I wish I could afford to send people to your fancy exec ed programs in person on campus in our beautiful buildings on the Upper West Side, I wish I could afford that but I can’t,” which is why we’ve developed a series of online offerings that are much more affordable, people can take them in place. We’ve got partnerships with companies like Emeritus and ExecOnline who really try to make this democratization of knowledge more accessible, and the two can coexist and I think that’s something important for coaches to take away, which is, yes, at the low end, some of this stuff might go to robots or online or whatever the cheaper alternative is, but it’s not the same as the high-end product, and I think you can see both of them coexisting. And in fact, maybe they even make you more effective.

Alex: Absolutely, I agree. So, as we come to a close for this episode of Coaches on Zoom Drinking Coffee, anything you would recommend to coaches as they navigate this uncertain fast-paced environment for themselves and for their clients as well?

Rita: Sure. Well, I think a couple of things. One is create a plan for your own learning around this. So, what are your current hypothesis about how it works? How might you test them? How might you experiment? I think that’s one that I would really encourage, because with any new technology, it’s going to take a while before we actually know what this is. I’m going to give you an example. I was writing a paper on globalization and the last time I did a deep dive on globalization was probably 10 years ago, and so I asked GD, I said tell me who were the original theorists on globalization, what were their names and citations, and there of them were absolutely rock solid and straight on, the fourth one was complete hallucination. Now, I had to have enough expertise to know that. If I just took that recommendation at face value, I would have been wrong one out of four times and that’s not good if you’re an academic. So I think what you want to understand is you’re aware these things can help you, and it did, it saved me a whole bunch of time digging up old references and stuff like that very quickly. And also what its limitations are. So you need to understand the boundary conditions, you need to understand how these things work. I wouldn’t avoid it just because it’s scary. Do a few simple experiments. So that’s one. second thing I would definitely recommend coaches do is get out of your bubble. Go talk to people who you don’t normally interact with, people from different industries, people who may have occupations or life statuses that are not like yours, because what we know is the best decision you can possibly make is only as good as the best option you have. And we know if you’re just circulating along the same group, the same old, same old people, it’s going to give you a narrow range of options. You really want to broaden and extend your options. And that’s a good general principle for networking as well.

Alex: Great. Thank you so much for sharing, Rita. It’s really nice to get to catch up with you and doing it in this format so thank you for joining me today and looking forward to seeing you at the Thinkers50 Gala of 2025.

Rita: Love it. Love it. Okay. See you then.