McGrath – Six disengagement activities

Onward with Rita Gunther McGrath and the end of competitive advantage. We just posted on the importance of deciding who is responsible to identify when to pull the plug on a business activity that is no longer optimal. Remember — in a world where competitive advantage is not long term, that becomes more and more important.

But how do you pull the plug? Rita offers six approaches. These approaches fit into a table thta plots how much time you have against the future of the asset or capacity involved.

There are three categories of future value

  • capacity is core
  • capacity has value but not for the firm
  • capacity is in decline

There are two categories for assessing timing

  • you have time
  • you are under time pressure’

so the varieties when you have time are

  • core with time – orderly migration
  • value for others with time – garage sale
  • capacity losing value with time – run off

so the varieties when you are under time pressure are

  • core no time – hail mary
  • value for others no time – fire sale
  • capacity losing value no time – last man standing

The bottom line is that you are either moving on (migrating or doing  a hail mary) selling (garage or fire sale) or killing off the activity (running down or ending).

We will take a look at each, but you may want to commit the above to memory.

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