Why putting customers first — and taking risks — will always be the best bet
When it comes to leading companies through change, Kathryn Harrigan, the Henry R. Kravis Professor of Business Leadership in the School’s Management Division, believes managers should trust customers — and customers’ instincts. Harrigan, who teaches courses in strategic management and turnaround management, is a specialist in corporate strategy, industry and competitor analysis, diversification strategy, mergers and acquisitions, and turnarounds. She has served on the boards of three publicly traded firms and is the author of several award-winning books on strategy.
In this Faculty File, Harrigan shares her expert advice for current managers and MBA students hoping to become tomorrow’s business leaders — and how she predicts the School and MBA education will adapt to help them reach that goal.
What brought you to Columbia and your area of expertise?
The School’s Management Division was building up its strategic management faculty at the same time that I was looking for a faculty position (circa 1980; I joined the faculty on July 1, 1981). You must remember that American industries were still in shock at that time from the rising competitiveness of firms in Japan and Germany, among others. Plant closings were rampant, and US firms needed to tap their inner resourcefulness to renew their competitiveness and stand their ground.
New York City appealed to me as an operational base because so many financing decisions affecting troubled companies would emanate from the New York financial community. I felt that it was important to explore how firms could justify receiving continued funding from investors within industry settings that were changing dramatically.
What general strategic advice do you have for current managers or MBA students hoping to become managers?
Entrepreneurship is still highly valued, and the US economy is still very tolerant toward firms that take risks to be innovative. I highly recommend seeking a career as an operating or line manager so you can enjoy the successes of your risk taking.
What specific advice would you give those handling a turnaround?
Never forget your customers and why they buy from your firm. Customer demand is the key to generating those all-important free cash flows that are needed to service debt. Remember why the firm you are rehabilitating is in business, and don’t stray far from customers who will pay.
What do you see for the future of your area of research?
Columbia Business School recently funded a patent database project that will allow me to investigate topics concerning operating synergies that arise from more radical types of innovation — aka “out-of-the-box innovations.” I’m looking forward to doing the field interviews that will enable me to learn how firms enhance technological synergies in their acquisitions as well as what traits make certain acquiring firms better parents for incubating these types of innovations than others.
What do you see for the future of Columbia Business School? For MBA education in general?
Columbia Business School is still poised to have a large impact on resource allocations in many diverse industries, and the MBA degree is still very important in making evaluations concerning which projects justify time and money. I look forward to even greater cooperation among the Business and Engineering Schools as technology becomes so salient to facilitating great organizational renewals.
On a broader scale, I have spent the last decade or more of my teaching career with the Executive MBA candidates because I find that many firms within industries that were not previously served well by business schools are now realizing the importance of a graduate business degree. I expect that this trend toward having students holding full-time jobs while they pursue an MBA degree will grow markedly in the future as firms competing in media, information technology, online services, and other industries that have been transformed by technology become hungry for frameworks and insights to help their firms cope with competitive changes.