When the wind changes, don’t miss out on a strategic shift Premium
When an inflection point occurs, it splits companies into two groups: winners and losers. Netflix and Amazon belong to the first category, while Blockbuster, Toys “R” Us, and Gillette falls into the second. What’s the difference between the two? The ability to see that there’s a bend in the road before it’s too late.
An inflection point is a point of no return, when what was previously true no longer is. This dramatic shift may predict difficult times ahead, for an isolated company or an entire sector. Take the case of the French hearing aid industry, which experienced a painful inflection point in 2016 when several newcomers — including Darty — entered the market. These competitors began to sell over-the-counter “hearing assistance devices” that were ten times less expensive than the existing products. Although the shift was abrupt, it did not come out of the blue: the regulatory, technological, and commercial conditions actually began to come together six years beforehand.
This example illustrates the characteristics common to almost all inflection points: they are the product of a combination of independent events that aggregate over a long period of time, made up of a number of faint signals that, with a little technique, you can detect, understand, and use to your advantage.
Visit the periphery of your ecosystem
Inflection points are usually detected at the edges of your organization: in your contact with customers, relations with suppliers, or in interactions with research organizations. It is unlikely that your board will be the first to spot the seeds of change. You, however, have to be able to see them in advance; otherwise there is a risk that you will be caught by surprise, miss an opening, or jump on an opportunity that doesn’t exist. Several avenues are open to you: you can schedule regular meetings between teams that are in contact with the outside world and teams that drive strategy and innovation; or you can entrust your people in the field with the resources to independently explore new ideas, without the need to produce results. Alternatively, you can foster diverse points of view so you are not confined to your usual frame of reference. In the same vein, don’t reject outright what the doom–and–gloom merchants and other Cassandras might have to say. Who knows whether their dark predictions might hint at a future inflection point?
Imagine the future to understand the present
Excerpt from Business Digest N°300, October 2019
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Inflection points : pivotal moments when everything changes
3 executives discuss how to spot - and act upon - inflection points
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