Spotting inflection points is critical to staying in business, and spotting them early could give the much needed advantage to stay ahead in the game. But spotting them is easier said than done. Inflection points – a word popularized by the legendary CEO of Intel, Andy Grove – represents a point in time when the very fundamentals (assumptions, knowledge) of a business change forever. They appear slowly, grow steadily and seem to happen instantaneously. It is therefore no surprise that when not identified in time, inflection points result in disruptions, and quickly turn established organizations into obsolescence. The more successful the organization today, the more its leaders should worry about inflection points. Today’s advantages blind and slow the search for tomorrow’s advantages. Therefore, revitalizing today’s advantages and creating new advantages for the future are two big challenges facing large corporations. Some of the other concepts that deal with similar ideas include organizational ambidexterity and strategic entrepreneurship.
Change is certain. Sensing them is not. Leaders struggle with sensing changes. For leaders of organizations, sensing emerging trends or changes provide opportunities for replacing old strengths with new capabilities and/or an opportunity to renew old capabilities. Both are urgent and necessary. The urgency for venturing and renewal has only accelerated with emerging trends such as digitalization, sustainability, and pandemics. Surviving and thriving in uncertainty is today becoming the norm. But embracing uncertainty and thriving in it requires new tools and capabilities. One such tool was introduced to us by Rita McGrath several years ago. In a new book, she builds on those ideas and provides several new tools to engage in spotting inflection points in a more disciplined manner.
All entrepreneurs and entrepreneurial leaders need to see around corners and Rita McGrath’s book shows how this can be done in a disciplined and repeatable manner. The book provides tools to sense inflection points. It also talks about what qualifies as a disruptive change, explore how leaders can decide whether a change is to be acted upon now or requires continued sensing, who are best placed to sense such changes, and how leaders can humbly make use of such sources for the greater good of organizational success. Her ideas build on her prior work, Discovery Driven Growth, and I particularly liked the idea of placing ‘little bets’. My work on corporate accelerators fits with this books’ ideas, particularly the approach of placing ‘little bets’ to validate signals, before making large investments. The two pathway model of corporate accelerators allows corporations to sense different types of changes – incremental and radical – and place ‘little bets’ before diving deep into developing new capabilities. Therefore, corporate accelerators seem to be one possible innovation space where large organizations can encourage experimentation and exploratory activities. Moving interesting and useful findings from such centres to the main business, calls for handling several challenges, but that would be a nice problem to have and solve. While the book provides several models, tools, and frameworks, it is also filled with innumerable cases of organizations that have been both successful and unsuccessful in sensing and adapting to change. Rita McGrath’s style of interspersing theory and cases makes the book a highly useful read for any practitioner. I have written notes to myself all over the book and looking at these I sense scholars of innovation, strategy and entrepreneurship may also find the book useful. Though not a difficult read, the book is best suited for slow consumption by thoughtful practitioners.
As a scholar of corporate innovation and entrepreneurship, I have always enjoyed Rita’s work and recommended her books and articles to my students. Thanks Rita for another thought provoking addition to this already fantastic list.
Reference: McGrath, R. G. (2019). Seeing Around Corners: How to spot inflection points in business before they happen. New York, USA: Houghton Mifflin Harcourt.
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