Strategic Inflection Points Disrupt the Underlying Assumptions of a Business or Industry

A strategic inflection point is the moment when a business’s fundamentals shift, calling into question the basic assumptions that structure its relationship to its environment. Strategic inflection points feel as though they happen all at once, but usually gestate over longer periods of time. If you are able to spot the signs of a coming inflection point, it may be a gift. It can create new opportunities and open up new possibilities for those who are able to capitalize on it. Companies that respond well to inflection points aren’t forced to rapidly restructure themselves.

Those companies that spot inflection points too late stall, and are forced to rapidly reorganize themselves. If their response doesn’t work out, they can fail altogether.

Strategic inflection points develop across four stages: hype, dismissal, emergence, and maturity. In the hype state, the change is loudly proclaimed, creating a bubble driven by “true believers.” Then the bubble bursts when those first actors underestimate the collective consequences of their actions. This provokes widespread dismissal of the trend. However, a handful of entrants survive and build the foundation of the future. This is where the greatest opportunity lies.

Subsequently, in the emergent phase, stable players recognize how the world is changing due to the inflection point. The shift reaches maturity and is absorbed into the everyday assumptions of the organization. Those organizations who were able to adjust at the right time thrive at the expense of those who were not.