Use Strategic Infection Points
A strategic inflection point, a term coined by Andrew Grove, former CEO of Intel Corporation, “occurs when a company is confronted by an innovation of revolutionary significance (force 10x) that affects the entire industry in which it operates.”[i] Minor shifts, such as price drops and changes in purchase behavior, challenge companies every day. Strategic inflection points, however, force companies into seismic shifts or extinction. As our economy becomes more unpredictable, strategic inflection points are increasing in frequency. By developing adaptability and resilience, organizations can leverage the opportunities these strategic inflection points present.
Chaos dynamics says that strategic inflection points represent decision points or bifurcations for many organizations. At this point, companies must adapt in order to survive. The status quo is no longer viable.
The long-term success of an organization in times of volatility depends on its ability to take advantage of each strategic inflection point better than its competitors. There are several ways to leverage this opportunity.
Organizations are better able to perceive key shifts in advance of competitors by tapping into their front-line employees. The “sales staff, warehouse managers, customer service representatives, product developers, scientists, or purchasing agents are often the first to sense”[ii] these changes.
When top leaders see continuation of the status quo as unviable, they may decide to generate a period of transitional chaos. Clear, frequent, and comprehensive communication is essential during these times. If employees are kept in the dark about what is happening, fear increases and positive energies that support innovation and cooperation shut down. At a time when it is often the most difficult, people need to be heard. Communication about the status and expected outcome must flow freely in all directions.
Disorder is a strange or chaotic attractor that can unleash powerful forces for change within an organization. However, when faced with an unforeseen strategic inflection point, top leaders are challenged with maintaining a delicate balance. By dispersing control and supporting the organization as it self-organizes within the new paradigm, the company survives and grows in resilience.
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[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 70.
[ii] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 72.