I attended an interesting webinar this week, rendered by Rita McGrath, author of the upcoming book ‘Seeing around corners: How to spot inflection points in business before they happen’.
One interesting outcome for me from listening to the webinar was to realize that most of our traditional assumptions about markets shift over time so it is key for us to recognize inflection points early enough to be able to actively act upon them.
Many recent examples were given but there was one general idea that stayed with me, which was the fact that nowadays, products and services are being HIRED rather than BOUGHT.
Customers want products that are easy to access, flexible, diverse and do not get them enslaved. For example, in clothing, the trend is to have fast fashion or disposable fashion (e.g., Ross Stores, Zara, H&M), rather than expensive clothing being sold in physical department stores. There are many other similar trends in the automotive industry (e.g., Uber), housing (e.g., Airbnb), and workforce (e.g., Amazon mechanical turk).
In sum, customers want ‘access to assets’ and are no longer interested in ‘ownership to assets’, as was the assumption in the past.
In an environment of constant change, the key issue for top management should become to be able to timely and effectively recognize those inflection points.
However, many companies missed these inception points due to internal, unintended, barriers, which get top management misled or blindsided about what is happening at the edges of their organization. The author gave a good example of this phenomenon, involving the Gap retail stores.
Gap managers had a good practice of routinely visiting the stores to get first hand information of the level of service and as a mechanism to see through the edges. But the problem was that employees were focused on setting up an artificial display of the store that was distant from the real customer experience, potentially driving managers to incorrect assumptions.
To recap, the important message for business managers is to remain permanently vigilant to changes in the market that may lead to points of inflection, even if they still seem weak signals. Also, make sure that your employees understand the benefits of this early identification of points of inflection and incorporate curiosity, innovation and resilience to change as key components of their work culture. Finally, watch out for internal practices that, even if well intended, may blur you from seeing those early signals of inflection.
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