Monday, July 23, 2007


Inflection Point of a Company

“An inflection point occurs where the old strategic picture dissolves and gives way for the new.”

A strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end. Understanding inflection point can help leaders, decision makers and voters to detect a change in outlook for better decision making process.

What is The Real World Strategic Inflection Point?
Finding the real world social, political, historical, business, individual strategic inflection point is far more difficult to detect than Mathematical inflection points, requires knowledge and high level of awareness.
Real world inflection point occurs where the old strategic picture dissolves and gives way to the new situation, allowing the social, political, historical, business, individual to ascend to new heights. However, if you don't detect and navigate our way through a peak and after the peak then the declines and disaster will occur. It is around such inflection points that things are different puzzled and hard to observe. Something major has changed and new direction, idea is needed to ascend not descend.
There are, basically, two types of inflection points. Any company needs to take care of both for sustaining its path of progress. The two are:
The start-up inflection point.
Lateral inflection point.
For a Start-up inflection point, the basic premise is:
Small engineering start-up is born, does well, hires like mad.
Heavy hiring bias for self-driven solo programmer prodigies.
Company grows; scores of engineers running around.
Soon primary challenge isn’t quality programmers: it’s organizing them.
No matter how self-directed programmers are, eventually their utility declines as ambiguities in direction, roles, goals and ownership become increasingly distracting and frustrating. The company is changing because of scale effects - but scale effects are hard to recognize, predict or compensate for. Hiring more brilliant engineers won’t solve this problem. So the companies come to the verge of what we call a Start-up Inflection Point.
The other type of inflection point that comes at a lateral stage in the life cycle of a company and that keeps on coming from time to time is Lateral Inflection Point. It comes whenever there comes a change in the external environment of the company. This usually brings with it a fundamental change in the way the business needs to be managed and usually hard to foresee. This may rejuvenate or may destroy a company, depending upon the actions taken in response. But the managerial capability lies in judging these changes in advance and taking proactive measures to manipulate them in company’s favour.

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