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strategic inflection points.
strategic inflection point is a time in the life of a business when its fundamentals are about to change.
Every person in the world is on the verge of becoming both a coworker and a competitor to every one of us,
When a change in how some element of one’s business is conducted becomes an order of magnitude larger than what that business is accustomed to, then all bets are off.
There are competitive forces and then there are supercompetitive forces.
the more successful the players were in the earlier industry, the harder a time they had to change with it.
Horizontal industries live and die by mass production and mass marketing.
What are these rules? There are three. One, don’t differentiate without a difference.
“a better PC” that was different turned out to be a technological oxymoron.
Two, in this hypercompetitive horizontal world, opportunity knocks when a technology break or other fundamental change comes your way.
Gra...
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Three, price for what the market will bear, price for volume, then work like the devil on your costs so that you can make money at that price.
By virtue of the functional specialization that prevails, horizontal industries tend to be more cost-effective than their vertical equivalents.
“category killers”
Alternatively, so might redefining your business to provide an environment, rather than a product, that people value, like the example of an independent bookstore that became a coffeehouse
Next found itself in the midst of a strategic inflection point.
It took facing a business survival situation for reality to win over long-held dogmas.
like the monumental cutbacks in staff that would be necessary, were so painful as to be inconceivable? It’s
the resistance to facing a painful new world—was the most important.
businesses fail either because they leave their customers, i.e., they arbitrarily change
or because their customers leave them
the moment when a leader decides to go forward, no matter what.
strategic inflection point is about and what it takes to claw your way through one,
It takes objectivity, the willingness to act on your convictions and the passion to mobilize people into supporting those convictions. This sounds like a tall order, and it is.
We became highly focused on tangible results (our word for it is “output”). And from all the early bickering, we developed a style of ferociously arguing with one another while remaining friends (we call this “constructive confrontation”).
“If we do well we may get ‘2X’ [twice] the price of Japanese memories, but what good does it do if ‘X’ gets smaller and smaller?”
chairman and CEO, Gordon Moore,
“If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.”
“Does it mean that you can conceive of Intel without being in the memory business?” I swallowed hard and said, “Yes, I guess I can.” All hell broke loose.
“It sure took you a long time.”
People who have no emotional stake in a decision can see what needs to be done sooner.
I learned that the word “point” in strategic inflection point is something of a misnomer. It’s not a point; it’s a long, torturous struggle.
fighting the inevitable,
clever marketing approaches, looking for a niche that couldn’t possibly exist in a commodity market, we were wasting time, getting deeper into red ink and ultimately forcing ourselves to take harsher actions to right things when we finally got around to taking action at all.
By making a forceful move, things turned out far better for us.
People in the trenches are usually in touch with impending changes early. Salespeople understand shifting customer demands before management does;
financial analysts are the earliest to know when the fundamentals of a business change.
“How do we know whether a change signals a strategic inflection point? The only way is through the process of clarification that comes from broad and intensive debate.”
“silver bullet” test.
Cassandra was the priestess who foretold the fall of Troy.
The most important tool in identifying a particular development as a strategic inflection point is a broad and intensive debate.
Altogether too often, people substitute opinions for facts and emotions for analysis.
But data are about the past, and strategic inflection points are about the future.
Complacency often afflicts precisely those who have been the most successful.
Intel have worked very hard to break down the walls between those who possess knowledge power and those who possess organization power.
transition from the vertical to the horizontal industry
To make it through the valley of death successfully, your first task is to form a mental image of what the company should look like when you get to the other side. This image not only needs to be clear enough for you to visualize but it also has to be crisp enough so you can communicate it simply to your tired, demoralized and confused staff.
What you’re trying to do is capture the essence of the company and the focus of its business. You are trying to define what the company will be, yet that can only be done if you also undertake to define what the company will not be.
the danger of oversimplification pales in comparison with the danger of catering to the desire of every manager to be included in the simple description of the refocused business, therefore making that description so lofty and so inclusive as to be meaningless.
Admitting that you need to learn something new is always difficult. It is even harder if you are a senior manager who is accustomed to the automatic deference which people accord you owing to your position.
