The latest book I have been reading is “Seeing Around Corners: How to spot inflection points in business before they happen” by Rita McGrath who delivers a sobering message every leader and innovator needs to hear: if we want to stay ahead and innovate, we need to understand how trends emerge and spot them before they surprise us.

An inflection point is “a change in the business environment that dramatically shifts some element of your activities, throwing certain taken-for-granted assumptions into question” (p.  1).

If you can spot inflection points in advance, and have a solid strategy when to act on these and how that action positions you as an emerging leader in this field, you’ll have much more opportunities to dominate that market.

Inflection points are often weak early signals that there is a possibility of a dramatic change in the operating environment down the line, and paying attention to these is key.


Finding weak signals in oceans of noise

Although weak signals are difficult to pick out, Rita notes that being observant about what is being written about at large and predicted helps in noticing the ones that matter.

Being at least aware of these points and potential changes early on gives businesses and organisations an edge as it enables them to correct course in a way that helps to adjust the business model before it is too late:

“When you can see an obstacle far down the road, you need to make a very small adjustment with your steering wheel. But when the obstacle is suddenly in front of your car, you have to quickly and drastically turn the wheel in a big, big way”(p. 43).

For example, the higher education sector has not seen massive changes in decades into how they deliver their main model, which is university degrees.

Yet, it is increasingly being challenged in what counts as a degree and with the emergence of MOOCs, more access to different forms of online education and accreditation, the sector might well do to keep an eye on what is going to change and how the “customers” now view education and what they need.

Yet, just like snow starts melting in the periphery first, in order to spot these points we need to have information from the ground.

This is because “evidence of an emerging inflection point doesn’t present itself neatly on a conference table in the corporate boardroom. It is the people who are directly in contact with the phenomenon who usually notice change early” (p. 14).

This information is vital for senior leadership as organisations often insulate easily those higher up from the everyday operational situations where the sales representatives deal directly with customers.

For example, customer dissatisfaction is one of the key indicators that there is a problem with the existing system and the way things are done.

Dissatisfied customers are more likely to flock somewhere else when other better suitable options emerge from those competitors who are keeping their eye on the inflection points, and can jump faster on a new trend/added value/service in that particular sector.


Understanding indicators

Most organisations are obsessed with indicators that tell them where they are at and these fall into three categories: lagging, current and leading indicators.

The most focus is often placed on the lagging indicators: these are conducted after the fact and include eg yearly revenue, returns on investment, profits; items which are the result of a specific activity.

Current indicators in turn give an estimate where the company is at currently: these are often seen in real-time measurements of performance and are solidly based on assumptions what success looks like in that particular operating environment.

Yet, what most companies miss out and use poorly are leading indicators that are often about the future, and presented in a qualitative narrative way about how things could be.

These indicators are where “the future is to be found” (p. 47).

Understanding and constructing reliable leading indicators can only be done by spending enough time on the frontlines where many of the inflection points emerge early on.

All of these relate to outcomes of course and these change and depend on what outcomes you are looking to achieve.

Companies like Microsoft under the leadership of Satya Nadella are for example now mostly focused on leading indicators for success, which is “customer love” rather than just profit and revenue as terms of success.

Leading indicators can become guiding principles and guiding vision as to what the company really wants to achieve and then builds the indicators towards that outcome.


Discovery-driven planning for multiple futures

Rita advocates for discovery-driven planning for companies that are serious about competing through broader perspectives and willingness to challenge the status quo and old assumptions.

It’s critical to keep “multiple possible futures in mind so that if and when they unfold, the landscape is more recognizable” (p. 102).

This means that in essence “Seeing around corners is about broadening the range of possibilities you consider paying attention to. Your ability to look into the future is only as well developed as the set of possibilities you are prepared to entertain”(p. 102).

Discovery-driven means that you are ready to question your assumptions:

“Stop pretending that you know all the answers. In a highly uncertain and fluid environment, neither you or anybody else has answers. Arguing about being “right” or having a detailed plan going eighteen months out is just wasting your breath.  Instead, articulate and pinpoint the major uncertainties and how you might gain some insight about them” (p. 103).

Discovery-driven process is also a different way of thinking about generating value: rather than focused on a specific final outcome (the value), discovery-driven processes focus on delivering value throughout the development process.

This is easier done if you construct what Rita calls “checkpoints”, which is “a point in time at which you will learn something” (p. 103).

At each checkpoint, you’d need to ask always two key questions: 1) the insights that you are gaining, are they actually worth the cost you are incurring, and 2) and with the insights you have learned, is your plan still solid enough to proceed.

The focus should be what success could look like but rather to define the positive outcomes that the idea could generate.


Changing models through inflection points

One of the keys for organisations that are serious about finding and understanding inflection points is how this needs to involve more than senior leadership:

“before an organisation can do something about an emerging inflection point, a critical mass of people to believe that they are indeed at a turning point… Although senior leadership has a role to play in the process of capturing employees’ hearts and minds toward this purpose, the actions of many people, up and down the hierarchy, are what truly lead to a desirable outcome” (p. 129).

This relates also to the way we think about innovation in our organisations and how we either enable or hinder innovation to become a continuous process and mindset.

This comes down to even the organisational willingness to entertain different ideas, to question the basic assumptions, but also giving space for people to map, detect and see around corners where big changes or new trends are likely to emerge.

The reality is that in today’s market place no one sector or department is able to decipher all of the change and trends in a meaningful way.

We need collaboration more than ever, more diversity of ideas, and more willingness to question together what we are seeing and which inflection points are emerging where, how, and why.

All of these ideas are hugely relevant especially to fields such as climate adaptation where we are truly trying to understand and plan for major inflection points that are likely to disrupt the current operational environment.

Many of these changes are likely to take place because of the changing climate and the projected increases in risks, yet many are also likely to emerge due to changing business demands and models, changes in economies and a range of reasons.

Reading this book has given me a renewed insight and trust in the power of people to innovate and to collaborate in a manner that can lead us to collectively see around corners and spot inflection points before they surprise us.