Inflection points
Inflection points could be thought of as retrograde as one's got to pin on the lagging indicators to identify them, but why do so many MNCs still swear by them in spite of them not being foolproof?
Am sure you might have heard / read / personally come across businesses that have changed direction over their strategy going from (x) earlier to (y) now & inflicting a massive change over their growth. Going from (x) to (y) may not have happened sans some path breaking analysis leading to seminal insight. And that’s why the term STRATEGIC INFLECTION POINT looks pretty justified.
As represented over the graph, it happens to be that point where things seem to take a totally wild dramatic turn. Although these points in time are largely perceived POSITIVE for a given business (which is not altogether the right perception), they may as well become the reason for nasty crashes / bottomless meltdowns if they aren’t tended to within a stipulated amount of time.
If one had to traverse back in time to that so-called inflection point, none of them for sure would know whether a certain proposed change / new strategy was going to turn towards the better or the worse given the pragmatic angle spanning the markets & the related events inducing quite a magnitude of uncertainty.
But then why do people at especially large corporates still seem so personally attached to inflection points?
Originally coined by Andrew S Grove in the early 90s when he was the CEO at INTEL Corporation with a detailed mention of it over his book "Only the paranoid survive", the inflection points are considered to be seminal pointing to that time where businesses could be forced to adapt if they are to even stay afloat, let alone riding that wave of success targeting that next million.
Products ought to pivot on a certain direction hinging on an unsolved problem over a given market niche which is obviously rooted in findings discerned by deep research & discovery. And that's why the job of a product manager tilting towards the strategist so as to be able identify those signals by deeply studying & closely analyzing market trends to supposedly lead to the identification of what could then be termed an inflection point.
Identification & Quantification
Most product people & data scientists would identify with this. Harking into the analytics of a product over the last quarter splitting & analyzing them over cohorts like months let’s say there is a drop / rise in one of the important metrics concerning product adoption.
How significantly sharp does that drop / rise have to be for it to be considered actionable?
When this question could be pretty massive for young PMs taking on to that role afresh, it is known to put even the experienced ones in a tizzy at times.
For example, consider this piece of info:
“DAU of YouTube shows a consistent drop of 5% over the last month & quarter”
What would you read into that?
Would you as a PM be alarmed about it or would you wait for it to show a much steeper drop to say 10-11% for you to classify it as a problem and then take the situation head-on working your way through the numbers, cohorts & then deeply analyzing the interactions users had across sessions so as to identify common patterns of friction that could gravitate towards helping you determine and enlist those pain point(s)?
When there could be deviations evident all the time over any of the metrics, what’s the threshold that it has to beat so as to be deemed good enough to term it an inflection point?
Like Andrew S Grove mentions over the book, these inflection points do not put up an appearance out of the blue & out of nowhere. If anything, they could exhibit slow changes, some bucking those pronounced trends which may require one to deeply analyze numbers (lagging indicators) back and forth across cohorts to get to a conclusion and call it actionable.
Well, when the exact quant value / percentage triggering off reactions could be deeply subjective to feature / product / users / markets / organization, just as it is with any other strategic decision-making exercise, it could be down to asking a few basic questions like:
Is there any identifiable discord in our customer segments and their needs?
Are we staring at a significant Drop-off Rate / Churn which could be the aftermath of a blocker / friction point identified by the ratio [“No. of users achieving an outcome” : “No. of user sessions”] & sans any reason whatsoever? Or has the competition taken the business adrift?
Do teams & members feel disconnected from their contributions over the entire workflow?
The Approach & Solution
The worst part about this whole thing is how nothing would really surface until things mostly go awry given how one ought to rely on the lagging indicators to establish even a hint of a problem.
The one way to overcome this is to approach it with an enterprising brand of communication, which is to gather a significant group of affected people, both internal and external and set the ball rolling over those discussions. And yes, it ought to start off as an initiative by the top management.
But turns out that isn’t always the case in the corporate world. Just as I had compiled some stats over my other article called the Minto Pyramid published a few weeks back this is what usually happens in the real world.
Communication problems galore!
One of the best ways to identify inflection points is to involve everyone concerned, predominantly the market-fronted teams - sales, marketing, support, internal teams concerned with strategic work like product management, leadership and the ones concerned with the product build to engage in a broad debate about the positives and negatives of the product in particular and the organization in general deriving it over observation from market events.
The eclectic areas of expertise and different interests would definitely augur well in subjecting the product to a rather vigorous scrutiny that although appearing totally hypothetical may yet be crucial to help dynamically gauge the organization’s preparedness to turn the tide in their favor.
An excerpt from “Only the Paranoid Survive”:
“DISCUSSIONS ought to be perceived like a photographer operating with that camera lens, he doesn’t get a clear focus as soon as the device is turned on, he fiddles with the zoom-in & zoom-out for a while until he gets perfect focus over that object of reference blurring out the rest of the details”
So, whenever you are in doubt initiate, spearhead and have that discussion.
- Andrew S Grove
But one would agree that those discussions need to be properly chaired and have each and every participant adhere to a clear agenda, sans which it would end up looking like loads of time being wasted and unwarranted for, reaching nowhere close to a solution.
Also, it’s quite possible that it could turn into a blame game of sorts with teams pointing fingers at each other derailing the entire purpose of holding those discussions / sessions in the first place.
Whether the workaround is straightforward or complicated could depend on how the teams are organized and managed with the cultural aspect also contributing in a large way. And it ought to be the leadership who ought to orchestrate this.
Here are a few steps to help you get your bang for the buck over each of those rounds of discussions:
Observe the super-successful organizations over the last 3 decades and you come across a visible pattern. They have had some kind of an internal mechanism to consistently gauge market direction at a regular cadence so as to help them target the right areas to pivot on, identify & frame the right problem statements, formulate the right strategy & enlist initiatives which then would land on middle-level-management’s porch & down to deep product work.
Conclusion:
If there is anything ever that ought to FIT-IN on a priority basis and contribute towards defining the CULTURE followed by the teams in an organization, leading with what’s described in the last paragraph of this article ought to be it.
Great piece. Wrote about the book in my substack recently. Do check it out.