At The Edge Of Inflection


Rita Gunther McGrath was a headline speaker at our Best Global Brands forum at New York’s Nasdaq. She also gave us an exclusive interview to expand on her ideas about change, inflection points and why melting snow can help understand your brand.

My latest book, Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen asks the question: how do you think about your brand strategy in a world that no longer has sustainable competitive advantage to rely on?

Put simply, what do we do when we can’t rely on the strategies that used to work for us?

The way business works is that an innovation happens which allows you to create something new, after which you can enjoy a commercial advantage for a while. But then something changes – it could be a shift in the environment, technology, regulation or your customers.

That’s a strategic inflection point, and what it does is to make the “taken for granted” assumptions in your business less relevant. Any business is born at a particular point in time, when some things are possible, and some are not. An inflection point changes those assumptions about what is possible: the digital revolution and the direct-to-consumer revolution are familiar examples. Understanding this pattern of transient advantage is critical.

Let’s take an example: When YouTube emerged as an innovation, was Gillette’s CMO worrying about whether it threatened the investments made in brand equity and management? It’s very unlikely. We all believed that YouTube was just cat videos. When Facebook emerged, we believed it was just pictures of college students. Gillette execs had built their brands (and done an excellent job) based on what was possible at that time. No one thought that internet information companies were going to create changes in a business like Gillette. And yet…

Back then, if you wanted to get a piece of film to hundreds of millions of people, you used to have to own a television station, you used to have to buy media, you used to have to have a whole creative department to do that. Today that is no longer necessary; the inflection point has changed the assumptions we held to be true. So, Michael Dubin of disruptive cut-price competitor Dollar Shave Club gets his video up on YouTube and Facebook, and uses Amazon Web Services to do the back-office operations. And many, many customers preferred it. Not the product itself – I’m told the blades aren’t quite as good, but the experience is. Gillette went from 70% market share to 59%.

Over the years, what happens to excellent businesses is they optimize around things that are success recipes. What an inflection point does, though, is to shift that success recipe. Sometimes it can take you by surprise because it feels as though it came out of nowhere, yet if you had been paying attention the signals had been building up more and more strongly.

Inflection points actually take a very long time to build up, even if when they’re upon you they feel as though they happened instantly. If, as an organization, you can start placing small advance bets on something that could be important down the road, that can help you from being blindsided by changes in your environment. If you’re watching for the right signals, inflection points can take your business to new heights.

“Snow melts from the edges.” How do you get out of those edges to see what’s going on?

This comes from Andy Grove, who wrote a fabulous book back in the ’90s called Only The Paranoid Survive. He was describing Intel’s gut-wrenching shift from making random access memory to having to make microprocessors – if they hadn’t made that transition the company wouldn’t exist today. And he said something that I thought was wonderful. He said: “if you want to know where Spring is making itself felt, you must go to the periphery because that’s where the snow is most exposed.”

The way that I frame that is “snow melts from the edges.” How do you get out to those edges and put yourself in a position where you can see what’s going on personally? Steve Blank is a really good friend of mine – he’s a serial entrepreneur who has started nine companies and taken three of them public. And he has another great phrase which I think we should all engrave on our desks: “There are no answers in the building.”

You have to get out of your building and see what’s really going on. It’s so easy, especially the more frantic you get about emails and deadlines and meetings and global travel, to forget that that’s not reality. That’s not where your customers live – that’s where you live.

Rita Gunther McGrath is a world-renowned thought leader and a professor at Columbia Business School, where she directs the “Leading Strategic Growth and Change” program. She is a premier expert on leading innovation and growth during times of uncertainty. Rita is the author of the best-selling book The End of Competitive Advantage. Her new book is Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen. She regularly contributes to Fast Company, the Wall Street Journal and Fortune and is one of the most published authors in the Harvard Business Review.


Leave a Reply

Your email address will not be published. Required fields are marked *