I don’t think there’s a single “way forward”. Staying alert to second-order effects becomes critical, because that’s where most mispricing emerges. As a start-ups founder I feel- Chaos is Good, but Ego is not. So, we need to ready to accept our misbeliefs and cut the losses bit fast. The challenge, of course, is acting early without clear signals - something easier said than done in practice.
A well crafted post with a logical flow and explanation of how one's strength eventually becomes ine's greatest weakness. History is replete with examples:
1. Dinosaurs - the lumbring giants perished as their advantage of enormous size eventually flipped into a big weakness, viz., loss of agility
2. Britain's automotive industry - eventually lost out and shut down. Internal systems and processes relating to design changes, once a necessity to prevent chaos, eventually became so rigid and inflexible that the time lines and internal approal processes for ideation to implementation of improvements in component design, new vendor introduction and producion processes became a hurdle in quickly and nimbly adapting to rapidly evolving customer needs/preferences, emerging technologies etc. Bottom-line: strength ossified into rigidity with disastrous consequences.
Brilliant articulation. One of the best reads in the recent past. Keep them coming ... And yes, I had watched that Tata Crucible final in 2018 as a avid former quizzer 😊
This post reminds me of the book 'What Got You Here Won't Get You There'. My question is, how to know till where this will get me after which I need to change?
That book was a good read for me also [read it in 2017-18].
Now, on your question isn't a checklist, it's a signal: the moment your strength stops being a tool and starts being an identity, you've crossed the line. When you defend how you got here rather than asking where this is going, the inversion has already begun.
If this resonates, there's a related frame I've written about in https://thegreyswan.substack.com/p/the-slope-framework. Slope beats Status. Knowing when to change is really about learning to read your own slope before the peak.
Enjoyed reading this. When you are clocking numbers, generating profit, etc, its very tricky to be able to identify when you are near the inversion point.
Its winner takes it all world so I wonder if there are cases where someone thought he/she is approaching Inversion Point and hence, made a course correction and ended up failing even more miserably... Such cases wont come to fore.... Hope I am able to share my thoughts clearly here.
A extremely well written article. Being someone who has spent significant time working in startups and some time is large organisation, i can fully relate to how optimising for efficiency can make the system rigid and less adaptable.
Super stuff...I find your writing very reflective and liberating. How does one overcome these cages especially in organisations that have a certain structure and rigidity that has helped them? I have often benefitted from having a diversity of experiences and views in a team (and perhaps ages too); working with partners who can bring different learnings; and watching other industries. Would look forward to your thoughts by way of an essay on how can organisations keep erasing its Maginot Lines. Thanks
Thank you Sir for this—it means a great deal coming from someone with your depth of experience. My underlying thesis isn’t that the system is “breaking” in a linear sense, but that we may be approaching an inversion in how signals are interpreted—where what once indicated stability may increasingly mask fragility (and vice versa).
Most organizations are optimized for first‑order thinking: What solves today’s problem? What defends against the last attack?
At core, I feel, both for individual as well as companies, the Key is ability to evolve fast. As a start-ups founder I feel- Chaos is Good, but Ego is not. So, we need to ready to accept our misbeliefs and cut the losses it fast. Happy to engage more on all this over email, I will drop you an email.
*Value Migration* might be the clue word/funda for spotting the in/oncoming inversion... - of course one needs to install a formal 'look-out' post for this - in the planning department, select a born worrier-pessimist as the best guy for the role, and permanently place this in the agenda of all strategic meetings.
VM will have external and internal components, pointers, as called out by the 'author' of the term* -
(a) *early migration of customers to an early adoption of a competitive offering*, especially in the fourth circle players of the 4-circles of competitions ((1) direct competitors, (2) indirect competitors, (3) remote competitors, and (4) niche/startup players) of/in the "Radar Screen" Method.
(b) Market Cap shifts of one's own: mysterious ones that defy simple reasonings. market is that (in)famous 'invisible mind-hand' that 'knows' before anyone else including you especially,
(c) talent flow: like (b) above, the leaving that are 'odd'.
Great writing. In the circumstances, what's the way forward recommended?
I don’t think there’s a single “way forward”. Staying alert to second-order effects becomes critical, because that’s where most mispricing emerges. As a start-ups founder I feel- Chaos is Good, but Ego is not. So, we need to ready to accept our misbeliefs and cut the losses bit fast. The challenge, of course, is acting early without clear signals - something easier said than done in practice.
Thank you.
A well crafted post with a logical flow and explanation of how one's strength eventually becomes ine's greatest weakness. History is replete with examples:
1. Dinosaurs - the lumbring giants perished as their advantage of enormous size eventually flipped into a big weakness, viz., loss of agility
2. Britain's automotive industry - eventually lost out and shut down. Internal systems and processes relating to design changes, once a necessity to prevent chaos, eventually became so rigid and inflexible that the time lines and internal approal processes for ideation to implementation of improvements in component design, new vendor introduction and producion processes became a hurdle in quickly and nimbly adapting to rapidly evolving customer needs/preferences, emerging technologies etc. Bottom-line: strength ossified into rigidity with disastrous consequences.
Being agile is the key to erase the Maginot lines. An easy to read intellectually challenging article.
Very appealing, very logical. and therein lies the danger!
Loved it!
Brilliant articulation. One of the best reads in the recent past. Keep them coming ... And yes, I had watched that Tata Crucible final in 2018 as a avid former quizzer 😊
I am also a former quizzer now. Left it in 2018 only, when the tick box of winning the National title was done.
This post reminds me of the book 'What Got You Here Won't Get You There'. My question is, how to know till where this will get me after which I need to change?
That book was a good read for me also [read it in 2017-18].
Now, on your question isn't a checklist, it's a signal: the moment your strength stops being a tool and starts being an identity, you've crossed the line. When you defend how you got here rather than asking where this is going, the inversion has already begun.
If this resonates, there's a related frame I've written about in https://thegreyswan.substack.com/p/the-slope-framework. Slope beats Status. Knowing when to change is really about learning to read your own slope before the peak.
Enjoyed reading this. When you are clocking numbers, generating profit, etc, its very tricky to be able to identify when you are near the inversion point.
Its winner takes it all world so I wonder if there are cases where someone thought he/she is approaching Inversion Point and hence, made a course correction and ended up failing even more miserably... Such cases wont come to fore.... Hope I am able to share my thoughts clearly here.
A extremely well written article. Being someone who has spent significant time working in startups and some time is large organisation, i can fully relate to how optimising for efficiency can make the system rigid and less adaptable.
Superbly written. A great read for Sunday Morning. Keep on the good work !!! All the best
Super stuff...I find your writing very reflective and liberating. How does one overcome these cages especially in organisations that have a certain structure and rigidity that has helped them? I have often benefitted from having a diversity of experiences and views in a team (and perhaps ages too); working with partners who can bring different learnings; and watching other industries. Would look forward to your thoughts by way of an essay on how can organisations keep erasing its Maginot Lines. Thanks
Thank you Sir for this—it means a great deal coming from someone with your depth of experience. My underlying thesis isn’t that the system is “breaking” in a linear sense, but that we may be approaching an inversion in how signals are interpreted—where what once indicated stability may increasingly mask fragility (and vice versa).
Most organizations are optimized for first‑order thinking: What solves today’s problem? What defends against the last attack?
At core, I feel, both for individual as well as companies, the Key is ability to evolve fast. As a start-ups founder I feel- Chaos is Good, but Ego is not. So, we need to ready to accept our misbeliefs and cut the losses it fast. Happy to engage more on all this over email, I will drop you an email.
Would look forward to that !
*Value Migration* might be the clue word/funda for spotting the in/oncoming inversion... - of course one needs to install a formal 'look-out' post for this - in the planning department, select a born worrier-pessimist as the best guy for the role, and permanently place this in the agenda of all strategic meetings.
VM will have external and internal components, pointers, as called out by the 'author' of the term* -
(a) *early migration of customers to an early adoption of a competitive offering*, especially in the fourth circle players of the 4-circles of competitions ((1) direct competitors, (2) indirect competitors, (3) remote competitors, and (4) niche/startup players) of/in the "Radar Screen" Method.
(b) Market Cap shifts of one's own: mysterious ones that defy simple reasonings. market is that (in)famous 'invisible mind-hand' that 'knows' before anyone else including you especially,
(c) talent flow: like (b) above, the leaving that are 'odd'.
(d) Margin Compression: stable top-line, reducing bottomline....
worthwhile to see if a new iteration is in order?
*Adrian J. Slywotzky wrote it in 1995 - a full 30+ years ago? funny how sometimes even thought-models also 'rejuvenate' ?