How Inflection Points Define The Future

Greg Satell
6 min readFeb 6, 2021
Image: Unsplash — John Gibbons

Humans tend to think in a linear fashion. If something is growing, we expect it to keep growing. If it is decreasing, we expect it to continue to decrease. We are natural trend watchers and instinctively look for patterns. Yet it is often the discontinuities, rather than the continuities, that have the biggest impact.

The mathematician Benoit Mandelbrot referred to this cycle of continuity punctuated by discontinuity as “Noah effects and Joseph effects.” Joseph effects, as in the biblical story, support long periods of continuity. Noah effects, on the other hand, are like a big storm creating a massive flood of discontinuity, washing away the previous order.

Throughout history, inflection points have defined the future. Business models, built on top of Joseph effects, are disrupted by Noah effects, creating new opportunities for those who are able to identify and adapt. Today, we’re in the midst of a series of inflection points in what was already a time of enormous flux. We can’t predict the future but we can prepare for it.

1920s: A Second Industrial Revolution

By 1920, electricity was already nearly a 40-year old technology. In 1882, just three years after he had almost literally shocked the world with his revolutionary electric light bulb, Thomas Edison opened his Pearl Street Station, the first commercial electrical distribution plant in the United States. By 1884 it was already servicing over 500 homes.

Yet although electricity and electric lighting were already widespread in 1919, they didn’t have a measurable effect on productivity and a paper by the economist Paul David helps explain why. It took time for manufacturers to adapt their factories to electricity and learn to design workflow to leverage the flexibility that the new technology offered. It was the improved workflow, more than the technology itself, that drove productivity forward.

Automobiles saw a similar evolution. It took time for infrastructure, such as roads and gas stations, to be built. Improved logistics reshaped supply chains and factories moved from cities in the north — close to customers — to small towns in the south, where labor and land were cheaper. That improved the economics of manufacturing further.

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Greg Satell

Co-Founder: ChangeOS | Bestselling Author, Keynote Speaker, Wharton Lecturer, HBR Contributor, - Learn more at www.GregSatell.com