In mathematics inflection points are where a function inverts concavity, that is a “concave upward” curve transitions to “concave downward,” or vice-versa.

Inflection points occur at critical moments in human history, like the one we are experiencing now, with profound changes in countries, companies, sectors, economies, and geopolitics, resulting in profound ruptures. These inflection points require flexible and adaptive strategies and attitudes.

Unlike the traditional approach to sustainable competitive advantage proposed by Michael Porter in the 1980s, an adaptive approach to strategy is based on the premise that competitive advantages are increasingly temporary, transitory. In unpredictable and inflexible environments, the emphasis is on continuous experimentation and real-time adjustment, rather than long-term analysis and planning. Because competitive advantage is transitory, the focus is on the means, not the ends.

An adaptive strategy is an iterative approach of formulating hypotheses, experimenting and adjusting, during strategy implementation. It is a continuous learning process that does not separate formulation from implementation. It helps prevent a company from setting a direction leading towards an unsustainable future.

An adaptive business strategy enables a company to continuously act proactively to achieve long-term objectives and allows for quick, as-needed adjustments to objectives. This is done through the rapid development and implementation of short-term strategies and actions to achieve broader objectives.

An adaptive strategy is not rigid, nor is it based on a schedule. Those at the top of the company do not impose it on the base. An adaptive strategy means that the team understands and responds quickly to transformations in the environment.

The adaptive strategy is based on four key principles: Eliminate the top-down strategy, continuously improve, experiment, and start now (see Figure 1).

Now we will go into more detail about the key principles of the development of adaptive strategies.

1. Eliminate the top-down strategy

A top-down strategy demonstrates a fundamental distance between the company’s senior management and those who will implement the strategy. Instead of a small group of leaders imposing strategy on a large group of workers, an adaptive process involves everyone in a relationship of cooperation and collaboration, such that important insights, ideas and knowledge may come from any direction. All employees are encouraged to contribute.

This is great for a strategy that is based on the team’s skill set, and it stimulates buy-in and commitment. The team is more likely to get involved in the strategic process when they firmly believe that their contribution has been implemented in the development of the strategy.

An adaptive process is inclusive; it shows inclusion is diffused across the organization, therefore adding more value to the business.

• Continuously improve

An adaptive strategy presupposes consistently incorporating learning to improve the strategy. Instead of an annual review of the strategy, the company needs to review the strategy monthly at the critical analysis meeting of performance indicators. An adaptive strategy is constantly in flux and improving.

• Experiment

Because an adaptive strategy is in continuous flux, the risk of experimentation is lower than with less flexible approaches. Moreover, experimentation is critical for the company to remain relevant in a competitive and rapidly changing market. An adaptive strategy means that if something goes wrong, you can change course.

A culture that favors experimentation leads to smarter and more efficient strategic processes and promotes an atmosphere of creativity that will result in innovations, new ideas, and solutions that otherwise would not flourish.

4. Start now

With traditional strategies, each step must be completed before the next one can begin. Implementation can take a long time, such that a strategy that was relevant when developed may be outdated by the time it is implemented.

The adaptive strategy is different: You need only the most relevant information about the steps immediately ahead. It means no time is the wrong time to start. Just start and adjust as the process progresses.

An adaptive business strategy works best when the transformation in the business environment is difficult to predict, and when opportunities for competitive advantage are ephemeral. An adaptive business strategy can help companies monitor changes in information technology needs, understand customer demand, identify possible disruptions in different sectors, create space to quickly develop competitive offerings for products or services to reposition the brand and add value to the business, and more.