In situations characterised by significant potential change, a business will want to be aware of the point when it might be either beneficial or necessary to follow a new strategy or approach. Tipping Point Analysis will assist in identifying or forecasting this Tipping Point.
Tipping Point Analysis (TPA) is a technique that can be used to help determine strategy in complex, uncertain environments. It supports the systematic decision making and preparation that accompanies planning for potential strategy change.
A Tipping Point is reached when certain criteria are met. These criteria will reflect
key attributes of the strategy being followed. Changes in these attributes or the assumptions that underpin them are the drivers that could cause the Tipping Point to occur, and may include scale of deployment, operating costs or customer satisfaction levels for example.
Reaching the Tipping Point will have certain impacts in the business. These will determine the feasible options for new strategies that could be followed going forward. TPA can also use “triggers”. Triggers identify the point in advance of the Tipping Point where action should begin in order to be ready to deploy the new strategy after the Tipping Point.
Understanding when Tipping Points can occur enables the business to be prepared for change and to be more confident in its planning and decision making processes.
Grid Scientific has used TPA to support electricity network operators in planning for the uptake of low carbon technologies. The Tipping Point threshold for a particular solution was the scale of its deployment. Beyond the Tipping Point a number of outcomes
were considered including change in technology, a new technical architecture, standardisation or cost reduction amongst others. Evaluation of key attributes allowed technical, operations and business impacts to be considered and decisions to be made.