Capital Ethiopia Newspaper

The S-curve



We often get excited when a new business, shop or restaurant is opened. People talk about it and we look forward to the opportunity to check it out. The service is good, workers are welcoming, things are in a good condition and in case of a restaurant, the food looks appetizing and tastes good. When we visit the same place sometime later, chances are that things are not the same. The uniform of the waiters looks scruffy, the chairs are not as comfortable anymore, the restrooms are a no longer spick and span and above all the food is not that special anymore. In fact the menu is still the same. Many businesses face a similar situation, whether in the service industry or the productive sector.

The curve is sometimes referred to as a learning curve: we learn through trial and error, develop confidence and achieve mastery. But unless we continue to renew ourselves, performance begins to drop off. In terms of organizational effectiveness, management could study where they are on the curve and see when decline will begin to take place. This is the time management will then try and turn things around. The solution to the problem is often found in worker harder.

But perhaps working harder is not the right answer and instead we may need to work smarter. In fact we should not wait for the curve to begin sliding down and until crisis occurs before beginning to work on renewal. The secret of constant growth is to start a new Sigmoid Curve before the first one peters out.

A study of the typical development curve shows that there is wisdom in anticipating the dropp-off before it begins to occur. Point “a” is the observation point. It is the stage at which a different plan needs to be put in effect. It represents the best time to step back, contemplate the progress made on the curve and consider launching a new one. At point “b” the slide has already begun. At point “c” it is too late.

Normally we concentrate only on what we are doing now but in today’s condition of constant change, we need not only pay attention to improving the present but also to designing for the future.

In other words, organizations must have two strategies operating at the same time.

Consider what happens to a new business, introducing a new product or service. When successful, competition will begin to spring into being and soon the business will find itself fighting for survival. Measures are taken to reduce delivery time, reduce employees, improve serve and reduce production costs. All these initiatives are aimed at trying to maintain the business; they are “first curve” improvements. “First curve” improvements are all about at getting better at what you already do and often revolve around the implementation of a new organizational model.

Continuously improving what you already have and do today may help keep the company afloat today but will do little to prepare for the market of tomorrow. Present reality strongly suggests that a company can be outclassing the competition today and be out of business tomorrow. That is why we need to engage in “second curve” thinking. While improving the company’s present operations, we need to begin trying various market strategies or organizational models until a good new fit has been found. When that occurs, the transition from the first curve to the second curve begins. This ongoing simultaneous approach to both improvement and innovation allows an organization to adapt to environmental change before a crisis has developed. Next we week we will continue to look into how this can be realised.