To sustain growth, companies need to discover their next S-Curve. But few have a repeatable process for uncovering new opportunities before their core business stalls. The Curve Ahead: Discovering the Path to Unlimited Growth offers a practical approach to sustaining long-term growth. It describes how growth companies can build innovation into the rhythm of their business operations and culture using design thinking, prototyping, business model design and other Innovation Power Tools.- Excerpt from Book PR
Author Dave Powers is my Guest Next Week on the Podcast.
Excerpt from the Podcast:
Joe: Is the S-curve a prescribed journey? Are there certain milestones in it or certain things that happen to a company that are familiar or is it just a revenue growth curve?
Dave: Revenue growth is the curve that is observable. However, underneath that curve, are a number of factors that all add up to what economists call diminishing returns. The reason that curve is shaped that way and every business audience I’ve been in front of, I said, “Have you seen this curve before?” They all nod, “yes”.
So why does the revenue curve start to tail down? You saturate your early market. You get competitors who bring in price competition. There are some other organizational factors. The business model outgrows the team that got them the early growth and now, you need a different set of skills.
Also, as the organization becomes larger, there’s complexity. You used to be able to fit the whole team in a room. Now, you’re getting conference calls and managing multiple offices. You have to do customer support in the beginning when you’re launching a new product. There were no customers to support. Now, you’re taking care of the last generation product while you’re designing the next generation product. All those things weigh down that rapidly growing thirty or fifty percent annual growth curve.
It’s inevitable. It’s like debt and taxes. Every business model matures generally faster than the executives expect to see it.
Joe: So there’s some mindset that needs to be changed?
Dave: It is a mindset. Think of it this way. You can take that S-curve that your business is on and you can think as you stretch that curve, you get more mileage out of your current business model. You can go overseas. You can find new customer segments to sell that new product to. But here’s the thing.
If you want to sustain growth over the long run, you’re going to need to find the next S-curve. What a sustainable growth strategy really looks like is one S-curve followed by another S-curve and followed by another S-curve. The new S-curve represents a new product or service that opens up a brand new market and that the growth in the new market offsets the declining growth from the current business model. If we could do this podcast visually (but I think the book does a great job of giving you the graphics and helps organizations get this idea), it’s just one S-curve followed by the next S-curve. That’s what sustainable growth looks like.
The challenging thing is that, each of those S-curves have a different managerial challenge. One is about sustained innovation and growth for the current business model. That’s the business model that pays the bills. You have to pay attention to that. Just like they say in the airplane, “put your own oxygen mask on before you help the person next to you.”
But you also have to invest a little bit of your seed capital (a little bit of your entrepreneurial energy) in searching for the seeds of that next S-curve. If you don’t do that, you’ll never have that next business model that drives that sustained growth.
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