What is S Curve?
Charles Handy defined the S curve in the 1990s. In layman’s terms, the S curve of the sigmoid function shows the average life cycle curve of a civilization, company, or individual.
As the name suggests, it is an s-shaped curve and represents exponential growth followed by a dip and an eventual rise. Every company experiences this wave. This also explains why over 90% of start-ups over the world don’t last more than 5 years. They can’t beat the curve and stagnate after the very first dip.
The Importance of S Curve in Business:
According to Charles Handy, the best way to survive the S curve in business is to jump from one sigmoid function to the other. This means every founder should switch it up when they’re riding the high wave!
Sounds crazy right?
This is great advice and happens to be the most effective way to beat the sigmoid function.
To survive, every start up must welcome change and do it at the right point in time!
So how will you identify if your business needs to leap into the second orbit and survive the first sigmoid curve?
There are certain tellers every start up founder must look for. Here are the 5 changes you will experience before you experience the first dip-
Your Employees Can’t Keep Up
A business grows exponentially, whereas every individual grows linearly. This means there will be a time where you’ll need new skill sets, fresh perspectives, or new blood.
When you begin to see a disparity between the capabilities of your team as opposed to what the company can achieve, you need to step in and make the necessary changes. Whether it’s hiring younger recruits, who can bring new technology and innovation to the table or new founders who can bring their experience and expertise into the equation, a start up should continue to monitor their talent and collective skill set to jump into the second orbit.
… Nor Can You!
Every founder is also an individual who cannot grow as fast as an entire organization. This makes the transition into the second orbit personally challenging for founders. This tends to affect start-ups when they are dealing with the effects of the S curve.
To enter the second S curve, every founder needs to be extremely self-aware. That’s one way they will realize what they are lacking and make changes accordingly.
As mentioned before, founders cannot grow as fast as their start-ups! Most start up owners make the mistake of limiting their vision to their capabilities.
Before you hit the first dip in the S curve, make sure you change your mind-set. Make decisions based on the capabilities of the company. Always lookout for the whole organization before you think of yourself! Your start up can beat the first dip in the S curve if your mind-set goes from “my company” to “our company”.
Chaos to Quiet
A smaller organization is inevitably chaotic. There are people who are juggling between multiple roles, there are fewer managers and probably more liberty. But as the organization grows, it becomes important to establish a structure and processes. Chaos certainly helps the innovation thrive until the company crosses the first orbit.
To enter the second orbit or the second S curve, the company has to become more conducive. As a start up founder, always ensure that you plan and execute the best possible practices for internal management. This goes a long way as far as the start-up’s success is concerned!
These are only some of the essential tips Anand Deshpande shared on an episode of the podcast ZerotoExit. If you are looking for more gems from veteran innovators and businessmen, make sure to follow us on Spotify and Apple