- The S Curve Theory of Business Lifecycle
- The Myth of Perpetuity
- We Keep Repeating the Same Cycle
This chapter is from the book
This chapter is from the book
This chapter is from the book
We Keep Repeating the Same Cycle
The lifecycle river is very familiar to all businesspeople, largely because everyone can think of so many examples. Yet management keeps repeating it as if there is no other option to the cycle of breakout, then grow, then decline and fail. While management gurus and academics talk about “jumping the curve” from one “S” to another, it simply doesn’t happen very often.
While businesses enjoy being in the Rapids, very few return to the Rapids after hitting the Flats. And practically none return to the Rapids from the Swamp. (When these do occur, such as the turnarounds at IBM and Apple Computer, they get an enormous amount of attention.) As a result, we become sanguine about Schumpeter’s forecasts of business failure—as if it is simply destined to happen.
Most business leaders have the will to turn their companies around—they are globally savvy, hard working, and smart. They have enormous desire to leave a legacy of success, and they are willing to demonstrate their will and their sacrifice by undertaking painful management actions, such as employee lay-offs, reducing benefits and pay, cutting executive ranks and perquisites, slashing expense budgets, and enforcing draconian vendor cuts and under-funding employee pension plans. They take these actions because they truly believe it is the right thing to do, often telling everyone the businesses are accepting the pain for the long-term good of the enterprise.
Many of these leaders will turn to outsiders for help. They seek experts at law firms, accounting firms, investment banking, and management consultancies in downsizing, outsourcing, and strategy. Yet, the vast bulk never find the Rapids again. When they find themselves in the Flats, they remember the theories surrounding lifecycle management developed 50 years ago and take actions that yield more than a hundred Polaroids for every Apple.
It’s time to understand why it is so hard for businesses to undertake a different set of recommendations. It’s time to look at how we develop Success Formulas.