AGE OF PARADOX

SIGMOID CURVE
HANDY
CONTEXT

• Easy to explain things looking backward.

• By doing this, we think that we can predict events going forward.
• Does not work… Why?
• Events are changing far too fast.
• Black Swan assumption.
• We are living in an age of paradox.
• What is a paradox?
PARADOX OF SUCCESS

• Things and the ways which got you where you are seldom keeps you there.
• In others words, that which led to your success are not the same factors that will
guarantee your success in the future.
• The past is not a good predictor of the future, particularly today.
• Best way to understand is to focus on contradictions.
• Balance is required.
SIGMOID CURVE

• S-shaped curve.
• Marginal change.
• Start slow, learn as we go. Some wins and many loses.
• Can be used at the macro level.
• Can be used at micro level.
• Can be used individually.
• Can be used at the organizational level.
• Dynamic modeling.
SIGMOID CURVE

• The accelerating pace of change shrinks every curve.

• The secret to constant growth is to start a new curve before the prior one peters out.
SIGMOID CURVE

• In the previous slide, identify the assumption.

• Note: variables – success as you define it over time.
• The right place to start the second curve is at point A.
• At point A, there is time, as well as resources, and the energy to get a new curve through
its initial explorations and floundering before the first curve begins to dip downward.
• Give examples of companies that have failed to do so…
S-CURVE

• Reality: difficult to reposition your company onto another curve.

• Discussion as to why!
• Knowledge.
• Capabilities.
• Vision.
• Mission.
• Resources – competing.
• Sunk cost.
• Culture and politics.
• Conflict.
S-CURVE

• Difficult to manage or operate in the age of paradox.

• Contradictions lead to confusion.
• Timing is important.
• Dealing with the future – unknown and uncertain.
• Crisis of leadership.
• Lack of motivation.
• Captured by your own success.
• Hubris.
EXAMPLE OF ACTIVITY TO GET ON SECOND
CURVE
• Merger.
• Acquisition.
• Re-structuring.
• New technology.
• Creation of a new organizational culture.
• New product development.
• New corporate strategy.
• Change of mission.
• New leadership.
WHERE IS THE CONFUSION ON THE 2 CURVES

• The shaded area is the part representing confusion.

• Competing ideas seeking to dominate and define the future.
• Question: managerially are you as an employee on the bus.
RELATED TO OTHER CURVES

• Product life cycle.

• Industry life cycle.
• Introduction, growth, maturity, decline.
• Political business cycle – short, medium, long.
• Politics and business intertwined and related – no separation between politics and
economics.
• Capitalism – boom and bust.
TAKE NOTE

• It is necessary to keep the first curve going while the second one takes hold.
• Eventually the second curve becomes the norm.
• The first curve is erased.
• No institutional memory.
DISCIPLINE OF THE SECOND CURVE

• How does management know where they are on the first curve?
• The reality is that everyone is too busy – crisis management.
• Most would disagree as to where you are on the curve.
• Need to use judgment.
• Need to proceed by guessing and making assumptions.
• Strategy – short – 1 year; medium 2-3 years; long-term 5 years.
• Japanese – 20 or so years.
ISSUE?

• Down-side.
• What happens if you are wrong?
• What happens if you make the wrong strategic choices.
• Do not make total commitment until second curve is embedded.
• Takes discipline.
• Takes time and resources.
DISCIPLINE OF SECOND CURVE – 4 STAGES

• 1. Like critical thinking – starts by asking questions – tough ones related to ideas,
possibilities, hypotheses, claims, vision, mission.
• 2, Next stage – test the ideas.
• 3. Review the results.
• Stage 1 and 2 use only imagination.
• Key is not to re-invent the first curve.
• The first curve is the seed of the 2nd.
KEY TO SUCCESS

• Let go of your past.

• Takes courage to move on.
• Give me examples of companies that have done this – discuss.
CURVILINEAR LOGIC

• Logic – deductive and inductive.

• What is the difference between the two?
• The argument is that everything in the world is represented by a sigmoid curve.
• In other words, business, political, and social cycles – ups and downs.
• While ascending on the first curve, curvilinear logic is not intuitively obvious due in part
to deductive logic.
CURVILINEAR LOGIC - CVL

• Basic or core is the idea that what got your success will not keep you there today.
• Obvious but difficult lesson to learn.
• CVL means that you are starting over life again, and again.
• Difficult to do as we get older – operate in comfort zone.
• To the Japanese this idea is “kaizen” – continuous improvement.
• Leads into the concept of scenario planning – military.
• The plans are actually possibilities.
CVL

• Need to continuous re-evaluate out assumptions.

• Why? Tend to lock us into the old model and original curve.
• The real secret is to create a balance in the time of paradox (contradictions).
• Need to allow the past and future to co-exist in the present moment.
CVL - FERTILIZE

• Frequently second-curve thinking comes naturally form the next generation.

• Those in a position to inherit the future.
• Issue – lack of knowledge of the past.
• Comes from education and experience.
• Need to focus on broad issues – look at Facebook and its in-ability to protect private
information.
• Need drive and commitment to carry the torch.
• Need to live it and to analyze it – hence critical thinking training.