For Whom the Bell Curve Tolls

&bell tolls

Want sustainable growth? Cannibalize yourself.

Growth curves. Life curves. We’re all graded on a curve. Going up is fun. Going down, not so much. But you can beat the bell curve – IF you can trump your own history.

Every enterprise faces a dilemma – the innovator’s dilemma – Clayton Christensen’s iconic insight. Their growth curve will eventually be thwarted by upstarts who sneak up from the fringe.

Curve 1 - The Innovator's Dilemma

These curves illustrate how smaller, cheaper, often flimsier alternatives enter the market from below and disrupt incumbents as they rapidly improve, fueled by the less attractive customer segments, either abandoned or ignored.

Now zoom out…

curve 2 - zoom out to see the bell curve

From this wider perspective, it’s easy to see that our original growth curve quickly becomes a bell curve, sloping inevitably downward as new rivals steal customers and revenues.

But – with equal inevitability – new threats are on the horizon, the disruptor disrupted.

curve 3 - in the end we all ring the bell

We’ve seen it time and again, as bronze replaces stone, only to be defeated by iron and eventually steel; counting on fingers elevated by the abacus, the slide rule, the calculator – ever better/faster/cheaper. Time marches on. Invention begets innovation.

curve 4 - disruptors disrupted

But what if you could cheat the curve?

Death need not be inevitable. You can beat the curve. But it comes with a daunting challenge.

curve 5 - eaten by your young

What if you gave birth to your own disruptors? What if  all three of the curves were yours? This suggests the immortality of the family tree. The old die off, but they are replaced by the next generation – younger, fitter, better adapted to changing conditions. The lesson of good parents is to procreate and feed your offspring, even as it costs you the time, attention and resources you could have spent on your own waning years.

The challenge of course is that corporations organize for one lifetime – for one set of measures – and to produce today’s set of offerings with today’s capabilities, not tomorrow’s. Somehow, the most natural act of reproduction in nature becomes, in a corporate setting, labeled as “cannibalizing your business.” But if disruption is inevitable, couldn’t this be the better answer?

Plot a new curve.

If, instead of fighting change, companies proactively sought their own disruption, they would benefit from the aggregate net growth. Curve a plus curve b…

curve 6 - additive growth

…eventually adding curve C, and setting a new, even stronger total curve.

curve 7 - set the curve

This does not come without pain. The same pain we feel as we age, but – as proud parents – with the joy of spawning the next generation and nurturing their growth.

For parents, we call this love. For companies, we first call it crazy, then foresightful, then bold. Ultimately, history describes it as brave.

But is it really so brave, if  you know in the end, the bell tolls for thee?

(And on the plus side, it can be pretty fun to make offspring.)

Set the curve.

Make better.

One thought

  1. Thanks for a thought provoking post. For me there are two important issues here.

    First is, is the threat of cannibalization from adjacent or disruptive internal innovation real? Everyone seems to fear it, but I wonder if it is one of those orthodoxies that no-one questions, and maybe we should. Is there any evidence of an organization creating a competitive product/brand/service for its own incumbent one(s) and being worse off overall as a result? I don’t know the answer to that but I expect not.

    Second is, are organizations “living” and, if so, how do such things grow? Although the parent-child analogy is attractive initially it doesn’t stand up against deeper scrutiny , largely because there is no sexual reproduction except in joint ventures where you could argue that two adults merge DNA to create offspring. Usually, though, companies grow asexually, through splitting. It seems to me that there is more value in thinking of organizations as populations which can grow by getting bigger (more individuals in one population) and/or by splitting (more sub-populations). One of the helpful things about thinking about populations is that it makes it easier to also think about resource scarcity and the carrying capacity of an ecosystem which provides limits to a population’s growth. I would suggest that brands/products/services are not living things themselves but are the various different strategies, tools and capabilities that populations develop in order to secure resources to survive. Thus different populations or colonies can develop different survival techniques while still maintaining similarities to the founder or “parent” population.

    As it happens, invasive species in nature offer a model of stratified dispersal in which both can happen at the same time (diagram attached). The interesting thing is that stratified dispersal often has the effect of accelerating overall expansion. We might argue, therefore, that any company that wants to grow should take into consideration both Core Innovation which grows their primary population and Adjacent/Disruptive Innovation which creates new sub-populations, allows them to take advantage of new ecosystems with new resource availability,and enables them to accelerate growth.

    Thanks again and best regards

    Henry

    Liked by 1 person

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