How companies can escape the "peak trap"

One day, a president called all the employees and said, "I want to tell you two things today." He said, "First of all, I want to remind you that we are a more successful business than ever before. Second, I have to tell you that if we're going to continue to be so successful, we have to fundamentally change the way we're working."

But no one's listening, all basking in the brilliance of success, they To think, change at this time is foolish.

Three years later, the company was in trouble and had to make changes to bounce back. So, they began to undergo surgery, which was accompanied by huge expenses and pain. Such tragedies repeat year after year, destroying company after company.

This story was told by management thinker Charles Handy when he formulated his "Second Curve Theory". The paradox of the business world, he tells us, is that the things and ways that got you where you are are rarely the things and ways that got you going on; by the time you know where you're going, you often don't The opportunity is gone.

Beware of the "peak trap"

Second curve theory emphasizes that the variability of corporate markets is an eternal theme. Any market will age with a certain market age, and with the advent of the digital age, the problem of market aging will become faster and faster. Therefore, businesses must always prepare for their second growth curve. And, the execution of the second curve plan should start before the first curve peaks. In other words, companies must be ready for change, and when the time is right, they should unswervingly execute their new business plan to avoid the old business falling into a trough.

Unfortunately, many of the companies we see today turn around when they have passed the peak of the first curve and started to go downhill, and they are far from the peak of the second curve. .

1997 was undoubtedly a year of great success for Kodak in the Chinese civilian film market, but Kodak, immersed in joy, lacked a keen judgment on the rolling digital wave. He blindly believed that in the Chinese market, especially in the secondary market and the rural market, Kodak would still be able to make a big difference in the field of film. And, in addition to China, there are a large number of third world countries such as India. Unfortunately, in the judgment of the market, Kodak made a serious mistake.

Facts later proved that as early as 10 years ago, when Kodak launched a digital camera, it was the most appropriate period to transform into digital. Unfortunately, Kodak gave up this opportunity with its own shortsightedness. Today, the digital camera industry is vying for hegemony, the traditional imaging industry is in the dark, and Kodak is in an increasingly embarrassing situation.

Intel is also in a similar predicament to Kodak. As a giant in the PC era, Intel's poor performance in the post-PC era shows that once an innovation makes an enterprise successful and becomes a core business, it may secretly hold the enterprise on the path of its original success. In the future, it will become a new growth point of the company and a "peripheral" business of the core business.

“inventing” the second curve

What Charles Handy told us is that the rules for the second curve require that you always assume that you are near the top of the first curve, so that you can guarantee Businesses always plan ahead. This is done to avoid the following situation: When forced to develop a new curve, the tangible and intangible resources that the company can mobilize are significantly reduced, and existing and emerging competitors are likely to take this opportunity to harass you. After chasing and fighting, the company has obviously lacked the calmness and confidence required to create a new business growth curve.

What Charles Handy doesn't tell us is where the new curve awaits.

Amazon, which grew into an internet giant from an online bookstore, has been struggling to find a new curve. Since its inception, Amazon has tried to expand its tentacles into many very unfamiliar fields. It has successively set foot in the field of online car sales, entered mobile commerce, acquired a 35% stake in HomeGrocer.com, an online home-cooked food seller, and invested heavily in the establishment of an online marketplace. Alcohol and beverage supermarket WinShopper.com... is gradually becoming a leader in online retailing.

The online retail business has given Amazon a comfortable start to the company's second curve, however, Amazon's quest for innovation continues. In 2006, Amazon introduced a series of breathtaking new web technologies - Mechanical Turk, S3 online store and EC2. It added the SideStep search engine to the online travel store and offered a digital video download service. More recently, Amazon has started selling basic services, such as storage and computing power, to small companies.

Amazon's practice tells us that there is no ready-made new curve, companies must "invent" new curves. There are two sentences to remember to "invent" a new curve.

A sentence is said by American entrepreneur Edwin Rand: "The person who eliminates your product should be yourself, not your competitor." In the wave of global economic automation, whether companies produce or sell Any product will eventually be eliminated, and the rate of elimination is now faster than ever. Enterprises must constantly deny themselves, eliminate themselves, and seize every flash opportunity provided by the market at any time to find future customers for the enterprise.

Another sentence is, "The intellectual level of an enterprise determines its value and future". The scale, equipment, inventory and other tangible assets of an enterprise cannot bring a new curve to the enterprise. The wisdom of all employees in the enterprise, the intelligence of the enterprise, can provide continuous power and thrust for the enterprise.

The author is editor of the CEConline website.