What is the Sigmoid Curve?
Another one of life’s great temptations of simplification is to see life, business, society, and success as linear progressions. As human beings, we’ve always generally had what can be described as a growth mindset - through dedication and hardwork we can develop to become better than we are today. However, as always, it’s not quite as simple as linear improvement over time, our periods of growth are inevitably followed by periods of decline. The Sigmoid Curve is a mathematical concept which was created to try and plot this cyclical nature of human experience.
The curve can be separated into 3 key sections: the Learning Phase, the Growth Phase and the Decline Phase.
The Learning Phase: This is the bottom of the curve where the groundwork is done to prepare a strong foundation for future growth. This is often characterised by hardwork and little reward. As such, it acts as a filter, those who are impatient and looking for immediate reward don’t make it through. The best analogy that I saw when describing this phase was: it’s like sowing a crop and tending to a field, at first there are no signs of growth, no fruits for your labour but under the surface the seeds are developing and growing.
In digital transformations this is where the hard work of listening and questioning occurs. The foundations are put in place by actively understanding the current situation and identifying those areas where technology can have the biggest positive impact on employee happiness and productivity. This is a patient process, a time consuming process that won’t result in any tangible benefit to company metrics like revenue or profit for a long time to come. As a result, this is the phase where many transformations are rushed, dictating the shape of the Sigmoid Curve to come. Those who prepare better grow quicker and for longer before reaching decline.
The Growth Phase: During this phase we reach the steep incline in our curve. Plans have been put in place and relationships have been matured. Every single day feels bigger and better than the last.
We have a clear vision for our digital transformation, adoption is increasing on a day-by-day basis resulting in constant growth of both productivity and efficiency.
The Decline Phase: The harvest has reached maturity and begins to die. Motivation within the organisation falls, we begin to question one another and the original plan that was put in place. What worked yesterday doesn’t seem to work today anymore and we don’t know why.
Adoption has peaked and we start to question whether the vision we put in place to begin with is still relevant. Technology moves at such a fast pace that we start to question whether we’re being left behind. Our more agile users start to adopt newer technologies whilst our less adaptable users are just relieved they understand the original. This causes division within the group and the productivity gains we earned in the Growth phase start to crumble away.
I have spoken a lot about long term success but how is that possible if decline is inevitable? In a rapidly changing environment like technology, not only are we witnessing some of the most rapid change out there, but the rate of progress is only increasing. This means success in the future is only going to become more reliant on adaptability.
The key is, when we’re on top of our game, change our game. When adoption of one technology is high, find the next one. Recruit new talent, alter tactics, reassess our strategy. If we do that, it might be possible to outwit the inevitable by making ‘Sigmoid Leaps’ that sees us jump from one Growth Phase to another.
However, this is easier said than done. It is very hard to jump off a curve that is currently peaking and move onto another curve that is still in its infancy. In other words, you’re currently using a technology that is massively benefiting the organisation, what is the incentive to introduce something new that is unproven? It’s a tough sell. The problem is, hanging around too long can result in painfully large swings in feast and famine. We go from high growth to sudden decline and would have to pick ourselves up again every time. It’s a much smoother journey to make the hard choice to pivot right as we’re on top of our game.
A leader needs to become the expert on coordinating these leaps. When do we bring fresh blood in? When do we change our tactics? A true leader has an intuitive awareness of the state of the organisation. Identifying an upcoming peak is almost instinctive based on almost imperceptible changes in the company environment. They can tell when tension among the team is building, they can tell how attitudes towards the incumbent technology is changing and they are brave enough to act on this intuition. I say brave because, more often than not, it is likely to be an unpopular decision that induces short term pain by introducing a new learning phase. It’s like offering a lavish buffet as the main course and then putting down a bowl of fruit for dessert and saying ‘turn this into something better will you’.
Sigmoid Leaps and Transformational Change
As I have often discussed, many companies see digital transformation as a journey with a destination rather than as an ongoing process. It is this same mindset that locks them into one curve rather than discovering what might come next.
With a long term plan in place, we plan our leaps in advance. This is often what is referred to as a roadmap. When I say plan, I don’t mean everything down to the nth degree because, if there’s one thing we’ve learnt over the last 12 months, it’s that the world is anything but predictable. But we can plan to initiate learning a new technology whilst resources, energy and confidence are still high from the growth phase of the previous technology.
Falling into the trap of waiting too long to transition just once can risk the whole transformational stack because moving into decline will not only create doubt in that particular technology but in the whole transformation strategy. With time and practice, we get used to finding the transition sweet spot and, more importantly, our employees get used to the feeling of transition. This shows that our transformation as a whole is actually on a larger Sigmoid Curve that consists of these smaller transitions. We start by learning how to transition from curve to curve, technology to technology, before it becomes second nature to us in the Growth Phase.
This means if we want true long term success and to solidify the future of the organisation by making it truly innovative, we need to figure out how to transition across these technology stacks or larger Sigmoid Curves. I sat thinking of a good analogy and I’m convinced Apple represents a good choice. Each year they bring out a new suite of products around September/October time. These represent our individual, smaller Sigmoid Curves that make up our technology stack. Over time, their customers got used to this release cycle and now we can almost set our watches to it. Initial sale of the iPhone was relatively slow compared to the last few years, we, the consumer, were in the Learning Phase. We weren’t sure what a smartphone was, how it fit into our lives, or what it could contribute to our lives. As we moved along that journey of discovery, adoption of the smartphone exploded, we reached the Growth Phase. Within that we had lots of smaller battles, which company can produce the phone with the best camera? Who can make the largest screen? The thinnest device? However, on the larger curve, in my opinion, we are slowly but surely reaching the peak. Growth will inevitably decline as consumers realise that having a phone with only a slightly better camera isn't worth the extra investment. In other words, I think Apple are going to have to reinvent themselves away from reliance on their current product suite to stay competitive in the long term. If they want to be truly innovative for the absolute longer term, they need to consider what that new technology stack looks like and plan ahead.
We have to do the exact same with our digital transformations. It’s not enough to just focus on automation or just on AI, at some point we’re going to reach saturation point with those technologies and we’re going to have to reinvent ourselves all over again. It’s going to be those companies that are brave enough to take the leap and the leaders most intune with their company environments, that time leap the best. They are going to be the most successful in the long run.