Jumping the S-Curve: A book review by Bob Morris

Posted on: February 5th, 2012 by bobmorris

Jumping the S-Curve: How to Beat the Growth Cycle, Get on Top, and Stay There
Paul Nunes and Tim Breene
Harvard Business Review Press (2011)

How companies can reach progressively high levels of achievement

The title of this book refers to pattern of consistently elevating (“jumping”) a company to progressively high levels of achievement. As I began to read Paul Nunes and Tim Breene’s brilliant book, I was reminded of the fact that most all-state high school athletes begin at the bottom of the depth chart of their college and university teams, and, that most All-Americans also begin at the bottom of the depth chart, when drafted by professional teams. As Nunes and Breene explain, the S-curve refers to “a common pattern in which a successful business starts small with a few eager customers, grows rapidly as the masses seek out the new offering, and eventually peaks and levels off as the [given] market matures.” Now what?

Today, faster than ever before, the tendency is to fall behind the competition, shrink, and eventually go out of business or (on occasion) be acquired. Nunes and Breene cite a work by Everett Rogers, Diffusion of Innovations (first published in 1962 and now in its Sixth Edition), in which Everett demonstrates how the process of an innovation takes on the shape of the letter S: early adopters, early majority, late majority, and laggards. Here’s the challenge: How to achieve repeated peaks of high performance?

As Nunes and Breene define it, “High performance is the consistent and enduring surpassing of peers in revenue growth, profitability, and total returns to shareholders, across business and economic cycles, often across generations of leadership, measured by widely accepted financial metrics.” They also make assertions that challenge conventional wisdom. Here are five:

o High performance is not dependent on industry factors of the general health of an industry.
o Industry-leading scale is not a requirement for high performance.
o Consistently outperforming competitors in both growth and profitability is a competitive reality today and a hallmark of high performance.

o The benefits of pursuing high performance can accrue well before actual operating measures improve.
o Even above-average performers have a lot to gain from becoming high performers.

In this book, Nunes and Breene provide a cohesive, comprehensive, and cost-effective program by which to climb and then jump a series of S-curve timeframes. Of course, the nature and extent of the program as well as specific details are determined by a company’s needs, interests, strategic objectives, and resources. Nunes and Breene provide a wealth of counsel that will help business leaders to make their determination when modifying the program to the given circumstances.

However, now more than ever before in what has become a ferociously competitive global marketplace, change is the only constant. Business leaders would therefore be wise to keep in mind the Yiddish insight, “Man plans and then God laughs.” When concluding their book, Nunes and Breene briefly describe many of the disruptors “that could change the competitive landscape and turn industries upside down in coming years”:

1. Business analytics
2. Digital marketing
3. Cloud computing
4. Consumers in emerging markets
5. Mobility
6. Global talent scarcity
7. Smart infrastructure solutions
8. Sustainability

These and other “disruptors” could radically change the configuration and dynamics of S-curves as well as what is necessary to “jump” from any of then and then begin the laborious process of achieving high performance prior to the next “jump” that may well be much more difficult than any of its predecessors. My hunch, only a hunch, is that it will be. Business leaders who read this book and then apply effectively what they have learned from it will gain a significant, perhaps decisive advantage over those who don’t.

 


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