RE: the S curve

Are you actually expecting companies to do things right?
If you ever find one... let me know... I've dreamed of working for such
a place!

-----Original Message-----
From: HankHeath@aol.com [mailto:HankHeath@aol.com]
Sent: Saturday, December 26, 1998 6:23 AM
To: MIDRANGE-L@midrange.com
Subject: the S curve


I once turned down a position at a consulting organization because of an
S
curve. The group had shown phenomenal growth for the past three years.
They
were owned by a larger international organization which had deep
pockets, many
contacts, but small margins. The consulting group was able to leverage
the
larger organization's deep pockets and many contacts to grow. The
consulting
group had wide enough margins that they were making greater profits than
the
parent group. So why would I turn down a wonderful opportunity like
this? Am I
mad?

Perhaps. However, I looked at two other facts that decided the deal for
me:
(1) the consulting group had reached a plateau for the current year; and
(2)
they were hiring like crazy to gear up for the next growth phase. I
asked some
silly questions. Why did they think they had reached a temporary
plateau? The
answer was that they had been dependant upon the larger group's contacts
to
grow. They had used up the contacts, and now were free to market
themselves to
the general business market. Why were they hiring? The answer was that
they
were bringing in professionals from other consulting businesses -
predominantly big six (or whatever number at the time) - to form
practices and
professional methodologies similar to the competition. They hoped to be
able
to market their services as being better than the competition. Based
upon
those two answers, I opted out.

I reasoned that they had grown as much as they could on their own model.
Now
they would have to re-invent themselves. However, they were trying to
re-
invent themselves based upon their competition instead of what their
customers
wanted. Not once did I hear anything about the customer. Instead of
throwing
customer research at the problem, they were throwing money into a
roaring fire
they had built from the paper of their benefactors in the larger
company. At
best, I could foresee only a shrinking of their profits based upon
greater
expenses with no increase in the market. They had ignored their S curve
of
growth.

When I explained this to the executives of the company, I got blank
stares.
What the hell was I talking about? They didn't have a clue. This plateau
was a
temporary dip. Their growth was destined to take off as soon as they had
the
manpower to take it to the next level.

I guess I misunderstood. I thought that the S curve analysis was quite
common.
Have I misunderstood something?

Hank Heath
Project Manager
HLHeath consulting
home office: 801-733-9716
cell phone: 801-814-5387
7054 S. Ponderosa Dr.
Salt Lake City
UT 84121-3734
e-mail: HLHeath@IBM.net

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