The Second Curve - Managing The Velocity Of Change

Change is the buzzword for today's business leaders. But unless prepared, massive changes in the marketplace can erode a company. This volume introduces a way to ride the first curve - a company's traditional business carried out in a familiar corporate climate - to the all-important second curve of the new consumers, new markets and new technologies, combined to bring about sweeping, irrevocable alterations in the way every industry functions. But the art is to know whether or not what one thinks is a second curve really is one - or whether it's a phantom, just something going bump in the corporate night. Sorting out the new technologies that will take off from those that will fail - even if they fail in interesting ways - is very difficult and critical. And sorting out real growth potential from hype is difficult even in non-technology areas. Is the second-curve candidate a Southwest Airlines or People's Express Is it a Toys 'R' Us with its 22 per cent market share or Child World, a chain that once had 130 stores with $180 million, but went bankrupt a few years ago The following little-known but useful piece of wisdom may be helpful in sorting out real second curves from there is a tendency to overestimate the impact of phenomena in the short run, and to underestimate in the long run. For most large companies, choosing one or the other curves to work on is a luxury they can't afford. The driving forces of change described will continue to generate two curves, and to make it to the 21st century, these companies must learn to manage on both. Large corporations will have to go beyond re-engineering, time-based competition and core competencies as the sole means of growth. They must build second-curve organizations to perpetuate themselves as market leaders, while at the same time getting the most they can from their first-curve business. Those that don't will wither and die