Sunday Books Vol.1

Topics around Strategy, Leadership and Sustainability

As promised for Sundays here comes the first book suggestions.

Let's talk about the sequel books of Charles Handy, who made the Sigmoid Curve metaphor famous in the business cycles, to widen our perspective on the applications of the Sigmoid Curve: "The Age Of Unreason-1989", "The Age Of Paradox-1994", "The Second Curve-2015."

I believe these books brought the sigmoid curve into business cycles and possess thought-provoking insights into today's most relevant business and environmental challenges.

In "The Age of Unreason," Charles Handy introduces the concept of sigmoid curves to explain how change occurs in our lives. He argues that transformation is not linear or predictable but a series of discontinuous changes that differ from previous times and do not follow a pattern. Handy believes that dealing with discontinuous change requires a sporadic upside-down thinking approach, even if both the thinkers and their thoughts seem absurd at first sight. We will dive deeper into the newest strategic thinking phenomenons later on.

According to Handy, we need to embrace the changes around us and think creatively to shape the future we want. He rests his argument on three assumptions: small changes make the most significant difference in our lives, changes in how we organize our work have the most significant impact on how we live, and dealing with discontinuous change requires a different approach.

Handy uses the Sigmoid Curve metaphor to illustrate his ideas. The curve represents the life cycle of a product or an organization. It starts slowly, rises to a peak, and finally, declines and dies unless a new curve is created. Handy suggests that we need to anticipate the deterioration and prepare for it by creating something new before the fall starts. He argues it's better to be proactive than reactive in dealing with change. This may be one of the biggest reasons of my book to be written.

In the book "The Age of Unreason" Charles Handy challenges the traditional view of change and provides a new perspective on the future . Handy's insights are based on his extensive experience as a management thinker and reflect his belief that we need to rethink our assumptions and embrace change to succeed in the future. To me this insight is the father of today’s big phenomenons like “blue ocean strategy and infinite thinking” 30 years ahead.

In "The Age of Paradox," Charles Handy presents a thought-provoking analysis of today's complex challenges that businesses, communities, and countries face. Using a variety of paradoxical themes, Handy delves into the underlying issues that are often overlooked or misunderstood.

Charles Handy's analysis of contemporary society identifies many paradoxes underpinning the modern world. One such paradox is the "paradox of intelligence," which recognizes that intangible knowledge is the newest form of property. Other paradoxes include the "paradox of work," which addresses how some people have work and income but no rest, while others have time off but no work or income; the "paradox of productivity," which suggests that because business efficiency eliminated jobs, people must perform work they once paid others to do; and the "paradox of time," which reveals that some people have work and no time and others have time and no job.

These paradoxes defined the evolution of the definition of work and worker in the coming 30 years with evolving trends of freelancing, fractional works, gig economy etc.

Handy also discusses the "paradox of riches," which acknowledges that economic growth relies on more people wanting more things. The "paradox of organizations" explains that organizations need global reach and local attachment to succeed. According to Handy's "paradox of aging," every generation uses structures that serve the last generation while producing changes that serve themselves, but not the next generation. His "paradox of justice" recognizes that capitalist societies ignore those who need the most, as capitalism claims those who work hardest should get the most.

Handy also argues that businesses should prioritize reinvesting in themselves for quality and improvement rather than shareholder value, which diminishes growth opportunities. He points out that Japanese and German companies keep around 65% of their profits for reinvesting in their business to help it grow and improve. In comparison, American and British companies keep only 54% and 45%, respectively.

Handy urges embracing productive irrationality to navigate today's multi-leveled, paradoxical aspects of existence. He recognizes that only the super-wealthy can get off the merry-go-round but entreats experts to be mindful of the processes surrounding them and in which they are immersed.

These paradoxes defined the failings of the share holder capitalism and globalization 30 years ago when they were not so obvious to all of us.

"The Second Curve" is a call to action, urging readers to initiate change while the current system still functions well. Handy emphasizes that societal change is measured in generations, not years, and that the need for widespread acceptance of change limits democratic governments. The book is not prescriptive and aims to provoke thought beyond the familiar.

The book also explores the inevitability of change and eventual decline, using examples of historical empires and governments that have followed the trajectory of the sigmoid curve. It emphasizes the importance of identifying and pursuing a Second Curve, as businesses are experiencing a shorter average lifespan, dropping from 40 to 14 years.

Indeed, it is accelerating. A study from 2016 by McKinsey claims “the average life-span of companies listed in Standard & Poor's 500 was 61 years in 1958. Today, it is less than 18 years”. McKinsey believed in 2016 “in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared. They will be bought- out, merged, or will go bankrupt like Enron and Lehman Brothers. Some companies manage to escape this mass destruction. General Electric, Exxon Mobile, Procter & Gamble and DuPont are among the oldest companies on the New York Stock Exchange. Nevertheless, the largest market capitalizations today have new names: Apple, Alphabet, Microsoft or Amazon”. Probably it is very much about being able to create the second sigmoid curves or not.

The book highlights the challenge of spotting and seizing new curves and emphasizes that it is a strategic challenge for various sectors including education, health, government, and business. It acknowledges the difficulty of embracing Second-Curve thinking during economic downturns.

This might be one of the underlying reasons of the COP’s (Conference of Parties – attended by the countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) – a treaty that came into force in 1994) plateauing performance curve.

The book also discusses the execution of Second-Curve thinking, which may mean competing with oneself and making significant organizational changes. It acknowledges that individuals and institutions may struggle to transition to the second curve, often requiring tremendous effort and sacrifice.

The book also explores institutional decline, discussing how institutions resist change and decline through stages such as hubris, pursuit of the same, and denial of risk. It emphasizes the importance of challenging norms, reimagining success, and navigating life and work by broadening perception and understanding the importance of thinking in dealing with risk and uncertainty.

As Charles Handy defined it, the Sigmoid Curve illustrates the inevitability of peaks, troughs, and transitions that characterize the journey of any entity. The Sigmoid Curve suggests that no growth is permanent or sustainable forever and that every growth curve will eventually hit a plateau point. If not addressed, that plateau point will become a decline in the business, creating a paradox in business. While you're on a growth curve, the Sigmoid Curve algebraic formula suggests that what goes up eventually will plateau and crash and burn unless you find a way to sustain growth and momentum.

Please feel free to share your thoughts or ask a question about the article.

If you want to stay informed about new articles in this series and more, subscribe to my Newsletter, "Rider of the Sigmoid Curve ."

Let's also connect if you share a passion for Strategy and Leadership for Sustainable Growth.

For more articles, check my LinkedIn profile and Blog posts at www.2yd.ch and

Cheers,

C.Firat Caliskan