BLOG POST

by Prof Worsak Kanok-Nukulchai, Executive Director, Chulalongkorn School of Integrated Innovation.

\"The pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world\" – Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum

In our lifetime, no other crisis has ever impacted humans more than the present COVID-19 pandemic. This crisis has caused sweeping structural changes in almost every fabric of human society. In Thailand, millions are jobless. Small and medium-sized businesses have been forced to close, and not all will be able to reopen after the crisis is over.

Mentally, people still hope that things will eventually get back to the old pre-pandemic normal. But as time passes, it is becoming increasingly clear that this is not going to happen. Even with the emergence of vaccines, the rough ride will last for several more years and will continue to cause radical structural transformations. Instead of trying to recover from the crisis and return to “normal,” should we decide to go for a reset and completely transform the trajectory of our lives? The key message of this article is this: the COVID-19 crisis affords us the opportunity to create a better society along with a new S-curve that will save crumbling businesses.

TIME FOR A GREAT RESET

They say every crisis comes with opportunities; thus, a greater crisis comes with greater opportunities. This crisis presents a rare opening for a reset. The pandemic opens the door to dramatic changes for both individuals and organizations.

For individuals, this period allows us to rethink and reset the purpose of life and our relationship with Mother Earth. For the many who lost their jobs, it is a good opportunity to launch a start-up and become their own boss. In the past, you needed capital to launch a decent business. But today, thanks to the democratization of digital technology, you only need a good innovative idea and pitch for crowdfunding, or the practice of raising small amounts of money from a large number of people, typically via the Internet. 

For businesses, this slowdown provides a rare chance to examine their position on the current industrial S-curve. The S-curve is a strategic concept that describes how old business models mature and are eventually superseded by new models. Knowing where you are on the S-curve helps you predict the potential of your business, and especially when it will reach the maturity stage, at which point it will requires a reset to survive. 

WHAT IS THE S-CURVE?

There are several equations that can generate an S-curve, the most common one being the logistics function. An S-curve has three phases: the early adoption phase (slow initial growth), the hyper-growth phase (rapid growth), and the saturation phase (no growth). While you may enjoy the hyper-growth phase, remember it will not last forever. At some point, things will slow down and move toward the saturation phase, when there is nothing left that might keep growing as you move closer to the asymptote (ceiling).

At that point, either you stay put on the same S-curve and become irrelevant, or you find a way to jump to the next S-curve. As your existing technology matures, there is anothertechnology that is still at the early adoption phase but has the potential to surpass the ceiling you have reached in your current technology. Note that the term “technology” is defined broadly in the context of the S-curve since it could mean jumping to a new product technology, a process technology, a new business model, new customer needs, or a new basis for competition.

NEW S-CURVES FOR CONSULTING BUSINESSES

In the illustration, a series of three S-curves for servicing businesses is shown. Starting from S1, the Engineering Consultancy was a typical business specializing in engineering services. Later, because of the integrative nature of mega-projects, most consulting firms jumped from S1 on to S2, with expanded scope for covering issues of environment, energy, socioeconomics, finance, etc. Today, given the pace of development of digital technologies, there is great demand for the provision of smart solutions, smart systems integration and operation, and big data analytics of mega-projects so as to increase customer satisfaction. Thus, a new S-curve, or S3, is on the horizon. It should not be unexpected that engineering firms will serve as concessionaires, which will invest in and operate the smart platform themselves. 

SUMMARY

(1) Every business should identify its critical S-curve so that it knows exactly where it stands. It will also want to assess the industrial asymptote, especially during the hyper-growth phase. If the business is getting closer to the asymptote, it is time to invest in a new business on the next S-curve.

(2) The strategy for moving to the next S-curve is to recognize it and invest early enough while the emerging technology is still at its infant stage. This is to ensure that the business will not miss the “high-speed train” when the technology breaks into the hyper-growth phase. 

(3) Jumping to a new S-curve requires leadership. Thus, it is important to invest in a champion who will help recruiting new talents fitting the new S-curve.