January 05, 2009

Riding the Sigmoid Curve

Career planning was easier when the life expectancy was 42. You worked as a kid, you moved into somewhat better-paying jobs, you probably stayed in one field unless you were thrown out of it, at 38 you were diseased or maimed, and at 42 you died. Not a lot of room for strategic planning; survival was tricky enough.

Now we live longer, way longer. 70 years (even 80 years for women) is not unusual. Back in the old social compact you had one career in your short life expectancy. In the new economy with the new life expectancy it's extremely unlikely for one career to cover the years. We need a new career strategy.

In nature and in life there are cycles. For instance, in the economy there's a business cycle - periods of growth, periods of decline, booms and busts. Charles Handy says there are cycles or curves in life and in business. He refers to a "Sigmoid Curve" of low growth, steady growth, wealth and success, and decline.

The best short read on this may be the Google Books excerpt of the Encyclopedia of Leadership, pages 73 to 75. The title is: "The Sigmoid Curve: Anticipated and Preparing for Change Despite Current Success". Also, see The Toolbox for Change, pages 23-27.

The Sigmoid Curve is an expression of success over time. The success can be measured in terms of profit, money, power, influence. The object considered can be a country, a society, an individual, or a career. In this discussion, I'm going to consider the Sigmoid Curve of Career Success over a person's lifetime. ( credit)

When a person starts in a career, their productivity and effectivess is usually negative, and it often gets worse before it gets better. There's an initial loss to the company (salary without revenue) and to the individual (education, clothes, relocation, etc).

After a while, the learning curve reduces, the person figures out how to succeed, and "success" (however measured) increases dramatically.

Given the initial loss or investment in a new employee, the break-even point of a new hire is the point at which the area of the pink triangle below the curve equals the area of the shaded "loss" above the curve.

The region of "increasing" success can be drawn, and if you note the slope of the curve as it moves from left to right, you'll see a mid-range inflection point in the slope of the curve.

The region of "increase" can be split into two significant sections at the inflection point; the two sections represent "growth" and "maturity". During the growth period, success increases at an increasing rate, and in the maturity period success grows in real terms but at a decreasing rate.

This chart indicates the characteristics of the person and the person's situation during the growth and maturity stages. (credit)

What does up must come down, or it least it probably will, and the sigmoid curve of this career ends in decline.

Research and experience suggest that the person receives positive feedback throughout the level-off, ambiguous signals at initial decline, and negative messages only when the nose-dive has begun. The person will not be warned of their demise until it is no longer avoidable.

We are not doomed. During the growth period, the person has many assets at their disposal - money, time, benefits, training, a network - and can use their situation to prepare for another career. (credit)

The strategy is to jump off the about-to-decline sigmoid curve and land on the bottom of a new sigmoid curve. The "sigmoid mindset" suggests that whenever times are good, success is climbing and your required effort is somewhat reduced, it's time to heed those footsteps you should be hearing and start planning for the next thing. The new curve could be a complete redesign of your current job, or a new job, or a new company, or a new industry.

In a perfect world, you'd start preparing for the career jump just before Career-A shifts from growth into maturity, and you'd accomplish the jump to Career-B close to the time that real success in Career-A starts to decrease.

The time spent between the intersections of Career A and B (see the above chart) can be difficult and stressful. People who are invested in the present career's version of You will resist the change. Complexity and stress will be high. Those about you who see the declining rate of growth may attribute it to your new "hobby", to the extent that they know about it.

If you buy the sigmoid concept, jumping the curve is the only successful option. You can ride the declining side of the first curve, struggling gloriously and making a lot of noise, but it won't change the result.

Near as I can tell, this is where I am. I've had a wonderful ride on Career-A, and I've been preparing for quite a while for Career-B. It's a bit scary, but most of the good things are.

Companies can make the sigmoid jump by redefining their products or industry. Countries can do this by redefining their economy (China) or realigning their alliances (Eastern Europe). I think it would be very hard for a declining city (Pittsburgh) to find a new curve to jump on to, unless external changes serendipitiously provide the new curve.

I suspect this also has implications for other endeavors (ie, marriage) and it suggests that you've got to mutually redefine it at the 20-year point but and that scares the hell out of me.

This sigmoid-curve-jumping is not a one-time trick; a long timeframe may call for successive sigmoid jumps. What most intrigues me about this depiction is that if you compare the segments spent in one curve with the segments spent between two curves, it looks like half the time is spent in ambiguous transition. (credit)

Here's an interesting use of the Sigmoid Curve to demonstrate the life cycle of Web 2.0, which moves into maturity and decline as the Web jumps onto Web 3.0 - click the image for full-size, opens in a new window. (credit)


Anonymous said...

I like your take on the Sigmoid Curve - one I looked into many, many years ago when reading Handy's Empty Raincoat - and it made so much sense to me - in fact it focussed a lot of my early career - now I feel I have a long plateau ahead - not quite on the decline, but looking for the next 'real' challenge - may not be a job but a new focus for learning.

I came across a slide I had produced for a presentation but no information on it so googled it and your interpretation was all I needed to refresh my memory of this enlightening concept.

Thank you

Julie Hoy
United Kingdom

nerak99 said...

A sigmoid curve cannot have a dip as its derivative is positive for all t. (or, in the reflection, negative for all t). It can be viewed as having a slow gain followed by a steep curve and then a levelling off (but never completely flat), like a learning curve. Never a dip though.

Mr Handy may have described some kind of sigmoidish curve but the sigmoid is a well defined function of the form (1+e-t)^-1 which gives a derivative with a positive numerator and a square in the denomininator.

For small t the denominator dominates giving a slow slope follwwed by a rapid slope as t increases and the 1 in the numerator dominates but for large t the exponential in the numerator dominates to reduce the slope again.

Mind you, as it is in a management book, it is probably a good place for a kind of sloppy version of reality.

Dora Valerie said...

I love your site! I believe that in the twenty-first century, we will see more and more people adopting a `portfolio' approach to their lives and to their work. A valuable resource about Charles Handy mindsets could be found here:
Charles Handy Mindsets

Dead Cat said...

nerak99 - I don't want to get caught up in mathematic detail but the formula you have provided is not the only one to produce a chartable outcome capable of bearing the Sigmoid moniker. Since Sigmoid simply means S-like there are many formulas whether mathematical, business or other in origin that will produce a wide variety of shapes that can be described as S-like in form. Speaking solely for myself I found your snide comment about 'sloppy reality' sloppy and feel your contribution misses the point of the post.

Of the post, I found it well written and the use of graphics considered and enlightening. Keep up the good work!

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