Incremental growth and productivity are essential for businesses: incremental revenue growth, incremental cost of goods sold productivity and as a result, incremental earnings growth. Many companies have become well-oiled machines at growing incrementally. In fact, you can use the tools of continuous improvement to calculate their consistent capability (Cpk). But there will come a time in the lifecycle of every business when it’s just not enough.
Instead, in the face of economic and competitive pressures, they need more. They need to kick it up a notch: a big notch. That’s when the incremental way of doing things in an odd way turns from an advantage to a handicap. Over time, these companies have built incrementalism into the design of their business model: incremental new products, incremental marketing, incremental productivity, incremental earnings growth. Then, when they need to break through to the next level, they can’t. They aren’t designed for the next level. Their strategies, processes, organization, technology and culture are all finely tuned machines churning out incremental results. And the current design (and culture) tends to preserve the status quo.
That’s the oddity of the trap. Good at incremental growth and productivity but their current design is incapable of something more. When faced with a need for something more than incrementalism will yield, businesses need to change their design… do something different… challenge the status quo… change their Cpk… Growth and productivity through better business design.
