Sliding Down the Sigmoid Curve

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Sliding Down the Sigmoid Curve

By John Stanley I was first introduced to the Sigmoid Curve many years ago by the garden centre consultant, Ken Allen. I have used it many times since then to explain business development and its relevance today is more critical than it�s ever been. Before explaining the significance, let me explain the theory. Industries and businesses start at �A�. Come up with a good idea or concept at A and you start losing money, (this in not a set time frame). If your concept is correct, you get to the bottom of the curve and then start obtaining success and profit from the venture. If you always do, what you�ve always done, then your business starts to fail and at �B� you�re sliding down the Sigmoid Curve. To go through this process may take days, weeks, months or years. We all know businesses that have been trend phenomena�s and over in a season, whilst other businesses have lasted decades without a need to re-invent themselves. Astute business leaders know when they reach point �C� on the curve; they have to re-invent themselves and their business. If it ain�t broke, fix it Hence, I�m a great believer in, if it ain�t broke, fix it. It�s all about timing and knowing when you�ve reached the point �C� on a Sigmoid Curve, where astute business leaders make a difference. In this article I will relate this to the independent garden centre industry. Historically, nurserymen grew plants in the field and bare root plants sold in the winter was the norm. Then in the early 60�s, the University of California in the USA and Efford Research Station in the UK started developing the concept of growing plants in containers. At this point, entrepreneurs entered the scene at point �A� on the Sigmoid Curve. Business owners such as the directors of Aylett�s in the UK, Siebenthalers of Ohio, USA and Lasscock�s in Australia saw the opportunity of year round sales and started developing garden centres. Many nurserymen who followed their success on in the 1980�s and 90�s benefited from the boom in garden centres. Alas many garden centres have gone past point �C� on the Sigmoid Curve; they should have re-invented themselves earlier and are now heading for the slide. Companies such as Bent�s and Mid Ulster Garden Centre in the UK, Gardenworks in Southern Ireland, Lifestyle in South Africa and Garden of Eden in Sydney, Australia identified what was happening and created a new sigmoid curve so they could benefit from the changing market place. Competing for Growth Various research organisations and trade associations have produced reports on the state of the industry in recent months. In the UK Mintel, reported a 12% drop in sales over a twelve month period and stated one of the major causes was the weather. The Horticultural Trades Association in the UK has produced two reports on �Competing for Growth� which lays out a strategy for independent garden centre survival. The Future is for Independents What we are seeing is a major shift in the market place. It is my view that this is the era of the independent garden centre. I�m not suggesting that the �box stores� will go away. They are here to stay and are an integral part of the industry. I�m suggesting that this is the time for the entrepreneur and that such people will have the support of the community and will gain market share, often at the expense of those who are sliding down the sigmoid curve. Andy Campbell, the UK garden centre consultant, summarizes the process every independent garden centre owner has to go through today. He has developed the Transition Curve, which he produced in the H.T.A. report. Step One � Awareness � �I�m being told something� Consumers are telling the industry today they want garden centres to differentiate from �box stores� and provide a consumer an experience. If they don�t, consumers will stay loyal to �box stores� where they can purchase plants as a commodity. Step Two � Understanding � �I know what and why� This is the point where you start to understand the dynamics in your local marketplace and why you�re not growing your market share. Step Three � Engagement � �I see the implications� This is when you realize you�re at point �C� or beyond on the sigmoid curve and it�s time to change. At this point, views split into two. Some owners have a positive outlook and see the opportunities. Whilst others have a negative outlook and feel threatened by the change. Step Four – Negative Management The negative manager will test the concepts and absorb the information and only change if it is a MUST. It is compliance management; �I must do it� is the conversation going on in this persons head or when talking to peers and partners. Step Five – Positive Leadership The positive leader will also test the concepts and put his or her reputation at stake. Their action is results focused and they are committed to change. Their conversation is �I WANT to do it�. Step Six – Keep Doing the Same Thing = Failure This is not the 1980�s. We can�t blame the weather when we are at the top of the Sigmoid Curve. I�m not suggesting that sales are affected by weather, they are. But, to grow independent garden centres at this stage in their evolution we need to rethink the way we do things. Step Seven – It�s Fun From a personal perspective, I�m enjoying working with the entrepreneurs who are making the changes and growing their businesses. The real message is don�t leave it too late; otherwise someone will take your market away from you. John Stanley is a conference speaker and retail consultant with over 25 years experience in 15 countries. John works with retailers around the world assisting them with their merchandising, staff and management training, customer flow, customer service and image. www.johnstanley.cc