Wednesday, May 7, 2008

Sustainability & Destruction Curves

By Thomas Sim, 13 Oct, 2006

It would be hard to believe life is a few graphs put together. Ironically, it may just be true. First, let us look at the Normal Distribution curve, i.e. Figure 1.

The science of 'AVERAGE' is most apparent when you compare wealth. Most people live in average standard of food, shelter, and security. When we look around, you could see that more than 80% of people in one location are living about the same comfort; with 10% who are extremely poor and another 10% extremely rich (see Figure 2).


This is a phenomenon of the NORMAL DISTRIBUTION - or the "Bell Shape Curve". Figure1 illustrate the Normal Distribution curve which is easily understood with measurements like Height, Weight, Intelligence and even Beauty. The simple sentence would explain it all: ON AN AVERAGE, most people have the same height, weight, intelligence and beauty. Only few are extremely tall/short, fat/thin, clever/stupid and beautiful/ugly.

Now, let us forget about the Normal Distribution Curve. We use the same curve however, we make it a "Time Factored Curve". It becomes a curve from zero to a plateau value and down to zero again. In another words, it represents childhood - adulthood - and death as illustrated in Figure 3. The area under the curve represents energy and performance.

Time factored Curve

As we link the two concepts together, when energy and performance contribute to wealth and comfort, we understand the first law of physics: We cannot create something from nothing. In life, we must put in effort to earn rewards.

The same condition applies to machinery performance and its wear and tear (Figure 5). In fact, many relationships also face the same scenario. Business relations between two parties can be strong for many years but with changing climates, many a time this bond becomes sour with fingers pointing at each other. The same applies to relationship among close friends and even husband and wife. It is no big news reading about husband killing wife or vice versa in newspaper nowadays.

The question is where the optimal performance can be found and how to sustain this performance for as long as possible. Before I go further, I would like to support my intepretation of curves with the graph of Sales and Profit of SMEs published by International Federation of Accountants (IFAC) www.ifac.org.

The curves here are both 'S' shape curves. One represents Sales with time progression and the other Profit. As Sales improves, profit emerges from negative to positive. As the curves pass the peaks, they come to decline and the business heads south! If you plot further along the dotted lines, you would end up with a 'Bell' shape curve like the above. This behaviour is expected by many. But the question is, why? Why the sustainability segment emerges rather than the total decline to baseline, or ZERO?

The Accumulation Curve

It is time that we move on to the very important curve that carries on our discussion - The Accumulation Curve. The typical "S" shape - time progression curve is modified with a plateau after achieving the peak. I call this the "S-Plateau" Curve. Figure 6 illustrates the Accumulation Curve with progression of time. As time passes by, more are accumulated and this is represented by area under the curve shaded with blue colour (Figure 6).

For example, if it is curve of income, then the areas under the curve represents the accumulated revenue/profit over the period. If it is plotted against love, that would mean the amount of affection 'invested' into the relationship over the time period.

In our activities, be it relationships or businesses, economically or emotionally, we are trying to achieve this curve. We would like very much to accumulate wealth, family ties, friendship, academic achievement, business influences, balance sheets and many more. However, it is most disappointed that our reality in this world is not true of the above.

Why?

In life, we not only accumulate cash, relationship, assets, knowledge or respect from others but we also accumulate negative elements like hatred, laziness, selfishness, kaisuism, egoism and greed. See my other article about The Human Touch on these natural human behaviours. Therefore, it proves again the theory that we resist change (see another of my article: What an irony) and we prefer the state of no change or stagnation.

If your religious believe is Christianity, it is most described in the Bible as the SIN has been 'passed down', from Adam and Eve to the many generation of mankind, and it is irreversible until Jesus came. Yet, human being is stubborn to change, we still SIN...

The negative face of Accumulation Curve

The accumulation curve describes most of the negative traits of our human behaviours. Drug addiction, genocide, infectious diseases - HIV, and corruption, business or political shenanigans to name a few. More historical terms would be Authoritarianism, Slavery and Religious Fanatics - Terrorism. Why? Because we have the inherited desire of destruction, and our nature allows this to escalate similar because it is part of the greater picture of SIN..

In short, we strike to achieve the Accumulation Curve with the forces of Normal Distribution Curve against us at the background. The interesting idea is how if we super impose the curves together?

Sum of two curves

The summation of two curves can either be additinal synergy or inverted contrarian like illustrated in Figure 7 and Figure 8. In the formal, the effect is peak and sustain, but by inverted summation, the zero-line goes straight and drops with continuous decline. I call them SUSTAINABILITY and DESTRUCTION curves!

Which is the curve that governs your life?

The sustainability curve is the "Good" curve and the destruction curve, "Bad". For a relationship to sustain, we must consistantly put in NEW EFFORT. For business to continue prosper, we have to continuously invest in time, money and research. The higher we hit the peak, the higher the possible level we could sustain. It is not possible to go back to the glories of the "PEAK", because of two factors: First, it is not a 'realistic peak', second, it is too costly.

Why?

This phenomenon of "PEAK" which is not reproduceable, is something I describe as "HYPE". Many times we go overboard for the thing we focus on and had immence interest in. That is how "First Date" can be so much of excitement. Sneaking out to watch your first "Porn Movie" had so much thrills. Can you have another such "FIRST TIME"? Cannot! Because it's Past! History! We cannot change history or create exact history (unless we have time machine), and excitement dies with time. These are laws of nature. Con man knows this, and that is how he 'con' people to such "HYPE" that soon after the victim fall into the trap, he runs disappeared! If he could reproduce the "HYPE", he doesn't need to run away, he can reaffirm the state of "HYPE".

In marketing, it is even more true that you cannot reproduce the phenomenon sales glory of a product. Product launched would hit the peak, then decline. No matter how much marketing and advertising you do, it will usually never hit the peak back again. But, hold on! Why I say 'usually' and not 'definitely'? There is an exception to this rule. If the product trait is along the SIN pathway, yes, it will. Such product life cycle would follow the Accumulation Curve, and not the sustainability curve. Products in this category are like: Ecstasy Pills, Alcoholic Drinks, Cigarettes, Prostitution and so on.

So, it is hard to live this life. GOD would not allow it to be easy, any way. It is testing time. The world is no doubt going for the second curve - destruction curve because majority of the human being prefer the SIN pathway - which is effortless. It is a great challenge for the rest of the human race to push on the Sustainability Curve as it takes great effort and sacrifies to achieve a balance in the universe.

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