Step Function and 1% Improvement: Yinyang of Business Growth

I didn’t like mathematics.

In fact from Primary School up till JSS 3, I frowned at the teachers, the textbooks, and the assignments. I didn’t just understand the whole essence of it, I only studied to pass it.

All this continued until I was recommended for “Science class” in my alma mater, a catholic mission school as I got into senior secondary school.

As a science student, I had to take Further Maths, No, scratch that, I needed to take further maths as it was an option between that and Agriculture, and as a science student in school then, if you opted for Agriculture, you are perceived as lazy.

So I took further maths in SS 1,  and a Ghanian seminarian was the teacher, the first day he came to class, he broke the perennial question in my mind, “What is the essence of the study of mathematics”

Referencing Pythagoras he pipped that the Universe and it’s systems is better understood through the lens of numbers, symbols and geometric figures and this is mathematics.

He gave several examples of how mathematics occurs in Nature, I had a complete mind-shift and so several years later when I learned of “Step Function”, its source in mathematics and how it applies to life and business” I could immediately relate!

Every business has growth as a goal, especially at the SME level, but growth typically comes in two forms

1. 1. 1. The 1% Incremental Growth
      2. The Step Function Growth

The 1% incremental growth of businesses follows “Arithmetic Progression”, the Step Function

Growth follows “Geometric Progression”.

I am sure I just took you back to elementary mathematics.

Now let me explain this using one of our subsidiary organizations; REICo, our real estate investment cooperative saw an average 18% month-over-month growth in deposits from its members in the last two quarters of 2023, it was a steady growth, it is a “1% Incremental Growth”

In January 2024, we introduced an investment plan that 5X’ed our monthly deposits in the same month, that is, the first inflow gave us a number we would have achieved in 5 Months, and that was just the least the plan could do, it is an exponential growth, It is a “Step Function Growth”

A “1% Incremental Growth” follows arithmetic progression, it has a gentle slope upwards in a graph against time on the x-axis.

A “Step Function Growth” follows a geometric progression, it has a steep upward almost vertical slope in a graph against time on the x-axis.

Businesses must pay attention to these two, it is expedient, “1% Incremental Growth” gives your business stamina, and “Step Function Growth” gives you speed, if your business has the former but not the latter, system rot will set in, competitors and trends will overwhelm that business the business will fold progressively, A certain old generation Nigerian Bank that was big, strong and reliable had this problem and almost folded until they were acquired and given a new lease of life.

If your business has the latter without the former, that business is in a bubble, between 2016-2020, this occured within the “Agricultural Crowdfunding” sub-sector, money was raised too quickly without the incremental development of the forward integration and support infrastructure that the model required , the bubble burst. Money was lost. In the late 90s to early 2000s there was “Enron” who also expereinced this rising bubble that eventually burst.

The message is crystal!, know the metrics in your business to steadily track and incrementally improve, and seek for opportunities to exponentially increase the bottomline to a higher step.

Step Function is equal to innovation at the touch point in the business value-chain that will yield a minimum of 5x result.