Summary. Like children, organizations typically go through different phases. Discover the five phases of the organizational life cycle, from start-up to decline.
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“Riches, mediocrity and poverty begin in the mind.” — Ramez Sasson
Overview of The Five Phases
first challenge for leaders who wish to grow their organizations
is to understand what phase of the organizational
life cycle one is in.
will argue on how many phases there are, but
there is elegance
in using something easy to remember. We divide the organizational
life cycle into the following phases:
This is sometimes divided into an early growth phase (fast
growth) and maturity
phase (slow growth or no growth). However, maturity often leads
When in decline, an organization will either undergo
Each of these
phases present different management and leadership challenges
that one must deal with.
ready is the secret of success.
In this phase,
we see the entrepreneur thinking about the business, a management
group formed, a business plan written. For entrepreneurs needing
money to kick start the business, the company goes into the growth
phase once the investor writes the check. For those the don't
outside funds, the start-up ends when you declare yourself open for
was the best of times,
it was the worst of times.
It was the age of wisdom,
It was the age of foolishness
it was the spring of hope,
it was the winter of despair
Charles Dickens, A Tale of Two Cities
the growth phase, one expects to see revenues climb, new services
and products developed, more employees hired and so on. The management
textbooks love to assume that sales grow each year. The reality
is much different since a company can have both good and bad years
depending on market conditions.
that have been around for a few years, a very interesting thing
happensdry rot sets in. There are many symptoms, some of which
we have presented below:
That's why many companies
have different types of programs relating
to organizational development in place.
Insanity is doing the same thing, the same way but expecting
Using the above
definition, one finds a tremendous amount of corporate insanity
out there. Management that expects next year to be better, but
doesn't know or is unwilling to change to get better results.
truth was shown in a 2003 study of 1900 professionals who help
businesses in trouble.*
Buccino and Associates: Seton Hall University Stiffman School
As reported in August 25, 2003, Business Week.
Many organizations will enter
decline the decline phase unless there are is in place a rigorous program of transformational leadership development. If senior leaders can
detect the symptoms of decline early, they can more
deal with it. Some of the more obvious signs include:
sales relative to competitors,
b. Disappearing profit margins, and
which continue to grow year after year.
However, by the time
accountants figure out that the organization is in trouble, it takes tremendous leadership to get the organization to change course.
is not death that a man should fear, but he should fear
never beginning to live. Marcus Aurelius
doesn't have to continue, however. External experts have focused
on the importance of organizational development as a way of preventing
decline or reducing its affects.
A story from
Aesop's Fables might help here.
horse rider took the utmost pains with his charger. As long as
the war lasted, he
looked upon him as his fellow-helper in all emergencies and fed
him carefully with hay and corn. But when the war was over, he
him chaff to eat and made him carry heavy loads of wood, subjecting
him to much slavish drudgery and ill-treatment. War was again proclaimed,
however, and when the trumpet summoned him to his standard, the
Soldier put on his charger its military trappings, and mounted,
in his heavy coat of mail. The Horse fell down straightway under
the weight, no longer equal to the burden, and said to his master, “You
must now go to the war on foot, for you have transformed me from
a Horse into an Ass; and how can you expect that I can again turn
in a moment from an Ass to a Horse?"
way to reverse dry rot is through the use of training as
a way of injecting new knowledge and skills. One can also
put in place a rigorous program to change
and transform the organization's culture.
though, that one has enough transformational leaders to change
status quo. Without the right type of leadership, the organization
will likely spiral down to bankruptcy.
after injury is like medicine after death. Danish
As many as
80% of business failures occur due to factors within the leadership's
control. Even firms close to bankruptcy can overcome tremendous
adversity to nurse themselves back to financial health. Lee Iacoccas
turnaround of the Chrysler Corporation is one shining example.
The Foundation Course on Transformational Leadership
• The Transformational Leadership Style
• The Transformational Mindset
• Increasing Your Influence
• Increasing Self-Mastery
• Getting Skilled at Skill Development
• Your Skills Assessment: Making the Transition
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