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Note: Growth indicated represents the growth percentage over the previous year’s revenue numbers. |
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IBSN enables Client Growth
When an organization (Client) is young, it does not always respond well or fully to its environment (customers, competitors, regulators, technology, etc.). There is a lag as the organization 'gets its act together'. This shows up as slow growth, errors and confused focus. With time and experience the organization learns how to get in synch with its environment. And the organization grows. Just when the organization thinks it has things figured out, change creeps back in often as a result of the organization's success.
For example the business grows to multiple locations and these multiple locations become a change that now impacts the organization with communication delays and coordination problems. Even if the business and markets are stable, success is likely to attract competitors. The business that learned to set prices based on cost plus or what the market would bear now finds it self competing with businesses who are satisfying the market at a lower price. This change demands a response. Yet the most likely response is to complain about the competitor, believe the competitors low prices will put them out of business shortly and do nothing else. This failure to detect, then respect then respond to the change adds viscosity of hysterics to the change process. It shows up in declining performance in market share, growth and profits.
Phases of a Growth Curve with IBSN Corporate Services |
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Phase 1: Growth through Creativity of IBSN Corporate Services
Here, the entrepreneurs who founded the firm are busy creating products and opening up markets. There aren't many staff, so informal communication works fine, and rewards for long hours are probably through profit share or stock options. However, as more staff join, production expands and capital is injected, there's a need for more formal communication.
This phase ends with a Leadership Crisis, where professional management is needed. The founders may change their style and take on this role, but often someone new will be brought in.
Phase 2: Growth through Direction from IBSN Corporate Services
Growth continues in an environment of more formal communications, budgets and focus on separate activities like marketing and production. Incentive schemes replace stock as a financial reward.
However, there comes a point when the products and processes become so numerous that there are not enough hours in the day for one person to manage them all, and he or she can't possibly know as much about all these products or services as those lower down the hierarchy.
This phase ends with an Autonomy Crisis: New structures based on delegation are called for.
Phase 3: Growth through Delegation to IBSN Corporate Services
With mid-level managers freed up to react fast to opportunities for new products or in new markets, the organization continues to grow, with top management just monitoring and dealing with the big issues (perhaps starting to look at merger or acquisition opportunities). Many businesses flounder at this stage, as the manager whose directive approach solved the problems at the end of Phase 1 finds it hard to let go, yet the mid-level managers struggle with their new roles as leaders.
This phase ends with a Control Crisis: A much more sophisticated head office function is required, and the separate parts of the business need to work together.
Phase 4: Growth through Coordination and Monitoring of IBSN Corporate Services
Growth continues with the previously isolated business units re-organized into product groups or service practices. Investment finance is allocated centrally and managed according to Return on Investment (ROI) and not just profits. Incentives are shared through company-wide profit share schemes aligned to corporate goals. Eventually, though, work becomes submerged under increasing amounts of bureaucracy, and growth may become stifled.
This phase ends on a Red-Tape Crisis: A new culture and structure must be introduced.
Phase 5: Growth through Collaboration with IBSN Corporate Services
The formal controls of phases 2-4 are replaced by professional good sense as staff group and re-group flexibly in teams to deliver projects in a matrix structure supported by sophisticated information systems and team-based financial rewards.
This phase ends with a crisis of Internal Growth: Further growth can only come by developing partnerships with complementary organizations.
Growth Analysis
The Growth Model helps you think about the growth for your organization, and therefore better plan for and cope with the next growth transitions. To apply the model, use the following steps: |
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Based on the descriptions above, think about where your organization is now. |
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Think about whether the organization is reaching the end of a stable period of growth, and nearing a ‘crisis' or transition. Some of the signs of ‘crisis' include: |
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People feel that managers and company procedures are getting in the way of them doing their jobs. |
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People feel that they are not fairly rewarded for the effort they put in. |
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People seem unhappy, and there is a higher staff turnover than usual. |
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Ask yourself what the transition will mean for you personally and your team. Will you have to: |
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Delegate more? |
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Take on more responsibilities? |
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Specialize more in a specific product or market? |
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Change the way you communicate with others? |
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Incentive and reward you team differently? |
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By thinking this through, you can start to plan and prepare yourself for the inevitable changes, and perhaps help other to do the same. |
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Plan and take preparatory actions that will make the transition as smooth as possible for you and your team. |
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Revisit Greiner's model for growth again every 6-12 months, and think about how the current stage of growth affects you and others around you. |
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Incorporate a company |
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