The Rise and Fall to Growth
The Essence of Your Business Stage Awareness
[part 1: what]
Sometimes in life you feel the fight is over
And it seems as though the writings on the wall
Superstar, you finally made it
But once your picture becomes tainted
It's what they call
The rise and fall
…
Craig DavidSelf-awareness plays a pivotal role in the success of any individual. As we mature, we gain a deeper understanding of the world as an environment of our existence. This maturation process instills a specific kind of wisdom that equips us to navigate life’s challenges, both personally and professionally. We acquire the ability to formulate plans and exercise the discipline to execute those plans in accordance with common wisdom acquired in the path to the present. But how effective are we in managing ourselves, and adjusting those plans and actions based on our self-awareness?
Progressing through infancy, childhood, and early teenage phases, which are characterized by rapid growth, we have yet to learn about the common characteristics of those stages. Impulsive and highly reactive decisions, which are sometimes very crucial, are made at that stage only by emotions formed by the pressure of external factors. Afterward, of course, if those decisions are not incompatible with life, in the following stages of life we start to analyze them from the height of gained experience and criticize them, missing the fact that we are in completely different stages of life with different values and priorities.
Compared to external changes our inner changes are dramatically slow and that slowness does not allow our minds to clearly encounter them (“The Boiling Frog Syndrome”) without in-depth analysis. It is not a secret that our takeaways from rereading the same books or rewatching the same movies at different ages are completely different. It is dramatically noticeable when rewatching cartoons from childhood or rereading tales for your children and after for grandchildren. The speed of external changes forces our minds to concentrate all our focus on them, not allowing any space for self-analysis, without any chance to proactively take our self-awareness into the equation of our daily challenges and decisions we make.
But wait, that is not the topic of this article. The reason for making the post-factum self-awareness analysis of human beings as an introduction was the fact that those thoughts were chasing me during the whole process of diving into business life cycle management, more widely known as the organization life cycle (OLC) management paradigm. The main purpose of the subject is to define the common stages that any organization/business is passing during development, their characteristics, and the solutions to challenges appropriate to that specific stage. In other words, define holistic patterns of the business development stages and apply solutions based on the identified patterns. That sounds like heaven. Master those patterns, and your business will flourish. But wait, not so fast, let’s dive in.
OLC Models Background
There is no purpose to review all developed OLC models here. There are plenty of books and publications that could be reviewed at the depth of your requirements. But let’s summarize them to have the context on the table.
Different economists started the first studies of organizational behavior at the end of the 19th century and at the beginning of the 20th. The process intensified after WWII and by the 1980s it has been identified as a key component of business growth. All the famous OLC models were developed during that period (Lippitt and Schmidt in 1967, Greiner in 1972, Adizes in 1979, Galbraith in 1982, Churchill and Lewis in 1983, etc.).
All of these models have plenty of fabulous built-in concepts, full of wisdom and value for the business community. Despite diverging on key components, such as the definition of stages (ranging from three to eleven stages of organizational development), transformation forces, crisis types, and occurrence, they all aim to assess a company’s current stage and specific challenges and solutions for that period of time. This awareness is essential for equipping management with valuable insights to address potential issues and make well-informed decisions throughout each phase of the life cycle.
In addition, all the reviewed OLC models share a common concept rooted in a biological model of organizational growth. The origins of this concept trace back to the 1890s when economist Alfred Marshall was among the first to draw parallels between organizations and living organisms. He recognized similarities in their functioning, which is unsurprising since when reviewing OLC models, my mind naturally draws those parallels with human self-awareness.
Fast forward about sixty years, and another thinker by the name of Kenneth Boulding expanded upon this idea. He demonstrated that organizations indeed undergo a life cycle, much like living creatures. This implies that they progress through stages of growth, akin to the development of humans, animals, and plants. In 1959, researcher Mason Haire made a significant breakthrough in advancing this concept. He identified a clear trajectory that all organizations appear to follow during their life cycle, drawing parallels between this growth process of organization and the growth and evolution of living organisms. His work, titled ‘Modern Organization Theory,’ is often regarded as one of the earliest studies to employ a biological model to elucidate how organizations grow.
The notion of organizations growing in a manner reminiscent of living beings gained widespread acceptance. By the 1970s and 1980s, it had become a firmly established concept for comprehending how organizations evolve and expand, serving as a fundamental premise in the development of OLC models.
So What?
Experienced leaders have honed the ability to identify the distinct stages that a business undergoes. The seasoned leaders possess an acute understanding of the challenges specific to each stage of business development. This comprehension provides them with valuable perspective, guiding their decision-making processes in both professional and personal spheres.
While this expertise is undoubtedly valuable, it’s important to note that it is neither replicable nor predictable. The pool of such adept leaders remains exceedingly limited, and their true significance often becomes apparent only in hindsight.
So after continuous review, the core question that remains open for me is why OLC models are not adopted by the business community and ignored by modern management scholars. In comparison other lifecycle models applied to teams (Truckman’s stages of group development) or product development lifecycles are very popular and advocated for intensive practical use. While a simple review of the current state of OLC models shows the opposite results. Why is it not so widely accepted and integrated into the business community, and why did the era of OLC model research end by the 1990s (only some minor attempts as an advancement of already created models)? Here are my initial conclusions and hypotheses on areas of OLC model improvement for a wider practical footprint. Please note that these are only my subjective conclusions, which certainly need to be reviewed and empirically tested:
The fatality and strictness of OLC models, driven by the biological model.
Stages in all OLC models could be generalized into the following path: start-up, growth, maturity to stagnation, bureaucracy, and decline to death. Accepting the bell curve as a way to describe the OLC makes the model a weak representation for only some organizations, whose lifecycle indeed follows a bell curve shape. But shouldn’t the model be universal for all organizations? A partial fit is not a fit. Should we wait over several generations and have our fingers crossed for proof?
Almost all models have a termination, death, and shut-down as a mandatory end of their cycle. The OLC models draw a parallel between businesses and living organisms, suggesting that they undergo predictable stages of development and growth, so as living organisms the cycle ends with death. It is naturally derived from the life cycle concept. If it is a life cycle concept then it should be concluded with death. Despite some models, like Truckman’s, they are already rejecting that concept.
But wait a minute, why is most of the business community choosing the hard path of entrepreneurship? The craving to create something eternal is one of the drivers for any entrepreneur. But then some model comes to focus with its common bell curve and insists that do whatever you do, and overcome all obstacles and challenges on the path to growth, anyway, the end of the cycle is known. Not surprisingly the answer will be “Thank you, we will look for some other model”.
How about the valuable framework for navigating the challenges that arise at each stage of growth? Why bother, the result is the same. So, if the OLC model accepts that it is derivative of living organisms’ lifecycles, then it should also deal with the existential crises of human beings.
The fact of importance of self-awareness and the aim to grow don’t make the path of the organization’s development and living organisms identical. Living organisms’ lifecycle is forced by nature, while for organizations there is only a causal relationship between our actions/behavior and the rise/fall of our business. Generally, the solutions taken from nature are genuine and simple, but the key point here is being appropriate. Once again the partial fit is not a fit. How about accepting big hugs from gems on the table below and staying away from living organisms’ lifecycles?
Of course, you can bring the biological immortality samples here. However, the concern is the fact that the biological immortality concept is due to limitations of our current understanding of nature. Also, so far there is no immortal jellyfish entrepreneur.
This is a great topic for management scholars, as the framework for navigating the challenges that arise at each stage of organizational growth is indeed a valuable tool for any business management. The OLC models are succeeding in defining the patterns and issues and applying reasonable solutions, but I see a screaming need for adjustment to keep away from the strictness of path and fatality of a life cycle derived from the forced-by-nature biological model. Even if that will force us to remove the life cycle term from the model naming.
Dissolving the OLC objectives in other fields of study
Fields of study like Organizational Theory, Systems Theory, Strategic Management, etc. cover almost all aspects, including designing/structuring organizations, goal setting, strategy planning, and execution techniques discussed in OLC models. That may be the reason for the lower acceptance of OLC models by the business community. Why do we need another level of complication? It does not seem quite right.
OLC models are the only field of study that is putting organization under the lens of time. Time is the central axis for OLC models and all organizational management concepts are reviewed around that axis. All theories insist on the dynamic nature of the organization, but only OLC models try to include that dynamics into the equation and make that a cornerstone of the model.
But nobody positions OLC models in that angle. Maybe because it is a lifecycle model and that should be clear without any explanation? The bottom line for me is that there is a certain need for better messaging to the business community and clear positioning among other fields of management study.
Being aware doesn’t mean actively executing.
As in the case of humans’ self-awareness, being aware doesn’t mean actively executing. Maybe behavioral economics (the study of the differences between what people “should” do and what they do) could help to explain this.
For me, it means that there is no clear/measurable integration and execution plan, with a corresponding value proposition. Let’s check back on Truckman’s stages of group development (team’s life cycle) as a sample which is greatly described here. Thanks, guys from West Chester University, it is a great job, clear and simple! There is no need to read 10+ books for implementation, although it will be a good idea to read them after implementation.
Sure, OLC is much much more complicated than a team’s life cycle, but hopefully, you got what I mean. Richard Thaler, the godfather of nudge theory in behavioral economics, likes to note “If you want people to do something, make it easy”. The only remaining point is to find the motivation to make it easy for business managers to include organization development stage concepts as a part of their strategy planning process and not only.
Conclusion
As a summary, respectfully for those who read just the title and jumped right here. Understanding the stage of an organization in its development path is crucial for business owners and their management teams to ensure the longevity and success of the company. Experienced leaders can recognize the telltale signs indicating the appropriate stage of their organization and apply solutions corresponding to that stage for the smooth growth of their business. However, the problem is that the pool of such adept leaders remains exceedingly limited, and without appropriate protocols, in the stages with growing complexity, even they are prone to errors due to human factors.
An appropriate model with time as a central axis will equip management with a valuable framework or will be a good addition to the management toolset to address potential issues in the right priority and make informed decisions to navigate through each development stage.
Not taking the company’s dynamics as a part of the company’s strategy equation may have the same impact as not taking into account the environmental conditions (like industry and market states, macroeconomic conditions, political and social situations).
There are already several great minds who contributed to OLC models’ formation. So the experience is already there and with an appropriate focus and modernization, an organization dynamics model with a time axis in the core may become a mandatory framework for business analysis and operation. As I’m going to continue these thoughts in several other articles, let’s name our subject for convenience. The Organization Dynamics Control or ODC, not so creative but gets the job done in communicating the concept.
Thank you for reading. Hope to see you in [part 2: why]. Stay calm.
