Do you know what stage of growth is driving change in your organzation? The need for change is often the result of an organization's growth. Research on organizations show that they go through their own process of development, no matter the industry. In particular, once an organization is established, it turns its focus to growth. Growth is somewhat contextual. A small, locally owned business or nonprofit organization may define its growth within a region. While a large, international corporation might define its growth in terms of countries and markets.
Research on organizational growth has shown that there are six stages of growth. The Seminal Work by Larry Greiner, Professor at USCs Marshall School of Business, shows that each stage builds to a crisis point. It's called the Greiner Curve, and it illustrates this process. Each crisis point pushes change, which in turn revolutionizes the organization, and allows it to grow to the next level. As we go through the six stages, see if you can identify the stage your organization is currently in, and the next crisis point you'll face. The first stage is growth or creativity, where the founders build the organization.
The organization is small at first so people wear many hats and communication is spontaneous and informal. But as the organization gets bigger it leads to the crisis point of leadership. Where professional management needs to be brought in to help take the organization further. The second stage is growth through direction. Additional leaders have been brought in to manage various functions, and the organization continues to develop new products and services. At some point the scale of the offerings get too big for the leaders to monitor. Which creates the crisis point of autonomy, where work and authority need to be delegated.
The third stage is growth through delegation, where layers of hierarchy are added. Top management become less involved in the day to day details and focus on the organization strategy. This stage can be a bit chaotic because mid level managers may not have fully developed key skills to take the reigns effectively. And some top managers may not be able to let go, and micromanage those beneath them. In addition, the sheer size of the organization starts to stress the current policies and channels of communication, creating the crisis point of control, where the different parts of the organization need to work together better.
This ushers in the fourth stage of growth through coordination, where new policies and procedures are introduced to bring structure to the various parts of the organization. Bureaucracy affects every division as the central office creates policies, systems, and procedures to manage the broader scope of the organization. This leads to the inevitable crisis point of red tape, where bureaucracy gets burdensome. Now we arrive at growth through collaboration. The fifth stage, where bureaucracy is replaced by a new culture of collaboration.
Instead of a rigid system for making decisions, emotionally intelligent leaders use good judgment. The organization lets go off formal controls and implements a range of scalable and agile systems that support more flexibility. This leads to the crisis point of internal growth, where the organization must look outside for new opportunities. The final stage is growth through alliances, where the organization can only solve it's challenges by partnering with other organizations through actions like outsourcing, mergers, etc. This can drive the crisis point of identity, where the organization must refocus on it's vision, mission, and strategy.
With all these forces driving change, it's not uncommon for small change initiatives to be deployed every year. And very significant changes to occur every four to five years. Some organizations move even faster than this. The Greiner Curve can be useful for seeing how growth is related to change. However, not every organization goes through the stages in this order. And the duration of each stage is really dependent on the organization's goals and opportunities for growth. I've even worked with organizations where one division, perhaps the core business of the company is at one stage, where newer functions are at another.
Using the handout in the Exercise Files, analyze the stage of growth your company is in, its next crisis point, and the types of change that will work for you.
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- Understanding resistance and the emotions of change
- Assessing the need for change
- Building your change team
- Evaluating solutions
- Announcing the change
- Implementing change that works