“Just as one would try to understand the landscape before setting out on a journey, one needs to understand the culture of an organisation before embarking on organisation change”, Gary Bolles, Singularity University.
The same can be said of examining its talent strategy and competencies, at an organisation’s growth phases. Greiner’s model predicts 6 phases and 5 crises that organizations go through. By identifying what stage the organization is in, a recruiter or coach can better determine staffing needs for the organization to get to the next phase.
According to Greiner, organisation growth is not straightforward, and unless the organisation changes, it will not be able to get on to the next stage.
Phase 1: Growth through Creativity
Greiner found from his research that at the birth of organisations, its founders are usually “technical or entrepreneurial oriented”. Energies are focused on making and selling a product. Communication among employees is informal.
However, as the company expands, more employees are hired, they cannot be managed only through informal communication. There’s a need for more formal communication and professional managers to take over the management responsibilities that founders find “burdensome”. At this point, a crisis of leadership occurs as founders often resist letting go.
Coaching and staffing needs to move to stage two: the organization’s founders to be less hands-on and provide more direction. Greiner suggests bringing in professional functional business managers (e.g. marketing or finance manager) “compatible with the founders and who can pull the organization together.”
Phase 2: Growth through Direction.
With capable functional managers, growth continues through a functional organizational structure with specialized roles like marketing and human resources.
At some point, with increasing workload, the professional managers begin to ask for more control, such as a marketing budget, while founders may struggle to let go. A crisis of autonomy emerges where work and authority needs to be delegated to lower levels.
Coaching and staffing needs to move to stage three: Coaching skills for founders to empower employees and delegate responsibility, lower level managers to take initiative and make decisions independently.
Phase 3: Growth through Delegation
With more delegation in this phase of decentralistion, more products introduced, with more divisional managers, the management find that they lose touch with what’s happening in the organisation.
At this point, a crisis of control results, managers face difficulty coordinating all divisions operating independently, and how to get different divisions to work better together.
Coaching or staffing needs to move to stage four:
To achieve greater coordination, more employees are hired at headquarters (HQ) to standardise processes and harmonise companywide programmes, such as Six Sigma. The ability to implement processes and programs for efficiency, standardisation, cost savings, corporate look. This brings stability and consistency to the organization.
Phase 4: Growth through Coordination
With more employees hired to implement companywide programmes, soon the centralised HQ becomes too focused on efficiency and bureaucracy and loses the ability to innovate and conquer new markets. This phase ends with a Red-Tape Crisis as the organisation becomes unresponsive to needs of the local customers.
Coaching or staffing needs to move to stage five :
Organization needs to develop better people managers and introduce more flexibility, staff engagement and team-work to develop evolutionary growth.
Phase 5: Growth through Collaboration
Finally, overcoming the red-tape crisis, L&D professionals like Britt Andreatta recommend that the organisation adopts a more flexible agile approach (e.g., team work, matrix structure) with emotionally intelligent leaders.
But soon the very mature business runs out of ideas on how to add products to its portfolio and faces a growth crisis.
Coaching or staffing needs to move to stage six :
Managers who can participate in the globalised market and network outside the organisation for opportunities through external partnerships, such as strategic alliances and acquisitions, outsourcing for efficiency and even new ideas using Blue Ocean Strategy. [Greiner suggests providing sabbaticals for employees, moving managers in and out of hot-spot jobs etc to connect better.] Networking for ideas is an important skills set.
Phase 6: Growth through Alliance
Recently, the Greiner model was updated to include the 6th stage or growth through alliance. In “Network for Advantage”, INSEAD Professors Professors Henrich Greve and Andrew Shipilov explore how organisations such as Samsung have unlocked value through such partnerships.
A crisis is not long in the horizon when the organisation may face a new challenge, a crisis of identity. Paul Petrone suggests for the organization to continue on its evolution, it “needs to reinvent its vision and mission and partner with organizations that best further that”.
Relevance of the Greiner model
Greiner’s model has relevance for recruiters and career coaches to understand that change is inevitable for the organisation to grow. Consultants or coaches implementing change management programs are to examine best practice vs best fit vs to the organisation’s growth stage. Inability of management to adopt a new style to deal with these crises will result in firm’s failure to move forward.
Organisations can go through these phases peacefully and without crises when leaders recognise the tension and the “change management” needed to be put in place.
What do you think about Greiner’s model for growth? Does it reflect the stages which your organisation has gone through? Give me some comments.