As an organization follows this growth path, it goes through a predictable series of evolutions and revolutions. For more on these natural cycles, read professor Larry E. Greiner’s classic Harvard Business Review article titled “Evolution and Revolution as Organizations Grow,” from July-August 1972.
Related Quotes
In the early phases of an organization, a company’s vision comes directly from its early leaders; it is very much their personal vision. To become great, however, a company must progress past excessive dependence on one or a few key individuals. The vision must become shared as a community, and become identified primarily with the organization, rather than with certain individuals running the organization. The vision must actually transcend the founders.
In summary, growing a business is a dynamic process as the leadership team navigates the evolutions and revolutions of growth. And like the growth stages of a child, they are predictable and unavoidable. To deal with these challenges, the company must grow the capabilities of the leadership team throughout the organization; install scalable infrastructure to manage the increasing complexities that come with growth; and stay on top of the
market dynamics that affect the business.
To do this, there are 4 Decisions that leaders must address: People, Strategy,
Execution, and Cash.
Land’s theory of transformation argued that organizations cannot resist the impulse to return to their old ways during the improvement phase move toward obsolescence before ultimately dying. At the center of this failure, he argued was the tendency to reinvent and improve rather than to create and innovate. The creativity that informs the start-up/invention phase dissipates, and the adaptive theory used to improve products and process is mistaken for growth.
Analysts wondered when this restructuring would end,” he said, “and they didn’t like our answer: never.” He was highly cognizant that “entropy is the rule in organizations, as it is in the physical universe. Over time, all organized systems evolve toward chaos. Unless you pursue change relentlessly, your efforts will eventually wither away.” Cote didn’t let that happen.
Notes
Chapter Four: Reinvention
- Rose Gailey, Ian Johnston, and Andre LeSueur, “Aligning Culture with the Bottom Line: How Companies Can Accelerate Progress,” Hedrick & Struggles, www.heidrick.com/en/insights/culture-shaping/aligning-culture-eith-the-bottom-line-how-companies-can-accelerate-progress#RefN2