Keith E Rice - Organisation LifeCycle #2

Part 2

Adizes via Greiner

The LifeCycle depicted on the previous page is derived from the Corporate LifeCycles model developed by Ichak Adizes (1988) through more than 40 years research as a practical 'hands-on' management consultant. (Adizes' blue chip' clients have included the likes of Domino's Pizzas; and he is often cited as being the man behind the 'Mexican Miracle' of the 1990s - ie: sustainable economic growth.) Adizes' model provides the most complete 'map' of how organisations grow, sometimes lose their way and fold, restructure, peak and then all too often go into decline.

However, the LifeCycle depicted, especially with regard to the growing and peak stages, also reflects the work of Adizes' forebear, Larry E Greiner - the pioneering nature of whose 1972 work on phases of development Adizes only too readily recognizes. (Greiner has been closely associated with the Harvard Business School for more years than probably either chooses to remember willingly!)

While Adizes maps the entire LifeCycle and sets up a structure for understanding how organisations grow, peak and decline, Greiner’s work is especially useful for looking in greater detail at the Go-Go through to Prime stages in greater detail and with some slightly different emphases. Greiner sees organisations as evolving fairly smoothly but then entering crises which inevitably precipitate a ‘revolution’ if the organisation is to get through the crisis.

According to Greiner, businesses grow through 5 crises:-

Growth through Creativity eventually leads to a crisis of leadership. More sophisticated and more formalized management practices must be adopted. If the Founder(s) can't or won't take on this responsibility, they must hire someone who can, and give this person significant authority. This reflects the turmoil of Late Go-Go and the need to avoid Pathological Go-Go.

Growth through Direction eventually leads to a crisis of autonomy. Lower level managers must be given more authority if the organization is to continue to grow. The crisis involves top-level managers' reluctance to delegate authority.

Growth through Delegation eventually leads to a crisis of control. This occurs when autonomous employees who prefer to operate without interference from the rest of the organisation clash with business owners and managers who perceive that they are losing control of a diversified company.

Both phases II and III can be seen as symptomatic of the internal struggles an organisation goes through as it moves from Go-Go into Early Adolescence.

Growth through Co-ordination eventually leads to a crisis of red tape. Co-ordination techniques like product groups, formal planning processes, and corporate staff become, over time, a bureaucratic system that causes delays in decision making and a reduction in innovation. Here Greiner is reflecting the problems of Late Adolescence and the danger of Premature Ageing.

Growth through Collaboration is characterised by the use of teams, a reduction in corporate staff, matrix-type structures, the simplification of formal systems, an increase in conferences and educational programs and more sophisticated information systems. While Greiner did not formally delineate a crisis for this phase, he guessed that it might revolve around "...the psychological saturation of employees who grow emotionally and physically exhausted by the intensity of team work and the heavy pressure for innovative solutions." Greiner has captured the integrated functioning of Prime well but also clearly identifies a key factor which can tip the organisation on the way to Aristocracy.

LifeCycle: a Biological Metaphor

The LifeCycle concept is based on a biological metaphor: that business firms resemble living organisms because they demonstrate a regular pattern of developmental process. Organisations that are said to pass through a recognisable life cycle, according to James Gibson, John Ivancevich & James Donnelly Jnr, are fundamentally impacted by external environmental circumstances as well as internal factors: "We're all aware of the rise and fall of organisations and entire industries…. Marketing experts acknowledge the existence of product-market life cycles. It seems reasonable to conclude that organisations also have life cycles."

While a number of business and management theorists alluded to developmental stages in the early to mid-1900s, Mason Haire (1959) is generally recognised as one of the first commentators to use a biological model for organisational growth. He argued that organisational growth and development followed a regular sequence. Following Greiner’s groundbreaking publication in 1972, the amount of research in to organisation life cycles increased significantly

In a summary of life cycle models, Robert Quinn & Kim Cameron (1983) wrote ithat the models typically propose that "...changes that occur in organisations follow a predictable pattern that can be characterised by developmental stages. These stages are sequential in nature; occur as a hierarchical progression that is not easily reversed; and involve a broad range of organisational activities and structures." The number of life cycle stages proposed in various works studying the phenomenon have varied considerably over the years. Some analysts have delineated as many as 10 different stages of an organisation life cycle, while others have flattened it down to as few as 3 stages. Most models, however, tend to portray the organisation life cycle as a period comprised of 4 or 5 stages that can be encapsulated as start-up, growth, maturity, decline, and death (or revival). Eg: in a longitudinal study of 36 corporations, Danny Miller & Peter Friesen (1984) proposed 5 growth stages: birth, growth, maturity, decline and revival. They traced changes in the organisational structure and managerial processes as the business firms proceeded through the stages. At birth, the firms exhibited a very simple organisational structure with authority centralized at the top of the hierarchy. As the firms grew, they adapted more sophisticated structures and decentralised authority to middle- and lower-level managers. At maturity, the firms demonstrated significantly more concern for internal efficiency and installed more control mechanisms and processes

PAEI

While there have been a number of variations in the findings of different researchers, the core stages that map birth, growth, maturity and decline seem to be pretty universal. What makes Adizes’ model so useful is both its sheer comprehensiveness and the fact that it also considers how 4 key structural roles influence an organisation's development through the stages. The 4 roles are:-

Production - short-term effectiveness (what do we need to do now?)
Administration - short-term efficiency (how do we do it now?)
Entrepreneurship - long-term effectiveness (what could/should we be doing?)
Integration - long-term-efficiency (how should we be doing things for sustainability?)

- and the natural tensions between the 4 roles!

The graphic below depicts the typical ebb, flow and influence of the the 4 roles over the LifeCycle...

Capital letters - eg 'P' (Production) in Infancy - indicate the capitalised role could normally be expected to be dominant at that given stage while roles shown in lower case play a lesser part. In advanced stages of ageing, some roles are effectively missing.

From his earliest findings that Entrepreneurship was the dominant role in the Courtship stage, Adizes has come to the view that Founders who also take an Integration perspective {paEI) have much more idea of how their business is likely to develop and are able to plan and use the other roles to accelerate and control growth as appropriate.

By considering how the vMEMES (of Spiral Dynamics) are functioning in an organisation, the 'health' of the thinking underpinning the 4 roles can be investigated and the management of their inter-relationships improved. From a 4Q/8L view of an organisation, we are matching the thinking in the Left Quadrants to the structure roles of the institution in the Lower Right. This facet makes the LifeCycle the premier tool for applying an integrated approach to organisational development.

Click here to take a basic test to get you thinking about which roles are most important in your organisation at this time.

Further information on the considering the inter-relationships between vMEMES and the 4 Roles can be found in the Article, 'The SME Spiral'.

The Value of the LifeCycle Approach
The Organizational LifeCycle is a critical model because of its premise and its prescription. The model's premise is that requirements, opportunities, and threats both inside and outside the organisation will vary depending on the stage of development in which the organisation finds itself. Eg: threats in the Infancy stage differ from those in Prime. As the organisation moves through the developmental stages, changes in the nature and number of requirements, opportunities, and threats exert pressure for change on the organisation. Lloyd Baird & Ian Meshoulam (1988) state that organisations move from one stage to another because the fit between the organization and its environment is so inadequate that either the organisation's efficiency and/or effectiveness is seriously impaired or the organiszation's survival is threatened. The LifeCycle model's prescription is that the organisation’s managers must change the goals, strategies and strategy implementation devices of the business to fit the new set of issues. Thus, different stages of the organisation’s LifeCycle require alterations in its objectives, strategies, managerial processes (planning, organising, staffing, directing, controlling), technology, culture, and decision-making.

By using the Organisation LifeCycle in an integrated approach - taking into account other factors such as motivation (vMEMES), dynamics across the neurological levels and the temperamental dimensions of key players - we can map where an organisation is, what its problems are, where it needs to go (including the option of staying pretty much where it is) and what it needs to do, relative to both what is happening to it internally and what is happening externally (the markets), With this breadth and depth of information, it is then possible to develop interventions which really do make a difference.

Not every organisation goes through the LifeCycle in the same way and Adizes has acknowledged many variations - some of them critical - and laid different emphases at times in his writings (eg: 1996, 1999) to make different points. Greiner has made much of the kind of industry an organisation is in and the opportunities for and constrictions on growth intrinsic in the very nature of the industry. Nonetheless, the LifeCycle provides a comprehensive and cohesive schematic with which to map structure, roles and natural tensions in any organisation.

A case study of applying the LifeCycle and Spiral Dynamics in a commercial company can be viewed here.

Whilst the Organisation LifeCycle is most commonly used to map commercial organisations, it can be used to great effect in both the public and voluntary sectors. A case study of a local government department using the LifeCycle and Spiral Dynamics to effect a partial redesign is available here.