Life Stages of a Business
Just as people start off small and grow… so do businesses. And while you may not realize it, all organisms (both people and companies) have a distinct lifecycle they follow from birth to death. As leaders of businesses, understanding which life stage your business lies can help you understand the challenges you are facing and figure out what needs to be done to survive and thrive.
So how is your business doing? Do you have a good understanding of where your business is in its lifecycle? As a business owner or leader, these are questions you should be able to answer. Your business is constantly growing and changing, and as its leader you should care about how this growth and change is affecting your business in order to maintain control and make the appropriate decisions.
The chart below is one I’ve used before in presentations given to groups of business owners who wanted to understand more about their business. As you can see, there are eight distinct life stages possible, and, although at any given time your business might show characteristics of more than one, your company falls in one of these. Each stage plays an important role in the growth and development of a successful business. And while there is a natural linear progression, it does go both ways. Depending on their actions, or lack of actions, a business can move both forward and backward.
Life Stages of a Business
Infancy – In this stage, there is a lot of energy, constant change, and possible chaos. This is mostly a one person show.
Go-Go – There is a ton of excitement, and the company is moving fast in many directions. People are spread very thin. At this stage, the company is flourishing.
Adolescent – There starts to be a separation from the organization’s leader. The company has a rebirth apart from the founder. At this stage, team building and defining and sharing the company’s mission is critical.
Prime – There is more awareness of the structure of the organization. There must be an organizational balance of self-control and flexibility. Organization is still growing and able to explain why it is going to make money.
Stable – The organization is still strong but losing flexibility and spirit of creativity. Finance has become more important than marketing. At this point, sales are still growing but meeting customer needs is a challenge.
Aristocracy – There is an emphasis on how things are done rather than what and why they are done. There is low internal innovation and TRANSFORMATION is needed to stay alive.
Early Bureaucracy – This stage shows no creativity from managers other than creating personal survival and discredit of others. Only the administrators survive and the creatives leave.
Bureaucracy & Death – The organization justifies their existence not by functioning well but by merely existing. At this stage, death occurs when no one is committed to the organization anymore.
There is a great deal of transformation that occurs at each stage. And it seems like the changes can happen overnight for some of the newer technology driven companies. But for smaller companies, change and progression may take a few years. Regardless of the size of your business or the length of time it takes your business to transform, successful businesses are the ones that are always changing. And for businesses that refuse to change, you can count on the fact that bureaucracy and death stage are headed your way.
Give some thought to where your business lies in the lifecycle. Are you at a point where you should aggressively decide to transform the business? In my next post, I will be discussing the OrgAlign and how businesses large and small, have used this process to accelerate transformation and change.