Understanding Business Growth Stages: Which One Fits You?

Aug 25, 2020 | 0 comments

“The 10 Stages of Corporate Life Cycles” was originally written for executives and their companies, but I also use it to help my individual clients identify the type(s) of companies/cycles that would be the best fit for them. It also is used to help entrepreneurs prepare a strategy and define their role when creating and building their own business. From a “big picture view,” this model enables you to see the pros and cons of each stage and helps you create an action plan. Providing understanding to these cycles allows you to ask deeper questions during “Discovery Sessions” (interviews) with others when considering a side-gig, and of yourself, when building your own business. 

Understanding all the stages of growth and doing the discovery work will help you define the specific roles/responsibilities that you’ll play in your business or side-gig. Review the 10 Stages of Business Growth and ask yourself these questions:  

  1. Which of these stages REALLY excite and interest me?
  2. When reviewing the cycle categories, are there any that remind you of current/past negative work-environment experiences? Which ones? What did you dislike about them?
  3. Identify the cycle(s) that evoke a positive feeling and resonates highly with you and explain why.

The 10 Stages of Corporate Life Cycles
(An excerpt from Dr. Ichak Adizes’ book The Pursuit of Prime.)

Corporate life cycles are defined by the interrelationship of flexibility and control. They are not defined by a company’s chronological age, sales or assets, or number of employees.

Courtship. Would-be founders focus on ideas and future possibilities, making and talking about ambitious plans. Courtship ends and infancy begins when the founders assume risk.

Infancy. The founders’ attention shifts from ideas and possibilities to results. The need to make sales drives this action-oriented, opportunity-driven stage. Nobody pays much attention to paperwork, controls, systems, or procedures. Founders work 16-hour days, six to seven days a week, trying to do everything by themselves.

Go-Go. This is a rapid-growth stage. Sales are still king. The founders believe they can do no wrong. Because they see everything as an opportunity, their arrogance leaves their businesses vulnerable to flagrant mistakes. They organize their companies around people rather than functions; capable employees can–and do–wear many hats, but to their staff’s consternation, the founders continue to make every decision.

Adolescence. During this stage, companies take a new form. The founders hire chief operating officers but find it difficult to hand over the reins. An attitude of us (the old-timers) versus them (the COO and his or her supporters) hampers operations. There are so many internal conflicts, people have little time left to serve customers. Companies suffer a temporary loss of vision.

Prime. With a renewed clarity of vision, companies establish an even balance between control and flexibility. Everything comes together. Disciplined yet innovative, companies consistently meet their customers’ needs. New businesses sprout up within the organization, and they are decentralized to provide new lifecycle opportunities.

Stability. Companies are still strong, but without the eagerness of their earlier stages. They welcome new ideas but with less excitement than they did during the growing stages. The financial people begin to impose controls for short-term results in ways that curtail long-term innovation. The emphasis on marketing and research and development wanes (lose power).

Aristocracy. Not making waves becomes a way of life. Outward signs of respectability–dress, office decor, and titles–take on enormous importance. Companies acquire businesses rather than incubate startups. Their culture emphasizes how things are done over what’s being done and why people are doing it. Company leaders rely on the past to carry them into the future.

Recrimination. In this stage of decay, companies conduct witch-hunts to find out who did wrong rather than try to discover what went wrong and how to fix it. Cost reductions take precedence over efforts that could increase revenues. Backstabbing and corporate infighting rule. Executives fight to protect their turf, isolating themselves from their fellow executives. Petty jealousies reign supreme.

Bureaucracy. If companies do not die in the previous stage–maybe they are in a regulated environment where the critical factor for success is not how they satisfy customers but whether they are politically an asset or liability–they become bureaucratic. Procedure manuals thicken, paperwork abounds, and rules and policies choke innovation and creativity. Even customers–forsaken and forgotten–find they need to devise elaborate strategies to get anybody’s attention.

Death. This final stage may creep up over several years, or it may arrive suddenly, with one massive blow. Companies crumble, (disintegrate), when they cannot generate the cash they need; the outflow finally exhausts any inflow.

Adapted from The Pursuit of Prime by Dr. Ichak Adizes.

Interested in what stage your business might be in? Join me for Her Own Business every 1st Tuesday at 6 pm CT. 

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Jan Barlow
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