Phases of organization growth - Creativity (Ph 1)

In the last blog, we concluded the initial discussion on the dimensions affecting the organizational development. From today's blog we begin a new discussion on the phases of organizational growth. The basis of this brief discussion is still the same source - Evolutions and Revolutions as organizations grow by Prof Larry E Greiner.

Building on the understanding of the various phases of organizational development, when we analyze the growth of companies over a relatively long period of time, we could categorize the phases of growth into the following phases:

• Creativity
• Direction
• Delegation
• Coordination
• Collaboration

It is important to note that, each phase is both an effect of the previous phase and a cause for the next phase. The principal implication of each phase is that management actions are narrowly prescribed if growth is to occur. 

We shall understand each of these phases beginning with Creativity today and continue through the week. 

Phase 1: Creativity

Organizations when they begin have 2 primary areas of emphasis - creating the product, creating the market.

The characteristics of this period include

• Company’s founders are usually technically or entrepreneurially oriented and don’t focus on the managerial activities.
• Communication amongst employees is frequent and informal
• Work is generally for long hours but rewards are modest salaries. There would be promise of ownership benefits
• Control of activities comes from immediate market place feedback - "management acts as customer reacts"

While all this is the daily happening, there is something lurking in the horizon - a potential leadership crisis. As the organization scales up, the range of activities widen requiring an entirely different mindset to handle these. The founders who love their freedom and creativity find them burdened with unwanted management responsibilities. The critical question now to answer is - who is to lead the company out of confusion and solve the managerial problems confronting it.

The founders often hate to step aside even though they are probably temperamentally unsuited to be managers. The need would be to locate and install a strong business manager who is acceptable to the founders and who can pull the organization together.