Greiners Growth Curve

The model helps to identify, anticipate and understand the root cause of problems for a fast-growing business. Each growth phase has a period of evolution and stability and ends with a revolutionary period of organisational turmoil and change. Successful resolution of the revolutionary period is essential to allow the business to move to the next phase.

(The model was created by Larry Greiner in 1972 and updated in 1998)
Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 1 Creativity

Emphasis on creating a product and market Founders are in charge

Technically orientated Focus on making and selling the product

Communication is frequent & informal Hard work is rewarded by modest salaries & promise of ownership benefits Crisis of Leadership
Increasing complexity, founders struggle to both run and manage the business, conflicts emerge on new products / markets, lack of decisive direction Solution - Install a strong business manager to pull the business together

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 2 - Direction

Capable business manager installed Functional organisation structure Accounting and capital management Incentives, budgets & work standards More formal communication & hierarchy Directive top down management
Crisis of Autonomy
Funnels energy into growth, increasing complexity, top management unable to oversee all operations, lower level managers feel tied down despite their greater knowledge of markets and products Solution - Delegation

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 3 - Delegation

Decentralised Structure Operational & market level responsibility Profit centres & financial incentives Top management acting by exception Decision making based on periodic reviews Rare and formal corporate communication, supplemented by field visits
Crisis of Control
Relative prosperity until top executives feel loss of control. Managers acting more independently, running own parochial campaigns. Management attempts to regain control and fail due to scope of operations & markets. Solution co-ordinate rather than control

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 4 Co-ordination

Merging of local units into product groups Thorough review of formal planning Supervision of co-ordination by corporate staff Centralisation of support functions Corporate scrutiny of capital expenditure Accountability for return-on-investment at product group level Motivation through lower-level profit sharing
Crisis of Red Tape
Resource use becomes more efficient, local management look beyond local needs, growth recommences. Product group managers have learnt to justify & account for decisions and are rewarded on results. Watchdog mentality de-motivates middle management so that rules and procedures are the goal (not the means). Solution increase market agility & people need flexibility

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 5 - Collaboration

Team action for problem solving Cross functional task teams Matrix type organisational structure Simplification of control mechanisms Real-time information systems Team behaviour education programmes Decentralisation of support staff to consult specific teams Team incentives
Crisis of Internal Growth
Only way to grow is through collaboration with other organisations Solution - alliances

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

Phase 6 - Alliances
Extra organisational solutions Mergers & acquisitions Creating holdings Managing a network of companies Crisis of Identity

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk

www.businessimpactsolutions.co.uk

Blog: http://businessimpactsolutions.wordpress.com

Creating & implementing insight led marketing strategies with real commercial impact Business Impact Solutions 2013 www.businessimpactsolutions.co.uk stephen.dann@businessimpactsolutions.co.uk