Greiner’s growth model was originally proposed in 1972 by Larry E. Greiner. In a 1998 Harvard Business Review article entitled Evolution and Revolution as Organizations Grow, he posited that companies experience six phases of growth that are punctuated by so-called “revolutions”. Importantly, each revolution disturbs the status quo and allows the next stage to establish itself.
|Model Overview||Greiner’s Growth Model is a framework developed by Larry Greiner in the 1970s to describe the stages of growth and evolution that organizations typically experience. It identifies phases of stability and crises.||– Provides insights into organizational challenges and changes.||– Stages of organizational growth and evolution. – Transitions from one stage to another.||– Analyzing organizational growth patterns, understanding challenges, and planning for future development.|
|Growth Phases||The model outlines five distinct phases that organizations go through: Creativity, Direction, Delegation, Coordination, and Collaboration. These phases represent periods of relative stability and crisis.||– Each phase has its unique characteristics and challenges.||– Creativity: Early stage with a focus on innovation. – Coordination: Focus on control and systems. – Transition points between phases.||– Diagnosing organizational issues, setting expectations for each phase, planning for growth, and adapting strategies accordingly.|
|Creativity Phase||In this phase, organizations are typically small and entrepreneurial, emphasizing innovation and creativity.||– Focus on new product development and market entry.||– Startups and small businesses with a strong emphasis on innovation and experimentation.||– Understanding the challenges and opportunities of early-stage organizations.|
|Direction Phase||As organizations grow, leadership becomes more formalized. The direction phase involves centralization of authority and a focus on clear goals and strategies.||– Need for strong leadership and strategic planning.||– Developing a centralized management structure. – Setting clear goals and strategies for expansion.||– Transitioning from startup to a more structured and efficient organization.|
|Delegation Phase||This phase sees decentralization of authority and delegation of decision-making to lower levels. It often leads to increased efficiency but can also create problems if not managed properly.||– Empowering employees and middle managers.||– Delegating decision-making authority to teams. – Balancing delegation with oversight and control.||– Adapting to increased complexity, empowering teams, and managing growth challenges.|
|Coordination Phase||Organizational growth can lead to silos and inefficiencies. The coordination phase focuses on improving communication and coordination across departments or units.||– Emphasis on cross-functional collaboration and efficiency.||– Implementing new communication and collaboration tools. – Breaking down silos and improving processes.||– Addressing challenges related to coordination, communication, and inefficiencies in larger organizations.|
|Collaboration Phase||In this phase, organizations aim to foster a culture of collaboration and innovation. They may explore partnerships, mergers, or acquisitions to further growth and competitiveness.||– Focus on fostering innovation and adaptability.||– Collaborating with external partners and competitors. – Embracing innovation and agility as core values.||– Navigating complex organizational structures, fostering innovation, and staying competitive in the market.|
|Crisis Points||Greiner’s model also highlights crisis points or triggers that can lead to transitions between growth phases. These crises are often the result of challenges that organizations face as they grow.||– Recognizing crises as opportunities for change and growth.||– Financial crises, leadership challenges, market shifts. – Responses to crises leading to phase transitions.||– Identifying and addressing crisis points, using them as opportunities for organizational development.|
Understanding Greiner’s growth model
Greiner’s growth model, also known as the Greiner curve, describes the various phases and crises an organization may experience as it grows.
Greiner’s growth model is not specific to any industry, instead providing a general overview of the various problems a company may encounter as its size increases.
The model allows decision-makers to anticipate problems before they occur and, at least in theory, avoid them altogether.
What else can businesses take away from Greiner’s model? For one, growth is inherently difficult and presents many obstacles in terms of management and leadership.
It’s also vital that organizations develop a leadership structure that reflects their growth stage and can be adjusted as they increase in size. Otherwise, they risk being overtaken by the competition.
The six phases of Greiner’s growth model
Greiner developed five phases in 1972 and then added a sixth in 1998. Let’s take a look at each of them below and their associated crises.
Phase 1 – Growth through creativity
In the initial phase, the company’s skeleton staff are busy creating products and seeking external investment.
Informal communication is suitable at first, but as the company starts to recruit more staff, expand production, and secure capital, communication should become more formal.
According to Greiner, the first phase ends with a leadership crisis. At some point, professional management will be required to drive the company forward. The company founders may take on this role or hire outside help.
Phase 2 – Growth through direction
Growth continues as activities such as marketing and accounting are grouped into departments that collectively comprise an organizational structure. Company culture may also start to develop in this phase.
Inevitably, the current management team will find that they cannot manage every aspect of the increasingly complex and multi-faceted business.
The second phase ends in an autonomy crisis. Upper management is actively involved in running the company but must rely on the collaborative effort of lower-level managers to pick up the slack and drive the company forward.
Phase 3 – Growth through delegation
The organization continues to evolve and expand as middle management deals with daily operations and upper management consider more significant opportunities such as mergers and acquisitions.
In any case, decision-making is based on periodic reviews, and cost centers may be introduced.
Sometimes, these cost centers start to act autonomously and service their own needs instead of the needs of the organization.
As a consequence, the company may enter a crisis of control and require a more robust organizational design so that functional units can work together harmoniously.
Phase 4 – Growth through coordination and monitoring
In phase four, the mature company is characterized by multiple departments working toward the same goal with established processes and functions. Growth continues as the whole business is greater than the sum of its parts.
In some companies, however, a red-tape crisis ensues as productivity becomes stifled under bureaucracy. The implementation of a new structure and culture can remedy this situation.
Phase 5 – Growth through collaboration
Collaboration means the organization adopts a matrix structure where product-focused teams are spread across multiple functions.
This creates a positive culture where processes are simplified, teams are rewarded based on performance, and employees feel their work and ideas are contributing to organizational success.
While this facilitates growth, the company may reach a point where it cannot grow any larger with its existing processes and resources. This is known as the growth crisis, which can only be addressed by looking to expand externally.
Phase 6 – Growth through extra-organizational solutions
Greiner’s sixth and final phase notes that company growth can continue via mergers, acquisitions, outsourcing, networking, and any other external solution.
- Greiner’s growth model, also known as the Greiner curve, describes the various phases and crises an organization may experience as it grows.
- Greiner’s growth model is not specific to any industry, instead providing a general overview of the various problems a company may encounter as its size increases. If nothing else, the model highlights the fact that growth is inherently difficult.
- Greiner’s growth model is comprised of six phases, with each comprising a different stage of company maturity. These are growth through creativity, direction, delegation, coordination and monitoring, collaboration, and extra-organizational solutions.
- Greiner’s Growth Model:
- Greiner’s growth model, proposed by Larry E. Greiner in 1972, describes the phases of growth that organizations experience, marked by “revolutions” that disturb the status quo.
- The model provides insights into the challenges organizations face as they grow and offers a framework to anticipate and address these challenges.
- Six Phases of Greiner’s Growth Model:
- Phase 1 – Growth through Creativity: Early stage with product creation and external investment. Ends with a leadership crisis, requiring professional management.
- Phase 2 – Growth through Direction: Departments formed, company culture develops. Ends with an autonomy crisis, upper management relies on lower-level managers.
- Phase 3 – Growth through Delegation: Middle management handles daily operations, focus on mergers. May face a crisis of control due to autonomy of cost centers.
- Phase 4 – Growth through Coordination and Monitoring: Established processes, departments work together. Red-tape crisis possible due to bureaucracy.
- Phase 5 – Growth through Collaboration: Matrix structure with cross-functional teams. Growth crisis occurs if existing processes hinder expansion.
- Phase 6 – Growth through Extra-organizational Solutions: Growth through mergers, acquisitions, outsourcing, and networking.
- Key Insights from Greiner’s Model:
- Greiner’s model emphasizes that growth is challenging and comes with various obstacles in management and leadership.
- Organizations must adapt their leadership structures as they grow to remain competitive.
- The model provides a general overview applicable to diverse industries, highlighting the difficulties of growth.
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