This paper creates a theoretical framework for understanding the various phases of organizational growth and explores the implications these dynamics have for how leaders should manage change.
The author identifies five phases of organizational growth, each of which comes with its own unique company focus, organizational structure, management style, and reward system. He argues that each phase consists of a quiet period of steady growth (evolution) followed by a period of turmoil and upheaval (revolution).
How leaders manage these “revolutions” determines whether the organization continues to grow or flounders and eventually fails.
- Each phase of an organization's growth calls for different managerial practices, focus, and incentives.
- As the company grows, these practices become mismatched to the needs of the company, which eventually leads to a “revolution.”
- The new approaches required to solve the problems of one revolution eventually become the seeds of the next revolution.
Change is constant, but understanding the phases of development all organizations go through allows leaders to effectively manage growth in their own companies.