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Is your organisation developing or dying? The 7 stage life-cycle

Like people, organisations have a natural life-cycle, from being a twinkle in someone’s eye, through to death. But unlike humans, an organisation can cheat death and renew itself before it’s too late. The key is to be conscious of these seven stages. Where is your organisation?

Credit to Managing Transitions by William Bridges for this 7 stage model. A classic and wonderful book on organisational change.

Stage 1: Dreaming

All initiatives begin with an idea, a dream, born out of a need of a founder and help from their collaborators. Many never get beyond this stage, but if you think big and plan your first small steps, you’re off.

Stage 2: Venturing

An idea becomes reality. The founders are improvising, hustling, and learning fast. This is the pioneer stage and the home of Lean Startup thinking. It’s chaotic and exciting. The first revenues are secured.

Stage 3: Organising

As the operating model settles down and the organisation grows, it’s time to get the house in order. Products and services become more defined and roles and internal processes become clearer. Clarity comes to the organisation and it enters adolescence.

Stage 4: Succeeding

Adulthood begins. It has the culture, structure and strategy for scale, and a reputation is being established. It begins to earn the rewards of its entrepreneurial birth and is now a fully established player in its market.

Stage 5: Institutionalising

Now in middle age, there’s a shift from staking out territory to occupying it. A reputation is firmly in place and there’s a sense of having arrived. Whilst the organisation is enjoying more success and fame than ever before, it’s a huge inflection point, but often one that’s missed. This is the moment for renewal – a return to dreaming, questioning the established processes and recapturing the pioneering spirit that got the whole thing started. It’s the time to face the innovator’s dilemma. If the organisation becomes complacent and doesn’t believe the mighty can fall, the outcome is inevitable…

Stage 6: Waning

The organisation becomes bureaucratic, internally focussed, and loses touch with customers. The organisational immune system works overtime to preserve the status quo and reject attempts to innovate or improve. Work in the organisation becomes about personal status and rules. Some people can see the organisation is beginning to slide, but they feel nobody is listening and it’s impossible to make change happen. At this stage the organisation might still be actually getting results, so denial is easy. It takes real leadership to bring an organisation like this back from the brink, but it is possible. Or else…

Stage 7: Dying

The end times of a company are not always dramatic. It could end in a take-over or with the company being broken up. If the cash runs out it may enter bankruptcy and be given a chance at a turn-around. For most, it’s too late.

Renewal

Organisations must continually renew themselves before they become waning institutions on their way to the graveyard. The time for renewal is when things actually seem at their best. You have the resources and energy for innovation and new initiatives. What it takes is humbleness and realism to know the good times never last for ever.

If you’d like to explore how NixonMcInnes can help with organisational renewal, please get in touch. You can also read how we helped publisher Pan Macmillan to develop and renew.

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