Growth of an organization

Growth of an organization

I think what I like most about working in a startup is the opportunity it normally gives you to observe growth and change in the organisation (Obviously, it does not always go like this). It is not only the people that grow and change with their role, the new guys who come in with new ideas and energy and slowly adapt to the pace of the existing group but the whole system changes. Hierarchies, Communication, everything evolves.

The scientist Bernard Lievegoed compares the evolution of an organisation to the biological evolution of every being, as he explain how an organisation moves from one developmental stage to the next starting from birth and ending with death. In between the beginning and the end he identifies a stage called differentiation, in which we try to set us apart and find our place in the market and a stage called integration which marks the completed development of the whole organisms. I am not saying that growing an idea to an established organization always works like this – obviously every product, every founder, every market has different needs and obstacles – but I do think that there is an underlying pattern. A schema that helps us situate ourselves or our companies on the roadmap of growth. In which phase are we right now? Where should we be going next? Is it normal that everything seems to be such a mess? This lifecycle of an organization was first delevoped by the above mentioned scientist Lievegoed and his colleague Friedrich Glasl in the beginning of the 19th century. Let’s go through it step by step:

1) Pioneering

In the beginning the founder, here called the Pioneer, has the biggest influence on the company. It his personality, ambition and passion that will shape the organization which is built around him. This makes the organization very adaptable and flexible but also highly dependable, autocratic and closed. It seems to be gathering around the Pioneer like a family around the father. It is completely relying on the Pioneer. Eventually, this construct – depended upon one single person – starts to shake with a fast paced environment, accelerated organic growth and a growing team.

The founder might be worried when seeing decreasing profits, a dent in the growth curve, communication problems and internal conflicts. He will notice a lack of motivation and strength and his team and he will be alerted to change something. The scientists Lievegood and Glasl propose a method called Scientific Management to make a successful transition out of this crisis. The propose to bring structure, protocols and standardization to the organization.

2) Differentiating

The Pioneer will be dedicated to observing and analyizing all processes in order to understand what is going on. Eventually he will systemize and standardize and give his organizations a strong focus on tasks with protocols. Structure is not always good, it helps to set up order and smooth workflows but it also inhibits flexibility. Our organization is now focussing on the task to do and not on the person who does it – this might lead to coordination problems and to rivalries between two individuals. 


3) Integrating

After having created structure in the before chaotic organization, all now comes together in a stage called Integration. It is the turning point of the life of this business as it joins creativity with efficiency. At this stage the development is complete. Our organization has reached its height and can be described as horizontally oriented, highly autonomous and responsible and is made up of decentralized, selfsufficient and pro-active work teams.

Normally by this stage the business has reached a good market acceptance, a strong growth and a great company culture. The company could go on like this. Lievegoed and Glasl prefer the organization to take yet another step, though.

4) Associating

After having established itself, the organization can now reach out to its environment creating partnerships. Borders between one company and the next are dissolved as biotopes (Keiretsu) are born to make each individual organization collectively stronger.

This lifecycle of organization is a great guidebook to every entrepreneur who feels overwhelmed by the changes in his/her small organization.


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