1. Starting a Business ES2A6 Lecture 24 GROWTH

2. HOW DO ORGANISATIONS GROW ?

SME SECTOR

EVOLUTION AND REVOLUTION

STAGE THEORY

FORMAL CONTROL MECHANISMS

CONTROL HIERARCHY

ICARUS PARADOX

SUCCESS

3. SME SECTOR About 3 million or 96% of Businesses 4. Greiners Model of Five Stages of Growth 1978 Large Small Size ofOrganisation Age of Organisation Young Old Revolution Evolution Key Creativity Delegation Co-ordination Collaboration Direction Autonomy Control Red Tape Crisis ? Leadership Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 5. Churchill &Lewis Model of Business Growth 1985 Small Large Young Mature Organisation Stage I Stage II Stage IIIDStage IIIGStage IVStage VExistenceSurvivalSuccess -Success Take offResource MaturityDisengagement Growth 6. Churchill &Lewis Model of Business Growth 1985 Small Large Young Mature Organisation Stage I Stage II Stage IIIDStage IIIGStage IVStage VExistenceSurvivalSuccess -Success Take offResource MaturityDisengagement Growth 7. Organisational Practices during Evolution in the Five Phases of Growth 8. Churchill and Lewis Model

Five Stage Model

Existence

Survival

Success

• disengagement

• growth

Take-off

Resource maturity

The Model looks at the changes over time to:

Strategy

Formal management systems and style

Influence of the owner

Organisational structure

9. Use of Formal Control Mechanisms 10. Alignment of the JET ENGINE Alignment of vision EnvisionerEnablerEnactor 11. THE START UP TEAM

ENVISIONER

ENABLER

ENACTOR

12. ENVISIONER

TENDENCY TOWARDS

EXPANSIVE THINKING.

BREAKS THE MOULD,

TERMED CREATIVE

DESTRUCTION

13. THE START UP TEAM

ENVISIONER

ENABLER

ENACTOR

14. ENABLER

SAFE PAIR OF HANDS,

GOOD ORGANISER,

AND MOTIVATOR.

INTERPRETER OF THE

VISION.

AN INFORMATION

GATHERER.

15. THE START UP TEAM

ENVISIONER

ENABLER

ENACTOR

16. ENACTOR

DETAIL PERSON, WHO

CAN CONCENTRATE

ON ONE PARTICULAR

TASK.SOMETIMES

REFERED TO AS A

COMPLETERFINISHER.

PENS NEATLY LAYED

OUT ON THEIR DESK.

17. 18. 19. 1 2 3 1 2 3 C 0 0 The Control Hierarchy 20. Ideas and No Action With only Envisioners and Enablers, there is great enthusiasm and clear direction, but no settlers to complete the work. 21. Analysis and No Hope When Enactors and Enablers combine, analysis paralysis may be the result. Certainly there is a likelihood that there will be less creativity and updating of vision. 22. Steam and confusion Envisioners and Enactors combine to form a volatile mixture of rejection and denial. We can see, but they dont understand! . CONFLICT !!! 23. The Chance Encounter In the absence of a shared vision and transparency, it is unlikely that these different attribute types will stay unified and together over the longer term. 24. DANNY MILLER THE ICARUS PARADOX 25.

The differences in the administrative structure of very small and very large firms are so great that in many ways it is hard to see that the two species are of the same genus

We cannot define a caterpillar and then use the same definition for a butterfly

[Penrose 1959]

26. Characteristics of the More Successful Business

Personnel

Approach to Markets

Managerial

Problem Areas

Use of Governmental Help

Objectives

Source: Professor David Storey, CSME, WBS

27. Characteristics of the More Successful Business

Personnel

Approach to Markets

Managerial

Problem Areas

Use of Governmental Help

Objectives

Source: Professor David Storey, CSME, WBS

28. EGG TO BUTTERFLY 29. BATON PASSING

THEENVISIONER ,

ENABLER AND

ENACTOR(THE 3 E s)

ARE NOW ALIGNED

AND RELEASE THE

IDEA TOWARD

COMPLETION.

30. METAMORPHOSIS OF ENTERPRISE 31. EMERGENCE -BUD BURST 32. TEAM ENLARGEMENT 33. TEAM ENLARGEMENT Sales Provider Alignment of vision EnvisionerEnablerEnactor 34. METAMORPHOSIS OF ENTERPRISE 35. FULL LAUNCH - FRAGMENTATION 36. Lessons from Geese

71% extra efficiency when flying in a

V formation

Shared objective

Recognition of roles and talents

Leadership changes as circumstances demand different talents

Encouragement culture - Honk Honk!