Lifecycle of a Corporate
By Dr.Mahboob ali khan Phd
As organizations grow and age they progress through predictable lifecycle
stages. Each stage brings increased organizational complexity as well as new
and unique challenges. Strategy, structure, levels of delegation, goals, rewards
systems and methods of operating usually differ quite markedly in each stage of
the organization lifecycle. How well or how poorly leadership addresses the
challenges and demands of each stage will determine the success or failure of
the organization. The following is a brief description of each of the 10 stages of
the corporate lifecycle:
1. Courtship
The organization is not yet born
There is excitement and unrealistic thinking
The founder is building commitment
2. Infant
Lack of cash
If undercapitalized the organization will chase any and all sales
opportunities
Lack of sales
The organization may sell at a loss to generate cash
Lack of experience
The organization makes excessive commitments
3. Go-Go
Founder’s Trap – one person show
Unfocused – spread too thin
Opportunity driven
Unclear priorities because everything is a priority
The organization believes that ‘more is better’
Strategic misalignment – mission, structure, systems, processes and
rewards are usually not mutually supportive
4. Adolescent
Conflict between we and they – new and old
Premature aging (loss of flexibility)
Confusing structure
Founder has difficulty delegating
Professional managers are hired and encounter resistance
Founder fears loss of control
5. PRIME
The organization is growing and profitable
New ‘infants’ are spun off
Success may breed complacency
Measurements focus on the present value of past decisions
Inadequate bench strength
6. Late Prime
Finance introduces controls for short term financial results
The organization is becoming complacent
Although it is not yet obvious the ‘aging’ process has begun
7. Aristocracy
Not making waves becomes a way of life.
Outward signs of respectability take on enormous importance.
The organization acquires companies rather than incubating startup
businesses.
8. Recrimination
Witch-hunts become prevalent
Back-stabbing becomes commonplace
The customer is effectively a nuisance
9. Bureaucracy
The Bureaucracy is survival oriented
There are policies for everything
The written word is worshipped
If the organization is important to the economy and the government has
socialistic tendencies the organization will be put on life support
(taxpayer dollars)
10. Death
The organization is bankrupt