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