The Greiner Curve model was introduced in 1972. Larry Greiner came up with the model along with six phases of growth. Like, if there is a stable phase and then a quiet phase later, there might be a crisis stage.
The company must alter its organizational structure and management style to solve the issues that the company faces. Understanding the framework in connection with the stages that Greiner Curve shows is crucial. In those stages, it would be crucial to develop relevant solutions.
Every organization has to go through six stages of growth. Depending on what stage it is, management strategies and changes in management capabilities will be applied to the situation. This is what the framework is all about.
Why Is This Framework Useful?
As per the framework, every organization has to go through six growth phases; it is crucial to understand your organization’s growth stage. Once you identify your stage, it becomes easy to implement the relevant solutions. It also helps to predict which can be the next stage, so you can properly plan that.
The framework describes that as the organization grows, even though the growth looks stable, there will be other stages ahead.
There might be a crisis point too on the way, and it’s inevitable. The organization will have to transition; hence, by understanding the framework and making the right arrangements for the future, the leaders and team will also be ready for such transformation.
The speed at which transitions in the growth phases will also vary. For example, an IT company might come across these growth phases quickly. On the other hand, a financial institution comes across these growth phases at a slower pace.
Six Stages Of Growth As Per Greiner Curve- Management Capability Framework
1. The first phase of growth is through creativity.
The first phase of growth is quite radical. The company has just started. The founders work more quickly to establish their name in the market. They also try to find markets where there will be better sales.
There are a few staff members at this stage, and communication among them would be informal. The founders work to develop better products, so there is more creativity involved in the entire process.
The first phase of growth is therefore called growth through creativity. But as the company advances and passes to the next stage of development, there will be a need for more staff, more management layers, and better strategies to cope with the growth.
2. The second phase of growth is through the direction.
The organization will look structured during this growth stage, with different departments like marketing, sales, finance, products, etc. The company will have teams and team leaders who can direct them. There is more investment in better and newer products. The growth is at a great pace, and the hiring process is also at its top.
In the first phase, one person was managing many things. But in the second phase, some managers manage different departments. The hierarchy and communication are formal, and there’s a top-down approach.
As the growth continues and moves to the next phase, there will be a need to delegate responsibilities. So, there is moving to the next stage. At the newer stage, there will be a need for better managers with high authority and responsibility.
3. The third phase of growth is through delegation.
The third phase involves more layers of hierarchy. There will be a delegation of tasks so that the top management can take care of the larger issues, and the middle managers can take care of the day-to-day business activities, goal attainment, and other vital things. Top management would concentrate more on higher goals, long-term objectives, and attainment strategies.
The organization’s size gets bigger, and hence there is some stress on the communication channels and policies. There are different departments, but something is lacking, creating the crisis point.
To go to the next stage, the company should change the organizational structure and give more importance to transparency and work culture so that the different departments come together and work effectively. For this thing, there may be a need to standardize the practices.
4. The fourth phase is growth through coordination.
In the fourth phase of growth, there are standardized procedures. The organization must try to bring stability. In its path to attain stability, there is a burden on the organization’s bureaucracy.
Their business structure is sophisticated, but to sync with the organization’s objectives and achieve a return on investment, the crisis point with the red tape becomes unavoidable.
Perhaps this is the time when the organization must make some changes in its structure and approach. More than a bureaucratic approach, autonomy will be needed to help implement new business culture.
5. The fifth phase is growth through collaboration.
The growth is still happening at this phase as active and scalable work systems are implemented. There is no place for rigidity now. The leaders use collaboration to achieve work satisfaction and a good internal structure.
There is better flexibility and good technological systems to assist further growth. But, now, internal growth seems to be limited. If the organization wants to grow further, it must look for alliances. If the organization is ready for further partnerships outside the organization, then it can go to the next phase.
6. The sixth phase is growth through alliances.
At this stage, companies with well-established structures can look out for mergers and better opportunities to grow outside. There might also be a need for outsourcing, strategic networking, and acquisitions.
But, with expansion, there is some resource stress, and there might be a crisis point. Here, the organization must revisit its mission and vision. It must make changes in the same, as per the situation.
What Are The Predicted Crisis Points In Greiner’s Growth Model?
While talking about the growth phases above, crisis points were mentioned. So, what does that mean? Every organization will meet a crisis point at some level on its path. It doesn’t mean that things have gone wrong with the company. It means the organization’s time to make potent changes or embrace the transition.
Here are the five predicted crisis points as per the model.
Crisis of leadership
This type of crisis comes into the picture when it becomes tough for the leader to manage everything independently.
The company is on the growth path, and now there is a need for more employees and managers.
Crisis of autonomy
This type of crisis arises when the organization has a good management system. Still, the leader finds it tough to control things.
This point of crisis is the autonomy crisis. The leader has to take action to resolve the crisis.
The control crisis
To resolve the previous crisis, the management comes up with more layers of hierarchy. Now, there are more structures in the organization.
The top management can’t control things happening at the lower levels. Thus, there has to be a delegation, and only then will the control be better at respective levels.
The red tape crisis
Since different levels of hierarchy are added, there is more bureaucracy. This action has made the decision-making process slow.
It’s a long process when any department wants to execute an action.
The further growth crisis
At some point, the company experiences growth saturation. Thus, the further growth will be a matter of question. The company might be short of ideas and new developments in this crisis. It should look for opportunities outside.
Understanding that every organization has to be dynamic and embrace change depending upon the demanding situation can make the company stay smooth during every growth phase.
When the organization grows to a non-specialist, it looks like consistent growth. But, the growth happens in phases. Greiner Curve provides insight into these growth phases and the need to implement different managerial strategies based on the capabilities of the relevant growth stage.
At every growth stage, there will be some alterations in managerial strategies and some crisis points as the organization develops. But what’s more important is that the leaders must take relevant action and not react to that negatively.
Suppose you can figure out which organizational growth stage your organization is going through. In that case, it will become easy for you to make the relevant changes in learning programs, the hiring process, and relatable solutions.
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Carol T. Mahaffey is a certified American Author And a creator of Theleaderboy. Carol is a Self-Taught Marketer with 10+ Years of Experience. She brings her decade of experience to her current role, where she is dedicated to writing books, blogs, and articles, inspiring the world on how to become a better Leader.