A company that grows rapidly experiences changes in its approach to get a job done. With increase in the number of projects, managers become overwhelmed with work. They start exerting pressure on their team members. It becomes a chaotic place and organizational structure is often hampered. As workload enhances, the span of a manager’s control also increases. As a result, they tend to make more mistakes. Subordinates too get tired of the work pressure and their performance falters. In this article, we will discuss about the growth model devised by Greiner. It will assist in understanding the basic reason behind problems faced by fast growing organizations and with the help of strategy tools contribute in recreating the organizational design
Origin of Greiner Curve Model
The Greiner Curve gets its name from its creator Larry E. Greiner. In the initial stage, the Greiner Cure had only five phases of growth. However, in 1998, Greiner proposed the sixth phase of growth and it was added to the original model.
An Idea of Greiner Curve Model
Greiner’s Growth Model talks about phases that companies have to go through. All types of organizations, whether it is a construction company, consultancy firm or manufacturing company, inevitably go through the phases mentioned in the model. Each phase is characterized by a stable period, followed by a crisis period during which the company decides to bring changes in the organization. After an overhaul, the company goes to the next phase.
It is good for a company to grow, but when the growth becomes exponential, managers and their subordinates are stressed beyond limit. The exertion of employees can be damaging for the future of a company.
The 6 Phases of Greiner Curve
Here are the 6 phases of growth a company experiences after its establishment.
It is still a new company and is driven by the founder’s creativity. Moreover, the new products and services create value for the customers. Being a new company, it indulges in a lot creative activities, thus creating value for people.
- Crisis - Leadership
Though the founder easily manages the startup team, in course of time, managing the company becomes difficult. As the company grows the founder’s attention is diverted to many other directions. As a result, her attention is lifted from the company’s affairs.
Growth also introduces several other complications which the founder finds difficulty in managing. If the founder is the original inventor of the products, managing the company may not be her cup of tea.
The leadership crisis can be averted by hiring professionals who are adept at managing companies and are well educated in the field.
These professionals are aware of the latest management techniques thus, ensuring quick planning of strategies. While the founder would hastily fill the gaps temporarily, a professional manager would take a long-term view of the affairs in the organization and plan accordingly. This way, they would render the company’s strategies a right direction.
Also, this is the stage when activities like, marketing and budgeting are given separate identities. However, they are not awarded separate departments.
- Crisis – Autonomy
Professional managers start taking more interest in things they like and other fields get ignored. Like all professionals, the manager also tries to succeed. In the process, if she receives all the resources she requires, things run smoothly, but if she does not, she comes into conflict with her peers. This is the time the chaotic situation emerges in a company and everyone fights for recognition and resources.
The founder of the company responds to the situation of autonomy crisis by dividing responsibilities into different departments. Each department has its manager and they have a lot of autonomy. The company therefore, gets into the hierarchy system.
Middle managers appear at this point of time. They run operational units to help out managers instead of giving direct orders to subordinates.
- Crisis- Control
Delegation gets complicated because the explanations of the managers may not percolate in the required form and subordinates end up doing a task in the wrong way. Moreover, at this level managers make decisions that are helpful to them, but can cause problem to the organization as a whole. In fact, managers often lose control over daily functions as they are not aware of the happenings at the lowermost level in the company.
To avoid the pitfalls of low control, communication network within the organization needs to be made more flexible.
- Crisis- Red tape
With increase in coordination, the level of reporting and control becomes improved. However, a lot of bureaucracy entails this coordination. Each team wants to compete with the other and tries to prove itself better than the rest.
As we learned earlier, growth and work pressure makes managerial approach quite cold. To bring things under control, managers again adopt the supportive approach. It helps in rebuilding trust, so that subordinates can link their goals with the goals of the company.
By using management techniques like, matrix management communication at various levels is made possible. The reward system should address a team’s effort rather than only the effort of a single employee. This motivates team members and promotes organizational success.
- Crisis- Growth
Collaborative companies are in a better state than its former forms. But, the management has to decide how it can further grow without exerting extra pressure on the existing processes.
This is the final stage and tries to overcome internal crisis faced in the last stage. The problem is solved by making external ventures such as merging and acquiring, forming partnerships where all partners are benefitted, etc.
- Crisis- Repetition of the earlier phases
If the communication among partners is not strong, coordination should be made stronger. Merging and acquiring also tend to fail at times owing to cultural differences. Here too enhanced coordination is required.
From this article, it is understood that every company goes through the six phases identified by Greiner in his growth model. By being able to identify the phases, a company can take steps to avoid problems and emerge into a successfully growing company.