As an entrepreneur, I’ve always believed that having a clear plan and a structured approach to business growth is essential for success. In my first year as a founder, I realised that my company would go through various phases as we evolved, and I decided to codify these into a business plan. Little did I know that my homegrown model would bear striking similarities to the well-established Greiner Growth Model.
The 4 Phases of My Business Plan
My initial plan outlined four distinct phases for my company’s growth:
Startup Phase: This phase focused on getting the company off the ground, securing our first customers, and establishing a solid foundation.
Stabilize Phase: In this phase, we aimed to mitigate risk by achieving scale and customer diversification. We needed to ensure that the company wasn’t overly dependent on any single client, and that a potential issue with one client wouldn’t jeopardize the entire business.
Self-Manage Phase: At this stage, we worked to build a capable management team that could execute our operating model effectively. This allowed us to step back and assess whether it was time for us to exit as founders. We also needed to ensure that the business was running smoothly and efficiently.
Self-Direct Phase: In the final phase, we aimed to create a company that could adjust to changing market conditions, innovate in response to new opportunities, and steer clear of potential dangers. This required a deep understanding of our domain, an organizational structure that aligned with our customers’ needs, and a culture of continuous learning and adaptation.
For each phase, we identified some exit criteria, which would help us ensure that we could balance the businesses financial model as we grew the operational parts of the business.
Discovering the Greiner Growth Model
While reading about company development, I stumbled upon the Greiner Growth Model, developed by Dr. Gerhard Greiner in 1972. I was surprised to find that my own phases bore a striking resemblance to the Greiner Model’s stages of growth:
Creativity Phase: This phase is characterised by:
- Few staff, Informal Comms.
- Founders driving product/service creation and value.
- Innovation is natural and people do what is needed to make things work
- The focus is on getting the company off the ground and establishing a solid foundation.
This phase leads to the founders being pulled into different directions until they are unable to fulfil their duties and ends with a Leadership Crisis.
Direction Phase: This phase is characterised by:
- Bringing in Professional Managers or Advisors.
- More formal communications, budgets and focus.
- Functional areas (marketing, sales, finance) being separated out with dedicated workforce.
This phase leads to a proliferation of products and services that becomes too complex to control by single management team and ends with an Autonomy crisis.
Delegation Phase: This phase is characterised by
- Creating structure with a focus on divisions and deeper hierarchy.
- Providing operational units with autonomy.
This leads to an explosion of complexity, and the autonomy together with the complexity creates an information gap where leaders don’t know what is going on at the bottom of the organisation and feel like they are losing control ending in a Control Crisis.
Co-ordination Phase: This phase is characterised by:
- Isolated business units re-organised into product groups and service practices.
- More effort into reporting and communications to enable alignment.
- Finance and ROI reporting gets more sophisticated.
All the reporting and control leads to increased beauracracy which ends in a Red Tape crisis.
Well that isn’t a very inspiring place to end, and as such, The Griener model was updated in 1998 to be expanded and brought up to date to deal with companies as they evolve and scale into larger corporations, but I believe there is a simplicity to the original model that I found to resonate with my experience in the early phases of company building.
Reflecting on the Experience
While I may have arrived at my own growth model independently, it’s reassuring to know that my approach aligns with a well-established and respected model like the Greiner Growth Model. This experience has also made me appreciate the value of formal education and training, as an MBA might have provided me with a more comprehensive understanding of business growth strategies.
In the end, my journey has taught me that while there is no one-size-fits-all approach to business growth, there are some patterns that have been observed over time that can be a very useful guide to how you plan your organisational design as you grow your startup company.
Next post in the series: Navigating the Startup Phase
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