How Do Companies Grow?

Many companies are telling us that business is growing, albeit marginally, after the challenges of the last couple of years.

How can companies monitor and drive this growth deliberately and proactively, rather than relying on business improving by default?

An interesting model by Larry Greiner, who discussed growth phases that companies go through, should help us clear the fog.

Greiner suggests that organisations go through 6 stages of growth and need appropriate strategies and structures to deal with the changes as they happen.

It also describes the appropriate styles you need to adopt as you go through the stages.

Firstly, there’s growth through creativity.

This would be a start-up company, an entrepreneurial approach, progressing through hard work and long hours.

Second, growth through direction.

This constitutes sustained growth, functional structuring of the business, proper budgeting and processes.

Then there’s growth through delegation.

This involves management taking less responsibility, allocating profit centres, financial incentives, etc.

This is followed by growth through coordination and monitoring.

This is where new product groups are developed, better planning is carried out, more capital expenditure is made, and more centralisation is developed.

Next, there’s growth through collaboration.

This involves action-learning sets, cross functional or matrix team management, decentralised teams and advanced information systems. Later, Greiner added a sixth phase to his growth phases model:

Extra-organisational solutions, like mergers and networks of organisations. By analysing what stage your company is at in the growth model, you can adapt your leadership style to match what is needed to produce results that will proactively drive you forward as growth continues.

Thanks again


Sean McPheat Managing Director

MTD Training   

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Updated on: 12 July, 2010

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