Management consultant Ichak Adizes first became famous in leadership circles more than twenty-five years ago for his Corporate Lifecycles Model (CLM). This model looks at businesses through a lens that maps stages of growth and decline. It outlines both opportunities and challenges that characterize and accompany each stage.
The model helps business executives better understand and accomplish the critical tasks of both leadership development and organizational development. This serves to promote growth and offers protection from decline. Not only has the model stood the test of time, but its insights have also become increasingly relevant for navigating pandemic-driven change.
At Pivot International, a deep understanding of the Corporate Lifecycles Model has played a part in our ability to achieve and sustain outstanding growth. In the last five years alone, we’ve achieved an annual growth rate of 141% and added eight new subsidiaries. Our product development expertise spans fourteen industries and 200,000 square feet of global manufacturing capability. With nearly a half-century of experience in supply chain solutions, we’re helping companies worldwide defy disruption and seize emerging market opportunities.
The Corporate Lifecycles Model maps ten stages of organizational growth and decline. In this article, we’ll introduce you to only the first five (the growth stages). We’ll then explore how the lessons specific to stages three and four have particular relevance for navigating disruptive change.
Adizes’ Growth Stages
Courtship. In this stage, the founder or founding group is attempting to solidify their company’s vision and “court” both human and financial capital to achieve an initial launch. Entrepreneurial (and often unvetted) ideas prevail. Key challenges and dangers involve unrealistic ideas and failure to secure resources.
Infancy. The founders’ focus shifts from generating ideas to driving concrete results. The all-consuming preoccupation is with making immediate sales. Organizational development recedes into the background, with little to no thought for processes, procedures, or systems. Founders “burn the candle at both ends,” assuming heroic levels of personal responsibility for the company’s survival and success. Key challenges and dangers involve tunnel vision and burnout.
Go-Go. Growth accelerates at breakneck speeds. The sky is the limit. Anything is possible. Leadership still views sales as the key success metric with the result that supportive organizational structures lag behind revenue growth. The organization, quite literally, is “getting too big for its britches.” With rare exceptions, founders have fallen prey to the Founder’s Trap. The key challenges and dangers lie in founders’ unconscious biases about the infallibility of their personal “winning formula.” This bias is reinforced by rapid growth that makes this formula that much more difficult to question.
Adolescence. Leaders are freer from the Founder’s Trap and growth is becoming more scalable. Although they can now question their winning formula and delegate responsibilities, they struggle to see their role in a less centralized way. A greater focus is being brought to processes, procedures, and systems. However, organizational structures, like leadership roles, tend to remain centralized and relatively fixed. Key challenges and dangers include infighting and losing sight of the need to build structures for successfully scaling.
Prime. Leaders are keenly aware of the dangers of Go-Go and Adolescence and vigilant about avoiding them. Leaders view their executive role and organizational structures in decentralized ways. Innovation and agility are the order of the day. Teams at every level of the organization are appropriately empowered. This puts an end to infighting and frees up energy for innovation. Key challenges and dangers include complacency.
The Founders Trap — The Key Growth Challenge of Go-Go and Adolescence
Let’s take a closer look at the Founders Trap. First of all, it’s essential to understand that while this trap first emerges in early Go-Go, it only fully resolves in late Adolescence. Founders are most vulnerable to ensnarement when they cannot question their winning formula. Leaders in this trap blindly believe that “what got us here will get us there.” They view the organization as revolving around people — namely themselves and their executive team — rather than flexible processes and distributive structures.
Leaders caught in this trap often succumb to arrogance and “command and control” forms of governance that stifle innovation and agility and limit scaling. They often refuse to delegate responsibilities or are reluctant to hire or develop qualified talent. Teams are not empowered to act without the direct oversight of the founder or executive team.
Success in the Unfolding Era Depends on Escaping the Founder’s Trap
The relevance to navigating the demands of disruption are abundantly clear. Regardless of a company’s growth stage, the pandemic served as a powerful wake-up call for the need to think and act differently. In the face of acute disruption, formerly winning strategies were no guarantee of survival, much less success.
When the gale force winds of COVID-19 began to blow, companies with leaders stuck in the Founders Trap found themselves standing on a foundation of sand. Many were washed out to sea. The companies that weathered the storm were most often those built on a rock-solid foundation of innovation and agility. (“Rock solid” is an ironic metaphor: stability derives from the very processes and structures — flexible, decentralized, and distributive — that those in the Founder’s Trap most resist developing.)
The journey to Prime is not without peril, but for leaders with a commitment to ongoing personal and organizational growth, it represents an adventure of a lifetime.
Is your company seeking a proven partner for helping you bring a winning product to market? Our world-class teams will work collaboratively with your business to make your product vision a reality. If you’d like to learn more about how a partnership with Pivot can fuel your growth, contact us today. We’re here to help.
