A Company story part 2 "The Life Cycle of a company"

Organizations grow from an entrepreneurial start to eventually become bureaucracies. There is a fixed pattern to this growth with a clear definition between stages that can be observed, described, and modified if necessary. Every organization has a life cycle. That is a truth you cannot avoid. However, you can eliminate some of the dysfunctional behaviors that are found at certain points in your company’s climb to growth and success. The complete cycle of an organization can be described in many ways with many labels.
For planning purposes and understanding your company story, you can do fine with a simple model that I call a growth line. In this model you must be able to fit yourself into a category and then understand what story you are telling, look for congruence in your story, and be willing to change your story if necessary.
Organizations can be generally characterized as falling into one of three categories or into a transition stage. Those three stages are entrepreneurial, professionally managed, and bureaucratic, and each has a corresponding story.
No matter how long you have been in operation, you will fall somewhere on this hypothetical growth line. A key to understanding the growth line and how it connects to the idea of telling a company story is knowing that each stage has a distinctly different story to tell. Your approach to planning is influenced by where you are on the growth line. Organizations risk death as they grow through three stages. Eventually all organizations attempt to return to their entrepreneurial roots.

Stage 1: Matching the Stage and the Story

Your position on the growth line is reflected in your story. I can listen to your story and place you with great accuracy on the line. Two significant pieces of management knowledge can be found by knowing where you are on the growth line and how you tell the corresponding story. The first lesson is the story and stage match. Are you entrepreneurial but acting like a bureaucracy? If you are at the professionally managed stage but your story is entrepreneurial, inconsistency occurs. If the story doesn’t match the stage of your company development, mixed messages are sent to employees. The results are a story that breeds distrust and disbelief.

Stage 2: Growing Your Story

The second lesson is that of a transition. As you move from one stage to the next, your story





will change out of necessity. A professionally managed company has a different story from the other two stages of organizational development. A bureaucracy certainly operates on the opposite extreme from an entrepreneurial company. This leads us to the belief that you must change your story depending on where you are on the growth line. There is one exception to the match situation. If you are a bureaucracy, you don’t want to encourage a story of bureaucracy. Although you may accomplish the consistency of being in the bureaucracy stage and telling a bureaucracy story, unfortunately, it would be the wrong story. In this instance you want to change both your story and your operating behavior. Failure to change your story is a serious foundation for failure and explains why so many rapid-growth companies get into trouble. Management doesn’t adjust its story as the business grows from entrepreneurial to professionally managed. As a company reaches a stagnant state the story gets institutionalized to the point that it is dysfunctional to your business process. In these cases your story automatically becomes unauthentic, incongruent, and unbelievable. The story befitting an entrepreneurial company is usually one filled with hopes, dreams, and hard work. It is about sweat equity and the promise of big rewards in the future. A charismatic leader who holds people in sway tells the story with passion generated from the depth of his or her personal convictions. People are sucked into the vortex.
The story and its passion generation are what attract people to a start-up company. In the second stage the company has grown to a professionally managed system. Managers realize the need to put systems in place to get organized. People with special skills such as human resources, logistics, or computer technology are hired to professionally manage each of the special functions. This is an effective method to pull the business process together. It is important for the congruence of your story. The story often found in a professionally managed company centers around performance. Words such as high performance, teamwork, and best of breed are commonly bantered about.
The story is replete with examples of heroism in getting the job done under adverse conditions. It attracts people who seek challenge, want a well-run machine, and are professional in word and deed. This professionally managed stage also creates passion within employees. In this case the passion stems not from the vision, as in the entrepreneurial stage, but rather from the challenge to accomplish great deeds. To create passion, build your story around educated, skillful people doing the right thing for the customer. Portray a company that puts professional competence in the limelight. In the words of Tom Peters, “Hire for talent, train for whatever.”

Stage 3: Accepting Stagnation of Your Story

If you are in the third stage your story will be very different. It will be one of stagnation, featuring all the ills associated with a bureaucracy. In the bureaucratic stage a company has perfected the lethargic model. Its management uses the textbook ploys to delay decision making, resist change, and fight progress. Your story in this stage will be filled with despair, failure, and hopelessness. Employees live out the story with sad faces. They are long past caring. Their model of work is to just make it through the day.