The Greiner Growth Model

Companies go through a series of predictable phases as they grow.

Below is a summary of the most important stages involved in business expansion.

The Start-Up Phase - Where Creativity Meets Innovation

When companies begin formation they are pushed forward by the creative ideas and vision of the founder to begin offering services and/or products that fulfill an unmet niche in the market. Innovation is natural and people do whatever is required to launch the start-up.

Leadership Crisis

Initially, the founder (or the startup team) is able to meet the demands of leadership while staying personally involved in all directions of the company's growth and management. However, the increased responsibility creates a leadership crisis where the founder cannot meet the needs of leadership, management, and development for the company. The founder (or team) are ultimately pulled in so many different directions that they are unable to fulfill the duties with efficiency.

Directional Change

The most effective response to a leadership crisis is to bring in a consulting company to help expand management and deal with new and emerging problems developed during this expansion phase. Often these problems involve employer-employee relations and the forming culture of the organization.

By bringing in an outside consultant, management becomes systematically organized by creating planning and tactical approaches to strategic thinking and operational plans.

Instead of frantically doing what seems to be completed at that moment, a long-term approach is built to give focus, direction, and growth to the emerging company.

This stage also includes a multidimensional approach to separate such areas such as budgeting and marketing.

Autonomy Challenges

As the work product becomes more divided and managers begin to direct the various part of work flow they typically have the greatest interest in their own specific area than the overall company.

This is when the new organization's office culture can hinder or help future growth. The managers often seek personal success and recognition. When they have access to all the resources at their disposal, growth continues. However, as the company expands their competing agendas collide and conflict emerges between the managers over limited recognition and resources.

Delegation Through Strategic Planning

The response to the autonomy crisis is offset with greater structure and hierarchy. This is when middle managers are hired to guide the departments and operations. The organization's internal culture that is fostered in this transitional period greater impacts the expansion of the business for the future.