The stages of organizational development

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The stages of organizational development

As a talent development professional, you're in the business of cultivating the potential of our organization and its people. Organizations actually grow and change in predictable ways, moving through various stages of development. Each shift requires new skills for the organization's leaders and employees. Knowing how to identify where your organization is, and more importantly, the next phase it's growing into will help you anticipate business needs and be ready with the right learning solutions. I used the Greiner Curve as a way to assess any organization I'm working with.

Doctor Larry Greiner is a professor at USC's Marshall School of Business and his research identified that organizations move through six distinct phases that are a function of an organization's age and size. But there can be profound differences in how quickly an organization moves through the phases. For example, a large traditional financial institution will have a slower and gentler progression than a fast growing tech startup. Every phase of growth ultimately leads to a crisis point when the current structure can no longer support what the organization needs, and these crisis points push change, transforming the organization to the next phase.

The organization can then experience a period of relative stability until it hits the next crisis point. Time can vary in each phase, ranging from months to decades. As I describe the six phases, see if you can identify where your organization is currently. I've included an exercise file to help you do this. The first phase is growth through creativity, where the founder build the organization. The organization is small, so people wear many hats and communication is spontaneous and informal, but as the organization gets bigger it leads to the crisis point of leadership where professional management needs to be broadened to help run the various functions like marketing and human resources.

The second phase is growth through direction. Additional leaders have been brought in to manage various functions and the organization continues to develop new products and services. At some point, again, months to decades later, the scale of the offerings gets too big for the leaders to monitor, which creates the crisis point of autonomy where work and authority needs to be delegated to others. The third phase is growth through delegation where layers of hierarchy are added. Top management become less involved in the day to day details and focus on the organization's long term strategy.

In addition, the sheer size of the organization starts to stress the current policies and channels of communication, creating the crisis point of control where the different parts of the organization need to work better together. This ushers in the fourth phase of growth through coordination and monitoring, where new policies and procedures are introduced to bring structure to the various parts of the organization. At first, this effort is helpful in bringing stability and consistency to the broader scope of the organization.

However, this leads to the inevitable crisis point or red tape where bureaucracy gets burdensome. Now we arrive at growth through collaboration, the fifth phase, where bureaucracy is replaced by a range of scalable and agile systems that support more flexibility. Instead of a rigid system for making decisions, emotionally intelligent leaders are trusted to use good judgment. This leads to the crisis point of internal growth where the organization must look outside for new opportunities.

The final phase is growth through alliances where the organization can only solve its challenges by partnering with other organizations through actions like outsourcing, mergers, et cetera. All of this expansion ultimately creates the crisis point of identity where the organization must refocus on its vision, mission, and strategy. It's not uncommon to be on the edge between two phases, and it's also common that the core part of the business is more developed and in a different phase than the newer, younger functions.

When I consult with leaders, I ask them to identify the overall phase as well as the phases for each of the functions, as this can provide valuable information for designing effective learning solutions. I want to ask you the same thing. Can you identify where your organization is on the model? More importantly, can you tell what crisis point and transformation is coming? Your learning strategy and your learning solutions need to map to where your organization currently is, and also where it's heading.


Source: https://www.linkedin.com/learning/organizational-learning-and-development/the-stages-of-organizational-development