Tuesday 18 June 2019       info@tesladuo.com

Enterprise Lifecycles and Your Career

When thinking about what you want from your next job, there are a number of important things to put on your wish list. Among them may be factors such as:

  • The sector / sub-sector of the firm
  • Its mission
  • The scope of the role, and
  • And opportunities for professional growth
One, perhaps less obvious factor, is at what point is the firm at in its “lifecycle”. Dr Ichak Adizes, of the Adizes Institute, proposes the idea that all corporations run through a predictable lifecycle, from Conception to “Prime”. If management fail to keep the organisation in prime, it will decline through three stages of decay, finally to death.

Adizes not only identifies each of the distinct stages of this lifecycle, but also offers us the idea that at each stage, there are problems which are entirely predictable. These problems he defines as Normal, Abnormal and Pathological.

In this article, we would like to set out the stages of a Adizes’ Corporate Lifecycle, and his definitions of the three types of problems. This will help you recognise where the company you are/were at is at, and will in turn, help inform you in your choices of where you would like to be.   

Before we go through the stages, let’s talk about the definitions of problems.

Adizes defines Normal Problems as transitional in nature, as the organisational moves from one stage to another, and as such, are unavoidable but can be dealt with.

Abnormal Problems arise when an organisation fails to solve Normal Problems. Energy is wasted and progress to the next stage towards Prime is slowed. Problems of ageing, i.e. moving away from Prime towards Death, are viewed as being abnormal because they can be averted with appropriate treatment.

Finally, Pathological Problems arise when the Abnormal Problems remain unaddressed for too long and the survival of the enterprise is threatened.

The first stage of organisational development according to Adizes is Courtship. The entrepreneur has an idea and the commitment to serve as perceived need, which will be appreciated by potential clients in the market.

Infancy is the second stage and the focus is production, sales and cash, with perhaps some beta testing before going into mass production. Mistakes are made and lack of cash flow can potentially kill the business, but if this stage is survived, the next stage is the Wild Years.

Here, despite growth and an easing in cash flow, the organisation lacks structure, systems and can spin out of control - Go, Go, Bust.

The next stage is Adolescence, at which the original entrepreneurs may give way to a professional management team who will infuse the enterprise with controls, systems and management with authority.

The target is to get to Prime, which is the optimal condition of the lifecycle. This is a balance between self-control and flexibility. If there is a lack of control or innovation, it is possible for the firm to slip into ageing, decay and death. Examples such as Comet, Woolworths and Blockbuster are only too common.

By the same token, it is possible with new management, investment and innovation to rescue companies which would have died some time ago. So for example, Jaguar Land Rover was rescued by the Indian firm Tata Motors in 2008.

If you are considering a move, think about where the company is in its lifecycle and whether this a place that you want to be. Some people are going to enjoy the ride at some point from Conception into Prime, whilst others have a personality best suited to being in a company already in its Prime. Others may consider that the challenge and excitement of turning a declining company back into Prime as being what really excites them. There are no right and wrong answers, but it is important to know where the business is at and what can bring the best out of you.

This leads me to ask one last question: If it’s the case that corporations have a lifecycle, then is it possible that industries and sectors also have lifecycles?

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