Managing the Growth Stages
Imagine that you have recently been given the reins of a start-up business. Even though the business is still young, it has a lot of promise.
Although you know there is a lot to do to make it become a strong, successful, mature firm, you want to make sure it develops and reaches this potential.
How then would you lead the business through this procedure?
If entrepreneurial businesses are to expand further, they must take specific actions and implement formal procedures at crucial junctures in their development.
A model like the Pyramid of Organizational Development can be helpful in this situation. Young and developing businesses can utilize the approach to construct a road map for managing the tasks required for expansion or development. Leaders can make sure they address important issues by using the pyramid and can prevent the occasionally serious consequences that can arise from not having done so.
This essay will examine the Pyramid of Organizational Development and consider approaches for dealing with each phase.
What the Model Is
The Pyramid of Organizational Development was created by Eric Flamholtz and Yvonne Randle after 20 years of management systems consulting expertise and research, and it was published in their book “Growing Pains” in 2000.
The Pyramid outlines seven crucial developmental milestones or activities that, in the authors’ opinion, must be successfully accomplished for a company to mature and become a prosperous firm.
The pyramid should be built in accordance with the seven steps, beginning with the base:
1. Describe the concept of the business.
2. Pick out and describe a market.
3. Create new goods and services.
4. Purchase assets.
5. Create functional systems.
6. Create management frameworks.
7. Control the company’s culture.
The pyramid is seen in image 1 below:
Leaders can ensure that their organization grows at a healthy, consistent rate and that they don’t skip any crucial duties if they are aware of the phases in the pyramid.
Making Use of the Seven Steps
Let’s take a closer look at each pyramid phase and see how you may use it.
1. Define the Business Concept
According to Flamhotz and Randle, businesses should begin by outlining the core idea behind why they are in operation. Your company’s mission and values are spelled out in detail in its business idea.
Application
A strong business concept and a well-thought-out plan are crucial whether you’re launching a new company or managing an established one. These are frequently stated in a business plan for a firm “and they give your team the direction and goal-setting they require to be successful.
You should draft a purpose and vision statement if you don’t already have one “for your business. Your mission statement outlines the goals and aspirations of your firm in a straightforward and understandable manner. The principles and purpose of your organization are then outlined in your vision statement.
It’s crucial to frequently convey these to your workforce so that everyone in your organization is aware of what you’re trying to accomplish and what your organizational goals are.
2. Pick out and describe a market
Not everyone can be served by your organization. You must identify your target market and consider how to appeal to its demands. Additionally, you need to develop a plan for how your business will outperform rival suppliers.
Application
Consider the people that you want to purchase your product first. Which demographics are most likely to need your goods or services, want them, and pay for them? How old are the group’s members? Who lives there? Our article on market segmentation will help if your organization isn’t already focusing on clearly defined and reachable groups “includes a lot of helpful questions that can be utilized to find specific target audiences you can target.
One of your goods, for instance, might be catered to older men, while another might be appropriate for younger women. You may create unique items for each group and advertise to each in a way that takes into account their individual requirements and viewpoints.
You must know how to compete in your chosen target segments after having identified them. In addition to helping you think about how you may compete successfully, our articles on Core Competence Analysis, USP Analysis, and SWOT Analysis can assist you identify who has “power” in the market.
3. Produce Goods and Services
To address the needs of your target segments, you must develop meaningful, practical products and services as the third phase.
You’ll already have items and services in place if your company is established. But are you certain that those goods and services satisfactorily satisfy the requirements and preferences of each segment’s customers? Or perhaps the goods are too generic and don’t fit different demographics well?
Application
A sufficient number of consumers in each group must find your goods or services appealing, and they must meet a critical need. Talk to a sufficient number of members of each target audience to fully understand their thoughts and desires.
In addition to private interviews, think about using focus groups, questionnaires, and other methods to get the necessary data. Test your items on these individuals as well to see how they affect them.
Successful innovation is crucial to ensuring that your goods and services satisfy the demands of your target market segments. Utilize Doblin’s 10 Innovation Types “to decide which areas of your business you can concentrate on innovation in. Tools like Kano Model Analysis “may help you improve your current products and services in line with what your customers most want, and the Four-Step Innovation Process “can help you come up with creative solutions to difficulties.
4. Acquire Materials
You determine and secure the resources your business requires for expansion in this step. These could be equipment, operating money, stock, retail space, or other essential resources for the operation of the business. Bringing the appropriate people on board with your organization is another aspect of this.
Think about your current needs as well as potential future needs when assessing your resources. This will guarantee that you choose wisely and make purchases quickly.
Application
Do a cash flow prediction “for, example, the next 24 months to detect any prospective cash shortfall, and utilize suitable project evaluation “techniques to identify project-related cash requirements to calculate the financial resources that you’ll need.
Perform a VRIO analysis “to identify the resources that are most important to you and make sure you have the appropriate amount of access to those resources. After that, pay attention to your supply chain and make sure it’s “lean” and “strong enough to survive reasonably expected hazards.”
When you need to hire more people quickly, designate a manager whose responsibility it is to spearhead hiring, and implement suitable hiring procedures “in position. Your focus must be on bringing in many of excellent prospects; “good enough” applicants will ultimately let you down. Outsource “Use contractors and freelancers for non-core tasks if you require their skills but don’t want to hire them full-time.
5. Create functional systems
Many businesses that are expanding quickly undervalue the significance of having reliable operating processes in place. These are the systems that manage routine tasks like accounting, billing, workflow, inventory, and helpdesk management; logistics for transportation; hiring; training; CLM; production; and advertising, to name a few. (The systems you require obviously vary depending on the business you are in.)
Without a suitable IT backbone, businesses can easily devolve into chaos and uncertainty. Established businesses must not only install systems at first, but also strengthen and modify them over time to manage growing demand. People and systems can easily get overburdened in a developing company, which can have negative effects on your organization. As a result, critical components of your operation may become “broken” until you can fix them.
Application
The diagrams in our swim lane post “demonstrates the process mapping technique so you can spot inefficiencies and make sure the right mechanisms are in place.
Likewise, watch out for tense individuals and congestion “These are frequently a warning that systems in your organization are not scaling well and require correction. The constraints discussed in our article “will aid in locating these snags.
Additional resources include Business Process Reengineering “to modify existing procedures or even design new ones from scratch.
6. Develop management systems
The management processes in place at your company govern how your leadership team runs it. This consists of four essential elements:
-The Planning System, which consists of budgeting, scheduling, operational planning, and contingency planning “.
-The organizational structure is the hierarchical structure of your company.
The Management Development System governs how your organization manages manager training and development.
Systems for staff motivation and performance evaluation are under the category of control or performance management systems. Additionally, formal controls like responsibility accounting are included.
Many new businesses can survive without these organizational management techniques. These mechanisms must be created and effectively maintained in established organizations, nevertheless, if you want to keep control as your firm expands.
Application
Share your organization chart with everyone so they can see how the company is managed.
Use the McKinsey 7S Framework after that “to ensure that your company’s components are effectively interacting with one another. (Mintzberg’s Organizational Configurations are another option.) “to comprehend the structure of your organization, evaluate whether it is acceptable, and make sure it is consistent with your overall plan.)
Next, consider how your company approaches training and development. Do your employees have the knowledge and tools necessary to advance? Do you have a method in place to meet these needs? Conduct a Training Needs Assessment of your team members if you’re unsure of their current skill levels “to better comprehend their requirements.)
Last but not least, be sure to regularly give feedback “to reassure your team that they’re on the right track or identify areas for improvement. This criticism may take the shape of a Performance Appraisal “, or something more casual like a quick talk or email exchange. (Read about Stop – Keep Doing – Start in our article.) “for a quick, efficient method of doing this.)
7. Control the Company Culture
What would you write if you had to describe the “personality” of your organization? What attitudes, convictions, and conduct does your company demand of its employees?
Your culture must support and complement your approach. Managing your business culture is the last step in organizational development because it is ideal for it to motivate and inspire your workforce as well.
Application
First, use the Competing Values Framework to examine the culture of your organization today “. You can define your culture and increase its effectiveness with the help of this tool.
Deal and Kennedy’s Cultural Model ” can be used to comprehend your company’s culture and determine which of four cultural kinds your company belongs to; our article on The Cultural Web ” will assist you in coordinating your company’s culture with your overall strategy.
Finally, when your business expands, you might discover that certain people are resistant to change. Reading our post on change management “demonstrates to you how to get past these obstacles so that you can develop together.
Major Points
The Pyramid of Organizational Development was created by Eric Flamholtz and Yvonne Randle and published in their book “Growing Pains” in 2000.
The pyramid’s seven steps are as follows:
1. Describe the concept of the business.
2. Pick out and describe a market.
3. Create new goods and services.
4. Purchase assets.
5. Create functional systems.
6. Create management frameworks.
7. Control the company’s culture.
The Pyramid provides guidance to executives on how to effectively manage the many stages of growth and development in their enterprises.
Additionally, it can be used to determine whether the organization’s critical systems need to be strengthened in order for it to advance.
If you found this article insightful, you might also be interested in exploring these topics further. Here are five articles that could capture your attention:
- Self-Coaching Strategies – Discover techniques to coach yourself towards personal and professional growth.
- Team Management – Learn effective ways to lead and manage a team successfully.
- Essential Competencies for Managing a Team – Understand the key skills and competencies required for effective team management.
- Providing for Your People – Explore strategies to support and nurture your team members’ development.
- Mentoring – Gain insights into the art of mentoring and how it can benefit both mentors and mentees.