Simon Leadbetter’s Post

View profile for Simon Leadbetter, graphic

Founder @ We Are Unchained | Mini MBA, Fellow of CIM

As businesses grow and evolve, they go through distinct stages that present unique challenges. Understanding these stages can help leaders proactively manage their company's trajectory. Having worked in start-ups, SMEs, and global corporations, two influential models that look closely at the corporate life cycle have always fascinated me: Dr. Ichak Adizes' Corporate Life Cycle and Jim Collins' Five Stages of Decline. The Corporate Life Cycle by Dr. Adizes: Dr. Adizes outlines ten stages that organisations progress through, from the spark of an entrepreneurial idea (Courtship) to eventual organisational death. Some of the key stages include: - Infancy: The business is just starting with no processes, working tirelessly for any sale - Go-Go: Sustained rapid growth and high energy, but lack of systems  - Adolescence: Professional managers bring order amidst growing pains - Prime: The ideal stage with a balance of control and flexibility - The Fall: The tipping point just before the decline, which is still not inevitable - Aristocracy: Success breeds complacency and loss of edge - Early Bureaucracy: Overly rigid processes stifle innovation - Bureaucracy: Creative death as procedures take over The model highlights how early success can lead to hubris and loss of discipline, sowing seeds of decline if not renewed. Adizes stresses the need for continual entrepreneurial behaviour to avoid bureaucratic ageing. Five Stages of Decline by Jim Collins: While Adizes focuses on the entire life cycle, Collins zeroes in on the path to organisational decline: 1. Hubris from Success  2. Undisciplined Pursuit of More 3. Denial of Risk  4. Grasping for Salvation 5. Capitulation to Irrelevance Collins' research found that decline doesn't happen suddenly but gradually through overconfidence, overreaching, ignoring problems, desperate solutions, and ultimately surrendering. Both models underscore similar pitfalls - arrogance from success, loss of discipline, and denial of risks - that can undo once-great companies. A few key lessons emerge: 1. Sustained success requires continual entrepreneurial thinking and disciplined action, not resting on laurels. 2. Recognise early warning signs, such as hubris, pursuing growth over discipline, and denial of data signalling decline. 3. Renew before bureaucracy and rigidity set in. Continually question processes and eliminate unproductive complexity. 4. Have the courage to face reality, address problems head-on, and make tough decisions to reverse the decline. 5. Nurture a culture of humility, truth-telling, and accountability to counteract overconfidence and denial. The corporate life cycle is unforgiving, but the decline is not inevitable with vigilant self-awareness and adaptive leadership. Studying these models can help businesses avoid a tragic fall from grace. #corporatelifecycles #IchakAdizes #JimCollins

  • Company Lifecycles.png

Dr.IchakAdizes: the Corporate Life Cycle
Jim Collins: Five Stages Of Decline

To view or add a comment, sign in

Explore topics