The 6 Stages Every Organization Goes Through as it Matures

December 2, 2016

The Greiner Curve shows the key learnings a company goes through as it matures.

Part of being a strategic learning and development team is having a plan for not just today’s business needs, but also of the needs of the business moving forward. Good thing, from an L&D perspective, that’s not as hard as it sounds.

“Organizations actually grow and change in predictable ways, moving through various stages of development, and your learning strategy needs to align accordingly,” L&D consultant Britt Andreatta said in her LinkedIn Learning course, Organizational Learning and Development.

Specifically, organizations go through six stages as they mature, outlined in the Greiner Curve. By identifying what stage your organization is in, you can both better understand what learning is the most critical for your organization right now, and plan for the future, Andreatta said.

What is the Greiner Curve?

The Greiner Curve was created by Larry Greiner, a professor at USC’s Marshall School of Business. Through his research, he identified the six phases organizations go through as they mature.

While an organization is within a stage, it’s a time of relative stability. However, every stage inevitably leads to a crisis point, which forces the organization to transform. Learning plays a vital role in helping leaders and employees make these transitions successfully.

It’s worth noting that organizations go through these phases at very different speeds. For example, a large financial institution might go through them much slower than a high-growth tech company. By identifying what stage your organization is in, you can uncover what learnings are most essential and also be prepared for what learnings will be needed in the near future as well.

The first stage of organizations: Growth Through Creativity

When organizations first start, 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.

The key skill needed to progress to the next stage: To advance to stage two, the organization’s founders need to go from more hands-on doers to leaders, and start to hire or develop other senior leaders.

The second stage of organizations: Growth Through Direction

As the organization grows, new executives are 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 leadership team to monitor.

That creates the crisis point of autonomy, where work and authority needs to be delegated to others.

The key skill needed to progress to the next stage: To advance to stage three, the organization needs to either develop or hire strong managers to help run different parts of the organization.

The third stage of organizations: Growth Through Delegation

In the third stage, layers of hierarchy are added. Top management become less involved in the day-to-day details and focuses more 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. That creates the crisis point of control, where the different parts of the organization need to work better together.

The key skill needed to progress to the next stage: To advance to stage four, the organization needs to standardize its procedures to allow it to scale.

The fourth stage of organizations: Growth Through Coordination

In the fourth phase, new policies and procedures are introduced to bring structure throughout 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 of red tape, where bureaucracy gets burdensome.

The key skill needed to progress to the next stage: To advance to stage five, the organization needs to double-down on developing great people managers and begin to free up its procedures to allow for more autonomy.

The fifth stage of organizations: Growth Through Collaboration

In the fifth stage, a range of scalable and agile systems that support more flexibility replaces bureaucracy. Instead of a rigid system for making decisions, emotionally intelligent leaders are trusted to use good judgment. 

While initially successful, this leads to the crisis point of internal growth, where the organization must look outside for new opportunities.

The key skill needed to progress to the next stage: To advance to stage six, the organization needs to create a culture based on collaboration and emotional intelligence.

The sixth stage of organizations: Growth Through Alliances

In the final stage, the organization can only solve its challenges by partnering with other organizations through actions like outsourcing, mergers and acquisitions. All of this expansion ultimately creates the crisis point of identity, where the organization must refocus on its vision, mission and strategy. 

The key skill needed to progress to the next stage: Here, the organization needs to reinvent  its vision and mission and partner with organizations that best further that.

Tying it together

There’s a good chance part of your organization is in one stage, while other parts are in other stages. What’s important is for you to determine what stage each part of your organization is in, and create learning programs that respond to it.

The good news is this framework should make things a lot easier. Andreatta recommended identifying what stage your organization is in, so you can better understand what skills are critical for your organization to master now, and what skills it’ll need to master in the near future.

And that’ll allow you to develop a more strategic L&D team, where you are proactively solving issues, instead of reacting to them.

Want to learn more about how to become a more strategic L&D pro? Watch Britt Andreatta's free course, Organizational Learning and Development.

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