Is your Organization Aging?
Updated: Jan 9, 2019
Now, I'm not talking about the chronological age of your employees, but what I am talking about is what stage of the corporate life cycle is your organization in or moving toward. Is your organization in its Prime, or is it Aging quickly?
In order for an organization to be successful in the short and long run, it must perform the following 4 roles:
Produce Results - that is, it must produce results for which it was created. Performing this role makes an organization effective. This role should be defined in terms of who our customers are and what needs must be satisfied. Success in performing this role is measured in sales, especially repetitive sales, but not necessarily profits. It is not hard to satisfy customer needs and go broke. A potential metric here could be customer retention.
Administer - performing this role makes an organization efficient. This role focuses on routinization and systematic processes that can be repeated. It requires attention to detail and a willingness to take corrective action. A potential metric could be profit per employee or any other appropriate measure of expense productivity.
Entrepreneur - the role here is to take an organization to where the world is going. It makes an organization proactive. Entrepreneuring is deciding what to do today, in light of the fact that tomorrow is going to be different from yesterday. This role requires creativity and capability to take risks. Metrics in this role can be new products/new markets, or any combination of those.
Integrate - this role makes an organization organic. It is a culture based on interdependence that leads to higher levels of commitment. Essentially, are people trying to leave your company or are they trying to join your company?
When an organization is performing these 4 roles, the applause is profits.
So, what questions should you be asking your team to identify whether you are in your "Prime" and where you need to focus?
What other customer problems could we solve? If customers can buy it cheaper elsewhere, why would they keep buying from us?
If you aren't doing this - this way, should you start doing it this way now?
What are the change drivers that might disrupt our business and what do we need to do NOW to position ourselves to continue to be successful? (these are most likely being developed in a different industry)
What are the factors that increase the commitment of team members to our cause? What are the factors that decrease the commitment of team members to our cause?
So, how does this all relate to whether your organization is aging? Size and chronological age are not factors in organizational aging. Organizations age when they lose their flexibility and willingness to change. Do any of these sound familiar in your organization?
People seek permission rather than ask for forgiveness
How is more important than what versus what is more important than how
Political power is in accounting, finance and legal rather than in sales and marketing
Judgement drives decision making rather than intuition
The system controls management versus management controlling the system
Opportunities are seen as problems rather than problems being seen as opportunities
Form rules function versus function ruling form
Manage by profit versus managing for profit
If any of these are happening to a large extent in your organization, there's a likelihood that your organization is, or quickly moving towards, an "aged" organization. Is status quo acceptable? Is there a failure to change the status quo, especially when things are going well? Are opportunities and entrepreneurial ideas welcomed, or are they seen as more work and a change to what's comfortable?
So, what can you do? Look at your leadership and ask yourself, "do we have a balanced management team" that brings all 4 roles to the table?" If we are in the "Aging" of our lifecycle which of the 4 factors most likely caused this? Which, if any of the 4 roles needs more of our managerial energy?
Great organizations are those organizations that are sustainable for the long haul, not because they've been around a long time. Operating with an Entrepreneurial focus in an organization creates an energy that sustains an organization in its "Prime." The organization 1) reaches a goal and then quickly redefines itself to achieve the next goal, 2) is dissatisfied with the status quo and recognizes that "where we are as an organization is not doing the best that we can do," 3) sees its structure not focused around one profit center, but rather the customer segments it serves, and 4) has leadership that is always challenging the status quo, especially when things are going well.
So where in the life cycle is your organization, and what are you going to do about it?
"Predicting the Future Success of Your Organization." The Theory of Organization Lifecycles: An Analysis of How Organizations Grow, Why They Die and What to Do About This. Holiday Inn, Appleton. 16 Sept. 2015. Lecture.
Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay