05-21-2016, 12:03 AM
The Fall is positioned at the top of the Lifecycle curve, but it is not the place to be. That position is Prime, where organizational vitality is at its maximum. Companies that are in the The Fall phase have started to lose their vitality and are aging. When an organization first begins to age, the symptoms won't show up on its financial reports. In fact, the opposite is true. The Fall companies are often cash rich and have strong financial statements. Like medical tests, financial statements reveal a problem only when abnormal symptoms finally surface late in the Aristocracy stage. If you wait until the signs of aging appear in the numbers, the company will already be significantly aged. If you want to catch aging early, you must look elsewhere.
When people begin to age, the initial signs aren't apparent in their actions or bodies. Aging starts in their minds with subtle changes in attitude, goals, and their outlook on life. This is also true for companies. When an organization starts to age, the first place the symptoms appear is in the attitudes, outlook and behaviors of its leaders.
The leaders of The Fall companies are starting to feel content and somewhat complacent. This attitude has been developing for some time. The company is strong, but it is starting to lose flexibility. It is at the top of its lifecycle curve, but it has expended nearly all of the "developmental momentum" it amassed during its growing stages. The rocket is slowing down and starting to change direction and head down the lifecycle curve. The organization suffers from an attitude that says, "If it ain't broke, don't fix it." The company is losing the spirit of creativity, innovation, and the desire to change that brought it to Prime. It has sown the seeds of mediocrity. As the desire to change lessens, the organization mellows. There is less contention than in previous stages. More and more, people are adhering to precedence and relying on what has worked in the past. The company's dominant position in the marketplace has given it a sense of security. From time to time, creativity and a push for change surface, but such eruptions become less and less frequent. Order and predictability prevail. To avoid endangering success, people opt for conservative approaches.
As organizations enter Aristocracy they characteristically:
The Witch Hunt
Everyone is busy trying to find out who caused the disaster. With blades drawn, it's backstabbing time in the boardroom. Like primitive tribes afflicted by extended drought or famine, there is a rush to appease the gods. The organization needs a sacrifice. Whom does it sacrifice? The fairest maiden, the finest warrior, or the cream of the crop? Typically, the management of a company in Recrimination sacrifices its most valuable and scarcest treasure.........the last vestiges of innovation and creativity. The company fires the EVP of Marketing, explaining, "We're in the wrong market with the wrong products and our advertising does not work." The heads of Strategic Planning, Business Development and Engineering are the next to find themselves on the street. "Our strategy does not work. Our acquisitions are not working. Our products and technology are obsolete." The people who get fired don't feel they are responsible for the company's situation. The Marketing VP often said that the company ought to change its direction. The strategist has an ulcer worrying about the lack of direction. Privately, these individuals complained, urged, begged, and threatened, but their efforts were like pushing wet spaghetti up a hill. Their exodus merely exacerbates the problem because these creative people are the indivduals the organization needs most for survival.
Although it should be dead, the company in Bureaucracy is kept alive by artificial life support. The company was born the first time in Infancy, it was reborn in Adolescence, and its third "birth" is in Bureaucracy when it gets an artificial continuance on its life. Death occurs when no one remains committed to keeping the organization alive. If there is no business or government commitment to supporting a company in Recrimination, death can occur instead of bureaucratization.
In the Bureaucratic stage, a company is largely incapable of generating sufficient resources to sustain itself. It justifies its existence by the simple fact that the organization serves a purpose that is of interest to another political and business entity willing to support it. The Bureaucratic organization:
Death when no one remains committed to sustaining the organization. Monopolies and government agencies that are quarantined from competitive pressure and provide a large employment base, often live long and very expensive artificially prolonged lives.
...Now my comment:
...This looks like a good model.
For a healthy economy, businesses need to be forming and going through growth stages while other businesses more 'advanced' in their lifetimes are in various stages of decline. The Bureaucracy stage looks like big trouble. Bureaucracy is not a good way to make a profit. Governments, monopolies, and businesses that basically shuffle paperwork (banks and insurance companies suggest themselves) can get away with bureaucracy. Maybe a creditor keeps a dying company around so that it can liquidate the assets for a profit because land or intellectual property is worth more than the book value of the dying company. Maybe one dominant can get a key component cheaply enough until it finds an alternative in some other source.
There will be failures. Many businesses don't really take off. Some quickly fill a niche with no chance of growth even if the operation is profitable (think of a strip club). Some will face legal calamities or be robbed blind in embezzlement.
When people begin to age, the initial signs aren't apparent in their actions or bodies. Aging starts in their minds with subtle changes in attitude, goals, and their outlook on life. This is also true for companies. When an organization starts to age, the first place the symptoms appear is in the attitudes, outlook and behaviors of its leaders.
The leaders of The Fall companies are starting to feel content and somewhat complacent. This attitude has been developing for some time. The company is strong, but it is starting to lose flexibility. It is at the top of its lifecycle curve, but it has expended nearly all of the "developmental momentum" it amassed during its growing stages. The rocket is slowing down and starting to change direction and head down the lifecycle curve. The organization suffers from an attitude that says, "If it ain't broke, don't fix it." The company is losing the spirit of creativity, innovation, and the desire to change that brought it to Prime. It has sown the seeds of mediocrity. As the desire to change lessens, the organization mellows. There is less contention than in previous stages. More and more, people are adhering to precedence and relying on what has worked in the past. The company's dominant position in the marketplace has given it a sense of security. From time to time, creativity and a push for change surface, but such eruptions become less and less frequent. Order and predictability prevail. To avoid endangering success, people opt for conservative approaches.
As organizations enter Aristocracy they characteristically:
- Are cash rich and have very strong financial statements.
- Have reduced expectations for growth.
- Demonstrate little interest in conquering new markets, technologies, and frontiers.
- Focus on past achievements rather than future visions.
- Are suspicious of change.
- Reward those who do what they are told to do and punish those who do not.
- Are interested in reducing their risks.
- Invest much more on control systems, benefits, and facilities than they do on R & D.
- Form dominates function in the organizational climate. More emphasis is placed on how things are done, than what was done.
- Value uniformity, consistency and formality in dress, decorum, and behavior.
- Employ individuals who are concerned about the company's vitality, but are willing to abide by a "don't make waves" operating motto.
- Engender only negligible innovation with internal efforts.
- Acquire other products or companies for new products, markets, and entrepreneurship to feed into their distribution channels and operating systems.
- May be takeover targets themselves.
- People focus on who caused the problems, rather than on what to do about the problems.
- Problems get personalized. Rather than dealing with the organization's problems, people are involved in interpersonal conflicts, backstabbing, and discrediting each other.
- Paranoia freezes the organization.
- Personal survival and turf wars absorb all available energy leaving precious little to deal with the needs of customers or the world outside the organization.
The Witch Hunt
Everyone is busy trying to find out who caused the disaster. With blades drawn, it's backstabbing time in the boardroom. Like primitive tribes afflicted by extended drought or famine, there is a rush to appease the gods. The organization needs a sacrifice. Whom does it sacrifice? The fairest maiden, the finest warrior, or the cream of the crop? Typically, the management of a company in Recrimination sacrifices its most valuable and scarcest treasure.........the last vestiges of innovation and creativity. The company fires the EVP of Marketing, explaining, "We're in the wrong market with the wrong products and our advertising does not work." The heads of Strategic Planning, Business Development and Engineering are the next to find themselves on the street. "Our strategy does not work. Our acquisitions are not working. Our products and technology are obsolete." The people who get fired don't feel they are responsible for the company's situation. The Marketing VP often said that the company ought to change its direction. The strategist has an ulcer worrying about the lack of direction. Privately, these individuals complained, urged, begged, and threatened, but their efforts were like pushing wet spaghetti up a hill. Their exodus merely exacerbates the problem because these creative people are the indivduals the organization needs most for survival.
Although it should be dead, the company in Bureaucracy is kept alive by artificial life support. The company was born the first time in Infancy, it was reborn in Adolescence, and its third "birth" is in Bureaucracy when it gets an artificial continuance on its life. Death occurs when no one remains committed to keeping the organization alive. If there is no business or government commitment to supporting a company in Recrimination, death can occur instead of bureaucratization.
In the Bureaucratic stage, a company is largely incapable of generating sufficient resources to sustain itself. It justifies its existence by the simple fact that the organization serves a purpose that is of interest to another political and business entity willing to support it. The Bureaucratic organization:
- Has many systems and rules and runs on ritual, not reason.
- Has leaders who feel little sense of control.
- Is internally disassociated.
- Creates obstacles to reduce disruptions from its external environment.
- Forces its customers to develop elaborate approaches to bypass roadblocks.
Death when no one remains committed to sustaining the organization. Monopolies and government agencies that are quarantined from competitive pressure and provide a large employment base, often live long and very expensive artificially prolonged lives.
...Now my comment:
...This looks like a good model.
For a healthy economy, businesses need to be forming and going through growth stages while other businesses more 'advanced' in their lifetimes are in various stages of decline. The Bureaucracy stage looks like big trouble. Bureaucracy is not a good way to make a profit. Governments, monopolies, and businesses that basically shuffle paperwork (banks and insurance companies suggest themselves) can get away with bureaucracy. Maybe a creditor keeps a dying company around so that it can liquidate the assets for a profit because land or intellectual property is worth more than the book value of the dying company. Maybe one dominant can get a key component cheaply enough until it finds an alternative in some other source.
There will be failures. Many businesses don't really take off. Some quickly fill a niche with no chance of growth even if the operation is profitable (think of a strip club). Some will face legal calamities or be robbed blind in embezzlement.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.