As a project manager looking for a job or managing your career, you need to be aware of your personal values, needs, and goals and how they match up against the stage of growth that your company is in or on the path to achieving., As companies grow in size, they face inevitable internal challenges and inflection points where what used to work suddenly fails or creates friction at the larger size. Understanding these patterns is critical for not only better understanding your current company and how best to navigate your team but also what the future holds for you as your company, team, and career grows..
I like Larry E. Greiner’s Organizational Growth Model that provides a useful framework to anticipate these transitions. He identifies five distinct phases of organizational growth, each driven by a dominant management style. Each phase ends with a crisis that must be overcome to progress to the next.
Remember that with any model, they are never perfect or capture the nuance of each unique situation, but models such as this one are helpful for providing perspective, a framework for understanding and insight, and a common vocabulary for assessing your situation.
Stage 1: Creativity
Key Characteristics:
Informal structure
Founder-led innovation
Focus on product development and market fit
Loose roles, long hours, passionate experimentation
Growth Driver: Creativity and technical work (usually by founders and early team)
Crisis: Leadership Crisis
As the organization grows, informal communication and unstructured decision-making become liabilities. Teams need direction, strategy, and someone clearly in charge. Founders often struggle to shift from "doer" to "leader."
Overcoming the Stage 1 Crisis: Leadership must install formal management
The company must install formal management with defined roles, responsibilities, and authority. Founders who can’t let go often become bottlenecks.
Stage 2: Direction
Key Characteristics:
Functional organization structure
Clear hierarchical leadership
Centralized decision-making
Focus on efficiency and process
Growth Driver: Strong leadership and top-down control
Crisis: Autonomy Crisis
Middle managers and frontline teams start to become frustrated under tight control. As the business diversifies, centralized decision-making slows execution.
Overcoming the Stage 2 Crisis #2: Provide Autonomy
To maintain agility, companies must decentralize. This requires trust, systems, and the ability to manage outcomes—not just inputs.
Stage 3: Delegation
Key Characteristics:
Decentralized decision-making
Profit-center divisions
Accountability pushed down to business units
Senior leaders become more strategic
Growth Driver: Delegation and divisional entrepreneurship
Crisis: Control Crisis
With so much autonomy, silos emerge. Some divisions hoard and fight internally over resources, pursue conflicting goals, or ignore company-wide initiatives. Leadership loses visibility.
Overcoming the Stage 3 Crisis: Cross-functional Control and Coordination
Now the organization must reintroduce coordination without crushing independence—usually via performance systems, cross-functional leadership, or shared services.
Stage 4: Coordination
Key Characteristics:
Centralized staff functions (HR, finance, etc.)
Formal planning and budgeting
KPIs and standardized procedures
Matrix structures may appear
Growth Driver: Systems and formal coordination
Crisis: Red Tape Crisis
Bureaucracy creeps in. Layers of oversight, reporting, and approval slow everything. Employees feel disempowered. Innovation stalls.
Overcoming the Stage 4 Crisis: Reduce Red Tape
To stay competitive, organizations must reduce friction and empower cross-functional collaboration. The solution is not less structure, but smarter structure.
Stage 5: Collaboration
Key Characteristics:
Emphasis on teamwork and trust
Cross-functional initiatives
Culture of transparency and adaptability
Continuous learning and innovation
Growth Driver: Culture, collaboration, and adaptability
Crisis: Larry Greener uses the "?" symbol (Often called Internal Growth Crisis or Renewal Crisis)
Even a collaborative organization can stagnate if it fails to reinvent itself or capitalize on external opportunities. Growth plateaus. Core businesses mature.
Overcoming the Stage 5 Crisis: Internal Growth or Renewal
Future growth may require acquisitions, spin-offs, or new product platforms. Companies may need to restart the cycle with new “creative” initiatives.
Additional Crisis Types that can occur at any time
Crisis of Identity: Loss of company purpose or culture during rapid scaling or diversification
Crisis of Talent: Failing to attract or retain the right people for a new stage
Crisis of Scalability: Legacy systems or tech that can’t handle operational load
Crisis of Market Fit: Competitive shifts render the core model obsolete
In summary: Growth isn’t just about scaling up
Greiner’s model doesn’t imply that each stage is better than the last, rather it models a typical trajectory. The danger comes when company leaders fail to recognize the limits of their current mode of operation. What made the company successful at one level may often undermine it at the next. To grow sustainably, companies must evolve their leadership style, structure, and systems, not just expand their headcount and revenue.
Table Format Summary:
| Stage | Key Focus | Crisis Transition | Solution |
|---|---|---|---|
| Creativity | Innovation | Leadership Crisis | Hire structured leadership |
| Direction | Efficiency | Autonomy Crisis | Decentralize decision-making |
| Delegation | Accountability | Control Crisis | Build cross-division systems |
| Coordination | Integration | Red Tape Crisis | Foster collaboration culture |
| Collaboration | Agility | Internal Growth Crisis | Renew through innovation |
For Project Managers:
Ask yourself:
What phase is my company in right now?
What type of crisis is emerging or imminent?
Am I still using project, program and team management tools and mindsets from a previous stage?
If you can answer these questions honestly and adapt accordingly, you will have a much better chance at navigating the complexities of your company's growth.
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