Phase II: The stage of Growth: think first, act flexibly

A phase two organization is also growing, but in the meanwhile it chooses direction. Strategy, planning, systematic action are the hallmarks of this stage. Usually we find a team of directors, line managers, some staff. The structure is more elaborate; things have now been worked out on paper. Decision-making proceeds according to plan, decisions are taken on a rational basis, the boss decides after discussion. The organizational climate can be characterized as ‘smart’.

Communication is usually clear and top-down, and employees are held to consistent output standards.

Growth in phase two does not always mean market growth or more employees, but can also take the shape of expanding know-how, refining technology, improving service.

The pitfalls of phase two are mainly the dangers of over-rationalization and of feeling invincible –these diminish the original sharp edge and fighting spirit.


Phase I: The pioneering stage: high energy, wild growth

Phase III: The stage of Consolidation: solid survival and success

Phase IV: The stage of Decline: keeping up appearances