The first possible outcome is the athlete hits the barrier, slows, and cannot break through the rubber band and is flung to the ground; eliminated from the race. The second possible outcome, the athlete struggles, pushes, but cannot break through. However instead of being flung backward to the ground and eliminated, the athlete instead has sufficient control to remain upright, yet still forced back by the rubber band; therefore able to attempt the rubber band barrier again. The third possible outcome is when the rubber band barrier is encountered, the athlete feels the strain, finds inner reserves and powers-on, breaking through and successfully enters the next stretch running stronger than before.
The 7 rubber band barriers – or as Carl Gould’s book refers to them – the crisis points in every business race are:
1. Crisis of confidence
2. Crisis of autonomy
3. Crisis of control
4. Crisis of management
5. Crisis of identity
6. Crisis of incumbency
7. Crisis of legacy
The athletics track and its rubber band barriers represent the analogy of a business’s growth path and its seven distinctly identifiable stages of organisational development. Look at the curved line within table one. Each of the stages is given a name reflecting the important characteristics for that stage. Each stage has a start based upon the legacy influence of the previous stage as its foundation stone; each stage has a period of relative calm (business-as-usual) then enters a period of difficulty, turbulence and ultimately crisis, (hitting the rubber band barriers).
The business can;
- Survive by breaking through,
- Survive by retreating or
- Does not survive.
In order to survive this race or journey, the owner must acquire appropriate personal skills and incorporate new knowledge to grow and prosper. As the athlete is made stronger when each barrier is successfully breached so is the business owner.
Because all 7 phases of growth possess distinct characteristics, each must be representative of a manifestly different goal, different growth strategies, changing task focus and different organisation practices. Therefore different planning and organising responses to fit changing priorities are also needed as are different resources. Each phase has been identified by Gould in a manner that describes the business-as-usual phase; the 7 phases of growth are:
1. Start-up…………………leading to the crisis stage called crisis of confidence
2. Specialty………………..leading to crisis of autonomy
3. Synergies………………crisis of control
4. Systems…………………crisis of management
5. Sustainability…………crisis of identity
6. Sale-ability…………….crisis of incumbency
7. Succession…………….crisis of legacy
Over the next few weeks I intend to frame organisational growth as a race, with seven predictable phases of acceleration, slowing, crisis and recovery. I have chosen to identify the characteristics of each phase using three elements; ownership planning and control tasks that are important, together with managerial characteristics that evolve from each crisis; and shaping the right organisational structure.
The intent of this blog is to highlight that the future of any organisation is not so much fashioned by externalities than by deficiencies and downright failures of contemporary business thought. For example our traditional business plans fall well short of being an adequate tool for owners of small businesses. This however can be overcome by using simple, structured yet uncomplicated plans that focus on the underlying phase of organisational growth being confronted. We have produced many business plans for our clients using this framework and we have called them “business plans on a postcard.”
I hope this is a good read – and of course being very interested in the topics of management, growth, value – I would live to receive your feedback. ~ Kevin