By Stuart Colligon, Director and Executive Coach at Auxesia
“I was having trouble making ends meet, and my beginnings weren't meeting either.” So said American comedian and writer, Allan Sherman. Although not intended to be relevant to business thinking, this has inadvertent parallels. Anyone who has started or attempted to start a business will identify with the struggles at the ‘beginnings’. But what about those companies coming towards the end of their life cycle?
The demands associated with sustaining and growing a business are just as real and no less challenging. A great deal of stress, and often poor decision-making, is generated by the uncomfortable notion that one day the end of the cycle will come.
Depending on which business textbook you read, there are either four, five or six phases of a business. Those ‘claiming’ five or six have elaborated on the basic four, perhaps in an effort to somehow seem superior or progressive. Essentially, they all agree on the following stages:
4. Termination (in practice, often a plateauing at significantly reduced turnover levels)
These phases can be represented quite neatly as the four seasons, with spring being the metaphor for launch and so on. In business theory, this model is often referred to as ‘The S-Curve’ - the ‘S’ reinforcing a sense of pending finality, but this need not necessarily be the case.
So, is it really that simple? Does every business tidily fit into this blunt model? Of course not. In reality, while some (typically small) businesses do follow a simple S-curve, for most it is not so clear cut. Every aspect of change in a business can trigger a new S-curve - every contract won, every person recruited, every strategic decision implemented. As a result, on closer inspection the so-called S-curve is often made up of many smaller S-curves, each one needing due attention to be paid to it to ensure that appropriate strategies and actions are being utilised. This is a part of management, and every S-curve has its challenges, many feeling like a constant supply of fires to be extinguished.
Leadership requires a broader perspective and we often use clichés like, ‘step back’, ‘give ourselves some space’, ‘looking up’ and ‘bigger picture’. Analysis of the S-curve could highlight where these phrases first arose, since in the vast majority of businesses as you draw back and ‘look up’, trying to make sense of the myriad of S-curves facing you, there is a realisation that the ‘bigger picture’ is…a much larger S-curve (macro) made up of all the smaller ones (micro).
Businesses vary considerably in many ways: sector, size, culture, ability (or intent) to grow, structure and management styles to name a few. Nevertheless, all businesses are affected by common characteristics and challenges at the same relative points on their respective S-curves. Understanding what these points are and what they mean will make a powerful difference to the business. The greater clarity this gives allows a business to focus management time on the most important factors. It enables accountants and analysts to forecast more accurately through being able to anticipate certain variables.
Greiner’s Growth Model is a good example of the insights that S-curve analysis can bring; insights that lead to improved preparation and maximised results. It informs the business where organisational structure changes may be needed, both in terms of personal development, delegation and new recruitment.
Understanding the S-curves, both macro and micro, and where your business sits on them is vital to optimising your performance. Doing so successfully may not make the ends of your S-curve literally meet, but it can lengthen the growth phase almost ad infinitum and is certainly worth your time and investment.
Auxesia’s Executive Coach Stuart Colligon has more than 25 years’ business experience. He works with clients to provide a catalyst for positive and lasting change, helping them to move forward in their professional career and empowering them to get the business results they crave. To find out more about Auxesia and how it could help you or your business to thrive, visit: www.adifferentwayofthinking.com< BACK TO NEWS
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