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Basic Overview of Life Cycles in Organizations

Much of the content of this topic came from this book: Consulting and Organization Development - Book Cover

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Sections of This Article Include

What Are Organizational Life Cycles?
Why Are They Important to Understand?
Example of a Simple Organizational Life Cycle Model
Product Life Cycles
Additional Perspectives on Life Cycles

What Are Organizational Life Cycles?

Simply put, organizations are social systems. They're groups of people organized around a common purpose. Their activities include similar recurring practices, for example, strategic planning, business planning, product and service development, marketing, financial management and evaluations. Each activity usually includes formally or informally clarifying goals, taking steps toward those goals, deciding if the goals are being met or not, and adjusting activities to be even more effective and efficient in reaching the goals. The social systems can be focused primarily on the entire organization, teams, each product or service, or within a certain activity. Individuals themselves are systems, needing a clear purpose and activities to continually work toward that purpose.

Social systems go through common life-cycles ranging from, for example, from start-up to growth to maturity. For example, as people mature, they begin to understand more about the world and themselves. Over time, they develop a certain kind of wisdom that sees them through many of the challenges in life and work. They learn to plan and to use a certain amount of discipline to carry through on those plans. They learn to manage themselves. Meanwhile, they go through infancy, child-hood and early-teenage phases that are characterized by lots of rapid growth. People in these phases often do whatever it takes just to stay alive, for example, eating, seeking shelter and sleeping. Early on, many people tend to make impulsive, highly reactive decisions based on whatever is going on around them at the moment.

Why Are They Important to Understand?

Start-up organizations, team and internal practices are like this, too. Often, founders of the organization or program and its various members have to do whatever is necessary just to stay in business. Leaders make highly reactive, seat-of-the-pants decisions. They fear taking the time to slow down and do planning.

Experienced leaders have learned to recognize the particular life cycle that a system is going through. These leaders understand the types of problems faced during each life cycle. That understanding gives them a sense of perspective and helps them to decide how to respond to decisions and problems in the workplace and their lives and the workplace.

That understanding also suggests the priories that they need to soon address in order to evolve to the next stage. Systems that do not evolve often stagnate or decline between stages. Symptoms can be unclear priorities, unclear roles, increasing frustrations and conflict, and people leaving the organization. If the understanding of the life cycle is not known, then these problems are often not resolved.

When discerning the particular stage that a system is currently in, it does not depend on the age of the system. Rather, it depends on the nature of its current activities. For example, if the activities are mostly unplanned, high reactive and decisions are made primarily by certain personalities rather than by plans and policies, then that organization is operating more like an early stage organization.

Example of a Simple Organizational Life Cycle Model

Life cycles of social systems are so important to understand that there has been an increasing number of suggested frameworks and models for life cycles. Here is one simple model to further enhance your understanding of life cycles. In this example, the focus is on an organization-wide social system.

Some systems planners consider there to be an additional stage of decline that is after the maturity stage. That stage recognizes that not all systems are meant to exist forever. It also helps systems planners to avoid desperately staying in the maturity stage, lest the system "fails".

Start-Up Features

  • Has compelling, exciting vision and purpose
  • People are motivated by exciting, charismatic leaders
  • Board is usually a hands-on (working) Board
  • People are recruited because they’re excited and want to chip in
  • People chip in wherever they feel they’re needed
  • Decisions are often reactive and spontaneous. Plans, if developed at all, are often not implemented
  • Resources (money, facilities, etc.) are continually sought, sometimes in crisis situations
  • Occasional confusion, frustration and conflicts can exist about who’s doing what, how and when
  • People begin to talk about the need for more planning and procedures
  • If there’s strong resistance to change, then crises increase, for example, cash shortages, conflicts and people leaving

Priorities in Growth Stage

  • Focus is on strengthening internal systems to support growth, while expanding services and markets
  • Leaders focus on managing change as much as on generating new ideas
  • Board evolves to more of a policy-Board with continued focus on plans, policies and full participation
  • Different departments and teams are appropriately coordinated for efficiencies
  • Planning is regular and systematic, and focused on goals, roles and deadlines
  • Progress is regularly monitored for status, learning and continuous improvement
  • Regular and routine activities are proceduralized for reliability and efficiencies
  • Internal systems are developed to systematically obtain resources, based on plans
  • Performance management practices are focused on personnel and the organization

Priorities in Maturity Stage

  • Focus in on sustaining momentum and renewal, especially to avoid entrenching in bureaucracy
  • Focus is also on creativity and innovation – sometimes to start new ventures, that start new life cycles themselves
  • Management priorities are especially on succession planning and risk management
  • More learning is shared with other people and organizations
  • Leaders seek to successfully duplicate their business model elsewhere
  • People attend to even longer-range planning, for example, 3-5 years out
  • Priority continues to be on managing change and transformation
  • Some organizations consider terminating the organization if its vision is achieved

Product Life Cycles

The recurring activities to plan, develop, implement, evaluate and then adjust the plans for each product and service is a essentially a systematic recurring set of activities. It is a system and has a life cycle like many other systems. The phases in the system might be described by the above simple diagram of phases.

Experienced product managers understand the stages of development of a typical product or service, and know what the typical traits of each stage are. Thus, they know what priorities to address to evolve the product or service to maturity. They understand that problems that can occur if the next stage is not reached. Consider the following articles.

Product Life Cycle Stages
Product Life Cycle diagrams
Product life cycle (Wikipedia)
Best Practice Report: Product Lifecycle Management
What is the Product Life Cycle? Definition and Examples
Ultimate Product Life Cycle Management Guide
Product Life Cycle Examples
Exploit the Product Life Cycle

Additional Perspectives on Life Cycles

Organizational Life Cycles (Wikipedia)
The Five Phases Organizational Life Cycle
Five Life Stages of Nonprofit Organizations
Life Cycles of an Organization
Organizational Life Cycles (it helps to see different diagrams)
Barbarians to Bureaucrats
Life Cycle Approach to Strategic Planning (in-depth and dated, but relevant)

Also consider
Systems Thinking, Systems Tools and Chaos Theory
Entrepreneurship -- Product and Service Development

This Article is in a Series About Understanding Organizational Structures and Design

This article is the fourth in the series which includes:

1. What is an Organization?
2. What Makes Each Organization Unique
3. How They're the Same: They're Systems
4. Basic Overview of Life Cycles in Organizations
5. Basic Overview of Organizational Culture
6. Legal Forms and Traditional Structures of Organizations
7. Driving Forces and a New Organizational Paradigm
8. Emerging Nature and New Organizational Structures and Design
9. Basic Guidelines for Organizational Design
10. Wrap Up: Grasping the Big Picture in Organizations (video)

Learn More in the Library's Blogs Related to Organizations

In addition to the information on this current page, see the following blogs which have posts related to organizations. Scan down the blog's page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.

Library's Consulting and Organizational Development Blog
Library's Leadership Blog
Library's Nonprofit Capacity Building Blog

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