Organizations grow from an entrepreneurial start to eventually become bureaucracies. There is a fixed pattern to this growth with a clear definition between stages that can be observed, described, and modified if necessary. Every organization has a life cycle. That is a truth you cannot avoid. However, you can eliminate some of the dysfunctional behaviors that are found at certain points in your company’s climb to growth and success. The complete cycle of an organization can be described in many ways with many labels. For planning purposes and understanding your company story, you can do fine with a simple model that I call a growth line. In this model you must be able to fit yourself into a category and then understand what story you are telling, look for congruence in your story, and be willing to change your story if necessary.
Organizations can be generally characterized as falling into one of three categories or into a transition stage as illustrated in Figure 1-4. Those three stages are entrepreneurial, professionally managed, and bureaucratic, and each has a corresponding story. No matter how long you have been in operation, you will fall somewhere on this hypothetical growth line. A key to understanding the growth line and how it connects to the idea of telling a company story knows that each stage has a distinctly different story to tell. Your approach to planning is influenced by where you are on the growth line. Organizations risk death as they grow through three stages. Eventually all organizations attempt to return to their entrepreneurial roots.