Greiner´s Model of Organizational Growth | Organizational Change | MeanThat

Summary

In this video, we explore the Grinders model of organizational growth, which outlines the five key phases an organization undergoes as it grows: creativity, direction, delegation, coordination, and collaboration. Each phase presents a crisis that marks the transition to the next, such as the Crisis of Leadership, Crisis of Autonomy, and Crisis of Control. The model emphasizes the shift from entrepreneurial innovation to structured management, highlighting the challenges organizations face as they scale. By understanding this model, both entrepreneurs and employees can navigate organizational growth more effectively.

Takeaways

• 😀 The Grinders Model of Organizational Growth describes five key phases in a company's evolution: Creativity, Direction, Delegation, Coordination, and Collaboration.
• 😀 The model emphasizes the distinction between entrepreneurship (creative innovation) and management (effective company operations).
• 😀 In the first phase, growth is driven by the creativity and innovation of entrepreneurs, who are not focused on managing the organization effectively.
• 😀 The first crisis, called the 'Crisis of Leadership,' occurs when investors lose trust in entrepreneurs as managers and hire new leadership.
• 😀 The second phase involves hiring professional management to formalize the company and set direction, which helps improve control and monitoring.
• 😀 The 'Crisis of Autonomy' occurs in the second phase as creative employees become frustrated with the loss of their freedom due to increased formalization.
• 😀 The third phase, Growth through Delegation, sees decentralization, reward systems, and a multi-divisional structure being introduced to empower creative employees.
• 😀 The third crisis, the 'Crisis of Control,' happens as managers feel they are losing control due to the decentralized structure and distribution of authority.
• 😀 In the fourth phase, Growth through Coordination, a balance is sought between hierarchical control and creative freedom to satisfy both managers and employees.
• 😀 The 'Crisis of Red Tape' occurs in the fourth phase, highlighting the danger of excessive bureaucracy that can stifle the organization's growth and effectiveness.
• 😀 The fifth and final phase, Growth through Collaboration, emphasizes organic structures and encourages spontaneity and social control, aiming for a flexible and collaborative organization.
• 😀 The model concludes after the fifth phase, leaving open-ended questions about the future challenges organizations might face as they continue to grow.

Q & A

What is the Grinders model of organizational growth?

The Grinders model of organizational growth describes the stages an organization goes through as it grows, highlighting the phases of development and the crises that occur at the transitions between them.

What are the two axes of the Grinders model?

The two axes of the Grinders model are time (or age) on the horizontal axis and the size of the organization on the vertical axis. These axes represent the organization's progression over time and its growth in terms of size.

How many phases are there in the Grinders model, and what is their significance?

There are five phases in the Grinders model, each representing a different stage of organizational growth, with specific challenges and crises that organizations face as they evolve.

What is the main focus during Phase 1 (Growth through Creativity)?

In Phase 1, the focus is on creativity and innovation. Entrepreneurs drive growth by launching new products and experimenting with new ideas, helping the organization get off the ground.

What crisis occurs at the end of Phase 1, and how is it resolved?

At the end of Phase 1, the organization faces a 'crisis of leadership,' where the original entrepreneurs may no longer be seen as suitable for managing a larger organization. This is resolved by hiring new management to set a clear direction for the company.

What is the primary challenge faced during Phase 2 (Direction Setting with New Management)?

In Phase 2, the main challenge is the 'crisis of autonomy,' where creative employees feel frustrated by the formalized processes and increased control imposed by the new management. This tension arises because the company shifts from an entrepreneurial approach to a more structured one.

How does the organization evolve in Phase 3 (Delegation and Decentralization)?

In Phase 3, the organization undergoes decentralization, delegating authority to lower levels within the company. This promotes greater autonomy for employees and encourages a more multi-divisional structure, allowing creativity to thrive again at different levels.

What crisis does the organization face in Phase 3, and what causes it?

In Phase 3, the organization faces a 'crisis of control,' where upper management feels that they are losing control over the organization due to the decentralization and delegation of authority to lower levels.

What is the goal of Phase 4 (Coordination and Balance), and what crisis occurs here?

Phase 4 aims to balance the need for control with the need for autonomy. The organization seeks coordination between different levels of management to ensure both creative employees and managers are satisfied. The crisis that occurs here is the 'crisis of red tape,' which refers to the increasing bureaucracy and inefficiency caused by an overload of rules and procedures.

What is the focus in Phase 5 (Collaboration and Organic Structure)?

In Phase 5, the focus shifts to collaboration and creating an organic structure that fosters flexibility and adaptability. The company encourages spontaneity, social control, and less rigid hierarchical structures, aiming to remain responsive to change.

What happens after Phase 5 in the Grinders model?

The Grinders model concludes at Phase 5, but it does not describe any crises or challenges that may occur after this phase. The model stops at the point where organizations are in a collaborative, organic phase.

How does the Grinders model distinguish between entrepreneurship and management?

The Grinders model highlights the difference between entrepreneurship and management. Entrepreneurship focuses on creativity and launching new products to grow the business, while management focuses on organizing, controlling, and increasing the effectiveness of the organization.

Why is it common for entrepreneurs to be replaced by professional managers in the Grinders model?

It is common for entrepreneurs to be replaced by professional managers as the organization grows because entrepreneurs often lack the experience and skills necessary for managing larger, more complex operations. Professional managers are brought in to provide strategic direction and more effective control.