Page 78 - MS Year in Review 2020

Growing pains are not only problems in themselves; they are symptoms of
organizational distress. Growing pains indicate that the “infrastructure” of an
enterprise (i.e., the internal operational and management systems it needs at a

given stage of growth) has not kept up with its size, as measured by its revenues.
For example, a business with $200 million in revenues may only have an

infrastructure to support the operations of a firm with $50 million in revenues, or
one-fourth its size. This type of situation typically occurs after a period of growth,
sometimes quite rapid growth, where the infrastructure has not been changed to

adjust to the new size and complexity of the organization. The result is an
“organizational development gap,” (that is, a gap between the organization’s actual
infrastructure and that required at its current size or stage of development) which

produces the growing pains.

Empirical Validity of Organizational Development Framework

There has been a significant amount of empirical research designed to assess the
predictive validity of the proposed framework and its three core models. This

research is detailed and technical in nature. A detailed summary of this research is
beyond the scope of this article. AS noted at the outset of this article, we will
examine this research in detail in the next issue of this newsletter. However, this

research can also be found in the references.

Conclusions of Empirical Research

Based upon the empirical research conducted, there is a statistically significant
indication that:

1) The pyramid is a driver of financial results,
2) There is an inverse relationship between growing pains and financial results,
and

3) There is an inverse relationship between pyramid development and growing
pains.

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