Page 61 - (DK) The Business Book

START SMALL, THINK BIG 59

See also: Beating the odds at start-up 20–21 ■ Take the second step 43 ■ How fast to grow 44–45 ■ From entrepreneur to
leader 46–47 ■ Keep evolving business practice 48–51 ■ The weightless start-up 62–63

These crises are
Start-ups are ...but growth predictable and can
exciting places brings inevitable
be managed by using
to work... crises.
the Greiner Curve.

illustrated on a graph that came will be required (perhaps from banks many cases the original founders
to be known as the Greiner Curve. or venture capitalists), and the need have neither the skills nor the desire
He noticed that companies of all for formal systems and procedures to take on more formal leadership.
types go through periods of growth increases. The founders—who In 2002, chef Jamie Oliver founded
followed by inevitable crises, when are likely to be technically or Fifteen, a chain of restaurants that
major organizational change is entrepreneurially oriented—find also provide training opportunities
needed to maintain momentum. themselves faced with their first for disadvantaged young people.
crisis, as they become burdened by As the chain grew, he handed over
Stages of growth management responsibilities that the management to a CEO, so that
Greiner initially identified five they are ill-equipped to deal with. he could return to doing what he
stages of growth, but later added This first crisis is therefore one of does best: being a commercially
a sixth. The first of these stages is leadership: who will lead the successful celebrity chef.
“growth through creativity.” During company out of confusion and solve Under professional managers,
this stage, the start-up is small and the new management problems? business growth continues in
growth is fueled by the enthusiasm Change of leadership required for an environment of more formal
of its founders. Management phase two may only be a question of structures and budgets, and with
procedures, communications—and internal reorganization and a change the establishment of separate
even interactions with customers— in style, abandoning the casualness functions, such as production
are usually informal and ad hoc. of the company’s early days in favor and marketing. This is the second
However, as more staff joins and of greater formality and more rigid stage of growth, known as “growth
production expands, more capital systems and procedures. But in through direction.” As the new ❯❯

The Greiner Curve Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6
illustrates the six Growth Growth Growth Growth Growth Growth
stages of growth that through through through through through through
creativity direction delegation coordination collaboration alliances
any company might
undergo during its
development. Each Crisis 5:
growth phase Growth
generates a crisis, Crisis 4:
the resolution of SIZE OF ORGANIZATION Red tape
which leads to the
next growth stage. Crisis 3:
Control
Crisis 2:
Autonomy
Crisis 1:
Leadership
TIME