Evolution and revolution: the challenges of large companies
Posted: Wed Feb 19, 2025 3:12 am
Every entrepreneur wants to see their business grow. Some want to be the success story of their city, others want to conquer the national market, and even the most ambitious dream of becoming multinationals. Expectations may vary, but the dream of those who start a business is always to grow !
And achieving this is not so easy, because growing means increasing sales, having more clients, opening new units. And all this, while it is a sign of success, also generates new crises.
A person goes through many challenges during his or her life: the first day of school, adolescence, first love, choosing a career and many other situations. There is no evolution without obstacles, doubts and momentous decisions.
The same thing happens to companies. Larry Greiner wrote an article for Harvard Business Review in 1972 called “ Evolution and Revolution ,” describing the stages of a company’s growth and the crises they entail. According to him, the phases are as follows:
1. Creativity vs. Leadership
It occurs at the beginning, when the entrepreneur creates his product and market. At this stage, communication among the team is informal and salaries are modest, although dedication is enormous. Thus, a leadership crisis arises :
Someone needs to lead the company to face the first management challenges.
2. Direction vs. Autonomy
This is when the company already has a hong kong phone number list leadership that guides the business. The organizational structure and internal communication are formalized, with the definition of processes and controls. After a period of stability in the company, a crisis of autonomy arises :
The manager is no longer enough to run the company, so it is necessary to delegate responsibilities.
3. Delegate vs. Control
Growth now occurs through delegation. The company decentralizes management and distributes responsibilities, tasks and roles in a hierarchical structure. A crisis of control thus arises :
Decentralized management requires independence, while at the same time distancing communication and reducing control over company management.
4. Coordination vs. Bureaucracy
To overcome the loss of control, the company adopts coordination efforts, with highly standardized procedures in all its processes. Some functions are recentralized, while operational decisions remain decentralized. A crisis of bureaucracy is generated :
Lack of management confidence in employees and structural obstacles make processes slow and cumbersome.
And achieving this is not so easy, because growing means increasing sales, having more clients, opening new units. And all this, while it is a sign of success, also generates new crises.
A person goes through many challenges during his or her life: the first day of school, adolescence, first love, choosing a career and many other situations. There is no evolution without obstacles, doubts and momentous decisions.
The same thing happens to companies. Larry Greiner wrote an article for Harvard Business Review in 1972 called “ Evolution and Revolution ,” describing the stages of a company’s growth and the crises they entail. According to him, the phases are as follows:
1. Creativity vs. Leadership
It occurs at the beginning, when the entrepreneur creates his product and market. At this stage, communication among the team is informal and salaries are modest, although dedication is enormous. Thus, a leadership crisis arises :
Someone needs to lead the company to face the first management challenges.
2. Direction vs. Autonomy
This is when the company already has a hong kong phone number list leadership that guides the business. The organizational structure and internal communication are formalized, with the definition of processes and controls. After a period of stability in the company, a crisis of autonomy arises :
The manager is no longer enough to run the company, so it is necessary to delegate responsibilities.
3. Delegate vs. Control
Growth now occurs through delegation. The company decentralizes management and distributes responsibilities, tasks and roles in a hierarchical structure. A crisis of control thus arises :
Decentralized management requires independence, while at the same time distancing communication and reducing control over company management.
4. Coordination vs. Bureaucracy
To overcome the loss of control, the company adopts coordination efforts, with highly standardized procedures in all its processes. Some functions are recentralized, while operational decisions remain decentralized. A crisis of bureaucracy is generated :
Lack of management confidence in employees and structural obstacles make processes slow and cumbersome.