Use the Greiner Curve to assess and anticipate business needs and create a talent development strategy to address them.
As a senior talent professional, you're in the business of cultivating the potential of your organization and its people. Organizations grow and change in predictable ways, moving through six stages of development. Each shift requires new skills for the organization's leaders and employees and can predict attrition in key groups. Knowing how to identify where your organization is, and more importantly, the next stage it is growing into, will help you anticipate business needs and be ready with the right learning and talent solutions.
I find the Greiner Curve to be incredibly useful in understanding and predicting all kinds of talent-related issues. As the former chief learning officer at Lynda.com, I used it to analyze the organization's current and future needs so that I could create an effective learning strategy. This enabled me to address crucial skill development for everyone from the senior executives to new hires.
As a consultant, the model now helps me to easily identify current issues and predict future ones. My clients often feel I have a crystal ball. And you need one too.
Talent development executives should be well versed in the Greiner Curve because it will help you better serve the business and strategic needs of your organization and position you as an incredibly valuable partner to the other leaders.
What is the Greiner Curve?
Larry Greiner, a professor at USC's Marshall School of Business, studied organizations of all kinds and across all sectors. He found that organizations move through six distinct phases that are a function of an organization's age and size (that is to say, head count).
He found that each stage first unfolds smoothly, signaling a time of effectiveness and efficiency. But as the organization adds more people and grows in size, it inevitably begins to strain the limits of its current structure and ways of working. Initially, this strain shows up as small but surmountable challenges. But over time, the strain grows, making it more difficult to resolve problems. This inevitably ushers in a crisis point, where the organization no longer can be successful without going through a significant transformation. Each stage has its own distinct crisis point, and it's the resolution that ushers in the next stage where once again things run smoothly.
Organizations move through the phases at radically different paces. For example, a large, traditional financial institution will have a much slower and gentler progression than a fast-growing tech company. The time in each phase can range from months to decades; the speed is dictated by how quickly head count grows.
Phase 1: Growth through creativity
This is where founders build the organization, so talent development professionals are rarely in-house at this time. The organization is small and people wear many hats with spontaneous and informal communication. People know each other and work closely together, which usually creates high amounts of trust and psychological safety—crucial elements for high performance. This team moves fast to solve issues, and hierarchical decision making rarely exists.
As the organization gets bigger and adds more employees, it leads to the crisis point of leadership, where professional management needs to be brought in to run the various functions such as finance, marketing, and HR. The needs of the organization have grown past what the original group can provide and the hiring of these functional experts shift it into the second phase.
Phase 2: Growth through direction
Each function leader attempts to bring his part of the house in order and prepare for future growth. The original team may be disappointed as the small, intimate-family feel begins to shift.
The new leaders tend to hire from outside, which has its advantages, but also can strain existing relationships. Employees who've been there from the start likely feel demoted if they no longer have the ear of the founders. The best leaders are sensitive to the impact this can have on morale and focus on augmenting and enhancing rather than constantly pointing out what is broken.
The original team is likely to protect what they built even if it isn't scalable, and conflict often arises between the legacy group and the new people. Simultaneously, the organization is focusing on developing new products and services to gain enough market share to be viable.
The organization eventually settles down to a smooth period that can last months to decades depending on how fast head count is growing. But at some point, the scale of offerings gets too big for leaders to monitor, which creates the crisis point of autonomy where work and authority need to be delegated to others.
Phase 3: Growth through delegation
This is when layers of hierarchy are added and authority is delegated down. Roles start to segment into levels such as
senior director, director, and assistant director. Top management becomes less involved in the day-to-day details and turns their focus to long-term strategy—at least, that's the goal.
But early in this phase, it can be rather messy as new leaders may not be ready yet to take the reins, or the top leaders are reluctant to let go and micromanage their functions. In addition, senior leaders may need to shift into smaller roles or transition out as the growth and needs of the company may outpace their current capabilities and leadership skills.
Often phase 3 is marked with several reorganizations and changes in reporting structures, especially if the company is in a high growth mode. This drives changes in many of the operations functions (such as finance, HR, facilities, and technology) to keep pace with the expansion of employees.
Phase 3 is incredibly important to talent development practitioners because trust often is earned or lost here, affecting the organization well into the next phase. Eventually, when hiring slows down, things smooth out and the company settles into some stability.
Over time, the sheer size of the organization creates inconsistencies across the functions and within its layers. In addition, communication gets bottlenecked with employees and even middle managers having less understanding of strategic goals and priorities. This is the crisis point of control, where the different parts of the organization need to work together better to grow effectively.
Phase 4: Growth through coordination
This phase often is where the operations functions, including talent development professionals, get to flex their muscles. New policies and procedures are introduced to bring structure to the various parts of the organization. Changes often include the creation of company-wide policies in management and supervision such as performance reviews, financial practices such as budgeting and spending, and the transition to formal procedures, shared technology systems, and platforms.
At first, this effort is helpful in bringing stability and consistency to the broader scope of the organization. But it's not without a cost. Senior and midlevel leaders often feel restricted, and some begin to blame the new structure for affecting their agility or efficiency. In addition, many employees feel things are getting "too corporate" and may leave for organizations that are still in phase 2 or 3.
As a result, other leaders make a strong push for decentralization, and talent development staff must be careful to not splinter amidst the blame game. The other challenge for operations pros in this phase is to resist overcorrecting. They tend to move past general structures to focusing on the lowest common denominator and creating policies to contain the worst employees. If 95 percent of your employees are making good choices, handle the violators individually rather than creating policies that constrain everyone.
But Greiner found that most don't resist this urge, which creates the crisis point of
red tape, where bureaucracy gets burdensome. That harms the organization's ability to be flexible and agile in today's ever-changing markets.
Phase 5: Growth through collaboration
To solve that problem, the organization switches gears and replaces bureaucracy with a range of scalable and agile systems. In addition, they hire emotionally intelligent leaders and trust them to make the right decisions. This often requires a change of top leaders who can work in this more organic and fluid way. Much of what was built in phase 4 is dismantled and replaced, often creating confusion for employees who had settled in to the new ways of doing things.
But once the transition is done, this phase can usher in a period of high performance because many of the challenges and difficulties of earlier phases have been resolved. The organization often can enjoy a long period of stable and steady growth.
According to Greiner's research, the next crisis point is internal control, where the organization has tapped its organic growth and now must look outside for new opportunities.
Phase 6: Growth through alliances
The final phase is growth through alliances, where the organization can solve its challenges only by partnering with other organizations through outsourcing, licensing and franchising, mergers, and acquisitions. These actions bring a whole new range of changes as complex entities are pushed together and leaders must try to integrate products, leadership styles, values, and cultures (not to mention policies, email systems, currencies, and regulations). It is quite common that each organization is at its own phase in the Greiner Curve, adding confusion.
This expansion ultimately creates some dilution as various entities mix and merge together. Over time, this leads to the crisis point of identity, where the organization must refocus its vision, mission, and strategy into a unified whole.
Keep ahead of the curve
My one critique of the Greiner Curve is that, today, I see these as behaviors or actions, not a phase. For example, I have witnessed phase 2 organizations engaging in licensing or M&A.
Can you identify where your organization is on the model? It is not uncommon to be on the edge between two stages. It also is common that the core part of the business is more developed and in a different stage than newer functions.
I recently worked with one company that had acquired several smaller organizations. When the organization was assessed using the Greiner Curve, it discovered that 12 different groups were scattered across phases 2 through 5, with the majority (including the parent company) on the edge between phases 3 and 4. That gave them all kinds of insight as to some of the issues that had arisen and how best to move forward.
More importantly, can you tell what crisis point and transformation is coming? There is no need to ever be surprised again. In fact, talent development professionals can and should help the rest of the organization prepare so the transition is as smooth as possible. Instead of being reactive to the inevitable shifts in organizational development, proactively build a learning and talent strategy that keeps you ahead of the curve.
What I've discovered is that the learning needs shift with each stage. All kinds of critical skills look different at the various phases. For example, someone who is phenomenal at innovation in phase 2 may completely stumble in phase 5 because the process and scope of innovation changes. What constitutes good leadership at phase 3 rarely works well in phase 4.
You need to develop and deliver different kinds of programs over time, and the mistake that many learning professionals make is to develop the management training or the workshop on communication as if one size fits all forever. While these programs may initially be successful, they'll ultimately hold back the organization because they remain static while the organization shifts and changes.
Become familiar with the Greiner Curve as well as other models of organizational development. It has been an invaluable tool for me and the organizations with whom I work.
Maturity Models and Blitzscaling
Those of us in talent development are likely familiar with Bersin's various maturity models. Bersin has studied thousands of modern organizations, and its maturity models detail the shifts that happen as companies move through the Greiner Curve, becoming increasingly complex and holistic. Bersin's Talent Management Maturity Model aligns with the Greiner Curve, giving us estimates of how many organizations are at each level:
Bersin's various models provide detailed roadmaps for every type of talent development professional, and perhaps more importantly, the places where we intersect and align.
Another model to consider is Blitzscaling by LinkedIn Founder Reid Hoffman and Chris Yeh, who co-authored The Alliance: Managing Talent in the Networked Age. In their Stanford University class, they focus on how and why tech companies scale quickly through these various levels:
The challenges for talent development practitioners who work in fast-growing high-tech companies is that this kind of rapid scaling outpaces the maturity and structures of the organization. Senior execs and investors often don't count or disregard the harm being done to engagement, retention, and employer brand until the damage and costs sufficiently cut into profits. The solution is to help them see the financial impact and time to recovery before it's too late to recover.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.