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Managing Corporate Lifecycles: How to Get to and Stay at the Top

“What causes aging is a decrease in flexibility and an increase in controllability. As controllability increases and flexibility decreases, the organization increasingly loses touch with its environment.”

Ichak Adizes, Managing Corporate Lifecycles

I came across this book in the late 90s when working for a startup that had just come out of an IPO (QAD).

My first employer was NCR where I had observed all the behavior Adizes describes for organizations in Aristocracy (reduced growth expectations, little interest in conquering new markets, suspicious of change …).

My next station was EDS where I experienced what Adizes describes as Prime (controlled and nurtured creativity, predictable excellence, growth in both sales and profit margins …).

When reading the book at QAD I realized I was part of an organization in Go-Go (high energy, sales orientation beyond the capability to deliver, insufficient cost controls, unclear responsibilities …). I loved it, there was so much space left to conquer, to build, and for personal growth!

But the most important lesson from the book was: there is a mechanism driving organizations through maturity stages and knowing this mechanism enables one to understand where an organization sits and what needs to be done to move it to the next level. It also explains the culture of customer organizations which is heavily impacted by the maturity stage they have developed into.

The same mechanism also explains why Incumbents have such a hard time to fend off the attack from a Disruptor: Over time they lost their original flexibility by increasing control. A disruption is simply too fast for them to respond to it.

This is why startup Disruptors have a chance to take the market away from Incumbents. Whereby there is one caveat, though: To be accepted by mainstream customers a startup will have to demonstrate the ability to balance their high flexibility with sufficient control over their business to limit the perceived risk in the eyes of the buyer.

In this 3rd Party Content Review I provide a synopsis and critique of the book which hopefully motivates you to read it.

I’d like to thank the Adizes Institute for their approval to share it under CC BY-SA 4.0.

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