At the foundation of effective management for any organization is the fundamental principle that as organizations grow and age they progress through a series of predictable stages known as the Organization Lifecycle. Like humans, the evolution of every organization proceeds in distinct stages. Companies go through the terrible-twos, being a teenage, and the prime of life.

Each lifecycle stage presents a predictable set of unique challenges (life lessons) that must be overcome to progress to the next stage. How well or poorly leadership develops the capabilities needed to address those challenges determines the success or failure of the enterprise. If leadership is not able to do this, the organization gets stuck. Problems that can’t be resolved become abnormal, retard the healthy development of the company, and lead to premature aging.

Leading successful lifecycle transitions is not easy or obvious. The same methods that produce success in one stage will create failure in the next. Knowing what to do and what not do to navigate the challenges of each lifecycle stage is therefore need-to-know information for every CEO, C-Level Executive, Board Member and Investor, as well as up and coming leaders who aspire to hold those positions in the future.


At this stage, the company is not yet born. It exists as a gleam in the Founder’s eye. The focus is necessarily on dreams and possibilities. The primary goal of this stage is to build the Founder’s enthusiasm and commitment to this dream. The higher the risk, the deeper the commitment needed. As Conrad Hilton said, “If you wish to launch big ships, you have to go where the water is deep.” FIND OUT MORE ABOUT THIS STAGE close


Infancy begins the moment financial risk has been undertaken and the Founder quits her paying job, signs the loan documents or promises 40% of the company to outside investors. Infant organizations are necessarily action-oriented and opportunity-driving. The focus instantly changes from ideas to action. The time for talking is over; it is time to get to work and produce results (sales and cash.) FIND OUT MORE ABOUT THIS STAGE close


A Go-Go organization is a company that has a successful product or service, rapidly growing sales and strong cash flow. The company is not only surviving, it’s flourishing. Key customers are raving abut the products and ordering more. Even the investors are starting to get excited. With this success, everyone quickly forgets about the trials and tribulations of Infancy. Continued success quickly transforms this confidence into arrogance, with a capital A. FIND OUT MORE ABOUT THIS STAGE close


During the Adolescent stage of the organizational lifecycle, the company is reborn. This second birth is an emotional time where the company must find a life apart from that provided by its Founder. This critical transition is much like the rebirth a teenager goes through to establish independence from their parents.The Adolescent company teeters on the brink of both success and disaster. FIND OUT MORE ABOUT THIS STAGE close


Prime is the optimal position on the lifecycle, where the organization finally achieves a balance between control and flexibility. Prime is actually not a single point on the lifecycle curve. Instead, it is best represented by a segment of the curve that includes both growing and aging conditions. This is because flexibility and self-control are incompatible and there is no stable equilibrium. Sometimes the Prime organization is more flexible than controllable, and sometimes it’s not flexible enough. FIND OUT MORE ABOUT THIS STAGE close


The Fall
The Fall is positioned at the top of the lifecycle curve, but it is not the place to be. That position is Prime, where organizational vitality is at its maximum. Companies that are in the Fall phase have started to lose their vitality and are aging. When an organization first begins to age, the symptoms won’t show up on its financial reports. In fact, the opposite is true. Companies in the Fall stage are often cash rich and have strong financial statements. FIND OUT MORE ABOUT THIS STAGE close


The effects of the steady decline in flexibility, which began in Prime, start to become more obvious in Aristocracy. Because it has neglected to pursue long-term opportunities, the company’s focus becomes increasingly short-term. For the most part, its goals are financially-oriented and low-risk. With less of a long-term view, the climate in an Aristocratic organization is relatively stale. FIND OUT MORE ABOUT THIS STAGE close


When an Aristocracy is unable to reverse its downward spiral and the artificial repairs finally stop working, management’s mutual admiration society abruptly ends. The good-old-buddy days of the Aristocracy are gone, and the witch-hunts of Recrimination begin. Companies in this stage focus on who caused the problems, rather than on what to do about them. FIND OUT MORE ABOUT THIS STAGE close


Although it should be dead, the company in Bureaucracy is kept alive by artificial life support. The company was born the first time in Infancy, it was reborn in Adolescence, and its third “birth” is in Bureaucracy when it gets an artificial continuance on its life. Death occurs when no one remains committed to keeping the organization alive. FIND OUT MORE ABOUT THIS STAGE close


Death occurs when no one remains committed to sustaining the organization. Monopolies and governmet agencies that are quarantined from competitive pressure and provide a large employment base, often live long and very expensive artificially prolonged lives. close


A Courtship which has no testing of the harsh realities that face any new business can easily degrade into an Affair where the founder’s commitment evaporates at the first sign of difficulty. What is an affair but lots of enthusiasm with no real commintment? close

Infant Mortality

Infant mortality occurs if the company is unable to continue to fund its negative cash flow, makes a mistake that results in an irreparable loss of liquidity, or crucial founders lose their commitment and interest in their baby. A prolonged infancy can also create mortality when the Founders finally realiza that after years of struggle they have little to show for all their hard work and suffering, and decide to hang it up. close

Founder Or Family Trap

The Founder’s Trap occurs when a Go-Go company is unable to relieve itself from its dependency on the Founder. It is trapped by the capabilities and limitations of the bottleneck that is its Founder. This can occur because the organization is unable to develop the abilities needed to replace the unique skills of the Founder. This Trap can also occur because the Founder is either unwilling or unable to delegate effectively and decentralize control. close


Adolescent infighting can become so severe that a breackup occurs. This is called a divorce. If the professional managers are pushed out, the company can fall back into the Go-Go stage or become an unfulfilled entrepreneur. If the Founder is pushed out by the professional managers, the resulting lack of entrepreneurial spirit can lead the company into premature aging. close


Mouse over the graphic above to find out more about each stage

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Find our more about the Lifecycles of Organizations

At the foundation of effective management for any organization is the fundamental truth that all organizations, like all living organisms, have a lifecycle and undergo very predictable and repetitive patterns of behavior as they grow and develop. At each new stage of development an organization is faced with a unique set of challenges. How well or poorly management addresses these challenges, and leads a healthy transition from one stage to the next, has a significant impact on the success or failure of their organization.

Leading an organization through lifecycle transitions is not easy, or obvious. The same methods that produce success in one stage can create failure in the next. Fundamental changes in leadership and management are all required, with an approach that delicately balances the amount of control and flexibility needed for each stage. Leaders who fail to understand what is needed (and not needed) can inhibit the development of their companies or plunge them into premature aging.

The challenges that every organization must overcome at each stage of development first manifest themselves as problems that arise from the growth and success of the company and from external changes in markets, competitors, technology and the general business and political environment. This simple, unavoidable reality leads to the following five important insights about the nature of problems in organizations.

1. Problems are Normal and Desirable.  Problems are the natural result of change. The only place on the lifecycle curve where there are no problems is the place where there is no change, which is Death. If you think that good managers are those whose organizations have no problems, think again. Your reward for successfully resolving the problems that confront you today, is a set of new problems tomorrow that will be larger and more complex. If your company faces a high rate of change in your markets, technology or industry, your challenge is magnified. The faster the rate of change, the faster problems appear and grow.

 2. Your role as a leader is not to prevent problems or slow the pace of change. Instead, focus on accelerating your organization’s ability to recognize and resolve problems. Your ability to work together as a team and quickly tackle any and all situations, or decide not to, is your ultimate competitive advantage.

3. Some of the problems you face are normal and some are abnormal. Normal problems are those that are expected for a given lifecycle stage. Abnormal problems are those that are not expected (or desirable) in a stage of the lifecycle. Since you will never have enough time or resources to address all the problems you face, focus on abnormal problems. Many normal problems can be ignored since they tend to resolve themselves during the natural course of growth and development.

4. You can drive your organization faster when you know the road ahead. Most of the issues you face are common to all organizations. There is no need for you to reinvent the wheel. You can save a lot of time and effort by thoroughly understanding the nature of all 10 stages in the lifecycle, and knowing what it takes to transition from one stage to the next. If you and your management team share a common understanding of this knowledge before problems arise, it will also help you attack the problems, instead of attacking each other.

5. Prime is the Fountain of Youth for Organizations. One key difference between the lifecycle for human beings versus organizations is that living things inevitably die, while organizations need not. The “age” of a company in terms of its lifecycle is not related to its chronological age, the number of employees, or the size of its assets. Instead, the lifecycle age is defined by the interrelationship between flexibility and control. There is a fountain of youth for organizations called Prime. An organization that is in Prime has achieved a balance between control and flexibility. A Prime organization knows what it is doing, where it is going, and how it will get there. It also enjoys both high growth and high profitability. Once an organization reaches Prime, leadership must work to sustain that position.

About Adizes

Adizes is a change management organization that specializes in helping CEOs, top management teams, boards and owners quickly and effectively accelerate through lifecycle transitions. The relationship it forges with its clients is much like that between the Olympic Training Center and the complete program of support they provide to athletics that want to become world champions. Adizes strives to help its clients dramatically improve the performance of their organizations, achieve sustainable revenue and profitability targets, and “Prime” conditions of operations. Adizes is careful about the companies it selects as clients. It is a small highly specialized “boutique” company on purpose. Since 1973, the organization has worked with clients in 48 countries from 75 different industries that range in size from the Global 100 to start-ups. All Adizes clients share a common goal of getting to “Prime” on the corporate lifecycle and enjoying both high growth and high profitability.

About Dr. Ichak Adizes

Dr. Ichak Adizes is one of the world’s leading experts on improving the performance of business and government organizations by making fundamental changes without the destructive conflict that plague many major change efforts. Since 1973 he has been involved with companies that range from the Global 100 to start-ups in more than 40 countries serving many different industries. He has also consulted to several heads of state. He is the author of 16 books that have been translated into 24 languages. His work has been featured in Fortune, Forbes, Business Week, Inc. Magazine, Financial Times and the New York Times. Dr. Adizes is the Founder and President of the Adizes Institute. Managing Corporate Life Cycles, 2nd Edition by Dr. Ichak Adizes. Published by the Adizes Institute. © 2004, Ichak Adizes.