Organizational Physics | The Science of Growing a Business by Lex Sisney

Author:Lex Sisney [Sisney, Lex]
Language: eng
Format: epub
Published: 2012-06-21T05:00:00+00:00

Maturity (PSIu)

In the prior lifecycle stages, the company has piloted the product for innovators and established thought leadership. Then it nailed the product for early adopters, drove repeat sales, and began to systematize how it operates. Now the company is in full-on scale mode for the early majority customers. It is producing results efficiently and driving revenues and profits. During the prior growth stages, the Innovating force needed to back off so that the company could efficiently produce results in its core product offering without unnecessary or untimely distractions. But now that it’s mature, it’s time once again to amp up the Innovating force. This means efficiently producing results for clients while simultaneously driving forward new product innovations that extend the life and margins of the product. The company has a healthy combination of stability and development. It’s increasing sales, profits, market share, and brand awareness. It’s like business nirvana.

However, the instant an organization reaches maturity, it also begins its decline and heads towards aging and, ultimately, death. Why does this occur? Because the organization’s stability continues to increase while its development begins to wane (this is what causes the top of the curve in any lifecycle). So, unlike the product and market lifecycles that plan for obsolescence, the goal of the execution lifecycle is one of constant renewal. The real objective is to first move up through birth to early growth, growth, and maturity and, once the organization is at a reasonable level of maturity (but before it begins an irreversible decline), to launch new organizations or business units that successfully develop new products for new markets and progress through their own lifecycle stages. Like a species that produces offspring, launching new business units allows a company to be vibrant, useful, and well adapted to its environment over an extended period of time.

Launching new business units successfully requires that the business have sound alignment in vision and values, structure, process, and people. It must be able to plan, adapt, measure, execute, and respond to future changes. It must have positive cash flow from one or more of its core product offerings to fund the development of new products. It must be able to carve out enough space or oxygen for the new business units to uncover new innovations, nail them, scale them, and repeat the process. This isn’t easy to do. Great businesses do it really well over long periods of time. I’ll discuss the elements of how to do this later. For now, just recognize that maturity is very hard to reach and the minute a business reaches it, unless the company leadership actively manages against it, it starts its decline into aging and death.

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