The 7 Stages of Growth: Mastering Complexity as Your Company Scales

At this stage of growth, it’s all about survival. A Stage 1 company is CEO-centric. Meaning the CEO is likely the ‘specialist’ who has created a product or service and is now getting their idea to take shape. It’s the energy, passion, and vision of the CEO that is the driving force behind the company’s success today. The CEO also makes all the decisions and brings in all the sales. Therefore, 50% of the CEO’s time should be spent as the technician, or the specialist, while only 10% of their time should be spent as a manager. The other 40% of the leader’s time should be in creating and fine-tuning the vision of the company.

CEOs of Stage 2 companies are still the center of the business. They need to stay calm and thoughtful, and before they react to the increases in activity and workload, CEOs should ask themselves these questions:

• Am I still focused on driving profits and revenue?
• Am I beginning to let go of critical aspects of the company to capable people?
• Am I watching the critical indicators of success every day?

At Stage 3, it’s typical to experience a staff revolution. The first indicator that a company has hit Stage 3 is the certainty that the leader can no longer hold all the strings and be in control of the organization entirely on their own.

Stage 4 is all about internal focus and internal processes, whereas Stage 3 was all about delegation and the CEO letting go. The necessity of that lesson will become painfully clear if the leader heads into Stage 4 still micromanaging — they have to let go!

Stage 5 has the CEO focus back on profit. The company has many more moving parts and requires a consistent source of fuel — sales! In Stage 5, the company must start integrating teams and processes — the divisions must have their budgets. The CEO has to rely on critical managers to help direct the business.

There’s a rhythm now. Patterns of behavior have been established, processes are in place, and the company has an air of familiarity that feels comfortable. The CEO’s confidence in their staff is strong. If the CEO has captured the imagination of the managers, they now provide the stability of making good decisions, connecting with their direct reports and providing sound input that keeps the leader updated on critical issues.

A CEO’s challenge in Stage 7 is all about transitioning into a large organization without losing what made it such a successful entrepreneurial business. Management’s efforts to professionalize the company often crush the entrepreneurial spirit that is so necessary to not to be left behind by newer entrepreneurial firms. The company has started to form layers of bureaucracy that quickly impede performance and growth. Stage 7, called the visionary stage, is a very different world than what’s been encountered in the first six stages.