Every organization goes through various stages of development, from the pioneering phase to becoming a mature organization, and possibly even restructuring or renewal. Each phase comes with different priorities, challenges, and most importantly: a different need for leadership. The right leadership, aligned with the organization’s maturity stage, is essential to drive growth or maintain sustainable success. Let’s take a closer look at these phases and explore the importance of executive search in this context.
There are several models that describe the life stages of organizations. The most well-known and influential one was developed by Larry E. Greiner (Greiner’s Growth Model of Organizational Change – 1972). This model provides insight into the various stages of organizational growth and development, and it outlines a so-called crisis at each phase that propels the organization into the next stage.
Greiner identified five phases that organizations typically go through:
- Creativity Phase (Phase 1):
- In this early stage, the focus is on product development and resource acquisition. The structure is informal, with founders being hands-on and involved in all aspects of the organization.
- Direction Phase (Phase 2):
- The organization introduces formal structures and systems to improve efficiency. A clearer hierarchy and division of tasks emerge.
- Delegation Phase (Phase 3):
- Decision-making authority is delegated to lower levels to ensure flexibility and quicker responses.
- Coordination Phase (Phase 4):
- Mechanisms for coordination and integration are implemented, such as cross-functional teams and standardized processes.
- Collaboration Phase (Phase 5):
- The organization promotes collaboration and flexibility, focusing on innovation and market adaptability.
Greiner outlines a crisis for each phase that drives the transition to the next stage:
- Phase 1 – Leadership Crisis: As the organization grows, founders struggle to manage all responsibilities, creating a need for formal leadership to support growth.
- Phase 2 – Autonomy Crisis: Increased departmental autonomy can cause conflict between control and freedom.
- Phase 3 – Control Crisis: Decentralization may result in a lack of unity and coordination.
- Phase 4 – Bureaucracy Crisis: Organizational complexity can lead to rigidity and slow decision-making.
- Phase 5 – Internal Growth Crisis: When internal solutions no longer suffice, external perspectives and innovation are needed.
Each phase calls for a distinct type of leadership. In the start-up phase, the founder typically leads with a content-driven vision and focus on developing the core product or service. In the following phases, leadership evolves towards organizing processes, centralizing and then decentralizing decisions, shifting the focus from process to results, and ultimately stimulating collaboration as complexity increases. A common pitfall that can trigger crises is the bureaucratization of decision-making, which stifles agility and innovation.
Tailored Leadership: No ‘One Size Fits All’
The importance of leadership tailored to the organization’s stage is often underestimated. Leaders are frequently selected based on past successes, without adequately considering context and future direction. A CEO who excelled in scaling a tech start-up is not necessarily the right choice for a family business in transition. Leadership does not operate in a vacuum—it is intrinsically tied to context.
That’s why it’s crucial to define leadership requirements in a tailored way. What does the organization need? Stability or disruption? Cultural continuity or cultural transformation? Only when these questions are clearly answered can the search begin for a leader who fits that specific context. A common pitfall is focusing too much on the present, without sufficiently anticipating future needs. Where do we want to go? What will be required in the medium and long term?
The Role of Executive Search
This is where executive search plays a vital role—and in two key ways. First, as a strategic partner to help clarify where the organization stands, including its strategy, culture, maturity phase, and ambitions, and to jointly define which experiences and competencies are essential for leadership. Second, this translates directly into the recruitment and selection process. Executive search is about making sustainable leadership decisions that align with both the current and future needs of the organization.
What Makes Executive Search Valuable in This Context?
- Contextual Matching: Executive search firms have the expertise and methodologies to match leadership with the organization’s specific development phase.
- Access to Passive Talent: Top candidates are often not actively seeking new roles. Executive search professionals know how to identify and engage these individuals.
- Strategic Advisory: A good search partner acts as a strategic sounding board and can advise on the ideal leadership profile based on market developments and internal dynamics.
- Cultural Fit: In times of change, not just competence, but cultural fit becomes a decisive factor for success. (See also the article by colleague Geert-Jan Plette, https://www.cfr-group.com/the-role-of-cultural-fit-in-executive-search/)
Conclusion
Understanding the phases of the Organizational Life Cycle and the accompanying leadership challenges allows organizations to proactively select leaders who align with both current needs and future ambitions. Executive search is an essential tool in this process, as it helps identify and attract leaders who not only have the right skills but also understand and strengthen the organization’s culture and values. By strategically aligning leadership with the organization’s specific stage, companies can more effectively navigate the complexities of growth and change, ultimately leading to sustainable success.
Article written by Nienke Rooda MSc, CFR Global Executive Search, Netherlands
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