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How to change the future of your business

(MoneyWatch) Last week I described the four phases that all organizations go through as they age. This is one of the most interesting and useful bits of research I've ever seen.

Today's question is, how can you use this information for your advantage? There are four ways. First, talk about the crisis directly ahead of you, and what the next phase will look like, including the type of people it will need.

Former eBay (EBAY) CEO and now Hewlett-Packard (HPQ) chief Meg Whitman did this in a startup, when she discussed the painful transition to a small company with experts brought in form the outside. Her first steps seemed brilliant, and they were -- because she understood how organizations mature. She brought in experts in legal and marketing, even as the company tried to protect its "all for one" spirit. In the end, most agreed her moves had been perfect, as the challenges that confronted the company were legal (should they sell guns?), and how to establish a great brand.

How to see into the future of your business

Talking about the crisis and how it will resolve into the next phase makes you seem brilliant, even psychic. But a word of caution: Don't tell a grizzled CEO that you read this article from an MBA professor that says how he should change. One of my students did exactly that, and was nicknamed "MBA boy" for years... even though he was right.

Most companies are like children growing up on a desert island, without adults around. They know children get older and grow up, but they don't understand the nuances of hormones, the awkwardness of adolescence, growing pains, and that a cracking voice is normal and temporary. As acne breaks out, imagine the horror of this new plague. Is it going to spread? Is it lethal? When will things get back to normal? The answer, in companies and in human development, is that "normal" means predictable changes. Thinking in terms of the life cycle gives you insight and wisdom, and may make people wonder how you know so much.

Second, assess yourself, and ask "what phase is the best match for me?" Startups love people with ideas, passion, the willingness to do anything, and who dislike structure. Functional companies love subject experts and a good debate about best practices. Divisional organizations want growth-oriented, take-charge managers who can harness functional parts of the company to achieve quick expansion. Matrix companies need people who can tolerate ambiguity, like informal working relationships and constant change (and a dose of political acuity helps, too).

Next, find companies in the phase that suits you. Or, if you want to think a step ahead, find a company in the phase just before the one in which you'd be a star. Help them grow into that next phase. If you're not careful, you might end up running the place as it makes the transition.

Third, find companies that haven't effectively transitioned phases, when they have parts of themselves that are leftovers from the early days. Most big companies have reams of reports that make no sense, pointless meetings, and policies that seem like someone added them just to mess with employees' lives. In most cases, these practices are chunks of the business left over from an early age -- like the human appendix. They add no value, but no one has shown the resolve or intestinal fortitude to remove them.

Simply going into a company and making sure all the systems, structures, and policies conform has made people fortunes. I know people who take advertising agencies from startup ad shops to little companies, or show divisional presidents why transferring budget to a shared service is in their best interest. I wish there were more such people, as the need for them far outstrips the demand.

Fourth, make sure the company's culture and its phase work together. The misfits between these two are as common as are the benefits for aligning them. A startup needs a culture that's can-do, focused on action, and also thoughtful and careful about making its bets -- one wrong move can mean organizational death. A functional company needs a culture of debate, dialogue, and respect. A divisional company needs healthy competition, and also a culture that promotes mentoring, succession, and personal growth. The biggest opportunities are in a matrix organization. Unless it has a "stage four" culture, it's doomed to debilitating politics, irrelevance, or worse.

There are fortunes to be made by finding companies at the end of one phase, ready but clueless about how to move forward to the next one. This was GM (GM) for years, and they never figured out how to move to a matrix. If you can ease a company into its proper phase, as dictated by its markets and competitors, you'll unlock its potential, and its growth will accelerate. And if you can do this while tweaking its culture at the same time, you'll look like a genius.

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