Practical complete coincidence with the characteristics of the Convolution (obscuration) phase by Gumilev, isnt it?
Generalized change in the characteristics of the company by phases of the Adizes life cycle is shown in Table 3.
The company is a complex system. With its numerous subsystems, each of which is also subject to its own stages of development. They also have their ups and downs. And they can lead to the premature death of the entire organization. For example, childhood illnesses growth difficulties that occur at the start of projects are especially relevant for so-called «startups». To quote the descriptions of the «childhood diseases» of companies from Adizes:
«Premature aging
In the event that a manager with a dominant vitamin A administration wins, employees with entrepreneurial inclinations in droves begin to leave the organization.
Table 3. Characteristics of companies at different stages of the life cycle according to Adizes
The loss of the entrepreneurial component and the increased control on the part of the manager-administrator leads to a minimization of flexibility and, as a result, to premature bureaucratization. The company ceases to quickly adapt to the changing reality and is rapidly losing its leading position. She begins to age before she can reach her Prime.
Fig. 9. Typification of managerial styles according to Adizes
Unfulfilled entrepreneurship
Another scenario for the development of events: the owner understands that he can no longer and does not want to be a substitute player in the team. He decides to voluntarily give up power in order to leave and start from scratch.
He is often pushed to such a decision not only by the hired manager, but also by the board of directors.
The collapse of the business partnership
Another danger that lies in wait for the company in Youth is «divorce». If the company is headed by two founders who are carriers of different management styles, then it is during the Youth period that their partnership ends.»
Product life cycle
The ruthless picture of the life cycle can also be projected onto the results of a business project its Product.
According to the marketing concept, any product goes through a life cycle, that is, there is a certain period of time when it is present on the market. In a typical product life cycle, the same main four phases, four stages are distinguished:
Bringing goods to market. First appearance of the product on the market. Characteristic is a small increase in sales volumes and, accordingly, the profit is minimal or non-existent.
Height. A period of rapid growth in sales volume if the product is accepted by the market and the demand for it increases. Profits also increase as sales increase.
Maturity. Sales volumes are significant, but further sales growth is not observed. Profit at this stage has stabilized, since additional costs are not required to bring the product to the market.
Decline, withdrawal from the market. This phase of the product life cycle is characterized by a significant decrease in sales volumes up to a complete drop in demand for this product. Profits plummet to zero.
The so-called BCG matrix is a tool for strategic analysis and planning in marketing. Created by the founder of the Boston Consulting Group (BCG) Bruce D. Henderson to analyze the relevance of the companys products, based on their position in the market relative to the growth in demand for these products and the market share occupied by the company selected for analysis.
This matrix highlights four possible product roles for the company producing it, and the names of these roles themselves also indicate the «age character»:
«Question mark». Low market share, but high growth rates. The outlook is not clear.
«Stars». Under conditions of substantial investment, they show high sales growth and a high market share.
«Cash Cows». High market share but low sales growth.
«Dogs». The growth rate is low, the market share is low, the product is generally low profitability. Looking ahead, we note that, according to the BCG methodology, the only correct marketing strategy regarding «dogs» is the closure of such projects, the withdrawal of products from the market. Later, we will show examples of how just such a stagnant market, according to another taxonomy «scarlet ocean», turns out to be fertile ground for the emergence of bifurcations completely new, innovative business models.
System dictates
Now that there are clear parallels between the life stages of social systems of completely different kinds and their products, let us describe the very phenomenon of the life cycle in the universal language of synergetics. Hoping that this will help us reach the same universal rules of behavior within different systems projects or companies.
If we introduce some action potential (we will not go into what physical meaning this value has), then during the life of the System, the potential from the zero level reaches a maximum at the break stage, and then drops to zero (the middle plot of Fig. 10).
Formation. The main direction at the stage is expansion. The system emerges, it needs to grow, expand, take shape and this requires resources. Expansion for systems of various nature can be territorial or market. Capture, expansion, obtaining resources from outside. Expanding your living space is the main trend. The impulse of the development of the system is directed outward capture, conquest, expansion. Growth of potential due to the extraction of resources around. Where else can a newborn get them from!
Peak Expansion Momentum exhausted.
Rise. Which actually means the beginning of the movement by inertia. Establishing a balance with the surrounding hostile world, securing the necessary flow of energy from the outside. Sometimes a painful transition (breakdown) from capture to stability and protection of what has been achieved. From the era of «warriors» to the era of «administrators». From «knights» to «traders».
Recession. The transition to protection from external challenges, the use of extracted resources to strengthen ones own structure within oneself. Digestion of what has been achieved by the members of the system. The economy of managing including, as a consequence, the streamlining of behavior and structure, and for this, the development of knowledge and culture is necessary. In the end, crystallization is the fixation of form, the concreting of order, patterns.
The potential, in turn, can be considered as a certain rate of entropy reduction in a particular self-organization (upper graph of Fig. 10). The system spends energy both on expansion and on the development of order, which is reflected in the form of an increase in negentropy information, including coded in the form of scientific achievements, works of art, etc.
«Negentropy is a philosophical and physical term, formed by adding a negative prefix neg- to the concept of entropy, and denoting its opposite. In the most general sense, it is opposite in meaning to entropy and means a measure of orderliness and organization of the system or the quality of the energy available in the system.»
Initially a minimum of order, at the peak active ordering, including in the form of administration through a large number of laws, instructions, regulations, descriptions, etc. On the decline necrosis, when a lot of information has been accumulated, order is cast in granite, but energy, the ability to act is no longer in the system.