Managing the Growing Pains of Adolescent Companies

Photo credit: Nicolas Postiglioni

Running a business is like raising kids. I know, I’ve done both.

When I left the last company in which I was a CEO to become a founder of new companies, I found myself returning to a lifelong passion of mine: the growth cycle of businesses. And this led me to discover the work of Ishak Calderon Adizes, who has developed an influential theory of corporate life cycles to explain the growing pains businesses and their founders must go through in order to successfully scale.

Adizes proposes that companies, like people, move through a series of developmental stages, beginning as a gleam in the entrepreneur’s eye, moving into what Adizes calls “go go” and “adolescence,” on the way to adulthood or “maturity.” For reasons I’ll explain below, I find adolescence the most fascinating and critical stage — for organizations as well as people.

As with individuals, each stage of the corporate life cycle involves changes that present unique challenges to the organization. The challenges arise naturally in the developmental process. The challenges are hard but natural parts in the growth of any company. Meeting them head on is critical to healthy advancement to the next stage. Companies that reach maturity — an attainment by no means assured — either thrive as they reach their “prime,” marked by a balance of flexibility and innovation tempered by control, or gradually lose their youthful qualities and ossify into a bureaucracy and wilt away.

My own experiences have made me a lifelong student of corporate life cycles, having worked at start-ups and both small and large companies. I was recruited out of the University of Florida to work in Procter & Gamble’s sales leadership program that has an amazing leadership development pipeline of which I took full advantage. My next job was at Boston Scientific, another larger company, where I became regional sales director. When I look back at these years, I see plainly the advantage of working at these kinds of places: a clear career path and well-worn training and development programs designed to help employees progress through the system.

But as the cliche goes, a strength can also be a weakness, and even then I found these organizations too uniform and predictable. Whether I was redesigning my sales sheets to work more sensibly or showing up to a national sales meeting wearing a linen suit (it was late July in Florida) rather than the standard uniform of dark suit, white shirt, and power tie, I felt different, and different wasn’t a recipe for long-term success in that environment.

Halfway through earning my Executive MBA, I was compelled to leave Boston Scientific and, quite by accident, found myself working on a start-up, an experience that convinced me 100 percent that I thrived in fast-growing companies. This feeling was confirmed when I took over as the CEO of Garden of Life and then MegaFood, organizations that were also deeply invested in progressive ideas and practices.

When I led them, these were classic, small-to-medium sized companies in the midst of full-blown adolescence, with all of the glorious and challenging ups and downs that go with it. They reminded me of my two smart, strong-willed teenage daughters.

I pictured my 17-year old who got up every school day and flew out the door with a bagel in her mouth and her unfinished homework, which she’d complete in study hall, spilling out of notebooks. She was figuring out who she was and what her mission in life ought to be. She was willing to take risks, big risks, in order to align these questions with her goals, choice of friends, whether she did a gap year instead of going right to college, and a hundred other questions.

I compared myself, a middle age man who rose each morning, does 30 minutes on the Peloton, showered, breakfasted on Bulletproof coffee while scanning the headlines, and commuted to work . . . every day. There was comfort in my routine because was predictable and I’d been doing it for years. It’s worked for me. I look at my daughter and prized her energy and sense of humor and total immersion in her life. I fed off it even as I saw its naivety and inexperience coming through in some of her decisions.

As she gets older, I thought, she’ll become more focused and methodical, but she’s not there yet. Nor need she be.

It’s a difficult challenge for a parent and child, because you essentially have two completely different worldviews inhabiting a single house. I think the same thing might be said of a situation familiar to many CEOs of adolescent companies that have been bought by larger, more mature organizations, which was the case with both Garden of Life and MegaFood. On the one hand, the adolescent company bursts with energy and creativity. It’s customers don’t just buy from it, they love it because of its passion. It’s what draws the mature company to it in the first place.

The mature company has developed analytical precision and smarts and a far less risk-tolerant view of doing business. It sees the world through the lens of maximizing gross margins and slow and steady growth — “doing what you say.” Mature companies are left-brained and organize experience around logic and systematic thinking; adolescent companies are right-brained and organize experience around innovation, emotion, and passion.

Neither way is better, they both just are. Still, I was inspired to write this blog by recalling Adizes, so let’s conclude with a short description of what he sees as the optimal place to be on the corporate life cycle, which he calls “prime:”

“Prime is the optimal position on the lifecycle, where the organization finally achieves a balance between control and flexibility. Prime is actually not a single point on the life cycle curve. Instead, it is best represented by a segment of the curve that includes both growing and aging conditions.”

If you buy into Adizes’ ideas, you have to believe that the CEO has a responsibility to reach for prime as their top priority: from the way the company organizes itself to make decisions to the way it interacts with its customers.

Where are you in your company’s life cycle? What steps have you taken to help the organization grow up without losing all that is great about this corporate life stage?

Let me know how I can support you at your company.

Sincerely,

Enjoy this article? If you would like to see simple, practical tips in your inbox every week sign up for TwoTip Tuesday to help scale your change-the-world business.

All credit to my ghostwriting partner, Dave Moore, who is instrumental in getting my thoughts out in a coherent manner & into these blogs. Thanks Dave!